Cooperative Federalism Is Not Federalism

Policy built on ‘If you don’t, we will’ isn’t empowering states.

There’s a rhetorical trick embedded in the phrase “cooperative federalism,” and once you see it, you start noticing it everywhere.

The trick is that it takes a vertical relationship—Washington sets the terms, states execute—and markets it as a horizontal one: a “partnership.” But a core tenet of federalism is divided sovereignty, maximizing legal autonomy, and providing substantial recourse against federal action. A system can involve states, and even rely on them, without actually respecting those things.

In the cooperative model, the federal government typically decides the ends and the basic architecture, then offers states a menu: run the program our way (maybe with some flexibility), or face a penalty, a loss of funding, or a federal takeover. That’s not an alliance of co-equal governments. It’s really just a subcontract.

Take the Clean Air Act, the poster child for cooperative federalism. The EPA sets the National Ambient Air Quality Standards, and states are responsible for submitting State Implementation Plans showing how they’ll meet those federal requirements. That sounds like federalism until you read the fine print: the “state plan” exists to satisfy a federally defined target under federal review. And if the state doesn’t submit an adequate plan—or the EPA disapproves it—the federal government can step in with a Federal Implementation Plan. That structure matters because it reveals what the “cooperation” really is. The state’s discretion is bounded by a federal standard, policed by a federal agency, with a federal backstop waiting behind the curtain. When the fallback is “we’ll do it ourselves,” the state’s “choice” is less the choice federalism implies (to govern differently) and more the choice a contractor has (to accept the client’s specs or lose the job).

The Congressional Research Service has a refreshingly plain description of the overall pattern. It is cooperative federalism that provides for shared state and federal regulatory authority, typically by empowering states to be the primary implementers of policies established at the national level, often using conditional grants and “conditional preemption” if states don’t adequately implement the federal program. This is like that meme about a married couple where the husband and the wife disagree over what the husband should wear to a special occasion, so they compromise and the husband wears everything the wife wants him to wear. “Empowering” is doing a lot of work, and in this context it doesn’t mean empowering states to chart the course their representatives would like; it’s a perversion that casts federal directives as discretion to make cooperative federalism seem more palatable to skeptics of federal power.

---

Most Americans Distrust The Feds And Say They Are Too Powerful

---

Cooperative federalism, like much of the centralizing infrastructure in this country, emerged during the 1930s New Deal era as scholars sought to shift away from the preceding regime of dual federalism, the idea that the state and federal government had clearly demarcated areas of responsibility neither should violate. The web of conditional grants, bureaucratic rules, and administrative requirements became the way for a federal government without the capacity to govern directly to wield its influence indirectly through the micromanagement of states and localities. Today, the presumed virtue of policy centralization is so entrenched both in political discourse and within an academic environment disinterested in studying subnational politics that cooperative federalism is referenced as a fair compromise of shared power that modernizes but still honors the union’s founding arrangement. The reality is that cooperative federalism is acutely hierarchical, and anyone who acknowledges the clear trajectory of political, corporate, and cultural power upwards can see that cooperative federalism isn’t an olive branch but a usurpation.

Now, the honest defense of cooperative federalism is that it’s a pragmatic response to scale. The federal government doesn’t have the administrative capacity (or local knowledge) to run everything directly. So it sets national goals and lets states tailor the means. Sometimes that tailoring is real. Sometimes it produces better outcomes. And in a country as large and diverse as ours, total uniformity can be both politically unstable and substantively dumb. Another defense is one pitched by folks including Donald Kettl, who argues that federalism fails because it produces unequal outcomes that are morally and politically unacceptable. In order to minimize or eliminate unequal outcomes between the various states, the federal government needs to intervene and condition policy toward equity.

These defenses concede the key point: cooperative federalism is primarily an administrative strategy, not a theory of divided sovereignty. It solves a management problem—how to get fifty governments to help implement national policy—while presenting itself as a constitutional virtue. Accountability also can become an issue. When a program is federally structured but state-administered, blame becomes liquid. Federal officials say, “the states are the ones running it.” State officials say, “we’re implementing federal requirements.” Voters sense the evasion, then conclude—often correctly—that nobody is really in charge. The system produces what looks like local governance while functioning like layered command-and-control.

This is why the anti-commandeering doctrine, the foundation of the Tenth Amendment of the federal constitution, is such a revealing contrast. The Supreme Court has been clear that Congress can’t simply force states to enact the federal government’s will. In the 2018 case, the Court, in a 6-3 decision, Murphy v. NCAA, restates the principle in blunt terms: Congress may not “commandeer” the legislative process of the states by compelling them, in this particular case, to not repeal prohibitions on private conduct. The very existence of this doctrine is an admission that there’s something constitutionally suspect about treating states as administrative arms of the federal government. And yet cooperative federalism is often designed to reach similar practical results without tripping that wire.

---

The U.S. Needs More Legal Patchworks

---

The Medicaid expansion in the aftermath of the Affordable Care Act fight in NFIB v. Sebelius is instructive precisely because it made this dynamic impossible to ignore. The Court didn’t say Congress can’t encourage states with money. It said the Affordable Care Act’s threat—loss of existing Medicaid funding if a state refused the expansion—crossed the line into unconstitutional coercion. Even if you think the Court’s line-drawing was messy, the episode exposed the underlying reality: a “cooperative” program can become a lever to force state compliance when the funds are too large to refuse. And if it isn’t via fiscal federalism that the federal government operates on a false sense of cooperation, it will attempt itthrough legal federalism, as it had in the landmark Lopez case, where the Supreme Court struck down the galaxy-brain notion that federal firearms regulations in public school zones (governed by state and local governments) could be defended under the Commerce Clause.

For now, the courts appear settled on permitting the more substitutionist “cooperative” regime of “if you don’t establish your own X program, you will run ours in your state.” Where federal efforts to disempower states could be curtailed in the future is in the Spending Clause. In the future, courts could limit Congress’ conditional funding power by limiting the loss of funds to noncompliant states to newly appropriated money, not existing funds. Courts could also render certain conditions unconstitutional, including ones that condition grants on states undermining their own taxing, policing, or even election process.

Federalism is not “states help carry out federal policy.” Federalism is deference to the states on, at a minimum, matters not enumerated to the federal government in the Constitution. What federalism can be in the future is another matter—and one that I hope to lay out the possibilities for in this publication over time.

The United States can look within and beyond its borders for how it can rearrange its institutions for a sustainable federalism—fiscal, legal, and cultural. One that understands the federal government to be a servant and facilitator of the states’ will; that recognizes a role for the federal government to play in a progressive fiscal redistribution; that develops a bias toward deference to states and localities on legislation and implementation; and that bolsters state identity over the burden of conforming to a loaded and conflicted national label. As long as the debates persist over what the United States is and is not, and what being an American means and does not mean, the intimate places where we spend most of our time exist to ground us and grant us the opportunity to self-govern in a more perfect, yet imperfect, cooperative way.