Historically the Supreme Court has played a formative role in federalism; and even the modern Court prides itself of safeguarding federalism’s “usual balance.” Most of the time, however, courts don’t get to see Executive Federalism at all. That is now the ordinary operation of our federalism: it’s how the ACA is being implemented, and how the clean power plan is being implemented. Even when courts do get to look at Executive Federalism in action, constitutional constraints are exceedingly weak; and that includes federalism constraints.
Big waivers are usually unreviewable because no one has standing. There ought to be some law or doctrine to control the basic operation of our government. If an agency cuts deals with 30 states and then says “no” to the 31, is that arbitrary or capricious? There is the anti-commandeering rule; but for the most part, the Executive has found ways to commandeer states without running afoul of the rule.
A few big settlements are reviewed; the vast majority aren’t (not even when the deal is cut, let alone the implementation). Even some agency rules have become practically unreviewable. Another example: during the financial crisis Secretary Paulson did not do anything he wouldn’t have done at Goldman Sachs: Buy. There is the made-for-one-case Medicaid holding of fame; but no one has ever identified another statute to which it might apply.
EPA routinely proposes rules that are strictly : draconian, arbitrary and capricious, in excess of statutory authority. But that will take four years, and utilities and investors and state commissions cannot wait that long. There are various federalism canons and presumptions; but no one has figured out how those should operate in administrative law cases. The federalism stuff that the courts do see is Administrative Law stuff; and unfortunately, the Court appears at sea both about Ad Law itself and about its interplay with federalism.
The trend to “Presidential Administration” cuts across a wide range of issues (think net neutrality); but again it is particularly pronounced in the federalism arena.
Deferred action for undocumented aliens wasn’t some bureaucrat’s idea; it was the President’s.Some states welcome these escapades, sometimes; others fight back. A “National Federalism” literature (emanating from the New Haven metropolitan area) says, no. For one thing, Executive Federalism is debt-financed federalism (which helps to explain why we are now extracting the needed funds for the programs and even just running the federal agencies from private entities). Admittedly that’s not a state but as goes Puerto Rico, so goes Illinois, and in its trail any other state that relies on federal transfers to support a failed business model. Executive federalism happens in the shadow of the law, and sometimes the bright sunshine of patent illegality.States can shirk, and they can participate in the regulatory process. And the federal courts have nothing consequential to say about it. Even when he had a legal basis for his actions he declined to invoke it because that would suggest he’d do the same thing in the next case, and there goes the leverage.When Congress goes AWOL, the Executive will tend to push its authority to the outer limits, and beyond.Examples spring readily to mind: immigration; executive waivers for states that have decriminalized marijuana; a clean power plan for which EPA plainly lacks authority; and so on.But the trend is secular, and robust to partisan politics.(It began under the Reagan administration and has accelerated since.) Herewith, six features of Executive Federalism: . The key decisions are made by high-level political appointees, usually in close cooperation with the White House. isn’t rulemaking by bureaucrats and administrative regularity; it’s political.Medicaid, education, welfare, and other programs work that way .Executive federalism is highly asymmetric: federal program requirements are worked out or waived for individual states, and the differences are huge. There are fifty different Medicaid programs, and they have only one thing in common: not one of them has anything to do with the statute. Executive federalism works through dealmaking, not rulemaking.The best example is a 2012 agreement between five big banks, the feds, and states. billion went to a gaggle of federal agencies, state agencies, and “fair housing” groups; billion were earmarked for “restitution” for underwater borrowers—mortgage relief, short sales, etc.