Federalism is a system of government in which power is divided between a central national authority and smaller regional governments, with each level holding some authority the other cannot override. In the United States, the definition of federalism is set by the Constitution: Congress holds a specific list of powers, the states keep everything not given to Congress or forbidden to them, and a handful of powers belong to both. Neither Washington nor any single state governs alone.
Why the Framers Split Power This Way
The choice wasn’t abstract. Under the Articles of Confederation, which governed the country from 1781 to 1789, almost all real power sat with the states. Congress could sign treaties but couldn’t enforce them, could ask states for money but couldn’t tax, and had no authority over trade between the states, which produced discriminatory tariffs across state lines.1Constitution Annotated. Weaknesses in the Articles of Confederation Any amendment required unanimous state approval, so one holdout could block reform.
The 1787 Constitutional Convention answered those failures with a compromise. The national government would be strong enough to tax, raise armies, and regulate interstate commerce, but it would be limited to specifically listed powers. Everything else stayed with the states and the people. That compromise is federalism.
What the Federal Government Can Do
Article I, Section 8 lists the powers granted to Congress. These enumerated powers include the authority to levy taxes, borrow money, regulate interstate and foreign commerce, coin money, establish post offices, declare war, raise armies and a navy, and set uniform standards for weights and measures.2Constitution Annotated. Article I Section 8 The list also covers naturalization, bankruptcy law, patents, copyrights, and the creation of federal courts below the Supreme Court.
Centralizing these functions is practical. A country can’t run on fifty currencies or fifty foreign policies, and interstate commerce authority stops states from imposing protectionist tariffs on one another. The list is deliberately finite, though. If something isn’t on it and isn’t reasonably necessary to carry out something on it, Congress doesn’t have the power.
The Necessary and Proper Clause
The final clause of Article I, Section 8 lets Congress “make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers.” Congress isn’t confined to the literal actions listed; it can take steps reasonably connected to carrying those listed powers out.3Constitution Annotated. Overview of Necessary and Proper Clause “Necessary” doesn’t mean absolutely essential; a law that’s appropriate and plainly adapted to a permitted end is authorized. The Supreme Court settled this reading in McCulloch v. Maryland (1819), upholding Congress’s power to create a national bank even though the Constitution never mentions banking, because a bank was a useful tool for carrying out taxation, borrowing, and currency powers.4Justia. McCulloch v. Maryland, 17 U.S. 316 (1819)
The Commerce Clause
No single provision has done more to expand federal authority than the Commerce Clause, which lets Congress “regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.”5Constitution Annotated. Article I Section 8 Clause 3 What counts as commerce “among the several States” has been fought over for nearly two centuries. By the mid-twentieth century, the Supreme Court had read the clause broadly enough that Congress could regulate purely local activities if they had a substantial economic effect on interstate commerce in the aggregate. More recent cases have marked outer limits: in United States v. Lopez (1995) the Court struck down a federal law banning guns near schools, and in NFIB v. Sebelius (2012) it held that the clause authorizes regulation of existing commercial activity but not compelling people to enter commerce in the first place.6Justia. National Federation of Independent Business v. Sebelius, 567 U.S. 519 (2012)
What the States Can Do
The Tenth Amendment is the constitutional home of state authority. Its text is short: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”7Constitution Annotated. U.S. Constitution – Tenth Amendment That closing phrase matters. Some powers don’t default to the states either; they stay with individual citizens and belong to no government at all.
In practice, the reserved powers cover a huge share of daily governance. States regulate internal commerce, run public school systems, issue professional licenses, manage elections, set most criminal law, and handle family law including marriage, divorce, and child custody. Property, contract, and tort law are overwhelmingly state systems.
The broadest category of state authority is the police power: the inherent authority of state and local governments to protect public health, safety, and general welfare. It’s what lets states order quarantines, impose curfews, enact building codes, adopt land-use rules, and maintain highways and emergency services. It isn’t unlimited. The Fourteenth Amendment bars any state from depriving a person of life, liberty, or property without due process of law.
Powers Both Levels Share
Not every power falls cleanly on one side. Concurrent powers are those both governments exercise at the same time. Taxation is the clearest example: the federal government collects income taxes, and states collect their own income, sales, and property taxes from the same residents. Both levels borrow money, build roads, run court systems, and pass laws promoting public welfare. A business often complies with federal workplace safety rules and state environmental rules simultaneously, enforced by different agencies, with no contradiction between them.
What Happens When Federal and State Law Collide
When a state law genuinely conflicts with federal law, Article VI, Clause 2 breaks the tie. The Supremacy Clause makes the Constitution, federal statutes made pursuant to it, and treaties “the supreme Law of the Land,” binding on judges in every state regardless of any state constitution or statute to the contrary.8Constitution Annotated. Article VI Clause 2 – Supremacy Clause The federal law has to be constitutional itself, though. A federal statute that exceeds Congress’s enumerated powers doesn’t get Supremacy Clause protection.
The Supremacy Clause produces the doctrine of federal preemption, which decides when federal law displaces state law. Express preemption is when a federal statute explicitly says it overrides state law on a subject. Implied preemption covers situations where Congress has regulated a field so thoroughly there’s no room left for state rules (field preemption), or where a state law conflicts with federal objectives or makes compliance with both impossible (conflict preemption).9Congress.gov. Federal Preemption: A Legal Primer Nuclear safety and aircraft noise regulation are classic field-preemption examples. Preemption fights are among the most common federalism cases in the courts, because the line between federal and state regulatory authority is rarely a bright one.
How States Deal With Each Other
Federalism isn’t only vertical. Article IV, Section 1, the Full Faith and Credit Clause, requires each state to honor the public acts, records, and judicial proceedings of every other state.10Constitution Annotated. Overview of Full Faith and Credit Clause A court judgment issued in one state is generally binding in every other, as long as the original court had proper authority over the parties and subject matter. A divorce granted in Ohio has to be recognized in Florida. The rule has more give for statutes than for judgments; a state doesn’t have to substitute another state’s laws for its own on matters it can legislate about, but it cannot completely close its courts to claims arising under another state’s law. Without this clause, the states would function closer to separate countries than to parts of one nation.
How Federalism Has Worked in Practice
The written definition is one thing; the working relationship between the two levels has shifted over time. For roughly the first 150 years of the republic, the dominant model was dual federalism, sometimes called the “layer cake.” The federal government and the states operated in sharply separated spheres: Washington handled foreign affairs, defense, currency, and interstate commerce, while states handled nearly all domestic policy. Each level was treated as sovereign within its own domain.
That separation eroded during the New Deal in the 1930s, as the Supreme Court began upholding federal regulation of activities previously considered purely local. The broader reading of the Commerce Clause and the growing use of conditional federal spending blurred the boundaries dual federalism relied on. What replaced it is usually called cooperative federalism, described with a “marble cake” analogy: the two layers are swirled together. Both levels work on the same policy areas, with the federal government typically setting broad standards and the states handling implementation. Environmental regulation is a familiar example. The EPA sets national air and water quality standards, but individual states often run enforcement programs under federal oversight.
Starting in the 1970s and continuing through the 1990s, a counter-movement pushed back against the growth of federal authority. Known broadly as new federalism, it sought to return power and program management to the states, through tools like revenue sharing and block grants. Even those shifts came with federal strings attached, which is a persistent feature of the system: money from Washington almost always arrives with conditions, and the conditions can shape state policy in areas Congress may not have the power to regulate directly. Federalism on paper is a division of power; federalism in practice is a continuous negotiation over where the line falls.