The State of American Federalism—1985

Abstract

Nineteen eighty-five might well be described as having been a wild and woolly year for American federalism. In February, the United States Supreme Court, in yet another 5-4 decision, overturned its 1976 holding in National League of Cities v. Usery' and told the states to look to the political process for the protection of their interests against congressional assertions of the federal commerce power. In December, the political process produced the Gramm-Rudman-Hollings deficit reduction act, the provisions of which, if fully implemented, could create a de facto new federalism not unlike the New Federalism originally advocated by President Ronald Reagan. Most of the nation's governors responded to the year's drive to balance the federal budget by saying that the states cannot absorb deep cuts in federal domestic spending. Earlier in the year, also in February, the president had rejected a bipartisan attempt by the governors to forge a deficit-reduction compromise that would have involved a tax increase, reductions in defense spending, and a freeze on most domestic spending, including a freeze on cost-of-living increases for Social Security beneficiaries. At the same time, the Reagan administration lit another fire under the political process by urging the Congress to eliminate the remaining tax code provisions for the deduction of state and local taxes on federal income tax returns. Officials in the administration did, however, entertain the idea of supporting an increased speed limit of 65 mph for rural stretches of interstate highways in states having a mandatory seat belt law, and the Environmental Protection Agency proposed that state and local governments be given principal authority to enforce toxic air pollution regulations. The U.S. Department of Energy continued to open informational offices at sites in several states which were being considered as a possible home for a nuclear waste storage facility. Citizens living near the sites were invited to make inquiries and register comments and complaints.