The ‘New’ New Federalism

By Dennis Herrera
[Originally published in the San Francisco Chronicle, January 3, 2005]
When Ronald Reagan used his 1983 State of the Union Address to foreshadow a sweeping proposal to devolve vast powers from the federal government back to states and localities, he described his New Federalism initiative as an effort “to restore to states and local governments their roles as dynamic laboratories of change in a creative society.”

Liberal critics at the time regarded the New Federalism as a thin veiling for a full-scale federal retreat from progressive social policy — which, of course, it was. In subsequent years, as successive Congresses grappled with mounting budget deficits and as the federal bench grew increasingly conservative, Reagan’s efforts to return power to local governments would indeed take hold among his presidency’s most enduring legacies.

To a Bush administration two decades later that appears taken aback by some of the consequences, then, it should probably have been predictable that the expanding spheres of responsibility that this New Federalism envisioned for state and local governments would give rise to a generation of progressive public-sector legal activists. Exemplified by such state attorneys general as New York’s Eliot Spitzer and California’s Bill Lockyer, the phenomenon has been mirrored at the local level by San Francisco’s city attorney’s office, whose own aggressive efforts to protect consumers, police the marketplace and expand civil liberties would have been unthinkable just two decades ago.

The irony is not lost on Spitzer, who openly taunts classical federalists by describing his brand of aggressive regulation of Wall Street as “the revenge of the New Federalism that the Republican Party’s conservative wing thrust upon the nation 20 years ago.” But while Spitzer’s observation may be ironic, its truth transcends mere spite. In shifting responsibilities from the federal government, Congress and the courts have indeed enabled significant accomplishments on issues previously considered ill-suited to state or local initiative.

The past year has witnessed dramatic policy innovations at the state level, ranging from insurance and mutual-fund regulation to prescription drugs, environmental protection and stem-cell research. States aren’t alone as dynamic laboratories for policy innovation, of course, with local governments exerting a significant impact in their own right — perhaps especially in San Francisco, with its long-held civic creed of progressive leadership.

When elected city attorney in 2001, I inherited an office from Louise Renne that was already nationally recognized for its affirmative litigation against gun distributors, lead-based paint manufacturers and tobacco companies. I’ve continued that aggressive program to protect taxpayers, consumers and civil liberties, achieving several milestones in 2004:

  • Our investigation and lawsuit on behalf of the San Francisco school district blew the whistle on a nationwide scam to defraud the federal E-Rate program, which helps America’s poorest school districts bridge the digital divide. The result: in May, a subsidiary of NEC pled guilty to bid rigging and wire fraud, and agreed to pay fines and restitution totaling $20.6 million.
  • We intervened as the nation’s only municipality in seeking to strike down the Bush administration’s federal ban on late-term abortion, successfully asserting a civic interest on behalf of the San Francisco Department of Public Health and San Francisco General Hospital as the public health-care providers of last resort for indigent women.
  • We filed the first litigation by a municipal government in American history to challenge the constitutionality of state marriage laws that discriminate against gay and lesbian couples. It is perhaps that issue more than any other on which the Bush administration has demonstrated its most glaring hypocrisy as heir to Reagan’s New Federalism. In advancing a constitutional amendment that would ban same-sex marriage nationwide, President Bush is asserting a needless federal imperative over rights that have always been the purview of the states.

In fact, Reagan’s vision of state and local governments “as dynamic laboratories of change” harks back to an earlier principle observed by U.S. Supreme Court Justice Louis D. Brandeis in his famous 1932 dissent in New State Ice Co. vs. Liebmann. “It is one of the happy incidents of the federal system that a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country,” Brandeis wrote. “If we would guide by the light of reason, we must let our minds be bold.”

Short of stepping up to long-abandoned federal responsibility on a broad range of social and economic issues, the Bush administration would do well to exercise some intellectual honesty, respecting the federalism to which it is heir. Indeed, the “new” New Federalism that has taken shape since Reagan’s presidency reflects neither a conservative nor liberal agenda, but rather the vital creative role that states and localities play in America’s governance.

Politics aside, we may be certain that tomorrow’s national progress will owe much to today’s novel social and economic experiments by state and local governments. America has much to gain if we let our minds be bold.

Dennis Herrera is city attorney of San Francisco.