New Federalism

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New Federalism refers to the transfer of certain powers from the United States federal government to the U.S. states. The primary objective of New Federalism is the restoration to the states of some of the autonomy and power which they lost to the federal government as a consequence of President Franklin Roosevelt's New Deal.

It relies upon a Federalist tradition dating back to the founding of the country, as well as the Ninth Amendment and Tenth Amendment.

As a policy theme, New Federalism typically involves the federal government providing block grants to the states to resolve a social issue. The federal government then monitors outcomes but provides broad discretion to the states for how the programs are implemented. Advocates of this approach sometimes cite a quotation from a dissent by Louis Brandeis in New State Ice Co. v. 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.

From 1937 to 1995, the Supreme Court of the United States did not void a single Act of Congress for exceeding Congress's power under the Commerce Clause of the United States Constitution, instead holding that anything that could conceivably have even a slight impact on commerce was subject to federal regulation. It was thus seen as a (narrow) victory for federalism when the Rehnquist Court reined in federal regulatory power in United States v. Lopez (1995) and United States v. Morrison (2000).

The Supreme Court wavered, however, in Gonzalez v. Raich, holding that the federal government could outlaw the use of marijuana for medical purposes under the Commerce Clause even if the marijuana was never bought or sold, and never crossed state lines. How broad a view of state autonomy the Court will take in future decisions remains unclear. (See Gonzales v. Oregon)

Justice O'Connor, dissenting in Gonzalez (transcript), began her opinion by citing United States v. Lopez, which she followed with a federalist reference to Justice Louis Brandeis's dissenting opinion in New State Ice Co. v. Liebmann.