The State of American Federalism 2011-2012: A Fend for Yourself and Activist Form of Bottom-Up Federalism

The signature developments in intergovernmental relations and federalism in 2011–2012 were generally found at the state and local levels. Strapped for funds to balance their budgets, states and local governments have made significant cutbacks, taken legal risks, renegotiated labor union contracts, and rejected federal aid. Conversely, subnational governments have created jobs and taken the lead in various policy areas. The U.S. Supreme Court showed strong support for state sovereignty claims, which could perhaps encourage further the bottom-up activism by state and local governments. The president and his administration made deft use of executive powers to influence public K–12 education reforms and energy and environmental policy, but much of the year was spent in budget wrangling over how to reduce the mounting federal debt.