Federalism 2.0

GRIN Diagnosis: Federalism is the Constitution's greatest resilience feature - distributed power means no single point of failure. But the balance has drifted, and both federal overreach and state extraction are problems.

v1.0 Design (Articles IV, VI, X)

The original insight was brilliant:

• States as laboratories: 50 parallel experiments in governance (G↑)
• Redundancy: If one level fails, the other can compensate (R↑)
• Exit option: Citizens can move between states (competition for good governance)
• Tenth Amendment: Powers not delegated are reserved to states/people

v1.0 Problems

• Federal preemption creep: Commerce clause expanded to cover nearly everything; states lose policy space
• Unfunded mandates: Federal government imposes costs on states without funding
• State extraction: "States' rights" historically used to justify extraction (Jim Crow, union-busting)
• Race to the bottom: States compete by lowering standards (environmental, labor)
• Interstate coordination failure: Problems that cross state lines (pollution, pandemics) poorly handled

v2.0 Proposals

1. Subsidiarity Principle (Explicit)

• Federal action only when states demonstrably cannot act effectively alone
• Burden of proof on federal government to justify preemption
• Court review of subsidiarity claims
• GRIN rationale: Preserves state laboratory function (G↑); prevents unnecessary centralization (R↑)

2. Floor, Not Ceiling

• Federal standards set minimums; states can exceed but not undercut
• Applies to: environmental protection, labor standards, civil rights, consumer protection
• States that exceed federal standards get regulatory flexibility in return
• GRIN rationale: Prevents race to the bottom while preserving upward experimentation

3. Interstate Compacts Enabled

• States can form compacts without Congressional approval (currently required)
• Exception: compacts affecting federal authority still need approval
• Enables regional solutions to regional problems
• GRIN rationale: Increases node fertility at state level; enables coordination without federal bureaucracy

4. Anti-Extraction Guardrails

• No state law can impose greater burden on out-of-state citizens than in-state (strengthen Privileges and Immunities)
• Federal floor on voting rights (no state can make voting harder than federal minimum)
• Civil rights floor applies regardless of state action
• GRIN rationale: Prevents states from becoming extraction machines targeting minorities or outsiders

5. Fiscal Federalism Reform

• No unfunded mandates: federal requirements must come with federal funding
• Block grants with outcome accountability (not process requirements)
• Revenue sharing formula based on need, not political favor
• GRIN rationale: Aligns responsibility with resources; reduces federal micromanagement (Ge↑)

The Exit/Voice Balance

Federalism works because citizens have both:

• Voice: Participate in state/local governance (easier than federal)
• Exit: Move to a state with better governance

v2.0 preserves both while preventing exploitation:

• Voice enhanced: State laboratories can experiment (G↑)
• Exit protected: No state can trap citizens or extract from visitors
• Floor prevents: States competing to be worse (R protected)

GRIN Scorecard

Metric	v1.0	v2.0
State G (laboratory function)	Eroded by preemption	Restored via subsidiarity
Resilience (R)	Strong but declining	Strengthened via floor/ceiling
Extraction prevention	Weak (states can extract)	Stronger (floor protections)
Coordination	Weak (compact approval)	Improved (compact freedom)