The precis for this panel concerns the Supreme Court's federalism decisions. I confess, however, that I'm more interested in the Constitution's federalism rules, which may or may not be the same as the Court's.
The original plan, sketched in Madison's famous Federalist No. 10, was to diminish the power of interest groups (factions) by diffusing power. Some powers would be national; all residual powers would be held by the States, which would compete with one another. Groups able to dominate one state would fail elsewhere, because economic interests would differ. Some states were agricultural, others depended on manufactures or trade. The States could ensure their independence by controlling the Senate (for Senators would be elected by states, not directly by the people). And the ability of factions to control the national government would be diminished not only by states" choice of Senators but also by the different electoral bases of the House (local elections every two years) and the Executive (indirect elections every four years). Representatives with different electoral bases would compete against one another, protecting the people.
That structure of diffused powers, not any delegation to the Supreme Court, is the Constitution's formula for protecting liberty through federalism. The 1787 plan is less useful today than formerly, for several reasons. One is the Seventeenth Amendment, which provides for the direct election of Senators. Another is the Sixteenth Amendment, which gives the national government an essentially unbounded taxing power. As Chief Justice Marshall observed in M'Culloch v. Maryland, (1) the power to tax is the power to destroy--and, we can add today, the power to regulate.
A third is the Supreme Court's conclusion in the early twentieth century that the federal commerce power can be used as a conditioning power: That is to say, Congress can provide that nothing moves across borders unless it meets certain conditions. This was used to adopt child-labor and minimum-wage laws and to regulate lotteries and other activities. (2) If a product is made by children, it can't be shipped across state lines. Congress might have regulated health care using the conditioning power. That power, plus taxation, make judicially adopted limits of little value. The Court could overrule Wickard v. Filburn (3) tomorrow without establishing any real limits on national power. Justice Scalia's concurring opinion in the home-grown marijuana case shows why. (4)
A fourth reason why the Constitution's original structure of federalism has faded is the change in the economy. The assumption behind giving commerce power to the national government and residual power to the States is that few goods moved in interstate or international commerce. Most economic transactions were local, just as most people died within fifty miles of their birthplace. But canals, roads, railroads...