Ever feel like the country is just 50 kids in a trench coat trying to look like one adult? Honestly, that’s basically what federalism is. And right now, it’s getting weird.
If you've been watching the headlines lately, you’ve probably noticed that the real action isn't just happening in the halls of Congress. It’s happening in statehouses in Nashville, Sacramento, and Des Moines. We’re currently living through a period where the tug-of-war between state power and the White House is tighter than it’s been in decades.
Whether it's the Trump administration’s 2026 "Schedule Policy" overhaul of the federal workforce or Tennessee’s brand-new "Immigration 2026" agenda, federalism in the news is no longer just a dry topic from your 10th-grade civics textbook. It’s the frontline of how your life actually functions.
The AI Power Struggle: Who Gets to Regulate the Robots?
The most high-tech version of this old-school power struggle is happening in the world of Artificial Intelligence. Imagine a world where California has one set of rules for AI ethics, but Florida has a totally different one. For a tech company, that’s a nightmare. It's a "patchwork" of regulations that makes doing business across state lines nearly impossible.
Just last week, on January 7, 2026, the White House issued a massive Executive Order designed to simplify this. The goal? Preempt state AI laws. Basically, the feds want to tell states like Colorado, "Hey, your 2024 AI Act is great and all, but we’re the ones in charge now."
But there’s a catch.
Legally, the executive branch can't just snap its fingers and delete state laws. They need Congress to pass a law that explicitly says federal rules override state ones. Without that, we’re looking at months, maybe years, of lawsuits. Organizations like the National Conference of State Legislatures are already predicting that data centers and "silicon and steel" infrastructure will be the next big battleground.
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The Immigration "Model" and the Supremacy Clause
Immigration is usually the go-to example when people talk about federalism in the news, and for good reason. It’s the ultimate "who's the boss?" scenario.
Take Tennessee. House Speaker Cameron Sexton and Lt. Gov. Randy McNally just unveiled their "Immigration 2026" package. This isn't just a local thing; they worked on it with White House Deputy Chief of Staff Stephen Miller. It’s designed to be a "model" for other states. The bill would force schools and health departments to verify immigration status.
"We're going to lay out a path that's transparent... and also not allow locals to have weak compliance with state law," Sexton said during the announcement.
On the flip side, you have states like Illinois. In December, they passed the Illinois Bivens Act. It’s a fascinating piece of law that allows people to sue federal officers in state court for constitutional violations. This came right after the tragic shooting of Renee Good by a federal agent in Minneapolis.
The Trump administration has already filed a lawsuit to block the Illinois law, arguing it violates the Supremacy Clause of the U.S. Constitution.
The "Punitive Federalism" Trend
There’s a term scholars are using more and more lately: punitive federalism. It sounds intense because it is. It’s when the federal government uses its "power of the purse" to punish states that don’t fall in line.
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We’re seeing this right now with federal grants. The administration has been accused of holding certain funds "hostage"—specifically $18 billion frozen for New York City projects—while prioritizing "recipient" states that align with federal policy.
It’s not just about money, though. It’s about people.
- The Schedule F Revival: In early 2026, the "Schedule Career/Policy" rule is set to go into effect. This could strip civil service protections from tens of thousands of federal workers, making them "at-will" employees.
- The SNAP Stand-off: New work requirements for SNAP (food stamps) mean that about 2 million people could lose access to food assistance. States now have a brutal choice: foot the bill themselves or let their residents go hungry.
- The EPA vs. California: This is a classic. The EPA is currently challenging California’s right to set its own, stricter emissions standards. The argument from the feds? "Federalism does not mean that one state can dictate standards for the entire country."
Why This Matters for Your Wallet and Your Rights
You might think, "Okay, this is just lawyers arguing in fancy buildings." But it hits home fast.
If you live in Iowa, the Department of Education just approved a "Returning Education to the States" waiver. This gives your local school board way more control over how federal money is spent than the school board over in Illinois has.
If you’re a business owner in a state that just banned cat declawing (looking at you, California) or a tech worker dealing with new AI transparency laws, the balance of federalism determines your daily "to-do" list.
The 2026 midterm elections are looming. Every single seat in the House and a third of the Senate are up for grabs. This isn't just about party politics; it’s a referendum on how much power we want the federal government to have over our local lives.
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What You Can Do Next
Understanding federalism is about more than just knowing three branches of government. It’s about knowing which lever to pull when you want change.
1. Track your state’s "Preemption" laws. Check the National Conference of State Legislatures (NCSL) website. They have amazing trackers that show when the state is trying to override your city's laws, or when the feds are trying to override your state.
2. Watch the "One Big Beautiful Bill" (OBBBA) rollouts. Many health care cuts and SNAP changes take effect throughout 2026. If you or someone you know relies on ACA tax credits, check with your state’s health exchange now. Some states are trying to create "wraparound" subsidies to fill the gaps left by federal cuts.
3. Pay attention to State Supreme Court races. With the U.S. Supreme Court often leaning toward national authority or specific conservative interpretations, state courts are becoming the ultimate "shield." In 2025, we saw state courts in Wyoming use "health care freedom" amendments—originally meant to fight Obamacare—to actually protect abortion access. That’s federalism at its most ironic and powerful.
Federalism isn't a stagnant system; it’s a living, breathing conflict. And in 2026, that conflict is the biggest story in the country.
Actionable Insights for 2026:
- Review your state's specific AI and data privacy regulations, as federal preemption attempts may cause temporary legal "gray zones" for businesses.
- Monitor local legislative sessions for "Immigration 2026" style bills that could alter reporting requirements for public services.
- Prepare for potential shifts in federal employment stability if the Schedule F/Policy conversion impacts your region's economy.