But the text of the Constitution makes it clear that the balancing and intermingling of powers is at the core of the federal system. Article II, for example, outlines the President's power and duties and provides that machinery of state government be used for election of the President. The distribution of powers in the federal system has two overlapping circles: (1) concurrent or shared powers by both national and state government, and (2) enumerated and implied powers by the Congress. The state holds police powers to protect health and safety of the citizens. Because both sets of powers require money to implement, both the national and state governments were given authority to levy taxes. Other important concurrent State powers include the right to borrow money, establish courts, charter banks and other corporations, and enact and enforce laws necessary to carry out these powers (O'Connor, 1993, 65). .
With regard to denied and reserved powers, both national and state governments are denied authority to take arbitrary actions affecting constitutional rights and liberties. Neither level of government may pass a bill or law declaring an act illegal without a judicial trial. A criminal cannot be sentenced without due process of law either. .
In return for the Anti-federalists agreement to the supremacy clause, many guarantees were made to the states in the Constitution. Each state is guaranteed two members in the Senate, each state according to Article IV has a republican form of government, and limits on states (Article I) to deal with foreign countries, and they could not coin money or tax imports or exports (O'Connor, 1993, 66). What they had was dual federalism, which changed to cooperative federalism in 1960, when there was a dramatic increase in grants-in-aid; federal, state and local sharing of responsibilities and increased regulation by national government. Then came President Reagan's New Federalism, which stripped away years of federal regulations.