A major interest that must be weighed in the balance of organizations' needs for information against the individual's interest in having his personal privacy protected is society's interest in maintaining the integrity of the Federal system. The division of responsibility and authority between the Federal government and States is a cornerstone of the American political system and the Commission has been particularly attentive to it in both the methods it recommends for establishing legal requirements and the regulatory mechanisms and sanctions for enforcing such requirements.
In areas of record keeping where the States are prominent record keepers, or where records are generated in carrying out State programs, the Commission pays particular attention to the reserved powers principle enunciated in the Tenth Amendment to the Constitution, emulating the Supreme Court's care14 not to interfere with the conduct of essential State government functions. Thus, where Federal regulation seems necessary, the Commission recommends making the requirements a condition of Federal benefits, which leaves the States some degree of choice. The Commission recommends tempering such exercise of Federal spending power by leaving considerable latitude in how the States implement the policies, and by urging them to make the minimum Federal requirements part of their own State legislation and to assume most of the responsibility for enforcing them.
In the areas of private sector record keeping where the States share regulatory power with the Federal government, the Commission recommends maintaining the current balance. For example, in financial areas where the Federal government now does most of the regulating, the Commission relies heavily on current Federal mechanisms in the implementation of the measures it recommends, with the State playing a supplemental role. In the insurance area, where the States now do most of the regulating, the Commission recognizes a need for some limited Federal intervention in order to provide the necessary uniformity, but relies on the State enforcement mechanisms that now have primary responsibility.
Each of the implementation measures the Commission recommends is designed to avoid disturbance of the current Federal-State political balance of power. Indeed, the structure of the Commission's recommendations as a whole should strengthen the FederalState partnership and increase the State's role in protecting the interests of the individual.