By Bush's third year in office, the nation was embroiled in three wars overseas and a political war at home. The progress made toward a functioning Iraqi government was eclipsed by violent resistance and by administrative scandals. The 9/11 Commission hearings uncovered “missed opportunities” in intelligence and repudiated the two principal reasons for the invasion of Iraq. Slow job growth, rising prices for energy and health care, and fears over outsourcing dragged the president's approval ratings to new lows. Senator John Kerry emerged from a large group of Democrats to become the party's putative nominee, and both he and the president wasted little time in attacking each other. Government revenues continued to be anemic, but there were signs the worst of the state government fiscal crisis had passed. Washington enacted the first-ever prescription-drug benefit for Medicare recipients and continued to ignore the worsening federal debt. State governments produced innovative as well as controversial policies including importation of medicines in defiance of the U.S. Food and Drug Administration and the legalization of same-sex marriages in Massachusetts. California elected a movie star in a gubernatorial recall election. U.S. Supreme Court rulings were less solicitous of state government concerns than in recent years. Intra-party feuding among Republicans who controlled all three branches of the national government led more often to a “divided” government than to a unified majority. With less than six months to the 2004 presidential election, the general public as well as political leaders formed two warring camps, and the principles of federalism were endangered by ideologically driven politics.
Krane, Dale, "The State of American Federalism, 2003-2004: Polarized Politics and Federalist Principles" (2004). Public Administration Faculty Publications. 57.