Regarding murder and federal police powers:
Your explanation appears correct, but I'd want to understand the larger framework around the whole thing. Because, taking a step back and looking at the big picture, it is certainly true that the federal government does not have general police power. See, e.g.,
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In United States constitutional law, police power is the capacity of the states to regulate behavior and enforce order within their territory ... Under the 10th Amendment to the United States Constitution, the powers prohibited from or not delegated to the Federal Government are reserved to the states respectively, or to the people. ...
Because the Congress has limited powers granted in the Constitution, the Federal government does not have a general police power, as the states do. The exceptions are laws regarding Federal property and the military; the Federal government was also granted broad police powers by the Interstate Commerce Act of 1887.
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To start the discussion, do you believe that the collective taxes of one state should go to benefit another?
There are two ways that I can answer, depending on exactly what you mean.
If you're talking about the application of federal revenues, then I think it's OK for a given state's residents to pay more in taxes to the federal government then they get back in terms of services, etc. For example, we do like to have interstate highways spanning across those large, sparsely-populated states. This clearly demands a model for spending that doesn't necessary allocate spending in lockstep with revenues. Similarly, the federal need to secure borders demands that more federal money be spent in border states.
However, I fear you might instead mean that, in a more decentralized system, state revenues could be redirected to other states. For example, in the absence of significant federal aid for education, it's likely that not all states would be able to subsidize public education in the same way. I would not support any forced redistribution of taxes from one state to another for such purposes. Not only do I believe that it's morally wrong, but I think it also ruins the potential for those mini laboratories. For example, the Massachusetts attempts at healthcare reform were crappy examples for the federal government to follow because their success (inasmuch as they were successful, which they were not, but the politicians like to pretend that they were) depended significantly on the use of greater federal Medicaid funding, and thus the rest of the country has been underwriting Massachusetts plan.
There is no reason why federal legislation can not give leniency to the states.
It's certainly true that our legislators could patch NCLB to fix its most glaring failures. However, they almost certainly will not address the flawed premise on which the whole thing is founded. They virtually never say "we were wrong, let's undo this", they'll keep patching and duct-taping more to the side of it to shore it up. And this interferes with finding an approach that really is better.
fortunately this administration is putting into place several policies to fix the fundamental issues of why NCLB didn't succeed.
If you're referring to what I think you are (Obama granting waivers to states based on his own criteria) [2], what Obama is doing is almost certainly illegal. The Congress, and only the Congress, has the power to set the laws. In some cases the President may have some discretion, like he could instruct DOJ to stop prosecuting people for marijuana violations. But there's no question that the President does not have the authority to simply discard terms of the laws as Congress passed them, and insert his own.
I'll note that this is becoming habitual with him. He's been doing it for some time already with waivers for ObamaCare, and there's further talk of IRS rules re-writing part of the ObamaCare rules governing federally-created exchanges.
EDIT: and this is precisely the kind of usurpation of power that your "living document" philosophy permits, and I believe is necessary to stop. The government is leviathan. It grows and grows. You may think that an instance of such growth is good or advantageous, but that's fleeting, because a little ways down the road your opponent will have a chance at the reins, and morph those powers into something that will damage you.
[1] http://en.wikipedia.org/wiki/Police_power
[2] http://www.tnr.com/article/politics/93414/arne-duncan-obama-...