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Federalism Politics of Modern Federalism. Federalism Federal Grants-in-aid (Money changes everything!) Grants show how political realities modify legal.

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Presentation on theme: "Federalism Politics of Modern Federalism. Federalism Federal Grants-in-aid (Money changes everything!) Grants show how political realities modify legal."— Presentation transcript:

1 Federalism Politics of Modern Federalism

2 Federalism Federal Grants-in-aid (Money changes everything!) Grants show how political realities modify legal authority. (Money changes everything!) A way for the federal government to get money into state hands without violating the Constitution. Politics of Modern Federalism

3 Federalism Federal Grants-in-aid cashFederal cash grants became popular in the early 20 th Century, made possible by: Federal budget surpluses resulting from tariffs. Federal income tax increased revenues Federal control of money supply (Federal Reserve could print money.) Politics of Modern Federalism

4 Federalism Federal Grants-in-aid Grant-in-aid system is popular with state & local governments: they dont have to tax. For a state official, federal money is like free money. Whats not to like? Politics of Modern Federalism

5 Federalism Federal Grants-in-aid: Problem #1 It is politically difficult for the federal government to spend money in one state without spending money in all states. Elected officials support each others programs. When money goes to one state, it usually goes to other states. Politics of Modern Federalism

6 Federalism Federal Grants-in-aid: Problem #2 Beginning in 1960s, federal money started to come with strings attached. Federal grants were targeted at national programs rather than state needs. Politics of Modern Federalism

7 Federalism The Changing Purpose of Federal Grants to State and Local Governments

8 Federalism Federal Grants-in-aid Politics of Modern Federalism Categorical Grants categorical grantsMost federal aid is distributed to states in form of categorical grants specific purpose.Can only be used for a specific purpose. Examples: building new airport, crime-fighting in certain areas, natural disaster relief. Block Grants more general purposesBlock grants: federal grants given for more general purposes, broad policy areas Welfare, public health, community development, education States prefer block grants; designed to allow state to spend money as it sees fit

9 Federalism Federal aid = federal control Politics of Modern Federalism Conditions of Aid Tell state governments what they must do if they wish to receive grant money. Strings attachedStrings attached Example: To receive federal highway funds, states must raise their drinking age to 21. Mandates Federal rules that states or localities must obey. Generally have little or nothing to do with federal aid. unfunded mandateStates must comply with mandates, even if they have to spend their own money (unfunded mandate).

10 Federalism Federal aid = federal control Politics of Modern Federalism Mandates Most federal mandates concern the environment and civil rights. Examples: school bussing to achieve desegregation unfundedmandatesMost unfunded mandates have concerned the environment. Example: Safe Drinking Water Act (1996)

11 Federalism No Child Left Behind Act (2002 ) Requires states to regularly test students and show improvement in test scores or face a reduction in federal funding. Considered by some to be the most intrusive federal law on how schools operate. Proponents: national testing standards needed to improve American schools. 10% of school funding comes from federal government. conditions-of-aidSchools must meet NCLB requirements to receive federal funding (conditions-of-aid). mandateNCLB is a mandate.

12 Federalism

13 Federalism DEVOLUTION: Beginning in the 1980s, many political leaders worked to return authority to state governments. 1980s: President Ronald Reagan supported returning power to the states Believed the national government was too big and too intrusive in peoples lives. Believed states were better at providing services. Cut federal grants and relaxed spending rules states had to follow.

14 Federalism Contract with America1994 elections: Contract with AmericaRepublican campaign promise to achieve specific goals devolutionCentral idea: devolutionreturning power to states Reduce size and power of national government by eliminating costly federal programs. Devolution The Devolution Revolution Newt Gingrich Speaker of the House

15 Federalism Federal and state spending on most programs increased after Public support for devolution was not strong. Most people favor shifting responsibility to the states, but not if it means cutting programs they value. Resulted in more, not fewer, government rules and regulations. Debriefing on Devolution

16 Federalism Do grant programs enable Congress to do what it pleases by bribing states into compliance? Or do these programs merely increase the likelihood of national policy uniformity? Is that good or bad? What would be the consequence if a state refused federal grant money? Does the system of grants-in-aid upset the balance of federalism designed by the Framers? For discussion

17 Federalism 1.Why do states like federal grants? 2.What is the difference between a block grant and a categorical grant? Give an example (real or hypothetical). 3.What is a condition-of-aid? Give an example (real or hypothetical). 4.What is a federal mandate? 5.What do states not like about federal mandates? 6.What is an unfunded mandate? For review


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