Important stuff

• Can you turn in the old book?• Federalism test on Thursday October 15-Federalism

Notes and Cards due that day• Review session I-Tuesday October 13 at 2:40 p.m. in

Room 3• Review session II-Wednesday October 14 in class• Former member of Congress Newt Gingrich has

volunteered to be Speaker of the House-why? Could this happen? What’s going on in Washington?

• A video…

So, does the Congress have the power to provide health care?

Grants-in-Aid

• Money given to states• Allows state to use the federal revenue

generating power without political costs• What’s not to love?

Tombigbee Dam

Some university that isn’t Carolina…

Change in purpose

• In the 1960’s the purposes of federal grants-in-aid change: based less on what states were demanding and more on what federal officials perceived to be national needs (urban poor, combat crime, reduce pollution, etc.)

• Has led to great dependence on federal aid

Intergovernmental Lobbies

• Not national organizations• State and local officials for particular state or

city• Purpose: Obtain more federal money with less

strings attached

Over the last five years, local governments in Texas have shelled out $17 million for lobbying the United States government.

States receiving the most federal funding per tax dollar paid:

• 1. New Mexico: $2.632. West Virginia: $2.573. Mississippi: $2.474. District of Columbia: $2.415. Hawaii: $2.386. Alabama: $2.037. Alaska: $1.938. Montana: $1.92 9. South Carolina: $1.9210. Maine: $1.78

Categorical grants

• A grant for a specific purposes defined by federal law (Build an airport, college dormitory)

• Usually require some amount of “matching’ grant from the state or locality

• A problem-could be so specific as to make it hard to adapt federal funding to local needs

• A response to this problem was…

Block Grants

• Combine several categorical or project grant programs into a single block grant devoted to a general purpose and with fewer restrictions

• Community Development Block Grants• Even block grants not as loose as…

Revenue Sharing

• Started 1972 (State and Local Fiscal Assistance Act)

• Federal government gives funds to states and locality with no matching requirement as to matching g funds and freedom to spend the money on any governmental purpose

• So, did all this stuff get lots of money with no strings to state and local governments…

WELL…THE BLOCK GRANT IDEA DID NOT GROW AS MUCH AS EXPECTED-FOR TWO REASONS…

First-Congressional reluctance• The amount of money did not grow as much as

some hoped and not as much as categorical grants-why?– “Strings” increased-more categorical, less block

• What accounts for “strings”—well, categorical grants are supported by Congress and federal bureaucracy because of increased federal control over the money’s use

• So, whenever Congress wanted to address the problem their default was categorical because that means they decide how it would be spent.

And in the face of the “federal” default-it is hard for state and locals to make a good case for block grants

• Because block grants and revenue sharing cover such a broad range of activities no single interest group has a vital interest in pressing for their enlargement– Example-revenue sharing provides some of the budget for

lots of different agencies, but not the whole budget for any one-so expansion of revenue sharing not life an death for anyone

• By contrast categorical grants are life and death for various agencies (ex. Highway department)– Categorical grants are overseen by special committees of

Congress-who have an interest in saying them expand

Rivalry among states--Snowbelt v. Sunbelt

• Formulas can be written into federal laws by which block grants are allocated– A slight change in formula can result in shift of

millions of dollars from frost to sun• With the advent of grants based on formulas

(as opposed to a project) there is more importance on the census-lose people lose money

• Struggle over allocation formulas-slight changes result in big dollar implications

• Some make sense-some don’t-the new York/Grand Rapids public transportation mass transit grant for example

Federal Aid and Federal Control

• So, too much federal control?• Increased block and revenue sharing over the

past decades? No, categorical grants continued to grow (why?)

• How else does the federal government control states?

• 2 ways-

(1) Mandates

• Federal government directly orders the state government to take specific actions

• Some related to money they take• Some not– Most of these concern civil rights (may not

discriminate) or – the environment (clean air, water, etc.)

Form of mandates

• Often regulatory-and – Some expand previous legislation (1982 Voting

Rights Amendments)– Some deal with new areas (1986 Handicapped

children’s Act)– Some are easy to understand (Ocean Dumping

Ban)– Some are harder to interpret/administer

(Americans With Disabilities Act)

Other ways to mandate costs on states

• Federal Tax or regulatory policies that limit the way states raise revenue, borrow funds, or privatize public functions

• Federal Courts– State prison plan, desegregation plans, etc.– Actions under the civil rights acts

(2) Conditions of Aid• Theoretically voluntary (if you don’t want the strings don’t

take the money)– If you build something with federal money you must conduct an

EIS, pay the workers “prevailing wage”, etc.• So, in the 60’s it seemed like free money• What happens is that the laws federal officials pass are

intended to address national constituencies-they end up leaving states and localities to manage the problems

• Notice both sides trying to address different constituencies, address problems, and pass the costs on to the other side

Reagan Revolution

• Attempt to change categorical grants to block grants-less money and less strings

• Was it wholly successful?– Congress went along to some extent– In the 80’s state and local governments did more

with less (aided by economic groth)– Then…

Devolution Revolution

• Let’s shift things back to the states! Give states federal functions

• Clinton “era of big government is over”• Welfare-– AFDC– Clinton-Personal Responsibility and Work

Opportunity Act ended federal guarantee of support– Turned management of program over to the states

aided by federal block grants

“Welfare” and Medicaid

• 2 biggest grant-in-aid programs– Not originally created as block grant programs– Both were operated as entitlement programs-each

state entitled to money based on how much it spent to help the targeted group

– Each state determined the levels of benefits they wanted to give out (within a framework of federal law and regulation)

So what happened to “welfare” and health care in the Devolution Era

• AFDC ended• Replaced by block grant program Temporary

Assistance for Needy Families (TANF)• Medicaid and other larger programs NOT turned

into a block grant programs• State and federal spending on grants increased• TANF the exception that proves the rule (no

widespread movement to blocks)

Effects of “Devolution”

• More, not fewer, government regulations (because states are now in the game too)

• Where it did occur (welfare)—consequences– Welfare rolls decrease (why?)– Lots of local governments are implementing

welfare programs through “for profits” and “nonprofits”

What’s driving devolution

• Ideology of elites• Realities of deficit politics• Views of citizens

Congress and Federalism

• Members of Congress don’t always represent states-they often represent interests in states-and different interests like different mixes of federalism

• Party controls on these individual assessments of interests have eroded-so a large number of different perspectives are represented

• Ideologically we differ on which level of government is most effective in addressing an issue

Let’s play…

Your job (whether or not you choose to accept it…)• Find someone from the other side• Shake hands and agree to bargain in good faith for “the sake of the

children”• Reach an agreement regarding the manner in which the United Sates

government should provide assistance to states for education…You can include whatever makes sense to you both, including , but not limited to:– Categorical grants– Block grants– Mandates– Conditions of Aid– Others?

• You must memorialize you agreement in a Memorandum of Understanding signed by both sides.

• Good luck!