Politics of Federalism & Federal Grants

Types of Grants• Categorical-Formula - Congress appropriates funds for

specific purposes such as school lunches or for building highways

– Subject to detailed federal conditions

• Project - Congress appropriates a certain sum, which is allocated to state and local units and sometimes to nongovt. agencies, based on applications from those who wish to participate

• Block - broad grants to states for prescribed activities—welfare, child care, education, social services, preventive health care, and health services—with only a few strings attached

Types of Federal Grants

• In 1996 there was a shift from Categorical Grants to Block Grants

Purposes of Federal Grants to State and Local Governments

The Changing Purpose of

Federal Grants to State and

Local Governments

Budget of the U.S. Government, Fiscal Year 2005, table 12.2.

Federal Grants to State and Local Governments, 1984-2004

Budget of the U.S. Government, Fiscal Year 2002, Historical Tables, table 6.1, and Budget of the U.S. Government, Fiscal Year 2005, table 12.1.

Federal Aid and Federal Control

• Conditions of aid – tell state governments what they must do if they wish to receive grant money

• Unfunded mandates – programs that the federal govt. requires states to implement w/out federal funding– Ex.) NCLB, Americans w/ Disabilities Act

The Devolution Revolution

• Devolution initiatives returned program management of things like welfare to the states, with some federal guidelines

• Devolution proponents harbor a deep-seated ideological mistrust of the federal government and believe that state governments are more responsive to the people

The Politics of Federal Grants: Devolution

The Republican “Contract with America” called for devolution-- the transfer of political and economic power to the states

The Politics of Federal Grants: Devolution

Positives and Negatives of Federalism

• Negative view: Federalism blocks progress and protects powerful local interests

• Positive view: Federalism contributes to governmental strength, political flexibility, and fosters individual liberty– Federalist #10: small political units allow

all relevant interests (factions) to be heard

– Federalism increases political activity

The Growth of Big Government

Why has the power of the national

government grown over the last two centuries?

The Future of Federalism

The persistence of international terrorism, the war in Afghanistan

and Iraq, and rising deficits all ensure a

substantial role for the national government in

the years to come