Mr. Plude Chapter 4 Section 3

A Need for National Power

Fiscal Federalism Fiscal – Government Revenue The use of funding to increase national power 9/11 results in increased national power States need for money increased to improve security Funding was required to meet national mandates

Fiscal Federalism Roots in Confederation Fiscal federalism: power of national government to influence state policies within context of spending, taxing, and providing aid in federal system Begins with Land Ordinance of 1785, took shape during 1900s National government gave land to states for establishing schools

Morrill Act

Fiscal Federalism Latest Trend 20th century: power of national government expanded with increased use of grants-in-aid Includes money, other resources national government provides to pay for state and local activities Examples: Low-income housing, community arts programs, energy assistance, disaster preparedness

Types of Grants and Mandates Categorical Grants Most used Grant to supply aid Specific use only Examples: building new airport, crime-fighting in certain areas Used to provide money to areas affected by natural disaster

Types of Grants and Mandates Block Grants Block grants: national grants given for more general purposes States have greater discretion in how money spent Examples: Welfare, public health, community development, education

Grants and Mandates 1980s, President Reagan increased block grants to increase State power Effectively decreasing National government power & influence

Types of Grants and Mandates Federal Mandates National government often distributes money with strings attached. Mandating (requiring) how money is to be used

Examples of Mandates Civil Rights - School busing, desegregation, affirmative action Environmental regulations - Clean Air Act of 1970: national mandate requiring states to meet national air-quality levels Grant money made available to states to meet Clean Air Act & reduce pollution Not meeting standards results in lost federal funding

Issues in Federalism Today Poverty 1996: Congress passed welfare reform law - gave states authority to manage own systems Results - number of people on welfare has decreased Some credit narrowing of eligibility requirements ? decrease represents strong economy?

Issues in Federalism Today Environment Environmental protection considered responsibility of national government Congress has been asked to limit reach of EPA in favor of local efforts

Issues in Federalism Today Immigration National government handles policies, citizenship, border protection States with international borders have greater immigration-related responsibility education costs health and social services low-cost housing

Issues in Federalism Today Health Care Crisis Rising Costs State & National governments seeking solutions to rising costs Socialized Medicine or Free Market? Which level should take lead on issues—state or national?

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