Chapter 4 Section 3 Mr. Gordon

Federalism Today Fiscal federalism is a system in which the national government uses grants and mandates to influence state policy to achieve national ends. Grants-in-aid from the national government to the states have increased the influence of the national government. Today American federalism continues to evolve in the face of new issues.

Fiscal Federalism The beginning of the twenty-first century marked yet another shift in relations between the states and the nation. In the wake of the September 11, 2001, terrorist attacks, the need for increased national security led to an expansion in the powers of the government.

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

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 Low-income housing, community arts programs, energy assistance, disaster preparedness

Grants and Mandates Categorical Grants Most federal aid is distributed to states in form of categorical grants Can only use for specific purpose, such as building new airport, crime- fighting in certain areas Used to provide money to areas affected by natural disaster

Grants and Mandates Block Grants Block 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 In the 1980s, President Reagan used block grants in an attempt to decrease the size and influence of the national government.

Grants and Mandates Federal Mandates State and local governments are usually pleased to receive money from the national government, but the national government often distributes money with strings attached. Federal mandates: demands on states to carry out certain policies as a condition of receiving grant money Particularly important in enacting civil rights and environmental policies School busing, desegregation, affirmative action—results of federal mandates Environmental regulations come from national government as well Clean Air Act of 1970: national mandate requiring states to meet national air-quality levels In exchange for grant money, states required to create programs to reduce pollution or risk losing federal funding

Issues in Federalism Today New issues challenge American federalism. Political debates over how to best address key policy areas drive new changes in our federal system.

Issues in Federalism Today Poverty 1996: Congress passed welfare reform law, gave states authority to manage own systems Since reforms, number of people on welfare has decreased Some credit decrease to flexibility, creativity when handled by states Others say decrease represents strong economy, question whether states will be able to continue to meet needs of poor

Issues in Federalism Today Homeland Security Department of Homeland Security formed after 9/11 terrorist attacks Local and state governments worked alongside Homeland Security to respond to Hurricane Katrina In aftermath of storm, some question whether better leadership and cooperation between levels of government might have saved more lives

Issues in Federalism Today Environment Many reasons why efforts to protect environment seen as responsibility of national government Congress has been asked to limit reach of EPA in favor of local efforts Immigration National government handles policies, citizenship, border protection Several states have international borders and take immigration-related responsibility—education costs, health and social services, low-cost housing Health Care Americans turning to state, national governments for solutions to rising costs Some think U.S. may be on the verge of health care crisis Which level should take lead on issues—state or national?