1. CHAPTER 3 FEDERALISM Federalism

2. Fiscal Federalism National Government’s patterns of spending, taxation and providing grants to influence state and local governments. Uses fiscal policy to influence the states through granting or withholding money to pay for programs.

3. What are federal grants? Federal revenue given to state and local governments to establish minimum national standards in important areas (urban development, education, transportation, water quality) Purpose:  Equalize resources among states  Attack national problems but minimize the growth of federal agencies  (growth of federal bureaucracy lower and states run programs)

4. Types of grants Categorical:  Congress appropriates & for specific purposes (roads, airports, housing)  States do not have to accept these but if they do they must comply with federal standards  Lessens power of state governments and legislatures Block grants:  Supports a collection of general programs  More state leeway- few restrictions  104 th and 105 th Republican Congress- $ back to states

5. Types of Grants Project Grants  Money states apply for by submitting specific project requests Formula Grants  Money given to states according to a mathematical formula

6. Dems vs. Reps. Democrats- favor more funding but with more strings  Categorical Grants- appropriated for a specific purpose  Lots of strings  States usually have to match the $  Medicaid and AFDC account for 85% of total funding  States say they are too narrow and can’t be adapted to local needs Republicans- favor less funding but with fewer strings  Block Grants- broad activities  1980s Pres. Regan consolidated categorical to block (New Fed)  Congress has less control over how money is used  Reps can’t take credit to districts  State governors usually support block grants b/c they have more control

7. Regulatory Federalism $ comes with regulation and compliance with federal mandates  Regulations: minimum wage, speed limits, handicap accessibility  Congress can pass mandates and force standards  Congress has forced state governments to meet certain federal guidelines- regulatory federalism Mandates are rules states must comply with  Usually deal with $ but sometimes do not deal with aid  Most apply to civil rights and environmental protection

8. Mandates Examples:  Americans with Disabilities Act (states don’t like it b/c of costs to remodel)  Clean Air, Clean Water etc.  Individuals with Disabilities Education Act Purpose:  Meet a goal of the federal government Impact on states:  Financial Burdon  Unfunded Mandates  Federal imposing on powers  Federal blackmail  Altering nature of federalism with excessive power

9. Unfunded Mandates Direct Orders- states must act/penalties  Congress vs. constitutional rights of the states Cross-cutting requirements- conditions on one grant extended to all federally supported activities  Follow Civil Rights Act or lose all federal $ Cross-over sanctions- federal $ in one program to influence state policy in another  Must comply or lose funds in another program entirely separate Partial Preemption- federal law establishes basic policies but states must administer them without federal funds Total preemption: supremacy clause and commerce clause  Sometimes states do not have to participate but then the national government will run the program anyway

10. Courts McCulloch v. Maryland (1819)  John Marshall  Implied national power and national supremacy  Support for nationalism  Need for flexible interpretation of the Constitution so it would endure  Bank was necessary and proper  “Power to tax involves the power to destroy”  States not free to destroy the national government- establishment of national supremacy

11. Federal Courts Supreme Court generally favors federal government over the states Devolution Revolution  Power back to the states  Republican 1994 Congress  Scale back size and scope of national government  Focused on welfare system Result in $ to states  Associated with Nixon, Reagan, 104 th and 105 th Congress  Unfunded Mandates Reform Act of 1995 restricted future unfunded mandates