CHAPTER 3 FEDERALISM

Federalism

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.

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)

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 104th and 105th Republican Congress- $ back to states

Types of Grants

Project Grants Money states apply for by submitting specific project

requestsFormula Grants

Money given to states according to a mathematical formula

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

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

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

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

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

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, 104th and 105th Congress Unfunded Mandates Reform Act of 1995 restricted future

unfunded mandates