Important stuff
• Can you turn in the old book?
• Federalism test on Thursday October 15-Federalism
Notes and Cards due that day
• Review session I-Tuesday October 13 at 2:40 p.m. in
Room 3
• Review session II-Wednesday October 14 in class
• Former member of Congress Newt Gingrich has
volunteered to be Speaker of the House-why? Could
this happen? What’s going on in Washington?
• A video…
So, does the Congress have the power
to provide health care?
Grants-in-Aid
• Money given to states
• Allows state to use the federal revenue
generating power without political costs
• What’s not to love?
Tombigbee Dam
Some university that isn’t Carolina…
Change in purpose
• In the 1960’s the purposes of federal grantsin-aid change: based less on what states were
demanding and more on what federal officials
perceived to be national needs (urban poor,
combat crime, reduce pollution, etc.)
• Has led to great dependence on federal aid
Intergovernmental Lobbies
• Not national organizations
• State and local officials for particular state or
city
• Purpose: Obtain more federal money with less
strings attached
Over the last five years, local governments in Texas have
shelled out $17 million for lobbying the United States
government.
States receiving the most federal
funding per tax dollar paid:
•
1. New Mexico: $2.63
2. West Virginia: $2.57
3. Mississippi: $2.47
4. District of Columbia: $2.41
5. Hawaii: $2.38
6. Alabama: $2.03
7. Alaska: $1.93
8. Montana: $1.92
9. South Carolina: $1.92
10. Maine: $1.78
Categorical grants
• A grant for a specific purposes defined by
federal law (Build an airport, college
dormitory)
• Usually require some amount of “matching’
grant from the state or locality
• A problem-could be so specific as to make it
hard to adapt federal funding to local needs
• A response to this problem was…
Block Grants
• Combine several categorical or project grant
programs into a single block grant devoted to
a general purpose and with fewer restrictions
• Community Development Block Grants
• Even block grants not as loose as…
Revenue Sharing
• Started 1972 (State and Local Fiscal Assistance
Act)
• Federal government gives funds to states and
locality with no matching requirement as to
matching g funds and freedom to spend the
money on any governmental purpose
• So, did all this stuff get lots of money with no
strings to state and local governments…
WELL…THE BLOCK GRANT IDEA DID
NOT GROW AS MUCH AS
EXPECTED-FOR TWO REASONS…
First-Congressional reluctance
• The amount of money did not grow as much as
some hoped and not as much as categorical
grants-why?
– “Strings” increased-more categorical, less block
• What accounts for “strings”—well, categorical
grants are supported by Congress and federal
bureaucracy because of increased federal control
over the money’s use
• So, whenever Congress wanted to address the
problem their default was categorical because
that means they decide how it would be spent.
And in the face of the “federal” default-it is hard for
state and locals to make a good case for block grants
• Because block grants and revenue sharing cover such a
broad range of activities no single interest group has a
vital interest in pressing for their enlargement
– Example-revenue sharing provides some of the budget for
lots of different agencies, but not the whole budget for any
one-so expansion of revenue sharing not life an death for
anyone
• By contrast categorical grants are life and death for
various agencies (ex. Highway department)
– Categorical grants are overseen by special committees of
Congress-who have an interest in saying them expand
Rivalry among states--Snowbelt v.
Sunbelt
• Formulas can be written into federal laws by
which block grants are allocated
– A slight change in formula can result in shift of
millions of dollars from frost to sun
• With the advent of grants based on formulas
(as opposed to a project) there is more
importance on the census-lose people lose
money
• Struggle over allocation formulas-slight
changes result in big dollar implications
• Some make sense-some don’t-the new
York/Grand Rapids public transportation mass
transit grant for example
Federal Aid and Federal Control
• So, too much federal control?
• Increased block and revenue sharing over the
past decades? No, categorical grants
continued to grow (why?)
• How else does the federal government control
states?
• 2 ways-
(1) Mandates
• Federal government directly orders the state
government to take specific actions
• Some related to money they take
• Some not
– Most of these concern civil rights (may not
discriminate) or
– the environment (clean air, water, etc.)
Form of mandates
• Often regulatory-and
– Some expand previous legislation (1982 Voting
Rights Amendments)
– Some deal with new areas (1986 Handicapped
children’s Act)
– Some are easy to understand (Ocean Dumping
Ban)
– Some are harder to interpret/administer
(Americans With Disabilities Act)
Other ways to mandate costs on states
• Federal Tax or regulatory policies that limit the
way states raise revenue, borrow funds, or
privatize public functions
• Federal Courts
– State prison plan, desegregation plans, etc.
– Actions under the civil rights acts
(2) Conditions of Aid
• Theoretically voluntary (if you don’t want the strings
don’t take the money)
– If you build something with federal money you must
conduct an EIS, pay the workers “prevailing wage”, etc.
• So, in the 60’s it seemed like free money
• What happens is that the laws federal officials pass are
intended to address national constituencies-they end
up leaving states and localities to manage the problems
• Notice both sides trying to address different
constituencies, address problems, and pass the costs
on to the other side
Reagan Revolution
• Attempt to change categorical grants to block
grants-less money and less strings
• Was it wholly successful?
– Congress went along to some extent
– In the 80’s state and local governments did more
with less (aided by economic groth)
– Then…
Devolution Revolution
• Let’s shift things back to the states! Give states
federal functions
• Clinton “era of big government is over”
• Welfare– AFDC
– Clinton-Personal Responsibility and Work
Opportunity Act ended federal guarantee of support
– Turned management of program over to the states
aided by federal block grants
“Welfare” and Medicaid
• 2 biggest grant-in-aid programs
– Not originally created as block grant programs
– Both were operated as entitlement programs-each
state entitled to money based on how much it
spent to help the targeted group
– Each state determined the levels of benefits they
wanted to give out (within a framework of federal
law and regulation)
So what happened to “welfare” and
health care in the Devolution Era
• AFDC ended
• Replaced by block grant program Temporary
Assistance for Needy Families (TANF)
• Medicaid and other larger programs NOT
turned into a block grant programs
• State and federal spending on grants
increased
• TANF the exception that proves the rule (no
widespread movement to blocks)
Effects of “Devolution”
• More, not fewer, government regulations
(because states are now in the game too)
• Where it did occur (welfare)—consequences
– Welfare rolls decrease (why?)
– Lots of local governments are implementing
welfare programs through “for profits” and
“nonprofits”
What’s driving devolution
• Ideology of elites
• Realities of deficit politics
• Views of citizens
Congress and Federalism
• Members of Congress don’t always represent
states-they often represent interests in states-and
different interests like different mixes of
federalism
• Party controls on these individual assessments of
interests have eroded-so a large number of
different perspectives are represented
• Ideologically we differ on which level of
government is most effective in addressing an
issue
Let’s play…
Your job (whether or not you choose to accept it…)
• Find someone from the other side
• Shake hands and agree to bargain in good faith for “the
sake of the children”
• Reach an agreement regarding the manner in which the
United Sates government should provide assistance to
states for education…You can include whatever makes
sense to you both, including , but not limited to:
–
–
–
–
–
Categorical grants
Block grants
Mandates
Conditions of Aid
Others?
• You must memorialize you agreement in a Memorandum of
Understanding signed by both sides.
• Good luck!