The balance of power between state and federal governments in the US has shifted over time, with the federal government gaining more power. The New Federalism was proposed to restore power to the states. The federal government’s involvement in issues beyond its original scope has led to the development of block grants. The debate over the balance of power is ongoing, but states cannot expand their power in the same way as the federal government.
In the United States, the balance of power between state and national, or federal, governments has changed since the founding of the Republic, with the federal government generally gaining more and more power as the power of the states has remained static or, from time to time , time, decreased. The New Federalism was the response proposed by many to try to restore power to the states, which they considered usurped. During the latter half of the 20th century, there was real concern that the power and influence of the federal government in the lives of average Americans too largely overshadowed that of the states. Thus, a debate ensued between the American political class and the intelligentsia about how to restore the states to their positions as equals in their partnership with the federal government. These discussions about how to restore the old federalism described a new vision called New Federalism.
When the American nation was founded in the 18th century, the scope and authority of central government was limited to matters of truly national scope and was consistent with the idea that the purpose of government was to do what the people themselves they could not . For average Americans, the government sat in the state capital and the concept of federalism was observed, i.e. the nation was a federation of sovereign states, each of which operated slightly differently from the others, with their own laws and customs. The federal government in Washington, D.C. handled foreign affairs, interstate commerce, and other matters that transcended state-level concerns. One of the hallmarks of federalism is the existence of a separate penal code in each state.
As the nation grew and the nature of American society became more complex, the federal government became involved in more issues that may have been beyond the imagination or intent of the nation’s founders. With the passage of the Fourteenth Amendment in 1868, the power of the states was significantly diminished relative to the power of the national government, because it was interpreted as an obligation on the states to observe the Bill of Rights, which is seen as a significant decrease in the power of states.
The economy moved from regional to national to international, and transformed from agricultural to industrial, and it became clear that while actors needed to be regulated, states were ill-equipped to do so. The federal government again expanded its power as it passed legislation in the first half of the 20th century, some aimed at curbing the financial excesses that led to the Great Depression, and at other times aimed at providing financial security for the nation’s seniors. The accretion of more power to the federal government increased over the course of the 20th century as the idea took firm hold that government could cure all ills – political, social, and economic. The new federalism anticipated the state governments that would benefit from that idea.
In the second half of the 20th century, the federal government developed a habit of categorically giving money to states, often with requirements that the funds be matched to state funds and always with extremely specific instructions about how the funds were to be spent. One of the most visible and successful developments to emerge from the New Federalism debate has been block grants; that is, instead of strictly controlling how grant money was spent, the federal government would send grant funds to states with only very broad and flexible guidelines on how they should be spent, thus giving states the ability to adjust programs to their own needs instead of forcing them to adopt a one-size-fits-all program imposed by Washington. While the first block grants were developed and awarded during the 1920s, during the administration of President Lyndon B. Johnson, Presidents Richard Nixon and Ronald Reagan used them much more widely, as a way to eliminate scores of block grants.
It is likely that as the debate continues over just how much power the federal government should have, the new federalism – in one form or another – will continue to be part of that debate. One of the problems inherent in the concept of new federalism, however, is that states’ power cannot expand like that of the federal government, through dominance in foreign affairs, regulation of trade, or regulation of financial affairs.
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