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The New Federalism

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One of the ways New Federalism tried to restore power to the states was by implementing the use of block grants to states. Unlike specifically targeted categorical grants, where the federal government tells states precisely how and where to spend funds, block grants give states more flexibility. Block grants are meant to be spent on some general area, such as education or transportation, but states are relatively free to spend the money as they wish within that broad parameter.

President Nixon proposed consolidating 129 different categorical grants into six block grants. Congress stymied this initial proposal but did begin to create some new block grants. President Ronald Reagan (1981–1989) had more success. At his urging, Congress consolidated 77 categorical grants into nine block grants in 1981. The move may have given more flexibility to the states in terms of how to spend the money, but states ended up with less money to spend as a result of the consolidation. Another expansion of block grants took place in 1996 when Democrat Bill Clinton (1993–2001) held the White House and Republicans controlled Congress.46

In his 1996 State of the Union Address, President Clinton famously stated, “The era of big government is over.” He added, however, that “we cannot go back to the time when citizens were left to fend for themselves.” Instead, he envisioned a leaner federal government working in partnership with state and local governments, as well as with religious, charitable, and civic associations.47 Toward this end, Clinton and the Republican Congress limited the ability of the federal government to impose unfunded mandates on states, reformed the federal welfare system, and abolished federally imposed speed limits.

Appointments to the Supreme Court by Republican presidents starting with Nixon also had an effect on Supreme Court rulings dealing with federalism. In 1995, for the first time since 1936, the Court struck down a piece of legislation on the grounds that Congress had exceeded its commerce clause power. In U.S. v. Lopez, a 5–4 majority invalidated the Gun Free School Zones Act of 1990, in which Congress banned guns from “school zones”: the grounds of a public, parochial, or private elementary or secondary school and the area within 1,000 feet of those grounds. Congress used its commerce clause power to do this; specifically, it prohibited any firearm in these zones “that has moved in or affects interstate or foreign commerce.” The Court majority, however, concluded that regulating guns fell under states’ police powers. Several subsequent rulings have extended this shift back toward states’ rights—a trend that is likely to continue as a result of President Donald Trump’s appointments to the Supreme Court.

American Democracy in Context

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