IV.                Federal-State Relations

1.       The national gov’t is supreme, but Congressmen selected from the states must pass its laws.

2.       The best illustration of how political realities may affect legal authority can be found in federal grants-in-aid, where the national gov’t granted land or money to various people or places for helpful use.

                                                               i.      At first, cash grants weren’t plentiful, as they were usually devoted to helping state militias or such, but in the 20^th century, these exploded, and today, housing aid fro low-income families, Medicaid, highway construction, services to the unemployed, and welfare programs for single mothers and for the disabled take up a huge chunk of grants-in-aid.

                                                             ii.      While states wanted money, Congress couldn’t simply give cash to them without reason or Constitutional authorization; the solution was for Congress to give money to state (pay the bills) and for states to do what they needed to do (run the exercises).

                                                            iii.      Reasons for states’ turning to Washington for $$$: (1) There was a lot of it (in the 1800s, there were lots of surpluses); (2) The federal government had an income tax that could generate revenue; (3) The federal gov’t could print more cash whenever it needed it and only had to borrow from itself; (4) Politics—federal money seemed to be “free” money for states.

                                                            iv.      On the other hand, if Washington sends money to one state or congressional district, it will have to send money to all others as well, since it “wouldn’t be fair” for just one state to get the cash while others have nothing.

3.       In the 1960s and beyond, though, the national gov’t began giving money not according to states’ needs, but to what it thought would be best for national needs.

                                                               i.      Unfortunately, some states and cities became dependent on national financial aid.

                                                             ii.      To fix this, intergovernmental lobbies have been set up to seek national aid for cities & states.

a.       For a while, cities and states did get more money but by the 1980s, federal grants had stopped growing.

4.       To get more money, lobbyists wanted federal aid moved from categorical grants, or one with a specific purpose, to revenue sharing, where a set amount of money could be distributed to anything (funds didn’t have to match in subject) or to block grants.

                                                               i.      Block grants were basically categorical grants jumbled together to form one large, broad grant to which cities could easily adapt their funds to support; only five were enacted—among them was one devoted to cities, another to law enforcement, and a third to the unemployed.

                                                             ii.      In theory, block grants and revenue sharing were supposed to give states total freedom to do what they wanted with money, but in reality, the money did not become as readily available as states hoped and the federal gov’t actually increased restrictions on this “unrestricted” money.