Power Shifts In Intergovernmental Relations: A Result Of Fiscal Feder

Power Shifts in Intergovernmental Relations: A Result of Fiscal Federalism

Fiscal federalism is the result of the states' dependence on the national government for funds. Until 1913, the national government had minimal monetary resources, thus possessing little control over the affairs of the states. Once effected, the Sixteenth Amendment resulted in the amassing of government funds on the national level. This reserve of money enabled the national government to initiate a multitude of national programs--such as the interstate highway--as well as provide grants to the states. It is primarily through these grants that the national government can exert influence over state affairs; for, by designating restrictions in the distribution of these grants, the national government can compel states and localities to make or alter policies and legislation in accordance with its agenda. The manner in which the national government has wielded the influence of money throughout the history of the nation has continually altered intergovernmental relations. Since the

Depression, fiscal federalism has caused the national government to dominate the states; recently, however, reforms have begun to return power to the states.

Policies and precedents of the New Deal centralized power in the national government. To remedy the devastation of the Great Depression, it assumed a more direct and prevalent role in the lives of the people. Con...