Over the years, the federal intergovernmental system of governance has been characterized by many scholars as becoming increasingly centralized and coercive, with the federal government using federal grants, federal mandates, and federal preemption of state authority to expand its influence in many policy areas previously viewed as being the traditional responsibility of state and local governments. In FY2019, the federal government is expected to provide state and local governments about $750 billion in federal grants encompassing a wide range of public policy areas, such as health care, transp ortation, income security, education, job training, social services, community development, and environmental protection. Federal grants account for just under one-third of total state government funding, and more than half of state government funding for health care and public assistance. Congress has a central role in determining the scope and nature of federal grant programs. In its legislative capacity, Congress first determines what it wants to accomplish and then decides whether a grant-in-aid program is the best means to achieve it. Congress then selects which of the six grant mechanisms to use (project categorical grant, formula categorical grant, formula-project categorical grant, open-end reimbursement categorical grant, block grant, or general revenue sharing), and crafts legislation to accomplish its purpose, incorporating the chosen grant instrument. As with all legislation generally, Congress oversees the grant's implementation to ensure that the federal administrating agency is held accountable for making certain that congressional expectations concerning program performance are met. Federalism scholars agree that congressional decisions concerning the scope and nature of the federal grants-in-aid system are influenced by both internal and external factors. Internal factors include congressional party leadership and congressional procedures; the decentralized nature of the committee system; the backgrounds, personalities, and ideological preferences of individual Members (especially those of party leaders and committee and subcommittee chairs and ranking minority Members); and the customs and traditions (norms) that govern congressional behavior. Major external factors include input provided by voter constituencies, organized interest groups (especially the National Governors Association, the National League of Cities, U.S. Conference of Mayors, and the National Association of Counties), the President, and executive branch officials. Although not directly involved in the legislative process, the Supreme Court, through its rulings on federalism issues, also influences congressional decisions concerning federal grant-in-aid programs. Overarching all of these factors is the evolving nature of cultural norms and expectations concerning government's role in American society. Over time, although the American public has become increasingly skeptical of government performance, they have also become increasingly accepting of government activism in domestic affairs generally, and of federal government activism in particular. Federalism scholars attribute this increased acceptance of, and sometimes demand for, government action as a reaction to the industrialization and urbanization of American society; technological innovations in communications, which have raised awareness of societal problems; and exponential growth in economic interdependencies brought about by an increasingly global economy. This report provides a historical synopsis of the evolving nature of the federal grants-in-aid system, focusing on the role Congress has played in defining the system's scope and nature. It begins with an overview of the contemporary federal grants-in-aid system and then examines its evolution over time, focusing on the internal and external factors that have influenced congressional decisions concerning the system's development. It concludes with an assessment of the scope and nature of the contemporary federal grants-in-aid system and raises several issues for congressional consideration, including possible ways to augment congressional capacity to provide effective oversight of this system. Different federal departments and agencies, including the U.S. Census Bureau, the Government Accountability Office (GAO), and the U.S. Office of Management and Budget (OMB), use different definitions to determine what counts as a federal grant-in-aid program. However, there is agreement on the general characteristics associated with each grant type. The three general types of federal grants to state and local governments are categorical grants, block grants, and general revenue sharing (see Table 1 ). Categorical grants can be used only for a specifically aided program and usually are limited to narrowly defined activities. Block grants can be used only for a specifically aided set of programs and usually are not limited to narrowly defined activities. General revenue sharing can be used for any purpose not expressly prohibited by federal or state law and is not limited to narrowly defined activities. The four types of categorical grants are project categorical grants, formula categorical grants, formula-project categorical grants, and open-end reimbursement categorical grants. Project categorical grants are awarded on a competitive basis through an application process specified by the federal agency making the grant. Formula categorical grants are allocated among recipients according to factors specified within enabling legislation or administrative regulations (e.g., population, median household income, per capita income, poverty, and number of miles driven). Formula-project categorical grants use a mixture of fund allocation means, typically involving the use of a formula specified within enabling legislation or administrative regulations to allocate available funds among the states, followed by an application process specified by each recipient state to allocate available funds on a competitive basis among local governments or other eligible applicants. Open-end reimbursement categorical grants, often regarded as the equivalent of formula categorical grants, provide a reimbursement of a specified proportion of recipient program costs, eliminating competition among recipients as well as the need for an allocation formula. Of the six grant types, project categorical grants typically impose the most restraint on recipients (see Table 1 ). Federal administrators have a high degree of control over who receives project categorical grants (recipients must apply to the appropriate federal agency for funding and compete against other potential recipients who also meet the program's specified eligibility criteria); recipients have relatively little discretion concerning aided activities (funds must be used for narrowly specified purposes); and there is a relatively high degree of federal administrative conditions attached to the grant, typically involving the imposition of federal standards for planning, project selection, fiscal management, administrative organization, and performance. General revenue sharing imposes the least restraint on recipients. Federal administrators have a low degree of discretion over who receives general revenue sharing (funding is allocated automatically to recipients by a formula or formulas specified in legislation); recipients have broad discretion concerning aided activities; and there is a relatively low degree of federal administrative conditions attached to the grant, typically involving periodic reporting criteria and the application of standard government accounting procedures. Block grants are at the midpoint in the continuum of recipient discretion. Federal administrators have a low degree of discretion over who receives block grants (after setting aside funding for administration and other specified activities, the remaining funds are typically allocated automatically to recipients by a formula or formulas specified in legislation); recipients have some discretion concerning aided activities (typically, funds can be used for a specified range of activities within a single functional area); and there is a moderate degree of federal administrative conditions attached to the grant, typically involving more than periodic reporting criteria and the application of standard government accounting procedures, but with fewer conditions attached to the grant than project categorical grants. As indicated in Table 2 , outlays for federal grants to state and local governments have generally increased over the years, with a relatively rapid increase from FY2008 through FY2010 due primarily to the enactment of P.L. 111-5 , the American Recovery and Reinvestment Act of 2009 (ARRA). ARRA provided state and local governments $274.7 billion in grants, contracts, and loans combined. State and local governments received $52.9 billion in ARRA grants, contracts, and loans in FY2009, $111.9 billion in FY2010, $68.8 billion in FY2011, $25.6 billion in FY2012, 11.8 billion in FY2013, and $1.6 billion in FY2014 to assist their recovery from the "Great Recession" (December 2007-June 2009). As expected, after reaching $608.4 billion in FY2010, outlays for federal grants to state and local governments declined somewhat in FY2011 as ARRA funding began to unwind, and then declined further to $544.6 billion in FY2012 and to $546.2 billion in FY2013 as most of ARRA's funding expired. Outlays for federal grants to state and local governments have increased since then, primarily due to increased outlays for Medicaid. As indicated in Table 2 and Figure 1 , in FY2019 health care is anticipated to account for more than half of total outlays for federal grants to state and local governments (an estimated $453.9 billion in FY2019, or 60.6% of the total), followed by income security ($114.2 billion, or 15.2%), education, training, employment, and social services ($67.5 billion, or 9.0%), transportation ($67.2 billion, or 9.0%), community and regional development ($21.9 billion, or 2.9%), and all other ($24.9 billion, or 3.3%). Medicaid, with $418.7 billion in expected federal outlays in FY2019, has, by far, the largest budget of any federal grant-in-aid program. Ten other federal grants to state and local governments are expected to have federal outlays in excess of $10 billion in FY2019: Federal-Aid Highways ($43.9 billion), Child Nutrition ($23.9 billion), Tenant Based Rental Assistance—Section 8 vouchers ($22.3 billion), the Children's Health Insurance Fund ($18.4 billion), Accelerating Achievement and Ensuring Equity (Education for the Disadvantaged—$17.4 billion), Temporary Assistance for Needy Families ($16.5 billion), Special Education ($13.2 billion), State Children and Families Services Programs ($10.9 billion), Urban Mass Transportation Grants ($10.3 billion), and the Disaster Relief Fund ($10.2 billion). Table 3 provides data on outlays for federal grants to state and local governments in nominal and constant (inflation-adjusted) dollars, as a percentage of total federal outlays and as a percentage of national gross domestic product (GDP) for selected fiscal years since FY1960. It also indicates the percentage of these outlays that are payments for individuals, as opposed to payments for capital improvements and government operations. As indicated in Table 3 , total outlays for federal grants to state and local governments have generally increased since the 1960s. However, the magnitude of those increases has varied over the years. For example, outlays for federal grants to state and local governments increased, in nominal dollars, 187.3% during the 1960s, 246.4% during the 1970s, 33.4% during the 1980s, 98.0% during the 1990s, and 98.6% during the first decade of the 2000s. Outlay growth for federal grants to state and local governments has, in most years, exceeded inflation. However, as indicated in Table 3 , those outlays, expressed in constant (FY2012) dollars, did not keep pace with inflation during the early 1980s and during the early 2010s. Federalism scholars have noted that since the 1980s, the focus of federal grants to state and local governments has shifted from providing assistance to places (e.g., to build public highways, support public education, criminal justice systems, economic development endeavors, and government administration) to people (e.g., providing health care benefits, social welfare income, housing assistance, and social services). Much of this shift is attributed to Medicaid, which has experienced relatively large outlay growth over the past several decades. As shown in Table 3 , during the 1960s and 1970s about one-third of total outlays for federal grants to state and local governments were for individuals, compared with more than 75% in FY2018. In the past, the now-defunct U.S. Advisory Commission on Intergovernmental Relations (ACIR) and OMB used information contained in the Catalog of Federal Domestic Assistance (CFDA) to count the number of federal grants to state and local governments. The CFDA "is a government-wide compendium of Federal programs, projects, services, and activities that provide assistance or benefits to the American public." It lists 15 categories of federal grants: formula grants (including formula categorical grants, formula-project categorical grants, and block grants); project grants; direct payments for specified uses to individuals and private firms; direct payments with unrestricted use to beneficiaries who meet federal eligibility requirements; direct loans; guaranteed/insured loans; insurance; sale, exchange, or donation of property and goods; use of property, facilities, and equipment; provision of specialized services; advisory services and counseling; dissemination of technical information; training; investigation of complaints; and federal employment. It lists all authorized federal grant programs, including grants that have not received an appropriation. Because the CFDA focuses on the needs of applicants, if a program uses a separate application or other delivery mechanism, the CFDA considers it a separate program. This complicates efforts to count federal grants to state and local governments. ACIR periodically published counts of funded federal grants to state and local governments during the 1960s and then for Fiscal Years 1975, 1978, 1981, 1984, 1987, 1989, 1991, 1993, and 1995. OMB provided counts of funded grants to state and local governments for FY1980-FY2003. Because they used a different methodology to determine which grant programs to include in their count, their results differed. OMB consistently identified fewer federal grants to state and local governments than ACIR. For example, in FY1995, OMB identified 608 funded federal grants to state and local governments compared to ACIR's count of 633. No authoritative count of funded federal grants to state and local governments is known to have been issued in recent years. ACIR included in its counts all direct cash grants to state or local governmental units, other public bodies established under state or local law, or their designee; payments for grants-in-kind, such as purchases of commodities distributed to state or local governmental institutions; payments to nongovernmental entities when such payments result in cash or in-kind services or products that are passed on to state or local governments; payments to state and local governments for research and development that is an integral part of their provision of services; and payments to regional commissions and organizations that are redistributed at the state or local level to provide public services. OMB counted only grants for traditional governmental operations, as defined in OMB Circular A-11. The definition covered only grants that "support State or local programs of government operations or provision of services to the public." It excluded federal grants that went directly to individuals, fellowships, most grants to nongovernmental entities, and technical research grants. A search of the CFDA's 2018 print edition and electronic version indicated that state governments, local governments, U.S. territories, and federally recognized tribal governments are eligible to apply for 1,616 federal grants (defined as authorized project grants, formula grants, cooperative agreements, direct payments for specified uses, and direct payments for unrestricted uses). Of these grants, 141 were not currently funded, 160 were research or fellowship programs that were not targeted solely at either public institutions of higher education or other public agencies, and 41 had broad eligibility extending beyond state and local governments. Removing them from the list left 1,274 funded federal grants to state and local governments (see Table 4 ). Because there is no consensus on the methodology used to count federal grants to state and local governments, the 1,274 count of federal grants to state and local governments listed in Table 4 should be viewed as illustrative, as opposed to definitive, of the current number of federal grants to state and local governments. As the data in the table suggest, the number of federal grants to state and local governments increased slowly from 1902 to 1930. Then, partly in reaction to the Great Depression, Congress doubled the number of federal grants to state and local governments during the 1930s, and continued to increase the number of federal grants to state and local governments during the 1940s and 1950s. During the mid-1960s, Congress increased the number of federal grants to state and local governments exponentially, primarily in response to national social movements concerning poverty and civil rights. Nine federal grants to state and local governments were added in 1961, 17 in 1962, 20 in 1963, 40 in 1964, 109 in 1965, 53 in 1966, 3 in 1967, and 4 in 1968. Congress continued to increase the number of federal grants to state and local governments during the 1970s, but at a relatively slow pace as it addressed budgetary constraints presented by "guns versus butter" issues associated with the Vietnam conflict. Then, at the urging of President Ronald Reagan in 1981, Congress approved the largest reduction in the number of federal grants to state and local governments in American history by creating 9 new block grants which consolidated 77 categorical grants and revised two earlier block grants. The Reagan Administration also eliminated funding for 62 categorical grants in 1981, mainly through authority provided under P.L. 97-35 , the Omnibus Budget Reconciliation Act of 1981. The number of federal grants to state and local governments increased relatively slowly during the remainder of the 1980s, as Congress faced budgetary constraints presented by demographic changes in American society that led to escalating costs for several federal entitlement programs, especially for Social Security, Medicare and Medicaid, and by the Reagan Administration's general opposition to the expansion of the federal grants-in-aid system. As the data in Table 4 indicate, the number of federal grants to state and local governments continued to increase during the 1990s, and has continued to do so, but more slowly in recent years. The relative influence of internal versus external factors on congressional decisions affecting the federal grants-in-aid system has varied, both over time and in each specific policy area. Prior to the Civil War, external factors, especially cultural norms and expectations concerning government's role in American society, restricted congressional options concerning enactment of federal grant-in-aid programs for state and local governments. During this time period, America was primarily a rural nation of farmers. Travel conditions were, compared with today's standards, primitive. Many Americans rarely left their home state, and many others never set foot in another state. Government as we know it today, with regulations and spending programs affecting many aspects of American life, did not exist. Although ratification of the Articles of Confederation and Perpetual Union on March 1, 1781, formally established the United States of America, personal allegiance was still directed more toward the individual's home state than to the nation. It was an era of what federalism scholars have called "dual federalism," where states were expected to be the primary instrument of governance in domestic affairs. However, even before the Constitution's ratification, the federal government found ways to provide state and local governments with assistance to encourage them to pursue national policy objectives. For example, under the Articles of Confederation and Perpetual Union, Congress did not have the power to lay and collect taxes and relied heavily on state donations to fund the government. This lack of revenue, and expenses related to national defense, limited congressional spending options in domestic affairs. The Congress of the Confederation addressed that issue by adopting the Land Ordinance of 1785. The Ordinance generated revenue for the government by authorizing the sale of land acquired from Great Britain at the conclusion of the American Revolutionary War. The Ordinance also required every new township incorporated in those lands, called the Ohio Country, to be subdivided into 36 lots (or sections), each 1 mile square. Lots 8, 11, 26, and 29 were reserved for the United States. The new townships were required to use Lot 16 "for the maintenance of public schools, within the said township. " Some schools are still located in lot 16 of their respective townships, although many of the school lots were sold to raise money for public education. These land grants for public education were reauthorized by Congress in the Northwest Ordinance of 1787. Congress subsequently adopted similar legislation for all states admitted to the union from 1802 to 1910, with exceptions for Texas, which retained all of its public land, and Maine and West Virginia, which were formed from other states. From 1802 to 1848, one lot in each township was to be used for education, from 1848 to 1890 two lots, and from 1894 to 1910, with one exception, four lots. When the Framers met in Philadelphia in 1787 to rework the Articles of Confederation and Perpetual Union, the national economy was in recession, state governments were saddled with large debts left over from the Revolutionary War, the continental dollar was unstable and destined to be a national joke ("not worth a continental"), the navy could not protect international shipping, and the army proved unable to protect its own arsenal during Shay's rebellion in 1786. To address these issues, Congress was provided 17 specific powers in Article 1, Section 8 of the U.S. Constitution, ratified in 1789, including the power to coin money, establish post offices, regulate copyright laws, declare war, regulate the Armed Forces, borrow money, and, importantly, lay and collect taxes. The power to lay and collect taxes provided Congress the means to expand the federal government's role in domestic affairs. Moreover, the Supreme Court issued several rulings under Chief Justice John Marshall concerning congressional authority to regulate interstate commerce that effectively cleared the way for congressional activism in domestic policy. However, the prevailing view in Congress at this time was that any power not explicitly provided to Congress in the Constitution was excluded purposively, suggesting that in the absence of specific, supporting constitutional language the exercise of governmental police powers (the regulation of private interests for the protection of public safety, health, and morals; the prevention of fraud and oppression; and the promotion of the general welfare) was either meant to be a state or local government responsibility, or outside the scope of governmental authority altogether. Nevertheless, during the 1800s there were congressional efforts, primarily from representatives from western states, to adopt legislation to provide federal cash assistance for various types of internal improvement projects to encourage western migration and promote interstate commerce. Most of these efforts failed, primarily due to sectional divisions within Congress which, at that time, made it difficult to build coalitions large enough to adopt programs that targeted most of their assistance to western states. Some opposition came from Members of Congress who viewed reducing the national debt from the American Revolutionary War as a higher priority. Other Members opposed federal interventions as a matter of political philosophy. They viewed the provision of cash assistance for internal improvements, other than for post roads, which were specifically mentioned in the Constitution as a federal responsibility, a violation of states' rights, as articulated in the Tenth Amendment: "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people." Given the prevailing views concerning the limited nature of the federal government's role in domestic affairs, Congress typically authorized federal land grants to states instead of authorizing direct cash assistance to states for internal improvements. For example, in 1823 Ohio received a federal land grant of 60,000 acres along the Maumee Road to raise revenue to improve that road. In 1827, Ohio received another federal land grant of 31,596 acres to raise revenue for the Columbus and Sandusky Turnpike. In 1841, nine states (Ohio, Indiana, Illinois, Alabama, Missouri, Mississippi, Louisiana, Arkansas, and Michigan) ̶ and, with three exceptions, all subsequent newly admitted states ̶ were designated land grant states and guaranteed at least 500,000 acres of federal land to be auctioned to support transportation projects, including roads, railroads, bridges, canals, and improvement of water courses, that expedited the transportation of United States mail, military personnel, and military munitions. By 1900, over 3.2 million acres of federal land were donated to these states to support wagon road construction. Congress also authorized the donation of another 4.5 million acres of federal land to Illinois, Indiana, Michigan, Ohio, and Wisconsin to raise revenue for canal construction and 2.225 million acres to Alabama, Iowa, and Wisconsin to improve river navigation. In addition, states were provided 37.8 million acres for railroad improvements and 64 million acres for flood control. States were provided wide latitude in project selection, and federal oversight and administrative regulations were minimal. Although land grants were prevalent throughout the 1800s, given prevailing views concerning states' rights, land grants, as well as cash grants, were subject to opposition on constitutional grounds. For example, in 1854, Congress adopted legislation authorizing the donation of 10 million acres of federal land to states to be sold to provide for the indigent insane. President Franklin Pierce vetoed the legislation, claiming that I cannot find any authority in the Constitution making the federal government the great almoner of public charity throughout the United States. To do so would, in my judgment, be contrary to the letter and spirit of the Constitution, and subversive of the whole theory upon which the union of these States is founded.... I respectfully submit that, in a constitutional point of view, it is wholly immaterial whether the appropriation be in money, or in land.... should this bill become a law, ... the several States instead of bestowing their own means on the social wants of their own people, may themselves ... become humble supplicants for the bounty of the Federal Government, reversing the state's true relation to this Union. One notable exception to the federal reluctance to provide cash grants to states occurred in 1837. The federal government used proceeds from western land sales to retire the federal debt in 1836. The Deposit Act of 1836 directed that, after reserving $5 million, any money in the federal Treasury on January 1, 1837, shall be distributed to states in proportion to their respective representation in the House and Senate. There were no restrictions placed on how states were to use the funds. About $30 million was distributed to states in three quarterly payments in 1837 before the banking crisis of 1837 led to a recession and payments were stopped. To avoid a promised veto from President Andrew Jackson, the legislation indicated that the funds were a deposit subject to recall, rather than an outright grant of cash. Overall, domestic policy in the United States prior to the Civil War was dominated by states. As a federalism scholar put it: With respect to the classic trinity of sovereign powers–taxation, the police power, and eminent domain–the states enjoyed broad autonomous authority, which they exercised vigorously. Indeed, property law, commercial law, corporation law, and many other aspects of law vital to the economy were left almost exclusively to the states.... Federalism thus provided a receptive structure for expressions of state autonomy and pursuit of state-oriented economic objectives, not only as a matter of constitutional theory and the distribution of formal authority but also as a matter of real power. The Union's victory in the Civil War marked the beginning of a second evolutionary era in American federalism. It effectively put to an end to the doctrine that the Constitution was a compact among sovereign states, each with the right to nullify an act of Congress that the state deemed unconstitutional, and each with the legal right to secede from the Union. It also signaled the triumph of the northern states' commercialism over the southern states' agrarianism: Unimpeded by the political opposition of the southern slavocracy, the Republican coalition of north and west carried through a program of comprehensive changes that insured the expansion of industry, commerce, and free farming.... Instead of the policies of economic laissez faire that the slavocracy had demanded ... the Republicans substituted the doctrine that the federal government would provide assistance for business, industry, and farming; the protective tariff, homestead, land subsidies for agricultural colleges, transcontinental railroads and other internal improvements, national banks. When the defeated south came back into the Union, it had to accept the comprehensive alternation in government policy and economic institutions that historian Charles A. Beard was later to name the Second American Revolution. Following the war, three constitutional amendments—the Thirteenth adopted in 1865, the Fourteenth adopted in 1868, and the Fifteenth Amendment adopted in 1870—abolished slavery, prohibited states from denying due process or equal protection to any of their citizens, and banned racial restrictions on voting, respectively. In addition, Congress enacted the Reconstruction Acts of 1867 and 1868, which imposed military government on the formally secessionist states and required universal manhood suffrage. Despite this active federal presence in domestic policy in the South following the Civil War, the concept of dual federalism and deference to states in domestic affairs remained a part of American culture. For example, several Supreme Court rulings during this time period limited congressional efforts to override state laws on civil rights, in effect leaving civil and voting rights matters to states until the 1950s and 1960s. The Supreme Court also limited congressional efforts to regulate interstate commerce by limiting the Interstate Commerce Commission's authority. Reflecting prevailing views concerning dual federalism, and limited federal fiscal resources, the first on-going, federal cash grant to states, other than for the support of the National Guard, was not adopted until 1879. P.L. 45-186, the Federal Act to Promote the Education of the Blind, appropriated $250,000 to create a perpetual source of income for the purchase of teaching materials for the blind. It marked the beginning of the modern federal grants-in-aid system. The funds were used to purchase interest bearing bonds. The interest was used to purchase teaching materials for the blind. These teaching materials were then distributed among the states (and the District of Columbia) annually, with each state applying for assistance receiving a share of the available teaching materials based on the state's share of the total number of pupils enrolled in public schools of education for the blind. The second federal cash grant to states was authorized by the Hatch Act of 1887. It provided each state an annual cash grant of $15,000 to establish agricultural experiment stations. In 1888, an annual grant of $25,000 was appropriated for the care of disabled veterans in state hospitals. States were provided $100 per disabled veteran. In 1890, funding was provided to subsidize resident instruction in the land grant colleges made possible by the Morrill Act of 1862, which provided each existing and future state with 60,000 acres of federal land, plus an additional 30,000 acres for each of its congressional representatives, to be sold for the endowment, support, and maintenance of at least one college where the leading subject was agriculture and the mechanic arts. In 1902, there were five federal grants to states and local governments (in addition to funding for the National Guard): teaching materials for the blind, agricultural experiment stations, the care of disabled veterans, resident instruction in the land grant colleges, and funding to the District of Columbia. Outlays for these grants were about $7 million in FY1902, or about 1% of total federal outlays. State and local government total outlays at that time were slightly over $1 billion, evidence of the relatively limited nature of federal involvement in domestic policy at that time. An important difference between land grants and cash grants had emerged, even at this early date. Because federal grants were funded from the federal treasury, many in Congress felt that they had an obligation to ensure that the funds were spent by states in an appropriate manner. As a result, Congress began to attach an increasing number of administrative requirements to these grant programs. For example, in 1889, states were required to match federal funding for the care of disabled veterans or lose it. The Morrill Act of 1890 authorized the Secretary of the Interior to withhold payments, pending an appeal to Congress, from states that failed to meet conditions specified in the act. In 1895, expenditures authorized by the Hatch Act for agricultural experiment stations were conditioned by annual audits. In 1911, funding authorized by the Weeks Act to support state efforts to prevent forest fires was conditioned by advance approval of state plans for the funds' use, annual audits and inspections, and a state matching requirement. The Sixteenth Amendment's ratification in 1913 provided Congress the authority to lay and collect taxes on income. Although the federal income tax initially generated only modest amounts, it provided Congress an opportunity to shift from land grants to cash grants to encourage state and local governments to provide additional attention to policy areas Congress considered of national interest. Between 1913 and 1923, Congress adopted new federal grant-in-aid programs for highway construction, vocational education, public health, and maternity care. Outlays for federal grants to state and local governments increased from $12 million in FY1913 to $118 million in FY1922. In 1923, Massachusetts brought suit against the Secretary of the Treasury, Andrew Mellon, claiming that the maternal care grants authorized by the Sheppard-Towner Act of 1921 were unconstitutional infringements on states' rights. The Supreme Court dismissed the case on the grounds that it lacked jurisdiction. Nonetheless, Justice George Sutherland, writing on behalf of the unanimous Court, indicated that, in his view, this form of congressional spending was not unconstitutional because federal grants to state and local governments were optional and, as such, were not coercive instruments. As a result, although few new federal grants to state and local governments were adopted during the remainder of the 1920s, those grants were now accepted as a legal means for Congress to encourage state and local governments to pursue national goals. Political scientists contend that about once in every generation partisan affiliations realign across the nation, typically taking a few years to materialize but often becoming apparent during a "critical" presidential election. Critical elections typically result in relatively dramatic and lasting changes in the partisan composition within Congress and state governments. They also usually signal the coming to power of a new partisan coalition that dominates congressional decisionmaking for a relatively long period of time. For example, the election of 1896 ended the political stalemate between the Democratic and Republican parties and solidified the Republican Party's position as the majority party for the next 36 years. The election of 1932 signaled a new period of Democratic Party dominance, particularly in the "Solid South," that lasted until the 1970s, when partisan attachments began to weaken, southern states became increasingly Republican, and the two major political parties became increasingly competitive, each seemingly on the verge of achieving majority party status at various times, but unable to retain that status permanently. The 1932-1960 period also saw the emergence of the "congressional conservative coalition," the unofficial title given to the shifting political alliances of southern, conservative Democrats and Republican Members. The conservative coalition became an increasingly important counter-balance to large Democratic majorities in both houses of Congress. Members of the conservative coalition generally advocated balanced budgets and states' rights, especially in civil rights legislation. They used congressional procedures, such as the filibuster or threat of a filibuster, to win concessions from the Democratic majority, and, in some instances, to prevent legislation they opposed from becoming law. They also benefitted from the congressional seniority system, which, during this time period, allocated committee chairmanships according to seniority. Because many of the congressional districts in the "solid south" were noncompetitive seats, southern representatives held a disproportionate number of committee chairmanships in the House, further strengthening the conservative coalition's influence on congressional policymaking. The conservative coalition prevented civil rights legislation from being enacted during this time period, but it could not prevent Democratic majorities in the House and Senate from expanding the federal government's presence in domestic policy. However, throughout this time period, the conservative coalition actively sought concessions to ensure that any new federal programs, including any new grants to state and local governments, respected state rights. As a result, the grant-in-aid programs adopted during this time period tended to be in policy areas where state and local governments were already active, such as in education, health care, and highway construction, or where additional federal assistance was welcomed, such as job creation. Also, federal administrative conditions attached to these grants during this era focused on the prevention of corruption and fraudulent expenditures as opposed to encouraging states to move in new policy directions. As a result, federalism scholars have labeled this time period as an era of "cooperative federalism," where intergovernmental tensions were relatively minor and state and local governments were provided flexibility in project selection. Faced with unprecedented national unemployment and economic hardship, President Franklin Delano Roosevelt advocated a dramatic expansion of the federal government's role in domestic affairs during his presidency, including an expansion of federal grant-in-aid programs as a means to help state and local governments combat poverty and create jobs. Congress approved 16 new, continuing federal grants to state and local governments from 1933 to 1938, and increased funding for federal grants to states and local governments from $214 million in FY1932 to $790 million in FY1938. Congress also enacted several temporary, emergency relief grant-in-aid programs that distributed federal funds to states according to the state's fiscal capacity. Congress devised mathematical formulas, based on a variety of economic and business measures, to allocate funding to each state, resulting in the share of relief funds varying among states based on the formula's assessment of need. At their peak, in 1935, emergency relief measures provided states nearly $1.9 billion to create jobs and provide emergency assistance for the unemployed. The emergency relief programs were terminated during the 1940s, but they established a precedent for extensive federal involvement with state and local governments in areas of national concern and for the use of mathematical formulas for distributing federal assistance. The Social Security Act of 1935 (SSA) was, arguably, the most significant legislative enactment of the New Deal period. It established a federal presence in social welfare policy. New federal grant-in-aid programs were established for old age assistance, aid to the blind, aid to dependent children, unemployment compensation, maternal and child health, crippled children, and child welfare. The act also enhanced federal oversight of grants to state and local governments as auditing requirements were now required in almost all grant programs. In addition, in 1939, state employees administering SSA programs were required to be selected by merit system procedures, a major advancement for the development of professional state and local government administration and a signal of the declining influence of state and local party bosses in American society. In 1940, the Hatch Act restricted the political activities of state and local government employees paid with federal funds. Legally, New Deal legislation was based on an expanded interpretation of congressional authority to spend through grant-in-aid programs to promote the nation's welfare under Article 1, Section 8, clause 1 of the Constitution, often referred to as the congressional "spending power." Federal expenditures through grant-in-aid programs during the New Deal were made in several functional areas, including some, such as social welfare, that were traditionally viewed as state responsibilities. Opponents of an expanded role for the federal government in domestic policy argued that New Deal grant programs precluded state action in these traditionally state functional areas and, as such, violated the Constitution's Tenth Amendment. Advocates of an expansion of federal involvement in domestic affairs argued that the power of Congress to spend is more extensive than, rather than concurrent with, enumerated or even implied law-making powers. This disagreement led to a number of Supreme Court cases, a full discussion of which is beyond the scope of this report. The Supreme Court rejected the New Deal's expansion of federal authority in 8 of the first 10 cases that it decided. Then, after President Roosevelt's failed legislative proposal to "pack the Court" in 1937, the Supreme Court upheld the constitutionality of several New Deal laws, including the Social Security Act. As a federalism scholar noted, A new era of judicial construction had been launched. The commerce power was given broad interpretation in cases upholding the Labor Relations Act. The older distinction between direct and indirect effects of commercial activity was abandoned and the more realistic "stream-of-commerce" concept adopted. The scope of Federal taxing power was also broadened expansively. In sanctioning the Social Security Act, the unemployment excise tax on employers was upheld as a legitimate use of the tax power, and the grants to the states were viewed as examples of Federal-state collaboration, not Federal coercion. The act's old-age and benefit provisions were deemed to be proper because "Congress may spend money in aid of general welfare." When combined, these decisions obviously amounted to last rites for judicial dual federalism. Although the Supreme Court was no longer viewed as a major obstacle for the expansion of the federal grants-in-aid system, external factors led to a reduction in outlays for federal grants to state and local governments from FY1939 to FY1946 as Congress focused on defense-related issues during World War II. For example, outlays for federal grants to state and local governments averaged $947 million from FY1939 through FY1946, less than half of the New Deal's peak. Following the war, the number of federal grants to state and local governments began to increase at a somewhat accelerated pace, reaching 68 grants in 1950 and 132 grants in 1960. Outlays for federal grants to state and local governments also accelerated, from $859 million in FY1945, to $2.3 billion in FY1950, to $3.2 billion in FY1955, and to $7 billion in 1960. A new development was increased outlays targeted at urban areas, such as grants for airport construction (1946), urban renewal (1949), and urban planning (1954). The most significant federal grant-in-aid program enacted during the 1950s was the $25 billion, 13-year Federal-Aid Highway Act of 1956, which authorized the construction of the then-41,000 mile National System of Interstate and Defense Highways, with a 1972 target completion date. For the next 35 years, federal surface transportation policy focused on the completion of the interstate system. The 1960s was a turbulent decade, marked by both political and social upheaval of historic proportions. Three leading public figures were assassinated: President John F. Kennedy in 1963, civil rights leader the Reverend Martin Luther King Jr. in 1968, and President Kennedy's brother, presidential candidate and Senator Robert Kennedy, in 1968. The civil rights movement, led by the Reverend King, was often met with violent resistance, with bombings of black churches, murders of civil rights workers, and televised police beatings of civil rights demonstrators. One of the defining moments of the civil rights movement was the march on Washington, DC, in August 1963, where the Reverend King made his famous "I Have A Dream" speech. Congress responded to the social turmoil by adopting the Civil Rights Act of 1964, which superseded state civil rights laws by prohibiting discrimination based on race, color, religion, or national origin; the Voting Rights Act of 1965, which superseded state election laws by outlawing literacy tests, poll taxes, and other means to discourage minority voting; and the Civil Rights Act of 1968, which superseded state civil rights laws by prohibiting discrimination in the sale, rental, and financing of housing. Nonetheless, race riots took place in several urban areas in 1965 and in 1967. During the latter half of the decade, the civil rights movement was joined by what has been called the hippie movement, where young people rebelled against the conservative norms of the time and disassociated themselves from mainstream liberalism and materialism. This "counterculture" movement began in the United States and sparked a social revolution throughout much of the Western world. It began as a reaction against the conservatism and social conformity of the 1950s, and the U.S. government's military intervention in Vietnam. These groups questioned authority and government, and demanded more freedom and rights for women, gays, and minorities, as well as greater awareness of the need to protect the environment and address poverty. The social movements and social unrest that swept across the nation during the 1960s had a strong impact on Congress. Reflecting the growing public demand for congressional action to address civil rights, poverty, and the environment, in 1961 the House approved, 217-212, a proposal by Speaker Sam Rayburn to enlarge the House Rules Committee from 12 to 15 Members. Prior to the change, the House Rules Committee was divided, 6 to 6, along ideological lines. Because a majority vote is necessary for the issuance of a legislative rule, the House Rules Committee served as an institutional barrier to the passage of legislation that the committee's more conservative Members believed infringed on states' rights, including civil rights legislation. The enlargement of the House Rules Committee in 1961 signaled the weakening of the conservative coalition's influence within Congress and enabled the large Democratic majorities elected during the early 1960s in the House and Senate to adopt a succession of civil rights laws, highlighted by the previously mentioned Civil Rights Act of 1964. It also enabled Congress to expand the federal grants-in-aid system, focusing on grants designed to protect the environment and address poverty, both directly through public assistance and job training programs and indirectly through education, housing, nutrition, and health care programs. These legislative efforts were both supported and encouraged by President Lyndon Baines Johnson. For example, during his commencement address at the University of Michigan on May 22, 1964, President Johnson announced that he would establish working groups to prepare a series of White House conferences and meetings to develop legislative proposals to revitalize urban America, address environmental problems, and improve educational opportunities "to begin to set our course toward the Great Society" which "demands an end to poverty and racial injustice, to which we are totally committed." The term "The Great Society" came to symbolize legislative efforts during the 1960s to address poverty and racial injustice. In concert with President Johnson's Great Society initiatives, Congress nearly tripled the number of federal grants to state and local governments during the 1960s, from 132 in 1960 to 387 in 1968. In 1965 alone, 109 federal grants to state and local governments were adopted, including Medicaid, which now has, by far, the largest budget of any federal grant-in-aid program. Outlays for federal grants to state and local governments also increased, from $7 billion in FY1960 to $20 billion in FY1969. Functionally, federal grants for health care increased from $214 million in FY1960 to $3.8 billion in FY1970, for income security from $2.6 billion to $5.7 billion, for education, training, employment, and social services from $525 million to $6.4 billion, for transportation from $3 billion to $4.6 billion, and for community and regional development from $109 million to $1.7 billion. For the most part, these legislative efforts were not opposed by state and local government officials and their affiliated public interest groups (e.g., National Governors Association, National League of Cities, U.S. Conference of Mayors, and National Association of Counties), primarily because federal grants are voluntary and, in many instances, provided funding for activities that had broad public support. However, the new grants had a number of innovative features that distinguished them from their predecessors. Previously, most federal grants to state and local governments supplemented existing state efforts and, generally, did not intrude on state and local government prerogatives. Most of the federal grants created during the 1960s, on the other hand, were designed purposively by Congress to encourage state and local governments to move into new policy areas, or to expand efforts in areas identified by Congress as national priorities, especially in environmental protection and water treatment, education, public assistance, and urban renewal. In addition, there was an increased emphasis on narrowly focused project, categorical grants to ensure that state and local governments were addressing national needs. Most of the new grants had relatively low, or no, matching requirements, to encourage state and local government participation. New incentive grants encouraged states to move into new policy areas and to diversify eligible grant recipients, including individuals, nonprofit organizations, and specialized public institutions, such as universities. A greater emphasis also was on grants to urban areas. For example, outlays for federal grants targeted at metropolitan areas more than tripled during the 1960s, and grew to include about 70% of total federal grant-in-aid funding, up from about 55% at the beginning of the decade. There was also a greater emphasis on mandated planning requirements. Although most of the federal grants adopted during the 1960s were narrowly focused project, categorical grants, the first two block grants were enacted during this time period. P.L. 89-749, the Comprehensive Health Planning and Public Health Services Amendments of 1966, later known as the Partnership for Public Health Act, created a block grant for comprehensive health care services (now the Preventive Health and Health Services Block Grant). It replaced nine formula categorical grants. Two years later, Congress created the second block grant, the Law Enforcement Assistance Administration's Grants for Law Enforcement program (sometimes referred to as the "Crime Control" or "Safe Streets" block grant) in the Omnibus Crime Control and Safe Streets Act of 1968. Unlike the health care services block grant, it was created de novo , and did not consolidate any existing categorical grants. The rapid expansion of federal grants to state and local governments during the 1960s led to a growing concern that the intergovernmental grant-in-aid system had become dysfunctional and needed to be reformed. For example, ACIR argued that along with the expansion of the federal grant system came "a rising chorus of complaints from state and local government officials" concerning the inflexibility of fiscal and administrative requirements attached to the grants. It suggested that state and local government officials were subjected to an information gap because they found it difficult to keep up with the host of new programs and administrative requirements. It also cited the need for improved coordination among programs, noting that many state and local government officials were reporting administrative difficulties dealing with federal agencies and those agencies' regional offices: Between 1962 and 1965 four new systems of regional offices were established as a consequence of grants-in-aid legislation. Adding these bodies to the separate, already existing regional structures brought the total number of regional systems to 12. Regional boundaries and field office locations varied widely. Kentucky, to cite the most extreme case, had to deal with federal agencies in ten different cities. This confusion imposed burdens on the recipients of grants and also made the task of coordinating operations by federal agencies in pursuit of national objectives more difficult. During the 1970s, President Richard Nixon and his successor, President Gerald R. Ford, argued that the intergovernmental grant-in-aid system was dysfunctional and advocated the sorting out of governmental responsibilities, with the federal government taking the lead in some functional areas and states in others. They also advocated a shift from narrowly focused categorical grants, especially project categorical grants, toward block grants and revenue sharing. They argued that block grants and general revenue sharing provided state and local governments additional flexibility in project selection and promoted program efficiency by reducing administrative costs. They, and others, believed that state and local governments should be provided additional flexibility in project selection and relief from federal administrative requirements because greater reliance on state and local governments promotes a sense of state and local community responsibility and self-reliance; state and local government officials are closer to the people than federal administrators and, as a result, are better positioned to discern and adapt public programs to state and local needs and conditions; state and local governments encourage participation and civic responsibility by allowing more people to become involved in public questions; active state and local governments encourage experimentation and innovation in public policy design and implementation; active state and local governments reduce administrative workload on the federal government, which creates program efficiencies; and active state and local governments reduce the political turmoil that sometimes results from single policies that govern the entire nation. Opponents of a shift from categorical grants to block grants and revenue sharing presented several arguments, including because funding comes from the federal Treasury, Congress has both the right and an obligation to determine how that money is spent; many state and local governments lack the fiscal resources to provide levels of government services necessary to provide the poor and disadvantaged a minimum standard of living and equal access to governmental services, such as education and health care, which are essential to economic success. Therefore, Congress must act to ensure uniform levels of essential governmental services throughout the nation; state and local governments that have the fiscal resources to provide levels of government services necessary to provide the poor and disadvantaged a minimum standard of living and equal access to governmental services essential to economic success are often unable to do so because they compete with other state and local governments for business and taxpaying residents. As a result, state and local governments tend to focus available resources on programs designed to attract business investment and taxpaying residents to their communities and states rather than on programs assisting the poor and disadvantaged. Therefore, Congress must act to ensure uniform levels of essential governmental services throughout the nation; Congress has both the right and the obligation to ensure through the carrot of grant-in-aid programs and the stick of federal requirements that certain national goals, such as civil rights, equal employment opportunities, protection for the environment, and care for the poor and aged, are met because it is difficult to achieve change when reform-minded citizens must deal with 50 state governments and more than 79,000 local governments; and some governmental services have either costs or benefits that spill over onto other localities or states. Water and air pollution controls, for example, benefit not only the local community that pays for the air or water pollution controls, but all of the communities that are located downwind or downstream from that community. Because state and local taxpayers are generally reluctant to pay for programs whose benefits go to others, state and local governments often underfund programs with significant spillover effects. Therefore, Congress must act to ensure that these programs are funded at logical levels. Opponents also asserted that the arguments presented by advocates for a shift in emphasis to block grants and revenue sharing were actually a "smoke screen" masking their true intent which, allegedly, was to shift federal resources to their core constituencies. As mentioned previously, most federal grant-in-aid funding during the 1960s and 1970s was targeted to metropolitan areas, which, at that time, were considered Democratic Party strongholds. Many observers believed that shifting from project categorical grants to block grants or general revenue sharing would result in less money for metropolitan areas and more money for suburban and rural areas, areas that were more likely to be populated by Republicans than Democrats. This shift would occur because project categorical grants are awarded on a competitive basis by federal administrators while block grant and revenue sharing funding is allocated according to pre-determined formula, often with minimum funding guarantees for each state and with a portion of the funding determined by either population or per capita income. Because block grant and revenue sharing funding tends to be more geographically dispersed than project categorical grants, congressional debates over which grant mechanism was best had partisan overtones that often transcended discussions over which grant mechanism would improve grant performance. Some federalism scholars have also suggested that Congress tends to prefer categorical grants over block grants and revenue sharing because Members take pride in the authorship of sponsored programs. They argue that categorical grants provide more opportunities for sponsorship, and more opportunities for receiving political credit for that sponsorship, than block grants or revenue sharing. In their view, constituents are more interested in a Member's ability to serve in a material way than in their competence in broad policymaking or in "the rightness of positions on issues of principle, form or structure." As a result, they argue that Members are more likely to be recognized for sponsoring or supporting specific, narrowly focused categorical grants than by championing a more general block grant or revenue sharing approach. For example, they assert that Members are more likely to receive recognition and political credit from constituents for sponsoring and supporting legislation to prevent lead-based paint poisoning among children than for legislation covering the broad area of preventive health services. Presidents Nixon's and Ford's efforts to gain congressional approval for a shift in emphasis from categorical grants to block grants and revenue sharing were only partially successful. For example, in his 1971 State of the Union speech, President Nixon announced a plan to consolidate 129 federal grant programs in six functional areas—33 in education, 26 in transportation, 12 in urban community development, 17 in manpower training, 39 in rural community development, and 2 in law enforcement—into what he called six "special revenue sharing" programs. Unlike the categorical grants they would replace, the proposed special revenue sharing programs had no state matching requirements and relatively few auditing or oversight requirements, and the funds were distributed automatically by formula without prior federal approval of plans for their use. The education, transportation, rural community development, and law enforcement proposals failed to gain congressional approval, primarily because they generated opposition from interest groups affiliated with the programs who worried that the programs' future funding would be compromised. However, three block grants, the first signed by President Nixon and the remaining two signed by President Ford, were approved. The Comprehensive Employment and Training Assistance Block Grant program, created by the Comprehensive Employment and Training Act of 1973, merged 17 existing manpower training categorical grant programs. The Community Development Block Grant program (CDBG), created by the Housing and Community Development Act of 1974, consolidated six existing community and economic development categorical grant programs. Title XX social services, later renamed the Social Services Block Grant program, was created de novo and, therefore, did not consolidate any existing categorical grant programs. It was authorized by the 1974 amendments of the Social Security Act, which was signed into law on January 4, 1975. Also, in 1972, general revenue sharing was approved by Congress. General revenue sharing distributed funds to states from 1972 to 1981 and to localities from 1972 to 1986. Nevertheless, Congress retained an emphasis on the use of categorical grants. On December 31, 1980, there were 534 categorical grant programs, 5 block grant programs, and 1 general revenue sharing program. Of the categorical grant programs, 361 were project categorical grants, 42 were project, formula categorical grants, 111 were formula categorical grants, and 20 were open-ended reimbursement categorical grants. Overall, categorical grants accounted for 79.3% of the $91.3 billion in outlays for federal grants to state and local governments that year, block grants accounted for 11.3%, and general revenue sharing 9.4%. Efforts to sort out governmental responsibilities were also met with resistance in Congress. For example, President Nixon's six special revenue sharing proposals would have provided state and local governments the leading role in decisionmaking in those six functional areas. Also, his proposed Family Assistance Plan would have replaced several public assistance categorical grant programs with a national public assistance system covering all low-income families with children. Although his Family Assistance Plan was not adopted, Congress did nationalize several adult-age public assistance grant-in-aid programs in 1972, including old-age assistance, aid to the blind, and aid to the permanently and totally disabled. Another related, new development during the 1960s and 1970s was the imposition by Congress of numerous federal mandates on state and local government officials. The concept of mandates covers a broad range of policy actions with centralizing effects on the intergovernmental system, including statutory direct-order mandates, both total and partial statutory preemption of state and local government law, federal tax policies affecting state and local tax bases, and regulatory action taken by federal courts and agencies. Many federalism scholars also consider program-specific and crosscutting federal grant administrative conditions mandates, even though the grants themselves are voluntary. Crosscutting requirements are, perhaps, the most widely recognized mandate. They are a condition of federal assistance that applies across-the-board to all, or most, federal grants to advance a national social or economic goal. Title VI of the Civil Rights Act of 1964 was the first post-World War II statute to use a crosscutting requirement. It specifies that No person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program receiving Federal financial assistance. In 1980, OMB counted 59 crosscutting requirements intended to further national social or economic goals in a variety of functional areas, including education and the environment. Some of the statutory direct-order mandates adopted during this era included the Equal Employment Opportunity Act of 1972, which extended the prohibitions against discrimination in employment contained in the Civil Rights Act of 1964 to state and local government employment; the Fair Labor Standards Act Amendments of 1974, which extended the prohibitions against age discrimination in the Age Discrimination in Employment Act of 1967 to state and local government employment; and the Public Utilities Regulatory Policy Act of 1978, which established federal requirements concerning the pricing of electricity and natural gas. ACIR suggested that the expansion of federal intergovernmental regulatory activity during the 1960s and 1970s fundamentally changed the nature of intergovernmental relations in the United States: During the 1960s and 1970s, state and local governments for the first time were brought under extensive federal regulatory controls.... Over this period, national controls have been adopted affecting public functions and services ranging from automobile inspection, animal preservation and college athletics to waste treatment and waste disposal. In field after field the power to set standards and determine methods of compliance has shifted from the states and localities to Washington. The continued emphasis on categorical grants, the increased emphasis on provisions encouraging states to move in new policy directions, and, especially, the increased imposition of federal mandates on state and local governments during the 1960s and 1970s led some federalism scholars to label the 1960s and 1970s as the beginnings of a shift toward "coercive federalism." Cooperative features were still present, but congressional deference to state and local government prerogatives seen in previous eras was no longer in force. Instead of focusing primarily on the "carrot" of federal assistance to encourage state and local governments to pursue policies that aligned with national goals, Congress increasingly relied on the "stick" of federal mandates. By the end of the 1970s, the social turmoil that marked the previous two decades had receded. Into the 1980s, the United States and most of the Western world experienced a revival of conservative politics, the advancement of free market solutions to improve government efficiency and solve social problems, and a renewed emphasis on materialism and the possession of consumer goods. Yet, at the same time, social change continued to affect American lifestyles, as women became fixtures in the workplace, the gay rights movement become more active, environmental concerns intensified, and rock concerts featuring the leading rock bands and performers of the era were televised to millions of viewers across the nation and the world to raise money for various social causes, such as famine relief, support for family farms, and AIDS prevention and treatment. The seemingly contradictory societal trends of self-promotion and altruism that swept across American society during the 1980s and 1990s were reflected in responses to national public opinion polls concerning politics and government. These polls evidenced a growing public hostility toward government intrusion and government performance, especially the federal government's performance, despite growing support for specific programs and regulations that represented the polar opposite of these attitudes. Perhaps reflecting these seemingly contradictory trends, during this era the public tended to elect a President of one political party and a Congress of another. Moreover, nationally, the two-party political system became more competitive as the once solid Democratic South turned increasing Republican. The Republican Party's resurgence was evidenced by its winning the presidency from 1981 to 1993, and its achieving majority status in the Senate from 1981 to 1987, and in both houses of Congress from 1995 to 2001. President Ronald Reagan's election in 1980, coupled with the Republican Party's resurgence, especially its winning majority party status in the Senate that year, signaled for some the potential for a "devolution revolution" in American federalism, where unfunded federal mandates would be rescinded, "burdensome" administrative federal grant-in-aid conditions removed, and the cooperative features of the federal grants-in-aid system enhanced. This belief was based on President Reagan's commitment to reducing the federal budget deficit. Because he was convinced that it was necessary to increase defense spending, President Reagan concluded that the only way to reduce the federal budget deficit was to increase revenue by encouraging economic growth through tax reduction and regulatory relief, and limiting the growth of federal domestic expenditures. As a former governor, he trusted state and local governments' ability to provide essential government services. As a result, he advocated a sorting out of governmental responsibilities that would reduce the federal government's role in domestic affairs, increase the emphasis on block grants to provide state and local government officials greater flexibility in determining how the program's funds are spent, and impose fiscal restraint on all federal grant-in-aid programs. For example, on February 18, 1981, President Reagan addressed a joint session of Congress and proposed the consolidation of 84 existing categorical grants into 6 new block grants and requested significant funding reductions for a number of income maintenance categorical grants, including housing (rental) assistance, food stamps (now Supplemental Nutrition Assistance Program), Medicaid, and job training. Congress subsequently approved P.L. 97-35 , the Omnibus Budget Reconciliation Act of 1981, which consolidated 77 categorical grants and two earlier block grants into the following nine new block grants: Elementary and Secondary Education (37 categorical grants), Alcohol, Drug Abuse, and Mental Health Services (10 categorical grants), Maternal and Child Health Services (9 categorical grants), Preventive Health and Human Services Block Grant (merged 6 categorical grants with the Health Incentive Grants for Comprehensive Health Services Block Grant), Primary Care (2 categorical grants), Community Services (7 categorical grants), Social Services (one categorical grant and the Social Services for Low Income and Public Assistance Recipients Block Grant), Low-Income Home Energy Assistance (1 categorical grant), and a revised Community Development Block Grant program (adding an existing discretionary grant and 3 categorical grants). Overall, funding for the categorical grants bundled into these block grants was reduced 12%, about $1 billion, from their combined funding level the previous year. President Reagan argued that the funding reductions would not result in the loss of services for recipients because the reductions would be offset by administrative efficiencies. In addition, the Reagan Administration eliminated funding for 62 categorical grants in 1981, mainly through authority provided under the Omnibus Budget Reconciliation Act of 1981. Some observers were convinced that the adoption of the Omnibus Budget Reconciliation Act of 1981 was proof of the coming devolution revolution. The number of federal grants to state and local governments was reduced and outlays for federal grants to state and local governments fell for the first time since World War II, from $94.7 billion in FY1981 to $88.1 billion in FY1982. However, in retrospect, federalism scholars now consider the 1981 block grants as more "historical accidents than carefully conceived restructurings of categorical programs" because they were contained in a lengthy bill that was primarily designed to reduce the budget deficit, not to reform federalism relationships. The bill was adopted under special parliamentary rules requiring a straight up or down vote without the possibility of amendment, and it was not considered and approved by authorizing committees of jurisdiction. Nonetheless, largely due to the Omnibus Budget and Reconciliation Act of 1981, in 1984 there were 12 block grants in operation (compared to 392 categorical grants), accounting for about 15% of total grants-in-aid funding. During the remainder of his presidency, President Ronald Reagan submitted 26 block grant proposals to Congress, with only one, the Federal Transit Capital and Operating Assistance Block Grant, added in 1982. In addition, Congress approved the Job Training Partnership Act of 1982, which created a new block grant for job training to replace the block grant contained in the Comprehensive Employment and Training Act of 1973. Federalism scholars generally agree that President Reagan had unprecedented success in achieving congressional approval for block grants in 1981. However, they also note that most of President Reagan's subsequent block grant proposals failed to gain congressional approval, primarily because they were opposed by organizations that feared, if enacted, the block grants would result in less funding for the affected programs. For example, in 1982, President Reagan proposed, but could not get congressional approval for, a $20 billion "swap" in which the federal government would return to states full responsibility for funding Aid to Families With Dependent Children (AFDC) (now Temporary Assistance for Needy Families) and food stamps (now Supplemental Nutrition Assistance Program) in exchange for federal assumption of state contributions for Medicaid. As part of the deal, he also proposed a temporary $28 billion trust fund or "super revenue sharing program" to replace 43 other federal grant programs, including 19 social, health, and nutrition services programs, 11 transportation programs, 6 community development and facilities programs, 5 education and training programs, Low Income Home Energy Assistance, and general revenue sharing. The trust fund, and federal taxes supporting it, would begin phasing out after four years, leaving states the option of replacing federal tax support with their own funds to continue the programs or allowing the programs to expire. Both the swap proposal and the proposed devolution of 43 federal grants failed to gain congressional approval, primarily because they were opposed by organizations and Members who feared that, if enacted, the proposals would result in less funding for the affected programs. For example, the National Governors Association supported the federal takeover of Medicaid, but objected to assuming the costs for AFDC and food stamps. The economy was weakening at that time and governors worried that they would not have the fiscal capacity necessary to support the programs without continued federal assistance. Evidence of a coming devolution revolution proved elusive as the upward trend in outlays for federal grants to state and local programs resumed in FY1983, although at a somewhat lower rate of increase than during the previous two decades. As shown in Table 2 , outlays for federal grants to state and local governments increased from $91.4 billion in FY1980 to $135.3 billion in FY1990 and $285.9 billion in FY2000. Medicaid accounted for much of that revenue growth, increasing from $13.9 billion in FY1980 to $41.1 billion in FY1990 and $117.9 billion in FY2000. Functionally, as shown in Table 2 , outlays for federal grants to state and local governments for health care increased from $15.8 billion in FY1980 to $124.8 billion in FY2000. Also, outlays for federal grants to state and local governments for income security increased from $18.5 billion in FY1980 to $68.7 billion in FY2000; for education, training, employment, and social services from $21.9 billion to $36.7 billion; for transportation from $13.0 billion to $32.2 billion; and for community and regional development from $6.5 billion to $8.7 billion. The number of federal grants to state and local governments fell at the beginning of this era, from 541 in 1981 to an era low of 405 in 1984, but then resumed an upward trend. As indicated in Table 4 , there were 541 grants to state and local governments in 1981, 405 in 1984, 435 in 1987, 492 in 1989, 557 in 1991, 593 in 1993, 633 in 1995, and 664 in 1998. Moreover, the number of intergovernmental mandates continued to increase throughout the era. ACIR, for example, identified 36 significant federal mandates affecting state and local governments in 1980. In 1990, it identified 63. ACIR concluded that "despite efforts to constrain the growth of intergovernmental regulation, the 1980s remained an era of regulatory expansion rather than contraction." It offered the following explanation for the increased number of federal mandates during the 1980s: The causes of this continued regulatory growth are complex and varied. Many regulations address important and well documented problems from pollution to health care to civil rights. The goals associated with these programs are popular not only with the general public but with state and local government officials as well. But, whereas the Congress in the past might have responded to emerging needs with a new federal aid program, the scarcity of federal funds during a decade of historic deficits has made the alternative of federal mandates look increasingly attractive to federal policymakers. Some observers believed that the anticipated devolution revolution might be realized following the 1994 congressional elections, which resulted in the Republican Party gaining majority status in both the House and Senate. As evidence of the potential for a devolution revolution they pointed to the Unfunded Mandate Reform Act of 1995 (UMRA). Its intent was to limit the federal government's ability to impose costs on state and local governments or on the private sector through unfunded mandates. Providing relief from unfunded mandates was one of the stated goals of the Republican Party's 1994 Contract With America. Under UMRA, congressional committees have the initial responsibility to identify certain federal mandates in measures under consideration. If the measure contains a federal mandate, the authorizing committee must provide the measure to the Congressional Budget Office (CBO). It reports back to the committee an estimate of the mandate's costs. The office must prepare full quantitative estimates for each reported measure with mandate costs over pre-determined thresholds in any of the first five fiscal years the legislation would be in effect. CBO's cost estimates include the direct costs of the federal mandates contained in the measure, or in any necessary implementing regulations; and the amount of new or existing federal funding the legislation authorizes to pay these costs. The thresholds triggering a full CBO cost estimate are adjusted annually for inflation. They were originally $50 million for intergovernmental mandates and $100 million for private sector mandates. The thresholds in 2019 are $82 million for intergovernmental mandates and $164 million for private sector mandates. CBO must prepare brief statements of cost estimates for those mandates that have estimated costs below these thresholds. Members can raise a point of order if the measure containing the mandate lacks a CBO cost estimate, either because the committee failed to publish the CBO's cost estimate in its report or in the Congressional Record , or CBO determined that no reasonable estimate of the mandate's cost was feasible. Members can also raise a point of order if the measure has an intergovernmental cost estimate that exceeds the annually adjusted cost threshold in any of the first five fiscal years the mandate would be in effect. UMRA's impact on unfunded mandates has been relatively limited. For example, from 1996 to May 2019, 62 points of order were raised in the House and 4 in the Senate. One point of order, concerning a 1996 minimum wage bill, was sustained in the House and two points of order, concerning amendments relating to an increase in the minimum wage in 2005, were sustained in the Senate. In addition, UMRA covers only certain types of unfunded federal mandates. As a federalism scholar argued, UMRA primarily covers only statutory direct orders, excluding most grant conditions and preemptions whose fiscal effects fall below the threshold. Statutory direct orders dealing with constitutional rights, prohibition of discrimination, national security, and Social Security are among those excluded from coverage. Moreover, analytic and procedure requirements do not apply to appropriations bills, floor amendments or conference reports–those tools of "unorthodox lawmaking" that have become increasingly prevalent in the Congress. Moreover, another federalism scholar noted that the overall record of the 104 th Congress, expected by some to decentralize and devolve federalism relationships, was more status quo than devolutionary: Shifting back to the overall record of the 104 th Congress, it is appropriate here to note the various proposed devolutionary bills that were defeated. Chief among these was the proposed Medicaid block grant with a $163 billion cut in funding over five years. Both a public housing blocking proposal and the big regulatory reform measure that would have seriously limited the Federal government's power to issue rules affecting health, safety, and the environment were scuttled. Extension of the Clean Water Act, enactment of a consolidation of eighty-odd manpower training programs, and passage of a revised Endangered Species Act, which eliminated the Federal authority to restrict threatening activities, were all successfully resisted. A rollback of affirmative action, a conservative shift in the Superfund's program and rules, and the proposed Product Liability Legal Reform Act of 1996 were also scuttled. Of the nine here, two died because of Senate rejection; three, because of a presidential veto or the threat of one; two others failed because neither chamber dared take either one up; and the last two died because of a deadlocked Conference Committee and a lack of time to consider a Conference Report. The devolution revolution never fully materialized during this era, despite growing public hostility toward the federal government. The emphasis on categorical grants and the issuance of federal mandates continued. Yet, some decentralization of decisionmaking authority did take place during the era. For example, in 1980, there were four block grants in operation. In 2000, there were 24 block grants, including the Surface Transportation Program (1991) and the Temporary Assistance for Needy Families (TANF) program (1996). Funded at $16.7 billion annually, TANF rivaled the Surface Transportation Program during this era for the largest budget of all the block grants. In addition, Congress authorized state waivers for Medicaid starting in 1981, and for child welfare assistance programs starting in 1994. The seemingly contradictory trends of centralization and decentralization that took place in the federal intergovernmental system during the 1980s and 1990s perhaps reflected the contradictory societal trends that swept across America at the time. As mentioned previously, national public opinion polls indicated that the public was increasingly dissatisfied with the performance of government, especially the federal government's performance, and expressed a growing hostility toward government (and Congress) as a whole. It could be argued that these views suggest that the public wanted Congress to devolve federal grant-in-aid programs to state and local governments or, at least, provide state and local governments greater flexibility in determining how the grants' funding should be spent. Yet, at the same time, the public also expressed relatively strong support for individual federal government programs (and individual Members of Congress). It could be argued that these views suggest that the public wanted Congress to maintain federal government control over these programs, and expressed approval of their individual Members for doing so. Another possible explanation for the continued focus on categorical grants and the imposition of federal mandates during this era is that federalism issues tend to be a second order priority for many federal policymakers. For example, it could be argued that President Reagan's commitment to strengthening federalism through program decentralization and devolution was unrivaled in the modern era. Yet, in an analysis of the Reagan Administration's federalism policies, a leading federalism scholar concluded that "devolutionary policies consistent with the president's definition of federalism reform ... consistently lost out in the Reagan Administration when they ... conflicted with the sometimes competing goals of reducing the federal deficit, deregulating the private sector, and advancing the conservative social agenda." For example, this scholar noted that President Reagan opposed the expansion of General Revenue Sharing, advocated the elimination of the deductibility of state and local taxes, supported the preemption of state laws regulating double-trailer trucks and establishing minimum drinking ages, overrode state objections to increased off-shore oil drilling and increased use of nuclear power, and supported efforts to require states to establish workfare programs for public assistance recipients and suing localities which sought to retain aggressive affirmative action hiring policies. Some observers thought that the number of federal grants to state and local governments and outlays for federal grants to state and local governments might fall during George W. Bush's presidency (2001-2009), given federal budgetary pressures created by what many called the "war on terror" following 9/11, President Bush's commitment to reducing the annual federal budget deficit and addressing the federal debt, and the Republican Party's winning majority status in the House of Representatives from 2001 to 2007 and in the Senate for portions of 2001 and 2002, and from 2003 to 2007. Yet, outlays for federal grants to state and local governments increased during his presidency, from $285.8 billion in FY2000 to $461.3 billion in FY2008. Others thought that the "the ascendancy of George W. Bush to the presidency, in concert with a remarkably unified Republican control of the Congress, presaged a period of unified government … [that would lead to] the arrest and even reversal of federal policy centralization." For example, President Bush used his authority to grant state waivers to increase state flexibility in the use of Medicaid funds and, in his second term, in complying with No Child Left Behind requirements. He also proposed grant consolidations of community development programs, state control of the Head Start program, and waivers of regulations in many low-income programs (called superwaivers). However, despite these efforts, federalism scholars argue that the federal government continued to further centralize its authority in many policy areas during his presidency, often with President Bush's approval. For example, President Bush supported the extension of "federal goals and standards to such areas as education testing, sales tax collection, emergency management, infrastructure, and elections administration" and the imposition of restrictions on partial-birth abortions, new work requirements for TANF recipients, and new standards for issuing secure driver's licenses. President Bush also supported legislative efforts to prohibit same-sex marriage. The expansion and centralization of the federal grants-in-aid system continued under President Barack Obama and has continued, albeit counter to his recommendations, under President Trump. As shown in Table 2 , outlays for federal grants to state and local governments has continued to increase in recent years (from $660.8 billion in FY2016 to $674.7 billion in FY2017, and to an anticipated $728.0 billion in FY2018), largely due to increased outlays for Medicaid (increasing from $368.3 billion in FY2016 to $374.7 billion in FY2017, and to an anticipated $400.4 billion in FY2018). However, outlays for federal grants to state and local governments has increased in other policy areas as well. As shown in Table 4 , the number of federal grants to state and local governments has also increased, from 664 in 1998, to 953 in 2009, 996 in 2012, 1,188 in 2015, and 1,274 in 2018. In addition, the emphasis on categorical grants has been retained, as 1,253 of the 1,274 funded federal grants to state and local governments in 2018 were categorical grants, and 21 were block grants. Also, despite UMRA, unfunded federal mandates have continued to be issued in many policy areas. For example, CBO reports that from January 1, 2006, to December 31, 2018, 217 laws were enacted with at least one intergovernmental mandate as defined under UMRA. These laws imposed 443 mandates on state and local governments, with 16 of these mandates exceeding UMRA's threshold, 14 with estimated costs that could not be determined, and 413 with estimated costs below the threshold. CBO reported that hundreds of other laws had an effect on state and local government budgets, but those laws did not meet UMRA's definition of a federal mandate. Grant conditions, historically the predominant means used to impose federal control over state and local government actions, have also continued to be used to promote national goals. For example, many observers consider the adoption of the No Child Left Behind Act of 2001, signed into law on January 8, 2002, to be President George W. Bush's signature federalism achievement. Although the act allows states to define the standards used for testing, it imposed federal testing, teaching, and accountability standards on states and school districts that, overall, significantly increased federal influence on public elementary and secondary education throughout the nation. In addition, during his presidency, the Help America Vote Act of 2002 instituted "sweeping new federal standards, along with new funding, that regulated significant features of state and local election processes." President Obama did not issue a formal federalism plan and did not formally advocate a major shift in funding priorities within functional categories. Instead, the Obama Administration attempted to cultivate a place-based approach, customizing support for communities based on their specific assets and challenges. This new approach seeks out communities' plans or vision for addressing a set of challenges and then works across agency and program silos to support those communities in implementing their plans. However, the expansion of Medicaid eligibility under P.L. 111-148 , the Patient Protection and Affordable Care Act (ACA), which President Obama strongly endorsed, increased health care's position as the leading category of federal assistance to state and local governments. The ACA also either authorized or amended 71 federal categorical grants to state and local governments, further enhancing the role of categorical grants in the intergovernmental grant-in-aid system. The Obama Administration did not formally advocate a major shift in funding priorities from categorical grants to block grants, or from block grants to categorical grants. However, the number of funded block grants declined somewhat during the Obama Administration, from 24 in 2009 to 20 in 2016. Also, although the Obama Administration did support ARRA's funding for two relatively significant temporary block grants (the $53.6 billion Government Services State Fiscal Stabilization Fund for public education; and the $3.2 billion Energy Efficiency and Conservation Block Grant for energy efficiency and conservation programs) and ARRA's provision of additional, temporary funding to TANF ($5 billion), the Child Care and Development Block Grant ($2 billion), the Community Development Block Grant ($1 billion), the Community Services Block Grant ($1 billion), and the Native American Housing Block Grant ($510 million) programs, the Obama Administration generally advocated enactment of new competitive categorical grant programs (e.g., TIGER surface transportation grants and Race to the Top education grants) rather than the expansion of existing block grants or the creation of new ones. However, the Obama Administration did advocate the consolidation of categorical grant programs in several functional areas as a means to reduce duplication and promote program efficiency. For example, the Obama Administration supported the consolidation of dozens of surface transportation categorical grant programs into other surface transportation categorical grant programs in P.L. 112-141 , the Moving Ahead for Progress in the 21 st Century Act of 2012 (MAP-21). The Obama Administration also advocated the merging of categorical grant programs in the Department of Homeland Security as a means to "better target these funds." The Trump Administration indicated in its FY2018 budget request that it intended to refocus federal grants on "the highest priority areas," provide "a greater role for state and local governments," "slow the growth of grant spending over the 10-year budget window," and "rein in the growth of Medicaid." This budget proposes to cap federal funding for the Medicaid program, to establish a state matching requirement for the Supplemental Nutrition Assistance Program, to eliminate the Community Development Block Grant and Social Services Block Grant programs, and to make other reductions that reestablish an appropriate federal-state fiscal relationship and contribute to achieve a balanced federal budget by 2027. Among other grant initiatives, the budget proposes to establish a 25% non-federal cost match for FEMA [Federal Emergency Management Agency] preparedness grant awards that currently require no cost match … authorizes a new Federal Emergency Response Fund to rapidly respond to public health outbreaks … reforms the Centers for Disease Control and Prevention through a new $500 million block grant to increase state flexibility and focus on the leading public health challenges specific to each state … [and] includes $200 billion in budget authority related to the [Trump Administration's] infrastructure initiative. The Trump Administration continued to advocate for these objectives in its FY2019 and FY2020 budget requests. For example, the Administration indicated in its FY2019 budget request that Over many decades, the increasing number of grants and size of grants has created overlap between programs, and complexity for grantees, and has made it difficult to compare program performance and conduct oversight. The multiple layers of grants administration can increase the cost of administration and create inefficiencies and duplication. Less Federal control gives State and local recipients more flexibility to use their knowledge of local conditions and need to administer programs and projects more efficiently. The 2019 Budget takes steps toward limiting the Federal role, and reducing spending. This budget slows the growth of grant spending over the 10-year budget window and, in particular, starts to rein in the growth of Medicaid ... The Budget provides $749 billion in outlays for aid to State and local governments in 2019, an increase of 3% from 2018. The increase is entirely due to spending for the Administration's infrastructure initiative; all grant spending other than Medicaid and the infrastructure initiative will decline by 11% in 2019. The Trump Administration repeated its intent to slow the growth of federal aid to state and local governments in its FY2020 budget request: This budget slows the growth of grant spending over the 10-year budget window and, in particular, starts to rein in the growth of Medicaid, which accounts for 56 percent of total grant spending to State and local governments. The Budget provides $751 billion in outlays for aid to State and local governments in 2020, an increase of less than one percent from spending in 2019. Among its proposals to slow the growth of federal aid to state and local governments and improve federal grant performance, the Administration recommended that Medicaid be converted to a block grant or be subject to a per capita spending cap indexed to the Consumer Price Index "to support States as they transition to more sustainable health care programs and encourage them to pursue innovative ideas to that aim to curb costs moving forward." states be provided "maximum flexibility over their Medicaid programs" to place the program "on a sound fiscal path." funding be eliminated for "lower priority grant programs," such as the Sea Grant, Coastal Zone Management Grants, and the Pacific Coastal Salmon Recovery Fund. funding be eliminated for Community Development Block Grants and the Economic Development Administration. In addition, the Trump Administration noted that its President's Management Agenda, released in March 2018, included a cross-agency priority goal of achieving results-oriented accountability for federal grants funding. The Administration's goal is to ensure that federal grants to state and local governments are "delivered to intended recipients as efficiently as possible" by standardizing the grants management process and data, building shared IT infrastructure, managing risk, and achieving program goals and objectives. The Administration also included proposals "to require able-bodied adults participating in the Supplemental Nutrition Assistance Program (SNAP) enter and re-enter the job market and work toward self-sufficiency." As the data in Table 2 , Table 3 , and Table 4 attest, outlays for federal grants to state and local governments, in both nominal and constant dollars, and the number of federal grants to state and local governments have continued to increase since the mid-1980s. Given its increased size and cost, providing effective congressional oversight of federal grants to state and local governments can be a daunting task. Given the decentralized nature of the congressional committee system, Congress is well positioned to provide effective oversight of individual federal grants to state and local governments. However, it could be argued that the decentralized nature of the congressional committee system is not optimally conducive to providing effective oversight of the interactive effects of multiple federal grants to state and local governments, or of the potential interactive effects of federal grants to state and local governments and federal tax policy. In the past, the independent, bipartisan ACIR, which operated from 1959 to 1996, provided Congress and others a series of authoritative reports on the status and operation of intergovernmental grants, both as individual programs and as a collective system. GAO has published several reports over the years on federal grants that have helped to fill the informational and analytic void left by ACIR's demise. However, it could be argued that Congress may wish to examine whether a reconstituted ACIR, perhaps one that focuses on the structure and operation of the intergovernmental system as a whole, might prove useful as an additional source of information and analysis as it conducts oversight of the federal grants to state and local governments. For example, such an organization could provide an accepted methodology for counting federal grants to state and local governments, and provide Congress periodic assessments of the intergovernmental grant system's overall performance. It could be argued that the recent upward trend in outlays for federal grants to state and local governments is about to end because there is a general consensus that anticipated growth in federal discretionary spending, which includes outlays for federal grants to state and local governments, may be targeted for reductions as part of an effort to address the federal deficit and debt. However, Congress's historical tendency to use federal grants to state and local governments as a means to create jobs and promote national economic growth suggests that the upward trend in federal grant outlays and federal grant numbers that has been experienced over the past several decades may continue, although at a slower pace. President Trump's FY2020 budget request estimates that total outlays for federal grants to state and local governments will increase from $696.5 billion in FY2018 to an anticipated $749.5 billion in FY2019 and $750.7 billion in FY2020. In retrospect, with the exception of the early 1980s, federal grant funding, the number of federal grants, and the issuance of federal mandates have increased under both Democratic and Republican Congresses and Presidents. Historically, there have been notable differences between the two parties' approaches toward federalism. Although both parties have generally opposed unfunded federal mandates, the Republican Party has done so more aggressively, as evidenced by its 1994 Contract With America, sponsorship of UMRA, and recent legislative efforts to broaden UMRA's coverage to include, when requested by the chair or ranking Member of a committee, the prospective costs of legislation that would change conditions of federal financial assistance. The Republican Party has also advocated the devolution of certain federal grant-in-aid programs to state and local governments while the Democratic Party has generally opposed devolution. The Republican Party has also been more aggressive in its support of the decentralization of grants-in-aid decisionmaking to state and local governments through the consolidation of categorical grants into block grants, for revenue sharing, and administrative relief from various grant conditions. But, overall, the historical record suggests that for most Members of both political parties, regardless of their personal ideological preferences, federalism principles are often subordinated to other policy goals, such as reducing the federal budget deficit, promoting social values or environmental protection, and guaranteeing equal treatment and opportunity for the disadvantaged. As long at this continues to be the case, and the public continues to express support for specific government programs ̶ even if they generally oppose "big" government as a whole ̶ there is little evidence to suggest that the general historical trends of increasing numbers of federal grants to state and local governments, increasing outlays for those grants, an emphasis on categorical grants, and continued enactment of federal mandates, both funded and unfunded, are likely to change.
The federal government is expected to provide state and local governments about $750 billion in federal grants in FY2019, funding a wide range of public policies, such as health care, transportation, income security, education, job training, social services, community development, and environmental protection. Federal grants account for about one-third of total state government funding, and more than half of state government funding for health care and public assistance. Congressional interest in federal grants to state and local governments has always been high given the central role Congress has in determining the scope and nature of the federal grant-in-aid system, the amount of funding involved, and disagreements over the appropriate role of the federal government in domestic policy generally and in its relationship with state and local governments. Federalism scholars agree that congressional decisions concerning the scope and nature of the federal grants-in-aid system are influenced by both internal and external factors. Internal factors include congressional party leadership and congressional procedures; the decentralized nature of the committee system; the backgrounds, personalities, and ideological preferences of individual Members; and the customs and traditions (norms) that govern congressional behavior. Major external factors include input provided by voter constituencies, organized interest groups, the President, and executive branch officials. Although not directly involved in the legislative process, the Supreme Court, through its rulings on federalism issues, also influences congressional decisions concerning the federal grants-in-aid system. Overarching all of these factors is the evolving nature of cultural norms and expectations concerning government's role in American society. Over time, the American public has become increasingly accepting of government activism in domestic affairs generally, and of federal government intervention in particular. Federalism scholars attribute this increased acceptance of, and sometimes demand for, government action as a reaction to the industrialization and urbanization of American society; technological innovations in communications, which have raised awareness of societal problems; and exponential growth in economic interdependencies brought about by an increasingly global economy. This report provides a historical synopsis of the evolving nature of the federal grants-in-aid system, focusing on the role Congress has played in defining the system's scope and nature. It begins with an overview of the contemporary federal grants-in-aid system and then examines its evolution over time, focusing on the internal and external factors that have influenced congressional decisions concerning the system's development. It concludes with an assessment of the scope and nature of the contemporary federal grants-in-aid system and raises several issues for congressional consideration, including possible ways to augment congressional capacity to provide effective oversight of this system.