Cooperative Federalism

We are back to federalism this week. We discussed the idea of dual federalism in our last installment. This week, we cover the idea of cooperative federalism. Coercive federalism comes next.

The constitutional independence of the federal government and the states does not rule out the possibility of cooperation.

Cooperative federalism makes the most sense when the federal government and the states need each other to achieve some goal.[1]  In general, Congress and the President often want to use the constitutional authority and administrative capacity of the states to implement federal policy – while the state governors and legislators want to benefit from federal funding.[2] A natural quid pro quo arises in which states gain the use of federal grant monies in exchange for accepting federal policies.

Grant priorities have shifted over time.  Transportation grants were dominant in the years 1959-66 as a result of the 1959 National Interstate and Defense Highways Act. Between 1967 and 1980, the priorities become education, training, employment, and social services.  As of fiscal year 2019, the states were implementing an enormous range of federal policies, including 1,253 categorical grant programs and 21 block grant programs with a total value of $749 billion.[3] The vast majority of that spending was for categorical grants, and roughly 60 percent of those grants were for health care.[4]

Some experts in federalism find a lot to like about federal grants-in-aid to the states.[5] Many categorical grants have built-in flexibility so that different states can tailor them to their needs. Many grants include rules for distribution that help fill the gaps between the richest and poorest states. Federal grants can be used to promote minimum national standards for many activities, including health insurance and pollution.[6] States can go further than the minimums if they wish. 

While these advantages are real, other experts urge caution. We will discuss that next week.

If you feel impatient and want to get to that right now, please here for access to the full course. We are in Part 3 of 4 now.

Image: Federal-State Cooperation on Road Project. WAFB 9 News.

[1] Grant money to a state government for a specific program could instead finance a tax reduction or spending on non-program purposes if a state has already committed to spend on program goals without federal money.

[2] Kincaid, 2017, pp. 1071.

[3] Rozell & Wilcox, 2019, p. 62 and Congressional Research Service, 2019a, Table 4.

[4] Congressional Research Service, 2020, Table 2.

[5] Rozell & Wilcox, 2019, pp. 62-65.

[6] Rozell & Wilcox, 2019, p. 68 & 74.

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