Regulating Intergovernmental Relations in the 1990s

The period since 1974 has witnessed major changes in intergovernmental relations as Congress has decreased federal financial aid to state and local governments and has exercised partial and total preemption powers in new areas and in innovative ways. President Ronald Reagan persuaded Congress to combine 57 categorical grant-in-aid programs into nine new or restructured block grants, thereby giving state governments a degree of regulatory relief. In addition, several of his administrative initiatives reduced federal regulation of state and local governments. Nevertheless, the president signed several major preemption, crossover-sanction, and tax-sanction bills into law. Current trends suggest that Congress will rely less on grants-in-aid and more on preemption, supplemented by crossover and tax sanctions, to achieve its policy goals. As a result, the federal system will become more complex. Federalism theory must be modified to explain fluctuating national-state relations on a continuing basis and the mutual dependence of each plane upon the other two planes for the performance of functions by incorporating, as central elements, informal and formal federal preemption.