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Federalism Poverty

Federalism & Poverty Many Americans believe that the federal government is too big, both in the number of agencies it directs and in the scope of its powers. Some people also think that the daily business of Capitol Hill has no effect on their lives, in part because they believe that politicians do not understand their problems. This dissatisfaction with Washington, D.C., in recent years has renewed debate over the division of power between federal and state and local governments. Federalism – the sharing of power between the states and the national government – has been a major issue throughout U.S. history. Thomas R.

Dye defines federalism as “a division of power between two separate authorities – the nation and the states – each of which enforces its own laws directly on its citizens” (Dye, 1999, p.98). When the U.S. Constitution established the federal government in 1787, it only exercised limited or enumerated powers, such as making treaties and printing money. The Tenth Amendment of the Bill of Rights, ratified in 1791, clarified that all other powers belonged to the states: “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,” (U.S. Const., 1791, Amend.

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10). Over the years, in response to national crisis, many of the government’s powers, particularly those over social programs, were centralized to the federal level. However, in recent years, an increasing number of people on Capitol Hill and across the country want to devolve, or transfer, power from Washington, D.C. to state and local governments. After the 1994 elections, the Republican majority in Congress pursued the devolution agenda as part of the party’s Contract with America. According to Michael S.

Greve, “One crown jewel of the devolution campaign..was the 1996 welfare reform, which replaced the federal Aid to Families with Dependent Children program, a set of very stringent, categorical federal requirements, with block grants to the states” (Greve, 1999,p.120). Within general federal guidelines, the states are permitted to design and implement their own welfare programs. State governments are largely responsible for managing the budgets and enforcing the laws in many policy areas, such as poverty and education. Many members of Congress want the states to take on even greater authority in these areas and other, including environmental protection and crime control. Some experts believe that state governments will be able to tackle these problems more effectively and efficiently than Washington. Others, however, doubt that the federal government will provide adequate funds and worry that some states do not have the necessary infrastructure to offer adequate services.

Before the Great Depression, aid to the poor came mostly from churches and charity organizations. When millions of Americans fell into poverty in the 1930s, however, charities and state governments were not financially equipped to provide for the needy, and there was no federal policy in place to provide aid to low-income people. President Franklin Roosevelt and Congress wrote landmark legislation, known collectively as the “New Deal,” to combat the effects of the Great Depression. The new legislation included massive job programs that provided work for unemployed Americans. Other programs, like Aid to Families with Dependent Children and Social Security, offered financial assistance to people who could not work because of family responsibilities, age, or disability.

This legislation also marked the beginning of an era of centralization; control over many services became more concentrated in the federal government. The legacy of Roosevelt’s New Deal continued with President Lyndon Johnson’s “War on Poverty” three decades later. In 1964, in the annual message to the Congress on the State of the Union, President Johnson declared that “no society could be great with poverty in its midst” (Johnson, 1964). Johnson implemented social programs designed to eliminate poverty by moving people up the social ladder through vocational education and job training. He also promoted programs, such as food stamps, Medicare, and Medicaid, to help poor and older Americans get enough food and adequate health care. Johnson called his plan the “Great Society.” President Richard Nixon advanced many of the New Deal and Great Society programs by establishing the Supplemental Security Income program and expanding the food stamp program. Alice Rivilin wrote,” President Nixon was attracted to revenue sharing which fit well with his new federalism philosophy of increasing state autonomy” (Rivilin, 1992,p.100).

Revenue sharing was popular with state and local officials. It provided financial support and made no burdensome demands. It was not as popular with members of Congress who preferred more control over how federal funds were used. In the words of political scientist Timothy Conlan, “Nixon participated in the greatest expansion of federal regulation of state and local governments in American history” (Conlan,1988,p.90). In his first inaugural address in 1981, President Ronald Reagan vowed, “to curb the size and influence of the federal establishment because the federal government is not part of the solution, but part of the problem” (Reagan, 1981).

Aiming to reduce the size and scope of the federal government, President Reagan promised to balance the budget by scaling back programs such as Social Security, Medicare, and Medicaid. Although the Democratic-controlled Congress went along with some of President Reagan’s proposals, it would not cut Social Security or Medicare, two very popular programs. Consequently, the budget deficit ballooned and the federal government became, in many ways, even bigger. However, the Reagan presidency gave new prominence to federalism issues that would be promoted after the Republican Party captured control of Congress in 1994. In 1994, for the first time in forty years, a Republican majority was elected to both the U.S. House of Representatives and the U.S.

Senate. A top priority for the new majority was scaling back the federal government. In the words of House Budget Committee Chairman John R. Kasich (R-Ohio), “Congress wanted to return money, power, and responsibility to the states” (Kasich 1994). This was a campaign some dubbed the devolution revolution.

President Bill Clinton responded to this shift in popular sentiment by declaring in his 1996 State of the Union address that “the era of big government is over” (Clinton, 1996). Clinton supported much of the legislation that emerged from the 104th Congress, including an unfounded mandates law so that Washington will have to provide funds for state and local governments to enforce most new federal policies or mandates. The recent emphasis on giving states more authority has had a major effect on the issue of poverty. President Clinton came into office in 1993 promising to end welfare as we know it. “But it was a Republican Congress in 1996 that did so. After President Clinton had twice vetoed welfare reform bills, he and Congress finally agreed to merge welfare reform with devolution” (Dye, 1999, p.122). In August 1996 he fulfilled his promise by signing a historic welfare reform bill called the Personal Responsibility and Work Opportunity Act. The law ended the 61 years guarantee of direct cash assistance to poor families with children and gave states vast new authority to run their own welfare programs with block grants from the federal government.

Supporters and critics of the new law disagreed not only about its potential effect on needy citizens, but also about the states’ ability to handle the problem of poverty better than the federal government. Supporters of the welfare reform bill believed that the federal government allowed welfare to become a lifelong entitlement, rather than temporary assistance. Many Americans also argued that the national government was too inefficient and bureaucratic to properly administer programs like Aid to Families with Dependent Children and that state governments deserved at least the opportunity to control welfare. They contended that states, largely free from federal regulations and more in touch with their residents, could more effectively implement their own welfare systems. On the other hand, many lawmakers and experts contended that the federal government should always guarantee some level of financial assistance to low-income Americans. Critics asked how state governments would provide welfare during recessions, when unemployment increases the demand for financial assistance. In addition, many doubted that the states had the necessary infrastructure to provide welfare recipients with job training and childcare.

The results of the 1996 welfare reform bill are still being compiled and analyzed. So far the news is encouraging. “Welfare caseloads across the nation fell by 1.2 million people between August 1996 and April 1997” (U.S. Gen. Acct.

Office, 1997, p.6). There have been significant reductions in the number of welfare recipients in almost every state. For example, Wisconsin, Oregon, and Massachusetts have about 25 percent fewer people on welfare than they did in 1993. Supporters of the welfare bill give credit for this caseload reduction not only to the legislation but also to reform-minded governors and innovative state experiments. “The welfare reform law was designed to promote work, and that is exactly what is happening,” said Bruce N. Reed, President Clinton’s chief domestic policy advisor.

“More people on welfare are working, and more people are leaving welfare to go to work” (Reed, 1998, p.1). Critics of the bill, however, remain skeptical of the results and say that the robust US economy is more responsible for the decline in welfare rolls. Federalism allows more people to participate the political system. Federalism also makes government more manageable, and more efficient. Federalism provides for a dispersal of power, it manages conflict and provides for unity. Federalism meets local needs, protects individual rights and creates jobs. Dye said, “Despite the strengths of federalism, it has its problems ..

federalism can obstruct action on national issues” (Dye, 1999 ,p.104). Federalism permits the benefits, services and costs to be distributed unevenly. For example, Medicaid is a federally funded program carried out differently in every state. Federalism does not always meet local needs; the federal government may not even consider local needs. Federalism provides for more NIMBY’s “obstructing things like airports, highways, waste disposal plants, public housing, drug rehabilitation centers, and other projects that would be in the national interest” (Dye, 1999,p.104).

Federalism provides a lack of uniform policies and laws as each state can have different definitions of laws. The current swing of the political pendulum is toward devolving power back on the states. The best example of this trend is the Welfare Reform Act of 1996, which ended federal welfare programs going back to the New Deal and established in their place a system of block grants to the states. It is not clear if this devolution revolution will continue. Turning Medicaid into block grants has also been proposed, along with ending most federal entitlements (programs whose funding is pegged to the number of qualified applicants rather than to set amounts appropriated by Congress).

Economic prosperity in the 1990s has reduced the need for a social safety net. However, even during these prosperous times, Republican governors worry whether states can and will perform as well as the federal government if economic recessions return or as the population ages, creating greater needs for health care and welfare support. References Clinton, W.J. (1996). “State of the Union Address.” Washington D.C. Conlan, T. (1988).

New federalism:intergovernmental reform from Nixon to Reagan. Washington D.C.: The Brookings Institution. Dye, T.R. (1999). Politics in America (3rd ed.).

Upper Saddle River, NJ: Prentice-Hall. Greve, M.S. (1999). Real federalism. Washington D.C.: The AEI Press. Johnson, L.B.

(1964). “State of the Union Address.” Washington D.C. Kasich, J. (1994). “Congressional Speech.” Washington D.C. Reed, B.N. (1998, December 30).

States meeting standards of welfare law. The Milwaukee Journal Sentinel: Retrieved October 16, 2000 from the World Wide Web: /1230welf.stm Regan, R. (1981). “Inaugural Address.” Washington D.C. Rivlin, A.M.

(1992). Reviving the American dream. Washington D.C.: The Brookings Institution. U.S. Constitution. (1791). Amendment 10.

U.S. General Accounting Office, Health, Education, and Human Services Division. (2000). Welfare Reform: States early experiences with benefit termination. Retrieved November 13, 2000 from the World Wide Web: =30 Political Issues.


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