Federalism Section 3 Study Guide

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Name _____________________________ Class _________________ Date __________________ Section 3 continued Section Summary FISCAL FEDERALISM Today the national government influences state policies—and its own priorities—through fiscal federalism, a system of spending, taxing, and What makes up the system of fiscal federalism? providing aid in the federal system. The national government has been assisting states as far back as the _______________________ Articles of Confederation, often giving states grants of _______________________ land to sell or do with as they like. In the twentieth _______________________ century, the national government’s power increased with the use of grants-in-aid—money and other resources that the national government provides to pay for state and local activities, ranging from low-income housing to disaster preparedness programs. These grants are funded by federal income taxes. GRANTS AND MANDATES The national government frequently uses categorical grants, or federal grants that can only be used for a specific purpose, or category, of state and local spending, to give aid to states. These kinds of grants can fund a variety of programs, from the construction of a new airport to relief efforts in a region affected by a natural disaster. States are often expected to also contribute money toward the project being funded, and the quantity of the categorical grant may depend on the state’s population. Block grants are federal grants that are given for more general purposes than a categorical grant or for broad policy areas, such as welfare or education. States can spend the money as they see fit. When the era of new federalism began in the 1980s, many categorical grants were changed to block grants. Federal mandates are the third way the national What is the main difference government gives monetary aid to states. Leaving between block grants and much less spending control to the states than federal mandates? categorical or block grants do, federal mandates are _______________________ demands to carry out certain policies as a condition of _______________________ receiving grant money. In the past, the mandates have been applied—and justified by the equal protection _______________________ clause of the Fourteenth Amendment—to establish _______________________ affirmative action and certain environmental regulations, including the Clean Air Act of 1970. States who do not meet the demands of a mandate Original content Copyright © by Holt McDougal. Additions and changes to the original content are the responsibility of the instructor. Chapter 4 45 Interactive Reader and Study Guide

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