How Do Block Grants Reflect Cooperative Federalism?

Block grants in the United States reflect cooperative federalism because they demonstrate a sharing of fiscal responsibility for local and state needs by national government, but they are also a devolution from previous categorical, formula and matching grants. Because they give states greater control regarding how the money will be used, block grants shift power back to the state level. Block grants are believed to have helped the concept of cooperative federalism to continue, but after the earlier types of grants, which carried strict regulations, had already forced state and local governments to become more capable and responsible in their spending decisions.

Cooperative federalism refers to the greater involvement in state and local affairs by the federal government that began during Franklin D. Roosevelt's presidency as a response to the many human crises which resulted from the Great Depression. Herbert Hoover, the U.S. president in office when the stock market collapsed in 1929, believed that people should be helped through private charity organizations and voluntary assistance rather than being aided by the federal government. President Roosevelt, who took office in 1933, believed otherwise, and initiated a wide range of federally-backed intervention and assistance programs, collectively referred to as "the New Deal." This marked the beginning of a major shift in the balance of power between state governments and the federal government.

The presidency of former state governor Ronald Reagan during the 1980s reflected an attempt to shift the balance of power toward state government. President Reagan pushed for more block grants as a means of continuing to provide federal aid to the states without the controls, measurement criteria and regulations that accompanied the categorical, matching and formula grants.