Federal Grants-In-Aid

• Author: Lee A. Albert
• Pages: 987-989

Page 987

Federal grants-in-aid are subventions to state or local governments, private institutions, or individuals in support of a wide variety of undertakings. Early in the nineteenth century, governmental transfers of land were used to support road construction and agricultural education. Cash grants to states for diverse functions, such as vocational

EDUCATION, forest fire prevention, and maternal health, came of age in the decades preceding the NEW DEAL. The public welfare programs established in 1935 greatly expanded the federal role in state finances. But it is the proliferation of categorical grants since 1960 that has rendered them the principal instrument of federal influence over social services and urban affairs. This recent extraordinary growth reflects an unplanned series of fragmented national responses to state fiscal inadequacy in the face of increased demand for collective goods.

Most of the current 500 or so national grant programs are intergovernmental, and federal monies under them constitute about one-quarter of the annual expenditures of both state and local governments. Notwithstanding federalism-inspired movements toward less directive federal grants, known as REVENUE SHARING and block grants, most aid programs remain categorical, with narrowly defined undertakings and detailed conditions imposed on the receiving agencies.

Grants are made pursuant to Congress's broad discretion to spend for the GENERAL WELFARE and common defense. Like other national powers, grant-making authority rests on permissive and expansive constitutional principles established during the post-New Deal era of judicial reaction and retreat, typified by such cases as STEWARD MACHINE CO. V. DAVIS (1937) and Oklahoma v. Civil Service Commission (1947). The recurrent use of grant conditions to impose national solutions on traditionally local issues suggests that the political safeguard of FEDERALISM constraining Congress in the use of national regulatory power is less operative in the exercise of grant-making authority. (See TAXING AND SPENDING POWER.)

Page 988

For many years intergovernmental relationships in grant programs were understood to be administrative, cooperative, professional, and donative. Consequently, federal judges declined to intervene in grievances founded on grant programs. This aloofness markedly changed with the advent of antipoverty litigation in the late 1960s, when courts acknowledged that private...