The Avenue

Nixon’s New Federalism 45 Years Later

Bruce Katz

Forty years ago, President Richard Nixon left office in disgrace. But five years prior to his resignation, he made a landmark contribution to our perpetual debate over the division of power in our federalist system.

Taking to national television six months into his first term, Nixon presented a bold vision of what he called “the New Federalism,” detailing his overarching domestic affairs agenda  centered on a new vision of how power should be shared between the federal government and the states.

“After a third of a century of power flowing from the people and the states to Washington, it is time for a New Federalism in which power, funds, and responsibility will flow from Washington to the states and to the people,” he said. The president went on to describe changes to welfare and job training, an overhauling of the Office of Economic Opportunity (which directed poverty programs) and a new system of revenue sharing between the federal government, the states and localities. He stressed that the proposals would offer “more money and less interference” to states and local governments and would act “not as a way of avoiding problems, but as a better way of solving problems.”

Like all bold presidential initiatives, the New Federalism had its triumphs and defeats. Nixon’s Family Assistance Plan, an attempt at reforming the welfare system, never moved forward. His revenue sharing proposal had to be dramatically increased before passing in Congress. The Community Development Block Grant initiative was authorized in the Housing and Community Development Act of 1974 and remains a federal program today.

Nearly half a century after Nixon’s New Federalism, the country is still trying to sort out what gets done in Washington and what responsibilities lie at the state and local level. Congressman Paul Ryan’s recent Opportunity Grant proposal, for example, extends Nixon’s thinking on block grants, but does so in disturbing ways. Unlike Nixon’s New Federalism, Ryan’s plan would devolve crucial safety net programs back to states, preventing their funding streams from automatically adjusting for economic growth or contraction.

The vast majority of the re-sorting today, however, is being done not through grand presidential addresses, blue-ribbon commissions, or formal negotiations between the federal government and its federalist partners. Rather, the re-sorting is happening by default due to the drift and dysfunction of the national government.  

States and metropolitan areas are finding it necessary to grapple with super-sized challenges on their own. Ensuring a living wage. Educating our future workforce. Designing, financing and delivering 21st century infrastructure. Managing the challenges of an aging and diversifying society.  

In essence, the withdrawal of the national government as a reliable partner has led to a burst of innovation at the sub-national scale. Federalism is being reinvented without the guiding hand or intentional participation of the federal government. States, local governments, private business and civil society are filling the vast vacuum at the center. This is the Next Federalism – messy, uneven, chaotic, ground-up, and quintessentially American.

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