Power Shifts in Intergovernmental Relations, a Result of Fiscal Federalism

Fiscal federalism is the result of the states' dependence on the national government for funds. Until 1913, the national government had minimal monetary resources, thus possessing little control over the affairs of the states. Once effected, the Sixteenth Amendment resulted in the amassing of government funds on the national level. This reserve of money enabled the national government to initiate a multitude of national programs--such as the interstate highway--as well as provide grants to the states. It is primarily through these grants that the national government can exert influence…