Reacting to the growth of the federal government and the increased centralization that marked President Lyndon B. Johnson’screative federalism, the Nixon administration sought to decentralize programs and devolve power to state and locally elected officials. Much of this initiative targeted federal aid, primarily through revenue sharing and block grants. State and local officials were the principal recipients of this aid.
General Revenue Sharing (GRS) was signed into law in 1972. This program allowed state and local officials to use the money allocated for supplementing existing services, initiating new programs or reducing taxes. The Nixon administration also proposed creating six special revenue sharing programs, which were eventually modified by Congress into block grants.
Administratively, New Federalism created ten regional councils covering nine federal agencies or departments, effectively decentralizing approximately 200 grant programs. The grant application process was also standardized by the Office of Management and Budget Circular A-102.
These initiatives were attempts to limit many of the policies created by Johnson’s creative federalism and restore authority to state and local elected officials. The success of Nixon’s New Federalism efforts was tempered by the Democratically controlled Congress, which continued to expand categorical grant programs, even as it approved GRS and block grants.
David B. Walker, The Rebirth of Federalism: Slouching toward Washington (Chatham, NJ: Chatham House Publishers, 1995).