Costs of the “New Federalism”

Among the economic changes wrought by the 1980s has been a new fiscal relationship between the federal government, on one hand, and the state and local governments, on the other. Ronald Reagan heralded the “New Federalism,” which was supposed to consolidate federal grants and free the other levels of government from federal constraints. But the result has been fewer dollars without fewer mandates on cities to serve their citizens in need.

The U.S. Constitution created a fed...