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New Federalism is the attempt to return control of resources and programs to state and local governments. The first modern use of the term was President Richard Nixon's “New Federalism,” and both President Ronald Reagan and President George W. Bush gave decision-making power to the states.
In 1969 Nixon attempted to restructure government. Federal programs had mushroomed under President Lyndon Johnson, and states and municipalities begged Nixon for relief from recession-driven revenue shortfalls and new demands on services. Nixon proposed giving the states and cities money and authority formerly dispensed by the federal bureaucracy.
The 1972 State and Local Assistance Act provided funds to state and local governments with no matching requirement and few strings. It was popular because it put decision making in the hands of ...