Reform Based on Power, Not Philosophy

In Trumpism, there was no consensus on just where the balance between federal, state, and local power ought to sit. Indeed, it was an unprincipled policy change – not in the sense that it was immoral but, rather, in the sense that it did not have a strong base in the principles of American political thought. Franklin D. Roosevelt and Lyndon B. Johnson shared deeply held convictions that the federal government was responsible for solving problems that state and local governments could not (or would not). Nixon believed that the federal government had grown too large and powerful, and that the country needed to shift funding and responsibility back to state and local governments. When previous presidents introduced policy changes to shift the pendulum, they set sail with the wind of principles at their back, even if sometimes it was rhetorical.

Trump, in contrast, had no philosophy about how to drive decentralization and centralization. His approach to federalism was fundamentally about power, wrapped up in his effort to pull more power from state and local governments, at least on the issues he cared about, to Washington, DC; within the federal government, from Congress and the courts to the executive branch; and within the executive branch to the White House. This approach, in turn, was deeply interwoven into his broader instinct that the president ought to have primacy over the executive branch and, through that, to the policies that mattered most to him.

Trump was not a philosopher who had sought to live the unitary executive approach to government, but he was heavily influenced by writers who were. They promoted the idea, originally discussed in the first years of the republic, but which had virtually disappeared until the Reagan revolution, when right redeveloped it with great energy.

The unitary executive theory held that Article II of the Constitution made the president supreme over the executive branch,Footnote ¹ and Trump believed that conveyed great power, including sending troops to American cities. “Not that I don’t have – I would – the right to do anything I want to do,” Trump said. “I’m the president of the United States.”Footnote ²

Trump conceived of federalism in the same sense, as a system in which he was the unitary executive: a system of unitary federalism. That label, of course, is an oxymoron. Federalism is inherently a concept about shared power, defined by a covenant among its members.Footnote ³ A system with a single individual shaping policy isn’t – and can’t be – federal. The story of how Trump nevertheless attempted to do just that prompted deep tensions in American democracy and has proven one of the most important legacies of the Trump era.

For generations, decisions about intergovernmental policy rested in the hands of policy entrepreneurs, who could fashion transformative ideas out of the big collection of Legos that defined intergovernmental programs. During FDR’s New Deal, officials such as Harry Hopkins, Frances Perkins, and Harold Ickes created new programs in relief, social welfare, and infrastructure.Footnote ⁴ Lucius Clay, a retired general who had headed logistics for then-general Dwight D. Eisenhower, established the grand interstate highway system and justified the cost as a program to help the military move equipment and troops. Bold policy entrepreneurs shaped Lyndon B. Johnson’s Great Society and the War on Poverty. New Haven Mayor Richard Lee saw New Haven as a model city. In New York, Mayor Robert F. Wagner, Jr., helped give the antipoverty programs shape. In the decades that followed, Tommy Thompson made a national reputation for his welfare-to-work initiative that he led as Wisconsin’s Republican governor. The federal grant system, whether its pendulum swung toward centralization or decentralization, opened the door to innovative entrepreneurs.

In the workings of Trumpism, a new central force took shape. The budget cuts and uncertainties about what was going to happen next created enormous challenges, where command rested in the hands of agile leaders throughout the system.Footnote ⁵ Gone were the hard-driving innovators, replaced with nimble steps of state and local leaders who sought to keep programs alive, politically and fiscally. Theirs was a world of policy disruptions, and no one was sure where that would lead – and who would lead the way.

Swirling around the background of these large strategic issues was a series of tactical steps whose very volatility was important in shaping Trump’s unitary federalism. For example, by June 2025, the daily target tripled for deportations of migrants in the country illegally, from 1,000 to 3,000, under pressure from White House deputy chief of staff Stephen Miller.Footnote ⁶ The administration opened a detention center in the middle of the Florida Everglades, christened “Alligator Alcatraz,” where sharp-toothed reptiles were guards, reporters pointed out. Trump was so taken with the idea that he visited it soon after its opening. Soon, however, critics contended that conditions inside were inhumane, ranging from inadquate climate control to overcrowding, and Florida quietly shut the facility down. The administration shifted to arresting and detaining migrants in big cities. That led to violent confrontations in Minnesota and the death of two Minneapolis residents, neither of whom was a migrant. The enormous blowback led the administration to end its surge into Minnesota.

The administration also campaigned against waste, fraud, and abuse in federal grants, a strategy that came directly out of the 900-page game plan for the administration’s second term, Project 2025, produced by the Heritage Foundation. The federal government’s medical care program for the poor, Medicaid, was “a prime target for waste, fraud, and abuse,” the report said.Footnote ⁷ (The federal government’s other principal medical program, Medicare, provided coverage for the elderly.) The report was correct. The US Government Accountability Office regularly produces its own analysis of “improper payments” in federal programs (“payments that should not have been made or that were made in the incorrect amount,” typically for more than was due, according to GAO). Medicaid ranked high in improper payments among all federal programs, at $31.1 billion in fiscal year 2024, second only to Medicare, at $54.3 billion. Together, just these two programs accounted for 53 percent of all the federal government’s improper payments.Footnote ⁸

These numbers reinforced the argument that conservatives had been making for decades: that the federal government was rife with fraud and that programs such as Medicare and Medicaid were prime drivers. And if that was true, then cutting back or eliminating the programs seemed the only cure. The argument drove the administration’s campaign to transform Medicaid, which had become the largest federal grant program, but high-stakes political battles pushed the fraud issue to the background. It also set up fierce combat with blue state California, even though some red states had much bigger problems.Footnote ⁹

The Trump administration counted on the federal judiciary to push back against state and local government policies that had angered many on the right, like allowing transgender individuals to compete on women’s swim teams. Local officials contested the Trump administration’s decision to send troops into many cities, all of which had Democratic leaders. Trump claimed the troops were needed to fight crime and deal with unrest caused by illegal immigrants. Local leaders countered that Trump administration officials were engaged in racial profiling and retribution against local progressive leaders. The courts became the battleground for that battle, and the administration had a spotty batting average in those contests.

The Transformation of American Federalism

All of these issues swirled in a mélange that transformed American federalism more fundamentally than at any time in more than a century. In the sections that follow, I will explore these issues, starting with the role that federalism played in the development of democracy in the United States.

Since the nation’s founding, democracy hinged on the balance of power, not only among the three branches of government but also between the federal government and state and local governments. All democracies have struggled to find the balance between centralized and decentralized power, but none have done so in a more complex political environment than in the US. There have been efforts by scholars to simplify the peculiarly American balance of powers, but none of those efforts have had much success for long because the underlying political tensions have prevented any kind of analysis from being stable for long.

There have also been multiple efforts to characterize American federalism, but those theories have rapidly changed as well.

What characterizes American democracy is the sharing of power among the different levels of government. What characterizes this sharing is a constant muddying of the lines between the layers. Rarely throughout American history have the lines been muddier than during the second Trump administration.

Throughout the study of federalism starting in the twentieth century, academics have developed a series of metaphors to describe federalism. There was “layer-cake federalism” and “dual federalism,” to suggest that the responsibilities of each level of government were separated into layers. That contrasted with “marble-cake federalism,” which argued – powerfully – that the functions of federalism became swirled into the levels of government.Footnote ¹⁰ There were theories of “cooperative federalism,” in which there was substantial collaboration among the levels of government; “pragmatic federalism,” where governments carefully navigated their way to pursue their own interests; “non-centralized federalism,” with substantial devolution to lower levels of government; and nation-centered federalism, which was largely the reverse.Footnote ¹¹ There is “partisan federalism,” the result of hyperpolarization, and “executive federalism,” in which the president’s use of executive orders undermined collaboration among the levels of government.Footnote ¹²

Thomas J. Anton wrote, “[W]e need to develop analytic concepts capable of organizing the wealth of available information [about American federalism] into general statements regarding system structure and change.”Footnote ¹³ That has been the goal – and the challenge – of academic work on federalism for decades. The descriptors and metaphors have been constantly changing because federalism has proven an especially dynamic part of the American political system. It is the singular issue that almost tore the nation apart during the Civil War, the tension that shaped the country’s response to the Great Depression, the center of the battle over Civil Rights, the engine driving the War on Poverty, and then in the Trump administration one of the major battlegrounds as he sought to gain control over domestic policy.

We don’t have general statements regarding system structure and change, except that we understand the players, the importance of the president’s role in a system involving so many players at different levels of government, the underlying and ongoing tensions in the system, and the role of federalism in shaping democracy in America.

Democracy and Federalism

This quest for balance thus became one of the most-often recurring themes in American political life. Indeed, it shaped the fundamentals of American democracy more than any other feature of the Constitution, including the separation of powers. That made the United States unique among the world’s democracies. There have been other federal systems. The Swiss have had semi-sovereign cantons since the thirteenth century, and the Canadian federation was created in the mid-nineteenth century. However, no country has been as large, with more reliance on state governments, for as long a period of time, with such a commitment to democracy, as the US.

The peculiarly American form of federalism drew French intellectual Alexis de Tocqueville to tour the US from 1831 to 1832 in search of an understanding about what made the country’s democracy tick. Tocqueville traveled from New York to the western wilds, in what is now Michigan, before heading down the Mississippi River by steamboat to New Orleans, and then back north to Washington, DC, and Philadelphia. He detailed his trip and his findings in a masterful two-volume book, Democracy in America. It was a tale of the central importance of democracy in the new and growing country.Footnote ¹⁸

This was a special point of curiosity for Tocqueville. Europe was dominated by strong central governments. Local governments were essentially branch offices of the center, and local officials were agents of the national government. America presented a fascinating alternative for Tocqueville: how a governmental system might function with a central government exercising a defined set of powers through a constitution and with state and local governments shaping most of their own policy. This was a very different model than what he knew in Europe. He wanted to understand democracy in America, what the chances were that it would succeed, and whether Europeans could copy the model.

Tocqueville knew that centralization of power in a national government was always a temptation. In the US, however, devolution of power to the states safeguarded the “sovereignty of the people” and created the fundamental – and unique – strength of the American republic.Footnote ¹⁹ “The sovereignty of the Union is an abstract being, which is connected with but few external objects; the sovereignty of the States is hourly perceptible, easily understood, constantly active; and if the former is of recent creation, the latter is coeval with the people itself,” he wrote. Tocqueville praised “municipal institutions which limit the despotism of the majority, and at the same time impart a taste for freedom and a knowledge of the art of being free to the people.”Footnote ²⁰ Democracy in America, he concluded, depended on the people for its strength, and local governments were the instrument of the people’s power.

The growing size and complexity of the country, however, created an increasing challenge to the local governments that were at the core of Tocqueville’s America. A depression ninety years after his travels, for example, demanded of local governments a response they could not provide. They had neither the money nor the administrative capacity to provide relief to people whose lives had been upended. President Herbert Hoover believed that the job rested with the state and local governments and that the Tenth Amendment tied his hands in providing federal aid.

Franklin D. Roosevelt won the 1932 election on the promise of a “New Deal” that would bring relief to Americans. That inevitably required a stronger role for the federal government, but like Hoover he faced the constraints of the Tenth Amendment. He relied on a clever work-around, through a vast expansion of federal grant programs. State and local governments badly needed money to help their people; the federal government could not force them to adopt expanded programs. Nor, he believed, could the federal government do so directly. But with federal grant programs, state and local governments had the choice about whether to accept the money, although given the problems they and their people were suffering, the federal government knew they would gladly take it. So the state and local governments voluntarily became partners of the federal government in administering federal programs without sacrificing their Tenth Amendment legal autonomy.

The strategy was pragmatic, not principled, and it fundamentally transformed the democracy that Tocqueville had observed.

Federal grants were not new. In fact, two ordinances – the Northwest Ordinances of 1785 and the Northwest Ordinance of 1785 – had set aside a portion of the land in new states, which local townships could then either sell or lease to support local schools.Footnote ²¹ The strategy expanded during the nineteenth century, especially through the Morrill Act of 1862, which sent land grants to any state that established a college devoted to agriculture and mechanical arts.Footnote ²² The grants funded the creation of universities such as Cornell, MIT, Penn State, Ohio State, Wisconsin, Purdue, Texas A&M, and the University of California, Berkeley. Then in 1890, Congress passed a second Morrill Act to establish land grants for historically Black colleges and universities, including Tuskegee University, Alcorn State University, and Kentucky State University. It’s a fair statement that, without nineteenth-century land grants, college football stadiums on Saturday afternoons would be very different places – many of the nation’s football powerhouses would not exist to field teams.

With FDR’s New Deal, the grant system pivoted from land grants to cash grants, increasing from $119 million in 1929 to $2.3 billion in 1935.Footnote ²³ Scholars have called the system that emerged “cooperative federalism,” in which federal, state, and local governments joined in achieving public goals and in which the responsibilities of the three levels of government overlap.Footnote ²⁴

With growing concern about civil rights in the second half of the twentieth century, the federal courts became far more involved in federalism, especially with the 1954 Supreme Court decision Brown v. Board of Education.Footnote ²⁵ In a stroke, unanimously decided, the Court ruled that “separate but equal” facilities were inherently unequal. The Court thus asserted jurisdiction over local schools – and by extension over all other state and local government policy. That, John Kincaid contended, made the system less cooperative and more coercive, with state and local governments holding less discretion about the role the federal government expected them to play.Footnote ²⁶ The balance of power in federalism had shifted from one where each level had relative autonomy to one where the federal government had far greater leverage through its grant programs and then, ultimately, to one where federal courts asserted a far stronger role.

The New Deal model therefore did not resolve the tensions between central power and local autonomy. It simply transformed the arena in which they played out, especially through the transfer of money, and it enormously increased the stakes, financial and legal. Traditional conservatives attempted to rein in federal power by relying on the Tenth Amendment and restraining federal power. Progressives continued to expand the federal government’s ambition, drawing state and local governments ever closer to the federal government and increasingly blurring the boundaries.

Since before the country’s launch, federalism has been at the core of the American story. Through grants, both land and cash, as well as court decisions, the balance of federal, state, and local power has changed, with a steady course through centralization – but with constant debates about whether and how to reset the balance. That quest to define the balance is the story of federalism and democracy in America.

The Eternal Debate over Balance

No leader in the history of the world has succeeded in running a country effectively from the capital. Different parts of every country are different – with varying problems, varying people, and varying resources – and they require distinctive governance strategies. Some degree of decentralization is therefore inevitable. Moreover, in a democracy, no leader could long survive by allowing local governments each to go their own ways. Some degree of centralization is therefore essential.Footnote ²⁷ History demonstrates that there is no single, correct answer to the question of how best to set the balance. And then, as governments seek solutions, none remains stable for long, so the balance shifts over time.

Ancient Chinese emperors discovered that they could not rule from Peking without fitting their policies to the widely varying conditions across the vast empire. The Qin dynasty, which ruled from 221 to 207 BCE, solved the problem by creating a civil service. A century later, emperor Wudi established a university designed to train officials in the bureaucratic skills they would need – and on a testing process to ensure they had learned them.Footnote ²⁸ The founders of America’s new country, two millennia later, added a new element to the underlying tension between centralization – shared rule of the entire country – and decentralization – self-rule by the people – to define the overarching theory of federalism in American democracy.Footnote ²⁹

Every nation that has tried to establish unity has struggled with the need to surrender control to local government. Students of Latin can recite by heart the beginning of Julius Caesar’s account of his Gallic wars, to bring what is now France into the Roman empire: “Gallia est omnis divisa in partes tres,” or “All Gaul is divided into three parts.” To conquer Gaul, he had to deal with three different tribes: the Aquitani, the Belgae, and the Celts (or Gauls). The three different cultures brought him three different problems, as he describes in his Commentarii de Bello Gallico.Footnote ³⁰ It was a challenge that repeated itself as the Roman empire expanded: how to bring a measure of national unity to a sprawling empire spread across many different cultures.

In England, King John faced a different problem in 1215. He had stumbled badly in expensive military campaigns, financed by heavy taxes on the country’s nobles but ultimately losing the property in France he was fighting for. The nobles, whose power and wealth came from owning large areas of land, were unhappy with both, and their opposition threatened to break out into civil war. The king agreed to meet with the nobles in an open meadow about twenty-five miles west of London, just a few miles away from today’s Heathrow Airport. Under their enormous pressure, he agreed to a “Great Charter,” or Magna Carta, which laid out the basic rights of the people, including the right to a fair trial, protection against unlawful imprisonment, and a prohibition against selling justice on the side.Footnote ³¹ The copy currently displayed in the magnificent Salisbury Cathedral captured all sixty clauses on a parchment of just fourteen by seventeen inches, in a remarkable script from a cathedral scribe.

Everyone who studies the history of democracy knows about the Magna Carta. Its short-term impact, however, was ironically minor. Two months after the agreement was signed, Pope Innocent III ruled that the agreement was illegal because the king had signed it under duress. King John never had to live up to its terms because he died the next year, and for a century kings and queens mostly ignored it. But the ideas in it had taken root in the country and framed the basic principles of English common law, especially this one: there were limits on just how broadly the central government could impose its will.

The Conservatives’ Approach to Federalism

In the modern American experience, there have been two major approaches to federalism and the role of the central government. The first was sorting out: conservatives, preferring a smaller government in general and a smaller federal government in particular, developed a principled approach, in the spirit of the Tenth Amendment. They sought strategies for defining the roles of government’s layers, both to determine who ought to do what and about how to prevent the blurring of boundaries. Their goal was to reduce federal intrusion into state and local government affairs. They sought to identify a function and then identify which level of government could – and should – best perform it.

This approach never took root in its pure form. During the twentieth century, the model of “dual federalism” it represented, with the federal and state governments performing different roles, gradually gave way to a “marble cake” model, in which the functions of government were swirled among different levels of the American system, as Morton Grodzins put it.Footnote ³² Scholars disagreed about whether the “dual” model ever described reality, but by mid-century the label gave way to an approach characterized by cooperation among the levels.

The “sorting out” issue became an important puzzle in post–World War II America. The New Deal had so dramatically transformed just about everything about government, including federalism, and reformers were eager to take a breath – to consider which functions ought to be left to the federal government and which to states and localities. The Eisenhower administration, for example, created the Joint Federal-State Action Committee, a body designed to improve highway safety. It brought together officials from all levels of government. Eisenhower had told governors that he thought the country needed legislation “to eliminate hodge-podge duplication and waste in existing federal-state relations affecting government functions and taxation.” He noted, “For a long time I have thought that there must be a clarification of the responsibilities of the state and federal governments in many fields of public activity.”

The goal, Eisenhower said, ought to be “to reallocate certain of these activities between federal and state governments,” which would make them “more effective instruments serving the security and welfare of our citizens.”Footnote ³³ Which programs needed federal support? Which activities ought best be left to the states? Sorting out the roles of different governments was the logical next step, Eisenhower believed. And, of course, it was the logical if gentle push-back to FDR’s expansionist ideas for the federal government’s role.

And which governments dominated which areas? Daniel J. Elazar developed a map of American federalism, that in turn answering the question.Footnote ³⁴ Elazar made perhaps the strongest argument in favor of the “sorting out” approach, suggesting that the job ought to be easy: “simply have the federal government return or turn over certain functions to the states, free certain revenue sources to accompany them, and reduce federal regulatory interventions into state affairs and the process of state governance.” Martha Derthick used case studies to demonstrate how functions varied across different levels of government and how strengthening that approach offered the opportunity for a new theory of federalism.Footnote ³⁵

In practice, the cross-pressures in the American federal system derailed most of these discussions, which never turned out to be easy. Conservatives never theless kept at the goal of lessening the power of the federal government by sorting out government functions. That would, of course, mean both shrinking and then limiting the federal government’s power.Footnote ³⁶ This model’s approach to the Constitution is originalist; it seeks constantly to move back toward what the founders designed – or, at least, what the approach’s proponents believe that the founders intended, which only indirectly matched what the founders really said.

The Progressives’ Approach to Federalism

The other approach is pragmatic: progressives, preferring a larger federal role, developed an approach founded in pluralism and devoted to advancing the Fourteenth Amendment’s promise of equal protection. They contended that any effort to make America’s inherently messy system into a neat separation of functions was doomed to failure. They pointed to programs where functions spread across intergovernmental boundaries, such as environmental protection, in which the federal government might define basic standards for clean air and clean water but where problems varied tremendously, depending on prevailing winds, the direction in which waterways flowed, the nature of a pollution’s source, and the technologies available for limiting it. In this world of economists’ externalities, what worked best was what could be made to work. This was FDR’s approach, one focused on problem solving, not ideology.

Supported by this approach, intergovernmental grants became far more important to the federal government, in shaping state and local governments’ policy decisions and as a source of state and local government revenue. The grants pay for things that state and local governments want to do but would struggle to finance on their own, from providing mass transit to running public health care programs. The federal government, on the other hand, can steer state and local government policy in improving access to health care, for example. This approach takes a far more dynamic view of the Constitution. By relying on grants as incentives, the pragmatic approach does not contest the roles of different governments but simply offers them incentives for doing what the federal government wants, even if the incentives are such that the only realistic choice is no choice.

Scholars have often described federalism as a pendulum, swinging between the extremes of national power and centralization, on the one hand, and state and local power, with decentralization, on the other.Footnote ³⁷ That framework has powerfully shaped the analytical approach of scholars, analysts, and practitioners for generations – until, that is, the launch of the second Trump administration, when the pendulum model no longer fit.

Executive Action Disrupts the Balance

In naming Vought to direct OMB, two weeks after the 2024 election, Trump said, “Russ knows exactly how to dismantle the Deep State and end Weaponized Government, and he will help us return Self Governance to the People.”Footnote ⁴² Trump did not have a theory of federalism to promote democracy as much as a theory of power advanced through federalism. That theory of power, in turn, relied heavily on officials such as Vought, who knew exceptionally well how to dismantle the existing centers of power, regulatory and financial, and how to couch the initiative in the mantle of originalism. He did not share the quest for equality of the progressives or the effort to sort out functions by levels of government of previous conservatives.

Trump’s singular goal was to re-center power in the presidency, and he relied on Vought to do that. In many cases, Trump’s approach to federalism picked up tools from wherever he found them, to exact retribution on blue states and blue cities, to pursue his policy goals, and to reclaim budget dollars where useful to pay for tax cuts – in general, to rely on a tactically useful hybrid approach, devoid of theory or ideology, with the sole purpose of shuffling the federalism deck in ways that met Trump’s singular approach to government.

Many analysts from both the right and the left suggested that, as the administration unwound the federal government’s administrative capacity through personnel cuts, more power would inevitably flow to the states. At Cato, the conservative think tank, Victoria Litman asserted, “The United States constructed a legal system that depends on federal enforcement, and its scaffolding is crumbling.” As a result, the Trump administration instituted a constitutional approach where the Tenth Amendment was no longer meaningful, with “post-supremacy federalism: a legal regime in which federal law remains formally binding, but it no longer governs in practice.”Footnote ⁴³ From the left, William G. Gale and Darrell M. West wrote in a Brookings blog post that Trump’s policies could produce “a renaissance in state actions,” in which they “take matters into their own hands.”Footnote ⁴⁴ The notion was that Trumpism had hollowed out federal agencies and that this hollowing-out would inevitably empower the states.

Some scholars, moreover, pointed to Supreme Court decisions that both weakened the power of executive branch agencies to interpret the law and created a tool “to weaken and dismantle the administrative state.”Footnote ⁴⁵ A weakened federal hand might even create a “policy vacuum,” full of “uncertainty and risk,” that might also create opportunities for more initiatives by state governments.Footnote ⁴⁶

That uncertainty and risk emerged just days into Trump’s second term. OMB announced a “temporary pause” in federal grants to state and local governments. OMB targeted, in particular, programs that advanced “Marxist equity, transgenderism, and green new deal social engineering policies,” which OMB asserted were “a waste of taxpayer dollars” that failed to “improve the day-to-day lives of those we serve.”Footnote ⁴⁷ OMB required every federal agency to freeze grant spending, review each program for its fit with Trump’s policy priorities, and send a list of its programs to OMB. To ensure compliance with the administration’s aims, its guidance insisted that every agency assign each federal grant program to a “senior political appointee” with the power to cancel any that didn’t match with presidential priorities. More than 2,600 programs were frozen.

State and local officials, who had already folded those grants into their budgets for the year, were stunned. The ranking Democrat on the US House Appropriations Committee, Rosa DeLauro, and vice chair of the Senate Appropriations Committee, Democrat Patty Murray, challenged OMB, writing that “The scope of what you are ordering is breathtaking, unprecedented, and will have devastating consequences across the country.” They contended that the administration had no power to take back money that Congress had appropriated and wrote, “The law is the law – and we demand you in your role as Acting OMB Director reverse course.”Footnote ⁴⁸

Nothing brings Republicans and Democrats together faster than a threat to money flowing to every congressional district. Opposition to the freeze exploded across the country. State and local officials raced to the federal courts, won an injunction against the freeze, and OMB withdrew the freeze. The administration, however, had demonstrated it was prepared to act on a scale previously unimaginable, with a speed that hinted at what was to come.

Did Trumpism create a vacuum into which state and local governments might reassert power? Or was the administration signaling in its first days that it was prepared to bully state and local governments to pull power away from them?

If nothing else, the administration was upsetting existing patterns of power, out of a firm conviction that great uncertainty gave the president more maneuvering room. The strategies that the administration’s short-lived Department of Government Efficiency reinforced its steps, with the federal government’s relationship with state and local governments just a small part of the much bigger plan. Federalism had long been a playing field on which it could shuffle the locus of power and transform domestic policy.

Trumpism did not follow the historic path on federalism, seeking a different balance between centralization and decentralization. Instead, it sought far more powerful levers over state and local government policy and administration. It pulled – hard – in bringing some issues to the center. It pushed – hard – to send other issues to state governments. Like so much else in the second Trump administration, it was a strategy that upset much of what had become established wisdom and practice in the quest for bringing more decision-making into the federal executive branch and, within the executive branch, into the Executive Office of the President.

The administration set out to redefine the typical centralization–decentralization swing of the pendulum, with some programs heavily centralized, others pushed out to the states, the life of some programs squeezed out while others saw a big push, often through very nontraditional ways. Presidents since Nixon have rolled out their own “new federalism” programs. Trump’s version of “executive federalism” was dramatically different from what the country had previously seen, not only in recentering the balance of power between the levels of government but also in fundamentally shifting who within the federal government had control over intergovernmental policy – and with it, the domestic policy agenda.

Congressional Acquiescence

Not only did Trump play a very different role than previous presidents, including during his own first term. Congressional behavior radically changed as well. In earlier eras with big policy changes, members of Congress joined forces with state and local government officials and the organizations that represented them in Washington, DC, the “Big Seven” (the National Governors Association, National Conference of State Legislatures, Council of State Governments, National League of Cities, US Conference of Mayors, International City/County Management Association, and the National Association of Counties).Footnote ⁴⁹ The Big Seven, in turn, connected their congressional work with the White House Office of Intergovernmental Affairs. Their concerns were twofold: winning increases in federal aid to state and local governments and pushing for decreases in federal restrictions on how they could spend that money.

The powerful role for state and local governments in Washington, DC, had already begun to unravel before the Trump presidencies. Medicaid had gobbled up an ever-larger share of federal aid to state and local governments, so there were fewer other grants for state and local governments to haggle over. Their focus shifted as a result away from Congress and the pursuit of new programs to the executive branch and the regulations controlling the program.

At the same time, Congress became increasingly polarized. Members increasingly focused on maintaining their narrow hold on the House of Representatives and on a supermajority in the Senate. The days of the 1960s and 1970s, when state and local governments could get the attention of members of Congress on grant formulas and special projects melted away, especially as Congress sought, with only partial success, to shut down pork-barrel spending. The White House matched that transformation, as its Office of Intergovernmental Affairs pivoted away from building partnerships with state and local governments as co-equals in the federal system to treating them as one more supplicant seeking the president’s favor.

The Big Seven dramatically fell in influence on Capitol Hill. Several of the organizations, especially the National Governors Association, splintered along partisan lines, with the Republican and Democratic Governors Associations gaining more leverage than their previously robust parent. The National Attorneys General Association, once an organization devoted to procedural coordination on judicial matters, broke completely along partisan lines. In the Biden administration, the Republican attorneys general allied on court challenges to the administration’s policy on issues such as reproductive rights and student loans.Footnote ⁵⁰ Their Democratic counterparts waged a campaign in the federal courts to stop the Republican campaign against abortion, environmental protection, and food assistance – filing more than 100 lawsuits against the second Trump administration in its first fourteen months.Footnote ⁵¹

Federalism issues thus drifted away from Congress and toward state legislatures and the federal courts. The close adherence of so many Republican members of Congress to Trump’s policies – and the administration’s blunt threat to primary any members who did not – further weakened Congress’s role in intergovernmental relations, in this and in so many other areas of American policy.

Federalism Fireworks

After the federalism fireworks of Trump’s first weeks in office, as the administration unfroze its freeze, the conflicts seemed to settle down.

Buried in the original announcement of the “temporary pause” was the assertion that federal officials “have a duty to align Federal spending and action with the will of the American people as expressed through Presidential priorities.” That launched an unprecedented effort to reshape federal aid. The Trump administration’s management agenda, released in December 2025, reinforced that assertion. Although the agenda is just two pages long, it upended sixty years of federal policy.Footnote ⁵²

Since the Civil Rights Act of 1964, Congress and successive administrations have been attaching a Christmas tree’s worth of conditions to federal grants. State and local governments never want to give up the chance for cash, but to get it, they’ve had to follow a lengthening list of “crosscutting requirements,” ranging from the civil rights standards to rules for environmental review, health and safety, labor standards, rehabilitation programs, anti-ageism, and a host of others. In 1980, the OMB tabulated fifty-nine different requirements, but no one really knew how many there were.

The more grant programs grew – from 387 in 1968 to 1,274 in 2018 – the harder the money was to turn down.Footnote ⁵³ That made the requirements a grippy Velcro for even more federal mandates.

For decades, state and local governments complained about these strictures; they wanted to get rid of them but, of course, keep the money. Trump gave them part of what they wanted – but not, as it turned out, what everyone wanted, and at a higher price than almost anyone wanted to pay. Trump’s management agenda promised to “eradicate woke and weaponized programs across government,” which meant ending requirements devoted to diversity, equity, and inclusion (DEI), among them ones attached to federal aid.

The US Department of Education told the states that it viewed DEI standards, which it didn’t define, as violations of the civil rights law because they provided preferential treatment to selected groups. It asked state officials to certify that they weren’t using DEI. Republican officials happily and quickly complied. Democratic officials refused to sign and headed to the courts.

It was the first time any president had tried to use federal grant programs to remove grant requirements instead of adding new ones – something for which state and local officials had been campaigning for years. But there was a huge catch, and it proved a federalism flash point.

For decades state and local officials had not only sought to remove crosscutting requirements but also to loosen federal control over the money. The Trump administration had very different ideas. The December management agenda reinforced the message of an August executive order requiring all federal agencies to name a senior political appointee to ensure that grant decisions “are consistent with agency priorities and the national interest,” that grant programs had to “demonstrably advance the President’s policy priorities,” and that political appointees had to revise grant programs “to permit termination for convenience,” especially if “the award no longer advances agency priorities or the national interest,” defined of course by presidential policy.Footnote ⁵⁴

That fundamentally redefined accountability in federal grant programs. Every president, of course, has awarded grants to jurisdictions that favor the president’s wishes and delayed or canceled grants to governments that opposed the president. The Biden administration followed that instinct, but its work came primarily through enforcing existing rules rather than aggressively strip-mining money away from programs that didn’t fit the administration’s policies.

Trump cut a string of education grants, work–study aid for college students, grants to nonprofits for victims’ services and substance abuse, and aid for housing programs designed for the homeless – all because the programs didn’t match his goals for what the federal government ought to be doing, or because they served DEI, in the administration’s view.

But beyond these discretionary programs, as I will show a bit later, the administration took aim at entitlements as well. The One Big Beautiful Bill Act in 2025 stripped $1 trillion from Medicaid over the following decade. SNAP funding – the federal government’s food assistance program – was reduced by as much as $300 billion. These amounted to the biggest cuts in the programs at any time in their history. State governments faced the choice of making up the difference or dealing with recipients losing their support.

In just a few months, the Trump administration boldly put its mark on federalism. It eliminated at least one major crosscutting requirement that had come along with grant programs for the last sixty years. With a wink, it said it was sending power to the states but made the states responsible for programs the feds had been paying for and added new administrative responsibilities to the programs. It crossed the line that once protected entitlements.

And, most fundamentally, it redefined accountability, away from the law and from the crosscutting goals that endured across administrations. It pivoted instead to the broader policy mandate that Trump asserted. It’s impossible to find any administration in recent memory that created more federalism fireworks.

Grants for State and Local Projects

Before the beginning of the Great Depression, nonprofit organizations and local governments had primary responsibility for social service and housing programs. With the enormous increase in unemployment, housing problems, agricultural setbacks, and hunger, they quickly ran out of money. The New Deal changed that: it relied on many of the existing organizations, funded them to expand their operations, sidestepped the Tenth Amendment’s restrictions, and vastly expanded the federal government’s footprint in state and local government policy.

The strategy expanded rapidly through the rest of the twentieth century and spilled into the twenty-first. After accounting for inflation, federal grants grew more than fiftyfold from 1940 to 2024 (Figure 1). This growing flow of federal money also increased state and local government dependence on federal grants, which tripled from 13 percent of state government general revenue in 1942 to 37 percent in 2022.Footnote ⁵⁵ (There was a short-term increase in the early 2020s with Covid relief money. Even after the grants ended, federal aid resumed its steady growth.)

Figure 1

Federal Grants (in billions of constant 2017 dollars)

Source: US Office of Management and Budget, Historical Tables, Table 12.1.

Most of the earlier grants were for capital investment and infrastructure, ranging from roads to bridges – more than half of all grants in 1940, in fact (Figure 2). Following World War II, there was a brief spike in grants for payments to individuals, as the federal government provided veterans with money to help ease their way back to civilian life, with programs administered through state governments. The pattern soon returned to a focus on grants for capital investment, especially for the interstate highway system, launched by the Eisenhower administration in 1956. Those highway grants were a terrific deal for the states: the federal government paid 90 percent of the cost for the increasingly car-loving population. Grants for other roads and bridges soon followed.

Figure 2

Federal grants for payments to individuals and for capital investment

Source: US Office of Management and Budget, Historical Tables, Table 12.1.

In the 1970s, however, the pattern shifted. Federal grants for capital investment such as roads and bridges shrank as a share of the total as grants for payments to individuals rapidly increased. Grants to state and local governments for payments to individuals, especially for health care, food stamps, and welfare, exploded and came to dominate the system. Over the next quarter of a century, these grants for payments to individuals made up nearly 80 percent of all grants.

Medicaid became the single most dominant federal grant program. Spending for the program grew from 11 percent of all federal grants in 1970 to 57 percent in 2023, through an especially complex program. The federal government set minimum standards and provided a core grant to each state. State governments were permitted to provide additional coverage, funded through state revenue. They had the responsibility for administering the program, but they contracted that work out to private companies that processed claims from health care providers on behalf of program recipients, bundled reimbursements and collected funds from the federal government, and then distributed the money to the health care providers. This tangled system made it impossible to determine who actually was responsible for what. Then, when problems inevitably popped up, it was difficult to determine who was responsible for fixing them. The feds paid two-thirds of the program’s total cost, with the states responsible for the rest.Footnote ⁵⁶ Federal grants grew from 23 percent of all state revenue in 1990 to 36 percent in 2023, largely because Medicaid had grown to consume so many state tax dollars.Footnote ⁵⁷

In 1982, the Reagan administration proposed to simplify the tangled web of funding and administration with a swap. The federal government would assume the full cost of Medicaid, while the states would pick up welfare costs. Reagan called it “a financially equal” swap, but the governors thought they smelled a trap.Footnote ⁵⁸ Reagan had already been reaping political capital from his tales of “welfare queens” taking advantage of the programs, and the governors feared they would inherit the political baggage that Reagan had created. Many governors feared that Reagan was trying to saddle them with an ever-more-expensive and increasingly unpopular program, and their negotiations with the administration never went far.

Moreover, the Reagan administration had concentrated on the federal-state program/budget swap and paid little attention to the complex dynamics between state legislators and mayors, which often generated enormous heat. The governors, in addition, didn’t trust OMB to keep the hands-off promise for welfare and worried that more federal strings might materialize down the road. The negotiations bogged down and the administration never proposed a bill to Congress. The proposal evaporated, and the decision has haunted state officials ever since. Medicaid costs spiraled up much faster than welfare. They would have been much better off had they taken the deal.

In 1996, Bill Clinton forged an unlikely – and short-lived – partnership with Republican House Speaker Newt Gingrich to pass welfare reform. The federal entitlement to welfare ended. The feds moved more administrative responsibility to the states, especially for ensuring that welfare recipients met work requirements. Funding to administer the program shifted to block grants, where the states had much more discretion about how the money should be spent. The number of people on welfare dropped by nearly 60 percent within a few years, and dependence on welfare dropped.Footnote ⁵⁹

That made the states’ decision to reject Reagan’s offer even more painful. If the states had taken the deal, the big federalism issues dominating Trump’s agenda, especially funding Medicaid, would have been the federal government’s problem to deal with. Instead, the program cast an increasingly large shadow across state budgets.

Since 1992, federal grants have been the single largest source of all state and local revenue (see Figure 3), larger than property, income, or sales taxes. Then Obamacare provided more aid for states that decided to opt in to expansion of Medicaid benefits, and this further accelerated the growth of grants in general and health care grants in particular.

Figure 3

Federal grants have grown as a revenue source for state and local governments

Source: US Census Bureau Annual Survey of State and Local Government Finances, 1977–2023 (compiled by the Urban Institute via State and Local Finance Data: Exploring the Census of Governments; accessed May 4, 2026 07:20), https://state-local-finance-data.taxpolicycenter.org

Federal grants in general have not only accounted for a larger share of state and local government revenue but also have grown to more than a third of all state government revenue because of the growth of Medicaid (Table 2). Grants for health programs, mostly Medicaid, became 60 percent of all federal grants to state and local governments (Figure 4).

Figure 4

Grants for health as a share of total grants

Source: US Office of Management and Budget, Budget of the United States Government: Historical Tables, Fiscal Year 2026, Table 12.2, www.govinfo.gov/app/details/BUDGET-2026-TAB

The 2025 Revolution in Grants

The second Trump administration came into office determined to reverse these trends. After the grant freeze in its first weeks the administration followed in July 2025 with the “One Big Beautiful Bill Act” – its actual title, shortened later to simply OBBA. It was an example of “winning, winning, winning,” he said.Footnote ⁶⁰ Members of Congress representing states whose residents had high property values, such as California, Connecticut, Illinois, New Jersey, and New York, won a substantial restoration of the deduction for state and local taxes, from $10,000 to $40,000. There were big increases in depreciation for research and development as well as real estate investment, among many changes in the nearly 900-page act, estimated to cost about $3 trillion in the next decade. The changes made it far more difficult for state and local governments to estimate their tax receipts.

On the spending side, OBBA cut federal funding for SNAP (food stamps), climate and energy programs, community development grants, and especially for Medicaid, where OBBA increased work requirements and eligibility standards and pushed more responsibility to the states for administering the program. States faced the choice of cutting the program or making up the difference from their own tax dollars.

OBBA changed the intergovernmental structure “unlike any other period since the Great Society programs of the 1960s, or perhaps even the New Deal of the 1930s,” a consultant to state and local governments, Eric B. Schnurer, observed. The bill introduced enormous uncertainty into state and local budgets and dramatically changed their roles and responsibilities. The result was a “sea change,” Schnurer concluded.Footnote ⁶¹

Medicaid was a special problem for federal and state budgeters and for conservatives in particular. The administration’s script came from the Heritage Foundation report, Project 2025, which argued:

It proposed to hold states more accountable for determining who was eligible to receive benefits, to make recipients more accountable for health care choices by giving families cash payments to buy their own coverage from private insurers, to increase work requirements for able-bodied individuals, and to increase state responsibility for reducing fraud and finding program savings.Footnote ⁶²

Much of what Project 2025 concluded was correct. The program had indeed become enormously complicated, and some vulnerable patients slipped through the cracks. Medicaid was indeed a prime source of fraud, waste, and abuse. In 2023 alone, the US Government Accountability Office estimated that Medicaid was responsible for more than $50 billion in improper payments, some but not all of which constituted fraud.Footnote ⁶³ It did consume more of both federal and state budgets. All of this made the program a tempting target for Trump officials.

Everyone agreed that some change needed to be made. Democrats wanted to invest more federal money in the program. Republicans were eager to cut spending and to deflate the forces driving costs up, in sync with Project 2025, which called Medicare and Medicaid together “the principal drivers” of the national debt. That analysis called for “a more flexible, accountable, predictable, transparent, and efficient financing mechanism to deliver medical services,” along with the end of the “Medicaid expansion” option that had come along with Obamacare in 2010 and that was helping drive up costs.Footnote ⁶⁴

OBBA targeted the program with cuts of more than $900 billion in the following decade. A third came from tougher work requirements. Recipients had to engage in eighty hours of work or community service per month, except for parents with children under the age of thirteen, individuals who were “medically frail,” and women who were pregnant or postpartum. The job of determining whether individuals met these requirements fell to the states, both when individuals initially applied and then every six months when they needed to reestablish eligibility.

But that left a host of questions to be answered: what constituted “work” or “community service”; what “medically frail” meant; how to let recipients know about the new requirements; and what to do when a state couldn’t verify an individual’s compliance, especially whether to continue them in the program as the state attempted to track them down or whether to cut them off and risk leaving them without health care at a critical time.Footnote ⁶⁵ For their part, states had to decide whether to invest extra money into the program to make up for the federal cuts – or leave millions of Americans previously covered by Medicaid without coverage.

The work requirement rule proved especially difficult to manage. The law contained a “look back” provision, which allowed states to consider an applicant’s work history for multiple months before the review. States could use data such as payroll records to decide whether an individual met the standards without talking to individuals before cutting them off. If an individual received a notice of termination from the project, there was a thirty-day appeal period. If the individual wanted to get back into the program, the compliance process began all over again, including determination of current work status and whether the individual had been working for the previous several months. If an individual was declared ineligible for Medicaid, the individual was also ineligible to receive subsidies in the Obamacare marketplace, so the implications were doubly draconian. If states chose to do so, they could impose even tighter review requirements.

Both the Congressional Budget Office and the Kaiser Family Foundation determined that, by 2034, ten million people or more would be without health insurance, with the impact highly uneven. The number of reinsured Americans would rise 1 percent in Alabama, Mississippi, and South Carolina; in Kentucky and Oregon, the increase would be 5 percent. Other policy changes in the works could increase the number of uninsured even more, by 14 million, Kaiser estimated, but with very different effects in different states: an increase in the rate of uninsured by 7 percent in Louisiana and 6 percent in Florida, but just 2 percent in Wisconsin, South Dakota, and Idaho.Footnote ⁶⁶

The implications were stark: more people would lose health care coverage; the states would have to pick up more administrative responsibilities, which would strain their capacity; the cost of the program would shift more from the federal government to the states; and the impact – on both state budgets and ultimately on those receiving medical care under the program – would vary enormously. From its first week in office, the Trump administration worked to unravel the assumptions on which the intergovernmental system had grown for decades.

States had long been responsible for reviewing the eligibility of Medicaid recipients, but OBBA imposed tougher standards for eligibility, increased state responsibility for reviewing eligibility, and created greater compliance burdens on applicants – and reapplicants. The definitional questions, including what “work” meant, were complex. The challenges for applicants in demonstrating eligibility had increased, as was their need to continually reestablish their eligibility – or start all over again if removed from the program. For the states, meanwhile, the administrative burdens escalated.

That drove many of them to private contractors for management support, including managing the work requirements. In turn, that further increased the administrative complexity of the program. The federal government defined the program’s basic rules and supplied much, but not all, of the money. State governments decided whether to add additional benefits and how much of their own money to contribute. The states were responsible for running the program, but virtually all states depended on private contractors for paying claims, enrolling providers, creating systems for deciding who is eligible for what, and managing the data systems. In both Florida and Texas, contractors carry almost all the administrative responsibility.Footnote ⁶⁷ They, in turn, collect bills from health care providers – hospitals, clinics, physicians, and other experts – process payments to them, and bill the government, state and federal, for the amount due.

Individuals seeking insurance through the Medicaid program had to be approved for the Medicaid program and find a provider who accepted Medicaid; not all did. Then, following OBBA, they also had to regularly reestablish eligibility, often through private contractors or through government officials operating under guidance created by the contractors. As I found in earlier research, many Medicaid recipients work their way through the system without ever encountering a government employee, federal or state. In fact, in helping my mother-in-law in the last months of her life, the complexity of an eariler version of the system meant that my wife and I had to weave together the system’s elements and often had to make the ultimate decisions about what care she would receive. The experts dealt with the puzzle over what Medicaid would pay for, but not what would most benefit her. As gatekeepers, we essentially made the decisions that determined how much money the government spent on her. All that got vastly more complex in the OBBA.Footnote ⁶⁸

Accountability in a Sprawling Grant System

In such a sprawling process, accountability proved exceptionally difficult, since no one ultimately is responsible for anything; a large collection of players, loosely coordinated at best, contributes to different parts of the care system. With OBBA, the accountability problems multiplied, especially since contractors played an increasingly important role.

OBBA also imposed new work requirements for recipients in SNAP (the Supplemental Nutrition Assistance Program, which used to be known as food stamps).Footnote ⁶⁹ The program imposed a requirement for eighty hours of work a month on those getting help. It also expanded those who had to meet the requirement: the age limit increased from fifty-four to sixty-four; it included those experiencing homelessness; and it eliminated the previous exemption for veterans.

Here again, the responsibility for determining eligibility was left to the states, with similar problems of sorting through the complex requirements, and reliance on private contractors. States that had higher error rates, of 6 percent or more, would have to pick up between 5 percent and 15 percent of the program’s cost. The Congressional Budget Office estimated that this would shift $35 billion in spending from the federal government to the states, especially because the short timeline for getting the changes into place increased the chance of implementation errors. These changes, CBO projected, would reduce participation in SNAP by 2.4 million people.Footnote ⁷⁰ All of this was in sync with Project 2025’s recommendations.

The idea of providing relief through food stamps started in 1939, when the federal government intended it as one more short-term program to help the poor out of the Great Depression. The federal government at the beginning actually distributed stamps, which then could be traded for food at markets. After a relatively short shutdown, the program resumed and then became permanent in the 1970s. The basics were constant: the federal government defined standards for who was eligible for the program, and those standards were uniform across the country; if individuals were able-bodied and not spending most of their time on childcare, they had to meet work requirements; and a household’s cost for the program was defined by its income.

The federal government paid for the food stamps, state governments administered the program, and the federal government reimbursed them for their costs. To streamline administration in the 1980s, the federal government ended the issuance of stamps and provided benefits instead on refillable debit cards. In 2008, Congress, always staffed by experts with an ear for a good acronym, changed the name to the Supplemental Nutrition Assistance Program. The nomenclature gradually switched from “food stamps” to “SNAP,” although for the most part only insiders – recipients, administrators, and policymakers – recognize SNAP as the acronym for a program that goes back to the New Deal.Footnote ⁷¹

The program, however, has always been subject to attack from those who saw it as one of the most out-front forms of welfare. When there were stamps or vouchers, every grocery store shopper had waited in line behind someone purchasing items with food stamps – and many shoppers complained that food stamp recipients were using tax money to buy things they shouldn’t. That undermined political support for the program. The switch to benefit cards made transactions more anonymous – SNAP recipients swiped the cards the same way credit card shoppers did – but even then clerks might have to hold up the line to ask SNAP recipients for a different form of payment to cover the cost of ineligible items or pull those items off the conveyor, and that’s a problem that grew even larger as states began reclassifying many items like soda and candy as ineilgible for SNAP. For many Americans not receiving welfare benefits of some kind, this was the closest they came to a welfare program, and it often led to grumbling.

OBBA to imposes tougher work requirements because SNAP benefits were among the most visible to all taxpayers (in supermarket lines, customers mumbled, “Gee, that person doesn’t look poor, or that person is buying steak – why are taxpayers providing support?”) and to pass more responsibility onto the states (“States that allow problems of waste or eligibility ought to be responsible for cleaning them up”). On average, states faced an increase of two to three times of what they previously had been spending on SNAP. In fifteen states, the Georgetown Law Center on Poverty and Inequality estimated, increases would more than quadruple. Costs were projected to increase by 540 percent in New Mexico, 650 percent in Alaska, and 770 percent in Florida.

As a result, the Georgetown Law report concluded, states would be “left with no good options: they will have to shift funding away from other priorities – like education and health care – to preserve SNAP, raise new revenues, reduce SNAP enrollments by adding red tape, or end their SNAP programs entirely.” Any of these options would most affect children, seniors, and rural residents.Footnote ⁷²

OBBA marked one of the biggest changes in the program’s history. Moreover, SNAP was one of what economists have called “automatic stabilizers” that kick in during a recession. Policymakers didn’t need to do anything to help people hurt by an economic downturn; the eligibility standards would sweep them into the food support program. It provided them with one of the basics of life, did it quickly, and pumped extra money from food markets into local economies. Most of the SNAP changes enacted in OBBA would undercut these steps.Footnote ⁷³

In just its first few months, the second Trump administration thus made clear it would transform the fiscal side of federalism. The administration took aim at programs it viewed as supporting DEI, including rental assistance. Block grant program such as the ones for Community Development (established in 1974) and Community Services (created in 1981), both the product of Republican presidencies (Nixon and Reagan), were eliminated.

The disinvestment in public health claimed other grant programs, while other grant programs targeted by Project 2025, such as grants from FEMA and the Department of Education, suffered cuts. The reductions in education grants, moreover, were also part of the strategy to cut and transfer as many programs as possible as part of the effort to eliminate the department. Of course, only Congress can create, change, and eliminate departments. But then in mid-November 2025, it announced a plan to outsource most of the Department of Education’s functions to other federal agencies, leaving only a skeleton staff at the department’s headquarters.Footnote ⁷⁴ Experts debated whether the department could hollow itself out, but it showed the administration’s determination to dramatically cut the federal government’s education footprint – and it also demonstrated its extraordinary ingenuity in advancing tactics that no administration previously had tried.

Put together, the administration used complex tactics to advance its strategy: eliminating some programs completely, especially block grants and aid for programs to the poor; reducing discretionary programs; and offloading costs and responsibilities on state and local governments.

The administration also showed a strong instinct for finding state and local anecdotes that reinforced its strategy. In Minnesota, for example, allegations of mismanagement of social service grants and the SNAP program led to a series of intergovernmental skirmishes, between the administration and the state in both administrative avenues and in the courts, over cutting off the state’s funds. The fight dragged on, but the headlines had two dramatic political impacts: it led Minnesota Governor Tim Walz, the Democrats’ vice-presidential candidate in 2024, to announce he was withdrawing from his bid for a third term as the state’s governor, and the Trump administration used allegations that program benefits were going to undocumented migrants to justify its deployment of armed federal forces. Five other states – California, Colorado, Illinois, Minnesota, and New York – filed another suit demanding that the administration unfreeze social service grants. The administration countered that it was concerned about “widespread fraud and misuse of taxpayer dollars.”Footnote ⁷⁵ At the bottom of these struggles was a remarkable irony: the higher Trump’s share of the vote in 2024, the more dependent a state was on federal grants, as Figure 5 shows.

Figure 5

Federal grants as a share of state revenue vs. Trump’s share of the 2024 vote

Source: The Pew Charitable Trusts, Fiscal 50 (U.S. Census Bureau, 2024 Annual Survey of State Government Finances); 2024 presidential election official state results. Federal share uses general revenue (excludes liquor stores, utilities, insurance trusts).

It was part of the constant intergovernmental battle at the core of Trump’s domestic policies. Federalism became the forum for advancing the administration’s policies and consolidating its power. In just a few months, Trumpism reversed the two generations of federal grants that had emerged since the 1960s. Trumpism accelerated the downshift of project grants, just as grants for payments to individuals, especially Medicaid and SNAP, suffered big cuts. Responsibility for administering the programs, which long had rested with the states, became even greater – and so did their financial responsibility for making up the federal cuts or for facing the responsibility for not doing so. That brought an even greater reliance on contractors to carry the administrative load that states could not.

OBBA not only made major cuts but also injected major uncertainty into the intergovernmental fiscal picture. State and local governments simply did not know and could not project the implications of Trump’s decisions for their own budgets. The administration’s uprooting of requirements to examine DEI accomplished one thing for which state and local governments had been campaigning for decades: reduction of crosscutting requirements across all federal grants But these requirements typically were not the ones that had bothered them most, and many of the most burdensome requirements, including environmental reviews and labor wage standards, remained virtually untouched.

For nearly a century, the rise of federal grants in the intergovernmental system had followed a steady and relatively predictable trajectory, oscillating between patterns of centralization and decentralization. Trump changed all that. There was no core strategy except disruption and, some critics suspected, retribution against Democratic cities and states. Disruption swept through every corner of the federal grant system, leaving the finances of all levels of government radically changed and on an especially unpredictable footing.

The Insurrection Act

To justify the force, Trump asserted that he had “unquestioned power” to send in the National Guard under the 1807 Insurrection Act. Half of all presidents had used it, he claimed, and he threatened to do the same.Footnote ⁸⁰

In fact, just fifteen presidents had invoked the Insurrection Act, with five presidents using it since 1945: Eisenhower (1957) to enforce school desegregation in Little Rock; Kennedy (1962–1962) for desegregation crises in Mississippi and Alabama; Johnson (1965–1968) to protect voting rights and then to deal with urban riots; Reagan (1987), to quell an uprising by Cuban detainees in an Atlanta who had taken hostages; GHW Bush (1989), to put down unrest following Hurricane Hugo and then (1992) in response to rioting in Los Angeles following the acquittal of white police officers in the beating of motorist Rodney King. Across the decades since the act’s passage, it had been invoked thirty times.Footnote ⁸¹ This certainly did not match Trump’s claim.

Did the president have the power to federalize the National Guard and send it to an American city? In October 2025, a federal appeals court found that the president’s use of troops – 200 members of the Guard to guard the federal building – a “measured response” and, therefore, legal.Footnote ⁸²

The story of the Insurrection Act goes back almost to the country’s founding. In the 1790s, Congress passed militia acts that empowered the president to call out state militias to put down conflict. The Insurrection Act itself dates to 1807, in a tale full of almost unbelievable ironies. In the first presidential elections, the presidency went to the candidate who won the most electoral votes, and the vice presidency went to the runner-up. In 1800, however, Thomas Jefferson and Aaron Burr tied in the electoral vote, which created a crisis that the founders had not anticipated. On the 36th ballot, the House of Representatives, charged with making the choice, swung to Jefferson, largely because Alexander Hamilton nudged a few members of his Federalist Party to vote for Jefferson in the Democratic-Republican Party. As fans of the Broadway musical Hamilton know, frictions between Hamilton and Burr were growing, and Hamilton did not want to see Burr as president.

Just in time for the 1804 election, the controversy convinced the country’s leaders to amend the Constitution to require separate electoral votes for president and vice president. By that point, Jefferson had developed his own frictions with Burr, who had a hard time making and keeping friends because of his unmistakable ambitions. He decided he didn’t want Burr on his ticket and worked with George Clinton to coast to an overwhelming victory over South Carolina’s Charles Cotesworth Pinckney.

Burr worried that his political career was over because of his dispute with Hamilton, whom he killed in a duel just before the 1804 election, and because of his frictions with Jefferson. He concocted a bizarre plan to reverse his fortunes. He would settle in the new Louisiana territory, provoke Mexico into battle, raise a small army to defend the territory, and then keep the captured land for himself. That would finally make him rich. Or so reports to Jefferson suggested – no one knew for sure what Burr was up to, but the reports genuinely worried Jefferson.

Jefferson wondered whether he could dispatch the army to quell a rebellion like Burr’s on American soil. His fellow Virginian, Secretary of State James Madison, counseled that a president could use federal troops to repel invasions from outside powers but not from forces within the country.Footnote ⁸³ Given his role in drafting the Constitution, Madison surely knew more about the nooks and crannies of the document than anyone.

Jefferson decided he needed separate authority to dispatch federal troops. He went to Congress with a letter from one of Burr’s conspirators and won legislation authorizing him to send federal troops into domestic action against internal insurrectionists. The law was the Insurrection Act of 1807. Burr was arrested for treason but was never convicted. He decided to leave the country but, true to form, he had to borrow money to do so. The Insurrection Act became perhaps his most lasting but least known legacy.

The Insurrection Act – actually a series of amendments that continued to be revised until 1871 – allows the president to deploy troops on the request of a governor or a state legislature to “suppress rebellion”; or suppress “any insurrection, domestic violence, unlawful combination, or conspiracy” that threatens the rights of the people. The decision about whether a particular case is indeed a “rebellion” or “domestic violence” justifying the use of federal troops is the president’s call, according to an 1827 US Supreme Court case.Footnote ⁸⁴ That, the Brennan Center for Justice has concluded, made the law “dangerously overbroad and ripe for abuse,” which is precisely what fueled arguments over the scope of Trump’s power to deploy troops in American cities.Footnote ⁸⁵

There’s a profound irony here. Trump repeatedly threatened to use military power under the Insurrection Act, as Jefferson used it to control Burr, that to stimulated just the kind of conflict that prompted Jefferson’s action to begin with. And there’s one more irony. Among all the founders, Hamilton made the strongest case for the exercise of executive power, but Burr shot him. Burr then turned around to embrace the very power he had complained about. Trump followed in the same model, which Hamilton, the founder most supportive of executive power, surely would have opposed. Hamilton approved of a strong executive, but always one under the tight control of democratic institutions.

Posse Comitatus

Trump’s dispatch of troops touches on another point of history, this one the election of 1876, which ranks among the nastiest in American history. The Republican candidate, Ohio’s Rutherford B. Hayes, was a compromise candidate when the party’s frontrunner, Maine’s James G. Blaine, couldn’t marshal enough support to win the nomination. Hayes went up against Samuel J. Tilden, a New York Democrat. Tilden won the popular vote but ended up one electoral vote shy of winning the White House.

Furious Democrats charged that federal troops, still in the South as part of Reconstruction and responsible for guarding polling stations during the election, had helped Republicans steal the election. Republicans countered that they deserved to be awarded the outstanding electoral votes from four states – Florida, Louisiana, Oregon, and South Carolina. That would give them the presidency, but the Democrats pointed to their popular vote majority and did not want to give in.

The two sides eventually bargained out a compromise. Democrats reluctantly agreed to count the electoral votes from these four states for Hayes, which would give him the presidency. In exchange, Hayes agreed to end Reconstruction and pull federal troops from the South. To seal the deal, Congress two years later passed a relatively obscure law, the Posse Comitatus Act, which prohibited the use of the Army and, later, other military branches for domestic law enforcement. That ended Reconstruction, long a fundamental Democratic goal in the South.

The roots of the strange-sounding “posse comitatus” principle go back to the ninth century of England. The king was exploring ways of government but he did not have – and could not afford – a large standing army. He relied, therefore, on his sheriffs (or his “shire-reeve,” the king’s representative in each shire, or county). The sheriff could call for a “posse comitatus,” or “power of the county,” from able-bodied male residents. Joining the posse was not like posses in Westerns. If a person summoned to the posse refused, he could lose his property, slide into servitude, and become an outlaw (i.e., be placed outside the protection of the law, which was always dangerous at a time when civilization was just taking hold).

English common law provided the foundation for the Posse Comitatus Act, although what emerged was a mirror image of the English tradition. In medieval England, the local county sheriff had the power to conscript civilians to keep domestic order. The Posse Comitatus Act did the reverse: it prohibited the use of the Army (and other military branches, later) for domestic law enforcement.

Trump wanted to create a show of force and federalized California’s National Guard, without consulting either Governor Gavin Newsom or Mayor Karen Bass, to put troops on the streets. The last time that happened was in 1965, when Lyndon B. Johnson sent federal troops to Alabama to protect civil rights protesters against violence. According to the provisions of the 1878 act, federal troops could support law enforcement but could not directly engage in enforcing the law.

Johnson knew that Democrats would pay at the voting booth for his decision. When his vice president, Hubert Humphrey, ran for president in 1968, he not only lost Alabama but also the rest of the South. Former Governor Alabama George Wallace, against whom Johnson deployed the troops, won the Deep South, and Republican Richard Nixon picked up the rest of the region through his “Southern Strategy.” Without Johnson’s deployment of troops, along with the rest of his civil rights strategy designed to sweep away Jim Crow, America might well not have endured the trials of Watergate or the enduring problems of trust that created the tinder that the federal troops on the streets of Los Angeles ignited.

Since Nixon’s presidency, the federal regulatory involvement of the states became even stronger: environmental standards, as well as workplace requirements through OSHA, wage and hour rules through the Fair Labor Standards Act, regulations governing access for the disabled to public facilities, educational rules through No Child Left Behind, and ongoing civil rights rules. But all these regulatory policies are more or less standardized around the country. No one could ever seriously claim there isn’t a partisan spin to some of these regulations, but none are punitive steps aimed at particular groups, focused on individual jurisdictions, or designed to appeal to a political base excited about both.

With Trump’s focus on deporting those in the country illegally, a very different conflict developed. Trump’s border czar, Tom Homan, threatened to arrest California Governor Gavin Newsom for resisting the administration’s immigration policies. After Homan threatened to arrest Newsom, a Fox News reporter asked Trump if he agreed. “I would do it if I were Tom,” Trump replied. “I think it’s great.” Newsom, he said, is a “nice guy” but is “grossly incompetent.”Footnote ⁸⁶

Newsom shot back to Homan, “He’s a tough guy, why doesn’t he do that? He knows where to find me.” There hasn’t been this kind of personal dare since Wallace stood in a doorway of the University of Alabama to keep two black students from enrolling. It had echoes of Hamilton’s duel with Burr.

“We’re gonna have troops everywhere. We’re not going to let this happen to our country,” Trump said, but “everywhere” meant just in the backyards of the woke.Footnote ⁸⁷ Trump’s decision resurfaced the painful memories of the 1876 election, when the goal of posse comitatus was to put an end to the use of federal troops for the domestic role Trump envisioned.Footnote ⁸⁸

The tensions over the administration’s mass deportation campaign festered to the point that they became a political liability. In April 2025, 34 percent of Americans strongly disapproved of the president’s immigration policy. By early February 2026, the number had grown to 49 percent. His overall approval dropped to about the same level as approval of immigration and border security, as they became an anchor dragging the administration down. The administration quietly began withdrawing federal troops and ICE agents from Los Angeles, Chicago, and Portland, Oregon, and soon thereafter from Minneapolis, which had become the flashpoint for the struggle.

Trump’s decision to send in the troops was a hallmark of his strategy of executive federalism. He turned federalism into a tool of confrontation, aimed at just some states. It told Trump’s base just what it wanted to hear, provoking just the kind of actions that would warrant an even more aggressive response and creating a license for an even broader deployment of troops.

Federalizing Elections

Along the way, however, Trump opened another avenue for attack on federalism with his surprising threat in February 2026 to federalize elections. “The Republicans ought to nationalize the voting.” When criticism of his statement arose on all sides, he doubled down. If states “can’t count the votes legally and honestly, then somebody else should take over,” he said.Footnote ⁸⁹

Trump’s argument for national control of elections went farther than anything Republican presidents have ever broached, but there was nothing new in Republican claims that Democrats have stolen elections, claims that stretched back many years. For example, in the 1960 presidential election, Republicans were sure that Chicago Mayor Richard J. Daley had committed fraud to tip Illinois to the Democrats. At a Christmas party a few weeks after the election, the losing Republican candidate, Richard Nixon, told guests, “We won but they stole it from us.”Footnote ⁹⁰ Nixon had a point. Researchers have since determined that there was indeed voter fraud in Illinois. However, they concluded, there was not enough voter tampering to flip the state and, even if Nixon had won Illinois, he still would not have had enough electoral votes to win the presidency.

Complaints about the Chicago Democratic machine go back even longer. In 1955, election official Sidney “Short Pencil” Lewis was accused of erasing primary votes cast for the mayor, Martin Kennelly, and changing them to votes for Richard J. Daley, who won and then used the victory to build his twenty-year control of city hall. “Short Pencil” Lewis had a bag of tricks for the days before voting machines, including putting short pencils on a short string that made it exceptionally hard to vote for individual candidates – and far easier to check one box to vote straight Democratic.Footnote ⁹¹

In the aftermath of the 1960 election, furious Republicans called for investigations of fraud in the states, but they did not call for federalizing voting. They took Article I, Section 4 of the Constitution very seriously. It says, quite simply, “The Times, Places and Manner of holding Elections for Senators and Representatives, shall be prescribed in each State by the Legislature thereof.” The US Supreme Court underlined that principle in a 1932 ruling in Smiley v. Holm. “It cannot be doubted that these comprehensive words embrace authority to provide a complete code for congressional elections,” the Court held.Footnote ⁹²

In writing the Constitution, why did the founders put control of elections for federal officials in the hands of the states?

Part of the reason was simply pragmatic. As colonies, the states had already created their own election administration systems and their own systems of courts. The founders had enough on their hands as it was, so it was easiest to ask the states to continue doing what they had already figured out how to do

In Federalist 59, Alexander Hamilton said it would have been impossible that “an election law could have been framed and inserted into the Constitution, which would have been always applicable to every probable change in the situation of the country.” Putting elections into the hands of the federal government, he worried, could prove “a premeditated engine for the destruction of the State governments.”

But that didn’t satisfy Steve Bannon in 2026. “We’re going to have ICE surround the polls come November. We’re not going to sit here and allow you to steal the country again.” In fact, he was willing to call up the 82nd and 101st Airborne Divisions under the Insurrection Act.Footnote ⁹³

When Republicans last used troops at polling places, however, it did not work out well for them, in the election of 1876. It tipped the electoral balance in the South to the Democrats, and they did not recover until the 1960s.

The Constitutional Roots of Federal Troops

The history of using federal troops in elections is thus a wild tale – and it stands as a warning of the political costs that could come to anyone challenging the Constitution’s prescription of state control over the election process. In December 2025, the Court ruled against the Trump administration’s contention that he needed to nationalize the Illinois state National Guard and send in National Guard troops from Texas to deal with what he said was violence on the streets of Chicago. With very rare exceptions, such as Lyndon B. Johnson’s decision to send in the Guard to protect advocates for civil rights in Alabama, federalizing the state Guard requires the consent of the governor. Illinois Governor J. B. Pritzker refused to grant permission, but Trump insisted he had the right to send in the troops anyway, to protect federal facilities from protesters.

Within hours of being sent to an ICE facility, U.S. District Judge April Perry issued a temporary restraining order blocking the federal government from using federal troops for local law enforcement. The administration appealed, but the U.S. Supreme Court ruled 6–3 against the administration in granting an extension of the lower court judge’s stay.Footnote ⁹⁴ The majority opinion said, “the Government has failed to identify a source of authority that would allow the military to execute the laws in Illinois.” The administration had not tried to invoke the Posse Comitatus Act. Instead, the president relied “on inherent constitutional authority that, according to the Government, allows him to use the military to protect federal personnel and property.” The Court rejected that argument. Then, because the administration had failed to establish a basis in law, the Court refused to lift the lower court’s stay. That, Pritzker said, was “a big win for Illinois and American democracy.”Footnote ⁹⁵

The administration backed away from the plan to make Chicago the center of its law enforcement actions and sent the Texas troops back home. It quietly withdrew troops from Los Angeles and Portland, Oregon. Border czar Tom Homan told reporters that the administration was ending its “Operation Metro Surge” in Minnesota and sending most National Guardsmen home. The operation had been a massive federal intervention in local law enforcement, with more than 3,000 federal troops on the streets of the Twin Cities, a number that swamped the 600 local police officers in Minneapolis.

The administration had faced fierce opposition to its use of federal troops in cities across the US, in part because of the long-established principle in Posse Comitatus that federal troops could not be used in local law enforcement except in rare circumstances, and in part because of the political opposition that the killing of two Minneapolis residents generated. On the one hand, Trump demonstrated his willingness to get tough in Democratically controlled urban centers. On the other hand, he discovered that both the Constitution and the existing body of legislation created guardrails on the use of federal power – and that even his appointees to the US Supreme Court were willing to reinforce those guardrails.

There was a profound paradox here. The administration’s use of force attracted big headlines but ended up being more important for the symbols it generated. On the other hand, the big changes in the grant programs attracted far less publicity but were destined to have much more staying power. This combination generated far more friction than during any administration in generations – and together fundamentally upset the law, finances, and traditions of federalism in ways that matched none of the existing theories of American intergovernmental relations.