The relationship between the federal government and state governments is complex. Early in its political history, the United States adopted a federal system of government as a way to ensure an appropriate balance of power between the states and the federal government. Under federalism, states share power with the federal government and are considered independent equals. As such, states have enormous policymaking roles in the American political system, allowing for more responsive and more representative public policy. However, federalism is not without its disadvantages, particularly the complexity and confusion that result from 50 different sets of policy recommendations.

In an attempt to address the disadvantages of federalism, the nature of the relationship between the states and the federal government has experienced many changes. While federalism provides states and the local government an opportunity to experiment with public policy, there has been disagreement over how much policymaking authority the states should have. These disagreements have spawned different eras of federalism. The 1930s saw the emergence of a more cooperative relationship between the states and the federal government, whereas the 1960s and 1970s saw an increase in the financial dependence of the states on the federal government. The relationship is further complicated by the fact that the U.S. Constitution fails to explicitly address the powers of state governments. States are now less financially dependent on the federal government, and they have more policy discretion and autonomy, but debates continue over what policy responsibilities lay with each level of government. This has led to renewed arguments over the role of both states and the federal government in the provision of basic public services.