Categorical grants are when the national government gives the state government money, but the state government must use the money according to how the national government wants the money spent. Categorical grants are a part of fiscal federalism. The national government has an increase of power here because they can get the state to do whatever they want them to do. This is also known as a conditional transfer because the state has to follow certain conditions the federal government gives them. Federal mandates is an order from the national government given to the state government that the state government must comply with and if they don’t, there will be consequences (federal funding can be revoked). It’s used when the federal government wants the state government to implement a certain policy. This also gives the federal government more power because if the state decides not to do it, the state can get punished by failing to comply with the national government.
On the other hand, the state government can have more power by the Tenth Amendment and by Block Grants. The Tenth Amendment states that certain powers are reserved to the states and to the people. It has been invoked as a States Right constitutional protection. This gives the state government increased power because it lets the state do things they want to do rather than them complying with whatever the federal government wants. Block grants are chunks of money given to the states from the federal government with few or “no strings attached”. Block grants are part of fiscal federalism. The states can decide what they use the money on. This also gives the state government more power because they have freedom of how they spend the money.
The Federal and State government are both separated powers of government and both have the constitutional rights. Federalism is important because it enables different states with different needs to suit the state individually but still feel as one with other states by the national government.