How does one gauge the health of a federal system? The elemental constitutional foundations of our federalism are threefold: (1) establishing a territorial division of power and functions between the national and state governments (which still exists despite an extraordinary intergovernmental combining of public services), (2) providing for direct representation (until 1913 and indirect thereafter) of the constituent subnational governments in the very policy-making processes of the central government; and (3) stipulating an institutional arbiter of jurisdictional disputes between the governmental levels, the Supreme Court. When the dynamics of these three areas of federal-state-local interaction produce a systematically balanced condition, then the health of federalism is fine. When there are serious imbalances (as there have been for at least a quarter of a century), then an enfeebled federalism, incapable of effective functioning follows. Americans need to end the ambiguities that the present imbalances have generated in order to permit each of the levels to operate more effectively and accountably, to eliminate some of the systems complexity that befuddles the electorate as well as many office holders, and to rediscover the vitality and resourcefulness that comes from the territorial division of labor that a functioning federalism nurtures. The Emergence of the Imbalances (1964-1992) As recently as Dwight Eisenhower's and John F. Kennedy's presidencies, the governmental was pretty much in balance in terms of the power, programs, and policy discretion of the different levels (and the racism, rural-bias, and frequently reactionary policies of that era are not being overlooked here). The present era began with the swearing-in of Lyndon B. Johnson as President in November 1963. The main trend in intergovernmental relations from 1964 to 1978 was an aggressive national assertion of policy leadership by both the political and the judicial branches of the federal government, even as the localities and, most notably, the reformed states were taking on greater operational roles within the (Walker, 1995). Richard Nixon's New Federalism (the first version of this approach) sought to devolve authority to the states and localities through general revenue sharing and block grants, to decentralize by revamping federal field offices and empowering their chief administrators, to enhance intergovernmental communication (i.e., the A-95 and A-85 circulars), and to strengthen grants management chiefly through Circular A-102. Despite some successes, the mounting growth in categoricals (Table), the advent of a era in federal regulation, and the soaring growth in entitlements, thanks in part to their indexation, combined to produce the earliest operational example of an ambivalent federalism that blended centralizing and devolving features (Conlan, 1988). A ten-year fiscal retrenching reaction set in, beginning in 1979, but with another ambivalent kind of synthesis of the earlier activist centripetalism and the later retrenching decentralization emerging in the second Reagan administration, despite his New Federalism (II) effort (Walker, 1995;151-162). The Bush administration (1989-1992) reflected more strongly this and other ambivalences. [TABULAR DATA FOR TABLE 1 OMITTED] Why this conflicted condition? The basic reasons are that the Supreme Court throughout most of the 1964-1992 period adhered to a centripetal course in cases of great significance for federalism. The states in the post-1986 years scored somewhat better than earlier, although in areas of secondary importance (Walker, 1995; 173-205). The new political system that emerged after the Democratic convention of 1968 with stronger national parties and even stronger, mostly centralizing political actors (rapidly proliferating pressure groups, PACs, pollsters, personal candidate organizations, and above all the media) was another factor (Advisory Commission, 1986). …