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The use of block grants to encourage the states to assist the federal government in achieving certain goals originated with the Lyndon Johnson administration (1963-1969). His successor, Richard Nixon, used this method (often referred to as the "New Federalism") more extensively. This has been seen by some as bribery (promising states grants of money to enact certain legislation) or blackmail (threatening to withhold block grants to states which did not comply with federal policy goals). In the 1970's, states were encouraged to set specific speed limits on Interstate highways by threatening to withhold grants for highway construction. Most states complied, though several western states refused.

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