The Government Should Make Use of Revenue Sharing Federal grants have become more common over the last 60 years, due to the expansion and retraction of the size of the federal government. The federal government began expanding in the 1930s to deal with the Depression. It used federal agencies to directly deal with problems. As time went on, the tasks were turned over to the states, but the federal government still remained involved through the use of federal grants to states and localities. In the 1970s, Nixon's New Federalism put a heavy emphasis on federal grants.