The author discusses political debates that have revolved around the question of whether our intergovernmental system should move toward the state-dominant or the Washington-dominant extremes. He reviews the history of state-dominant federalism (1789-1933) and Washington-dominant federalism (1933-late 1970s) and discusses the more balanced federal system of the 1980s in which neither the states nor the federal government dominated the intergovernmental landscape. The paper concludes with a discussion of three reasons why federalism increasingly is taking this middle-of-the-road approach.