What is the purpose of a block grant?
Block grants are awarded by the Federal government to state and local governments for broadly defined purposes — for example, social services or community development. Block grants are given primarily to general purpose governmental units in accordance with a statutory formula.
When was the block grant created?
The earliest block grants were enacted as Democratic initiatives. The first two block grants, the Partnership for Health program, approved in 1966, and the Safe Streets program, created under the Omnibus Crime Control and Safe Streets Act of 1968, were enacted by a Democratic Congress during the Johnson administration.
Why do states prefer block grants?
Block grants are given to states or communities and they decide how to spend the money. States prefer block grants because there are less strings attached and the money can be used for a broader purpose.
What is a block grant and why is it more favorable?
Block grants are federal funds earmarked for specific state or local programs. A block grant is supported by federal funds but administered by state or local governments, the thought being local authorities are better suited to handle local issues. Such programs are often meant to improve social welfare programs.
Which president used block grants?
President NixonIn 1971, President Nixon proposed consolidating 129 different programs into six block grants. A Democratic Congress rejected Nixon's original consolida- tion proposal. Nonetheless, by the end of the Ford administration, Congress had created three large new block grants.
What president increased block grants?
If enacted, the current proposals would more than quadruple the proportion of federal aid to state and local governments delivered through block grants. Republican control. In 1971, President Nixon proposed consolidating 129 different programs into six block grants.
What are the advantages and disadvantages of block grants?
One advantage of block grants is that they allow the states flexibility in spending and less restrictive. One disadvantage of block grants is that money can be used ineffectively. As a way to organize government, federalism has both advantages and disadvantages.
What is a block grant example?
Block grants are funds the federal government gives to state and local governments to spend on broadly defined purposes. For example, the federal government may offer block grants to help fund law enforcement, public health, or community development programs.
How do block grants affect policy making?
Block grants are federal grants-in-aid that allow states considerable discretion (within broad limits) about how the funds will be spent. These give greater flexibility to state political actors to tailor programs to the state's particular needs than do categorical grants.
How are block grants determined?
The block grants can be set based on "per capita" or on the needs of the state. Each state has to fill any funding gap if there is a difference between their spending and the amount set by the federal government. Block grants are the topic of debate in the United States.
What is the opposite of block grants?
The opposite of block grants is categorical grants, which are chunks of money given by the federal government to state and local governments that have far more rules attached to them.
What is one of the biggest problems with federal block grant?
What is one of the biggest problems with federal block grants? There is a need for greater accountability in how the funds are actually spent by the states.
Why did President Reagan use block grants in 1980?
Similar ideas from President Reagan in 1981 and Congress in 1995 were introduced but not enacted. Block grants aim to provide greater federal budget certainty and a stronger state incentive to contain program costs.
When were categorical grants created?
Federal categorical assistance started back in 1862, when Congress passed the Morrill Act and allowed states to sell public lands to fund land grant colleges, according to a 1978 report published by the Advisory Commission on Intergovernmental Relations.
What are the 3 types of grants?
ED offers three kinds of grants: Discretionary grants: awarded using a competitive process. Student loans or grants: to help students attend college. Formula grants: uses formulas determined by Congress and has no application process.
What are the three types of block grants?
Other significant block grants include the Social Services Block Grant (SSBG), the Community Services Block Grant (CSBG) and the Community Development Block Grant (CDBG).
Which states are using federal block grants?
A handful of states, notably Louisiana and Texas, are using the federal block grants as an opportunity to merge similar state programs into a single state office.
How does repealing the matching fund requirements affect block grants?
Repeal the matching fund requirements. These requirements increase block grant costs by forcing specified levels of state outlays. States can provide useful in-kind services to compen sate for reduced matching requirements Current efforts to consolid ate state programs alongside federal programs and provide supplemental matching funds by sub-units of government suggest that states will augment blocks regardless of matching fund requirements.
How many federal grants in 1981?
'Since 1961, the number of categorical aid programs slated for states has trebled, reaching 510 in FY 1981.l Federal spen d ing for those programs amounted to $94.4 billion in FY 1981, up 3 billion from 1980 and $12 billion from 1979.2 The average annual growth rate for those programs over the twenty-year period was 13 percent, or roughly three times the growth in Gross Nati o nal Product. Categorical grants-in-aid to the states constituted 3.4 percent of the 1981 GNP, compared to 1.4 percent of the 1961 GNP.3 The Advantages of Block Grants The rapid growth in federal aid was seen by many as a wel come indication of a national c ommitment to resolve supposed national problems and to offer states needed monies to finance basic service programs. However, such growth brought with it increased federal influence over state and local policies. The typical grant featured 300 to 500 sepa r ate spending requirements on state government regulations attached to just one of the nutrition programs involved 62 million Itburden hourst1 of paperwork annually. Those millions of man-hours spent on paperwork did more.than siphon resources that could h a ve been directed to actual service delivery. They also were a clear signal that federal authorities intended to use the spigot of public monies to change the course of state and local policies White House officials estimate that This "mandate millstone,I1 as New York City Mayor Ed Koch described the hundreds of thousands of changes states must make routinely in their own programs to accommodate federal direc tives, is a major problem to states in securing block grants The millstone burdened each of the 500 -plus categorical aid A cogent history of categorical grants is given in Thomas Ascik, "Block Grants and Federalism Backgrounder #144, June 5, 1981, pp. 18-23.
What is the Energy Assistance Program?
Energy Assistance Program a block grant gives the states more flexibility in their assistance to eligible households for heat ing, cooling, and weatherization costs. Consolidation also reduces federal requirements for state assistance under the program. This block is funded at $1.87 billion for FY 1982 Low-Income Energy Assistance. Designating the Low-Income Community Serv i ces. The consolidation redesigns programs previously administered by the Community Services Administration including Community Action, Senior Opportunities and Services Community Food and Nutrition, Training and Energy Conservation Evaluation, and Technic a l Assistance. Consolidation is.designed to enhance the anti-poverty efforts of federal, state, and local governments. This block grant is funded at $389 million for FY 1982. 6 State Community Development Block Grant Proqram for Small Cities. This consolid a tion gives states the option of taking over responsibility for a program previously administered by the Department of Housing and Urban Development. It seeks to enhance housing, income, and environmental living conditions for low income individuals. The b lock is funded at $1.08 billion for EY 1982.
How did the Reagan Administration consolidate the federal government?
HOW CONSOLIDATION WORKS The Reagan Administration's 1981 economic recovery plan stress ed two aims of block grants 1) to reduce.the cost and number of federal-state categorical programs and (2) to limit the growth of aid under such programs. 1 To achieve these goals, the Administration proposed to consolidate almost 100 different categorical programs into seven blocks-=grants that would allow states to implement the programs free from the need for annual reports, maintenance of effort standards, state matching funds or even the submission of applications for the grants. The grants would have been funded automatically without the means tests and application procedures associated with categorical programs.
What was the impact of the ESEA?
The regulations and spending mandates that accompanied the Elementary and Secondary Education Act (ESEA) are but one example of federal influence. Federal spending in 1981 amounted to only 8 percent of all monies spent on education. Yet this had a dispro portionate impact on states and localities because it financed almost 100 percent of student loan, nutri t ion, and specially targeted aid programs. To qualify for this 8 percent, the states which bore 88 percent of all education costs) were required to prove compliance with a variety of curriculum, hiring, and admis sion standards. These forced states to star t new programs or revise existing ones without regard to efficiency or local desires.
Which states use previously funded grantees as service delivery systems?
The report cited Colorado, Kentuc ky, Washington and Michigan as prime examples of states continuing to use previously funded grantees as service delivery systems Because of states' prior experience, relatively few organizational adjustments were needed stated the GAO report. The GAO adde d In addition to employing existing organizational structures, states drew upon their insti tutional knowledge for carrying out block grant responsibilities.
When were block grants created?
The 2014 Congressional Research Service (CRS) report says the first true block grant was in 1966. In 1949, first Hoover Commission 's 1949 report recommended the creation of "a system of grants" based "upon broad categories—such as highways, education, public assistance, and public health—as contrasted with the present system of extensive fragmentation." The Eisenhower Administration (1953–1961) created "block grants in the health and public welfare fields". In the 1950s, the U.S. Department of Health, Education, and Welfare (HEW) was able to consolidate "child health and welfare, vocational education, and vocational rehabilitation areas" into block grants for public health. But most proposals for block grants repeatedly met rejection in the 1950s. Reasons included a political misalignment between federal and state levels, concerns about a lack or reduction of federal controls, and that giving states wider latitude in spending would be a "more effective and efficient use of public funds."
Why are block grants important?
According to the 2014 Congressional Research Service (CRS) advocates, who would like to see Medicaid converted into a block grant, say that block grants assist in reducing the federal deficit, increase government efficiency, redistribute power, improve accountability, and allow for flexibility. Critics, who are specifically against converting Medicaid into block grants, say that block grant "undermine the achievement of national objectives", "reduce government spending on domestic issues" where, for example, the "most vulnerable seniors, individuals with disabilities, and low-income children" would lose their health care through deep cuts in Medicaid. Critics also say that because block grants are decentralized, it is more challenging to "measure block grant performance and to hold state and local government officials accountable for their decisions".
Why did block grants diminish over time?
Block grant critics said that the funding for block grants was prone to diminish over time because it was more difficult to regenerate political support for broad-purpose, state-run programs, than for categorical programs focusing on specific purposes.
Why did Trump create the new Medicaid guidelines?
According to a January 11, 2019 Politico article, the Trump Administration was creating new guidelines to overhaul Medicaid in order to reduce health care costs for the poor through block grants, bypassing Congress.
How many federal block grants were there in 1980?
According to the General Accounting Office, from 1980 to 2001, the number of federal block grant programs went from 450 to 700 . The grants were aimed at a wide range of activities from education to healthcare, transportation, housing and counterterrorism.
What was the Eisenhower Administration's goal in the 1950s?
Department of Health, Education, and Welfare (HEW) was able to consolidate "child health and welfare, vocational education, and vocational rehabilitation areas" into block grants for public health.
How does a block grant affect a town?
According to microeconomic theory, the grant shifts the town's budget constraint outwards, enabling the town to spend more on both education and other goods, due to the income effect. While this increases the town's utility, it does not maximize the town's spending on education. Therefore, if the goal of a grant program is to encourage spending on a particular good, a categorical grant may be more effective in achieving this goal than a block grant, as most block grant critics would argue.
What Is a Block Grant?
A block grant is an annual sum of money that is awarded by the federal government to a state or local government body to help fund a specific project or program.
Why are block grants bad?
Critics of block grants cite the relative lack of federal oversight as a problem. Notably, the proposal to turn Medicaid into a block grant program was seen as endangering the federal government's ability to guarantee a standard level of service.
When was the Mental Health Block Grant established?
The Mental Health Block Grant, established in 1981, has disbursed millions of dollars to states to assist in the treatment of mental illnesses. The grant was amended in 1986 to require that states develop its services based on the advice of Mental Health Planning Councils comprised primarily of family members and non-treating professional citizens.
What is CDBG program?
The CDBG program, administered by the Housing and Urban Development agency, is broadly defined as working to ensure decent affordable housing, to provide services to the most vulnerable in our communities, and to create jobs through the expansion and retention of businesses, " according to the agency.
When were block grants established?
The first five block grants were established by the United States federal government from the mid-60's to the mid-70's. The initial block grants were the Community Development Block Grant, the Partnership for Health Act, the Omnibus Crime Control and Safe Streets Act, the Comprehensive Employment and Training Act, ...
What is a block grant?
The definition of a Block Grant is a lump sum of federal government funds awarded to a state, county, or city government for use in a general purpose. The Federal role in administering block grants is less active when compared to other types of grants. They generally do not specify application requirements, negotiate awards, or evaluate the effects.
How much did HUD give to Louisiana?
As recently as 2005, HUD was provided with $11.5 billion in Community Development Block Grants to award to the states of Louisiana, Texas, Mississippi, Alabama, and Florida in their efforts to rebuild the Gulf Coast after Hurricanes Katrina, Rita, and Wilma. © 2021 Federal Grants.
What is regional grant?
The regional grantees are allowed to allocate the grant money at their discretion in accordance with local needs. This provides the regional governments with the flexibility to design programs and distribute resources that target a wide array of issues. The first U.S. Block Grants.
What is the law enforcement assistance program?
The Omnibus Crime Control and Safe Streets Act of 1968 formed the Law Enforcement Assistance Administration (LEAA) and provided over $100 million in grants to states in order to improve local law enforcement and community crime control efforts.
When was the Community Development Block Grant enacted?
In 1974 , the Community Development Block Grant (CDBG) was enacted to support community development at a local level. Read more about this important block grant in the next section.
What was the Partnership for Health Act of 1966?
The Partnership for Health Act (PHA) of 1966, also known as Comprehensive Health Planning Act, consolidated separate health program authorizations so that $23 million in grants could be awarded by the states directly to local governments and community non-profits.
When did block grants start?
The first major, sustained wave of block grant proposals occurred in 1971, when President Nixon proposed that 129 distinct federal programs be consolidated into six block grants. A Democrat-controlled Congress rejected the President’s original program consolidation plan, but nonetheless by the end of the Ford Administration Congress had enacted three sizable block grant programs. In each instance, spending under the block grant programs of the 1970s was greater than aggregate outlays under the categorical programs they replaced. Even states and cities that qualified for a smaller share of federal aid under the applicable funding formulas received more money than they had under the predecessor programs.57
What was the Reagan Administration's plan for Medicaid?
A Medicaid block grant proposal was a major linchpin of the President’s sweeping 1981 plan to shift fiscal responsibility and control back to state and local jurisdictions. Under the Medicaid portion of what came to be known as "Reaganomics," federal financial participation was to grow by 5 percent in FY 1981 and be adjusted annually thereafter by a gross national product deflator. Administration budget officials calculated that the cap would save the Federal Government $1.1 billion in FY 1982, with the amount of savings growing steadily in future fiscal years. The President also proposed a number of statutory and regulatory changes designed to afford states greater flexibility in designing and managing their Medicaid programs. Included was a proposal to allow the Secretary of Health and Human Services to waive certain statutory requirements in order to permit
What did President Clinton do to the AFDC?
President Clinton signed into law a welfare reform measure that repealed the AFDC program and replaced it with the TANF state block grant program. Passage of this legislation marked the first and to date only time that Congress has agreed to transform an open-ended entitlement into a state block grant authority.
Is Medicaid a block grant?
Medicaid block grant proposals have been the leitmotif of Medicaid policy for the past three decades. Indeed, the tensions inherent in operating an open-ended entitlement program have been evident from the onset of the federal-state Medicaid program. In 1967, the second year of program operations, Congress became so concerned by the rapid growth in Medicaid outlays it enacted legislation designed to curb program expenditures (P.L. 90-248).55
What is a CDBG grant?
The Community Development Block Grant ( CDBG ), one of the longest-running programs of the U.S. Department of Housing and Urban Development, funds local community development activities with the stated goal of providing affordable housing, anti-poverty programs, and infrastructure development. CDBG, like other block grant programs, differ from categorical grants, made for specific purposes, in that they are subject to less federal oversight and are largely used at the discretion of the state and local governments and their subgrantees.
How does the CDBG help the government?
The CDBG was presented as explicitly meant to “redistribute influence from the federal bureaucracies to local governments” - in Ford's words, to “return power from the banks of the Potomac to people in their own communities”.
What is the Small Cities program?
The 1978 re-authorization also required HUD to award 30% of all CDBG funds to states for grants to municipalities and counties that are not entitlement communities. This is often called the "Small Cities" program, because it includes many small cities and rural counties.
What is CDBG in urban development?
The CDBG shares some features of the Urban Development Action Grants (UDAG). UDAG, along with urban renewal and other previous federal attempts to alleviate poverty and blight in US cities, was criticized as being a "top-down" approach. For these programs, federal planners would dictate how and where funds were spent. In contrast, CDBG was constructed to be a "bottom-up" approach.
What are CDBG funds used for?
CDBG funds may be used for community development activities (such as real estate acquisition, relocation, demolition, rehabilitation of housing and commercial buildings), construction of public facilities and improvements (such as water, sewer, and other utilities, street paving, and sidewalks), construction and maintenance of neighborhood centers, and the conversion of school buildings, public services, and economic development and job creation/retention activities. CDBG funds can also be used for preservation and restoration of historic properties in low-income neighborhoods.
What percentage of CDBG funds must be used for activities that benefit low- and moderate-income persons?
First, “not less than 70 percent of CDBG funds must be used for activities that benefit low- and moderate-income persons”.
When was CDBG enacted?
History. The CDBG program was enacted in 1974 by President Gerald Ford through the Housing and Community Development Act of 1974 and took effect in January 1975. Most directly, the law was a response to the Nixon administration's 1973 funding moratorium on many Department of Housing and Urban Development (HUD) programs.
Why are block grants preferred by Republicans?
Block grants are generally preferred by Republicans because of the freedom allowed in the spending whereas categorical grants are generally favored by Democrats because the regulations attached help ensure the original goals of the grant are met. To unlock this lesson you must be a Study.com Member. Create your account.
What are the negatives of block grants?
Opponents of block grants, on the other hand, argue that the money is rarely spent with the intended purpose, and states usually end up spending less or cutting critical programs important to the national goals. TANF is an example here. After switching from a categorical grant to a block grant, government spending on welfare dramatically dropped, causing states to cut several welfare programs for poor families. Likewise, critics of Paul Ryan's plans to convert Medicare into a block grant argue that the end result will simply be to cut funding for the healthcare of older Americans.
What is TANF grant?
TANF is commonly called welfare. This block grant replaced an earlier categorical grant called Aid to Families with Dependent Children (AFDC), which placed a lot of requirements on states. Now, under TANF, states have more control over how money is spent.
What did Paul Ryan propose to overhaul?
For example, former Republican Vice Presidential Candidate Paul Ryan has proposed overhauling the Medicare and Medicaid systems by converting them from categorical grants to block grants. Ryan argued that block grants give local states more control, allowing them to decide how they should spend money.
How many block grants were there in 2013?
In the 2013 fiscal year, the federal government had 25 block grants, as reported by the Congressional Research Service. One of the biggest block grant programs is called Temporary Assistance for Needy Families, or TANF for short. TANF is commonly called welfare.
What is a low income home energy assistance grant?
Another block grant is the Low-Income Home Energy Assistance Block Grant, which provides assistance to low-income families to help pay energy bills. Like TANF, this grant gives a lot of control to states in deciding how to distribute funds across the state. This program is especially important for northern states, where cold winters drive up heating costs.
Which party favors block grants?
Although not necessarily exclusive to one party, Republicans generally tend to promote block grants more than Democrats.
What Is A Block Grant?
Understanding Block Grants
A block grant in the United States is a grant-in-aid of a specified amount from the federal government of the United States to individual states and local governments to help support various broad purpose programs, such as law enforcement, social services, public health, and community development.
Through a block grant program for Medicaid, for example, each state would receive a set amoun…
Criticism of Block Grants
Examples of Block Grants