What is the difference between block grants and federal mandates

Block grants come with less stringent federal administrative conditions and provide recipients more flexibility over how to spend grant funds. Examples of block grants include the Workforce Investment Act program, which provides state and local agencies money to help youths and adults obtain skill sets that will lead to better-paying jobs, and the Surface Transportation Program , which helps state and local governments maintain and improve highways, bridges, tunnels, sidewalks, and bicycle paths.

Finally, recipients of general revenue sharing faced the least restrictions on the use of federal grants. During the s and s, funding for federal grants grew significantly, as the trend line shows in Figure 1. Growth picked up again in the s and s. The upward slope since the s is primarily due to the increase in federal grant money going to Medicaid.

Figure 1. As the thermometer shows, federal grants to state and local governments have steadily increased since the s. The pie chart shows how federal grants are allocated among different functional categories today. The federal government uses grants and other tools to achieve its national policy priorities. Take a look at the National Priorities Project to find out more. The national government has greatly preferred using categorical grants to transfer funds to state and local authorities because this type of grant gives them more control and discretion in how the money is spent.

In , the federal government distributed 1, grants, 1, of which were categorical, while only 21 were block grants. In response to the terrorist attack on the United States on September 11, , more than a dozen new federal grant programs relating to homeland security were created, but as of , only three were block grants. There are a couple of reasons that categorical grants are more popular than block grants despite calls to decentralize public policy.

One reason is that elected officials who sponsor these grants can take credit for their positive outcomes e. Another reason is that categorical grants afford federal officials greater command over grant program performance. A common criticism leveled against block grants is that they lack mechanisms to hold state and local administrators accountable for outcomes, a reproach the Obama administration has made about the Community Services Block Grant program.

Finally, once categorical grants have been established, vested interests in Congress and the federal bureaucracy seek to preserve them. The legislators who enact them and the federal agencies that implement them invest heavily in defending them, ensuring their continuation. In , the Republican-controlled Congress passed legislation that called for block-granting Medicaid, which would have capped federal Medicaid spending. President Clinton vetoed the legislation. The Temporary Assistance for Needy Families TANF block grant replaced the AFDC in , marking the first time the federal government transformed an entitlement program which guarantees individual rights to benefits into a block grant.

Under the AFDC, the federal government had reimbursed states a portion of the costs they bore for running the program without placing a ceiling on the amount. Block grants have been championed for their cost-cutting effects. By eliminating uncapped federal funding, as the TANF issue illustrates, the national government can reverse the escalating costs of federal grant programs. Without federal government resources, states must spend their own funds. This can potentially displace other priorities.

Passing responsibilities down to lower levels of government should be undertaken primarily to place services closer to the people being served and to maximize administrative efficiencies. It should not be done as a way to reduce costs. Higher levels of government should provide adequate resources when mandating functions to lower levels of government.

Services should be implemented and operated by the level of government that can most appropriately and efficiently deliver them. Block grants should be structured to ensure that the lower level of government maintains the prior level of funding. Funding formulas and allocation decisions should accommodate changes in demographics and inflation. Decisions about the use of block-grant allocations should be made in the open.

Adequate advance notice and information must be provided to affected stakeholders, and input from those stakeholders must be considered. People who cannot attend meetings in person should still be able to provide feedback. Now Reading:. Rewards for Good. States often compete or cooperate on many different issues, from environmental policy to economic development. One state, for example, may lower its tax rate in order to attract businesses away from other states.

States have a great deal of leeway in how they behave toward one another. SparkTeach Teacher's Handbook. Summary Federalism in Practice. There are two general types of grants-in-aid: Block grants: Money given for a fairly broad purpose with few strings attached. Categorical grants: Money given for a specific purpose that comes with restrictions concerning how the money should be spent. There are two types of categorical grants: Project grants: Money states apply for by submitting specific project proposals Formula grants: Money given to states according to a mathematical formula Example: When the Republicans retook Congress in , they changed many federal grants into block grants.

Revenue Sharing In , the Nixon Administration initiated a practice called revenue sharing, in which the federal government gave money to the states with no restrictions attached whatsoever. Popular pages: Federalism. Take a Study Break.