Event Summary: Block Grants: Past, Present, and Prospects

October 15, 2003

The Brookings Institution convened three panels this morning to discuss the legitimacy and effectiveness of proposals by the Bush administration that would turn at least six existing federal programs serving low-income families into block grants. A federal block grant is a fixed amount of money given to states by the federal government to run a program with varying degrees of guidelines.

Isabel Sawhill, vice president and director of economic studies at the Brookings Institution, summed up the debate over block grants in her introductory remarks.

“Proponents see them as a way to eliminate inconsistencies in programs serving similar constituencies and to give states more flexibility,” she said. “Opponents think that block grants will lead to cutbacks in funding for needy populations, lack of uniform standards at the federal level, and inadequate accountability.”

The debate over block grants has become more pronounced recently as Congress considers the reauthorization of the 1996 welfare reform bill.

Much of the discussion addressed the issue of federalism and whether or not low-income families were better served by states or the federal government.

Senator Jim Talent (R-Mo.) made the case that locally administered programs are more effective at providing services that either state or federal programs.

“Community-based models and organizations have a number of advantages over any kind of bureaucratic model from above, whether at the state or federal level,” he said. “They are on the scene with people who genuinely care and know about the community.”

Heritage Foundation Senior Research Fellow Robert Rector, however, suggested that any discussion of federalism within the context of this debate was without merit. “[Block grants] have nothing to do with federalism. Federalism would mean that state governments or local governments tax their own constituencies and spend their own money. Collecting money at one level and shoveling it to another level is almost the antithesis of federalism.”

Rector called for “block grants with moral principles” that would provide greater flexibility to both state and local governments. He also called for higher performance standards. “We need to change the basic structure of the system so that those become systems that challenge individuals to move towards self-sufficiency?We need to harness the powerful energies of the recipient with the program instead of programs that reward non-work and single parenthood.”

While almost all panelists spoke in favor of increased flexibility in the administration of block grants, panelists disagreed about exactly how flexible these programs should be, and what conditions or accountability standards should be attached to them.

“States like flexibility,” said Jack Tweedie, director of the Children and Families Program in the National Conference of State Legislatures. “They like the chance to adapt social programs to the needs of their states and citizen.” But he added that “this appreciation for flexibility does not automatically translate into a love for block grants.”

Tweedy said that block grants worked only if the program allowed states to adjust their programs during difficult economic times.

“We want protection for the states if situations changed, if the economy declines,” he said. “We want to be protected to still be able to run these programs if that happens.”

Brookings Senior Fellow Pietro Nivola indicated that states may not be as enamored by flexibility as Tweedy suggested and addressed some of the thornier political aspects of block grants.

“Yes, state officials like the added flexibility, but they also like to avoid blame for program failures, and it’s often useful for them to point the finger at federal red tape, strings attached, or federal budget cuts as the source of their problems. If you take away the tape and the strings and all the dollars, the states wind up owning the problems.”

Critics of block grants suggested that the Bush administration’s proposal had ulterior motives.

Robert Greenstein, executive director at the Center on Budget and Policy Priorities, said that the Bush administration was more motivated by fiscal concerns rather than a desire to expand local autonomy. “Block grants are attractive to some policymakers as a way, over a long period of time, to squeeze funding,” said Greenstein, and he indicated that block grants provided politicians with a way to “not look heartless” when social programs are cut due to diminished funds, which Greenstein said would occur over time.

“I find it difficult to identify any real agenda,” said Barbara Sard, director of housing policy at the Center on Budget and Policy Priorities, “except primarily to cut funding and possibly to—covertly and silently, without admitting it—try to foster the goals that Mr. Rector talked about, about promoting work and possibly marriage without participating in a genuine debate over if those are appropriate goals for the program.”

Wade Horn, assistant secretary for the Administration for Children and Families at the Department of Health and Human Services, defended the administration’s proposals.

“What the Bush administration is interested in,” said Horn, “is providing flexibility to states to be able to be the laboratories of democracy that they were meant to be, and convince you that they are not, despite Greenstein’s assertion, being driven by fiscal concerns.”

Today’s program was co-sponsored by the Brookings Center on Urban and Metropolitan Policy and the Welfare Reform and Beyond Initiative.