Is the Federal-State-Local Partnership Being Dismantled? The History of Block Grants and Current Proposals

Margy Waller
Margy Waller Visiting Fellow, Economic Studies and Metropolitan Policy, The Brookings Institution

September 2, 2003

Thank you for inviting me to participate in today’s discussion about proposed changes in the federal—state—local partnership. The National League of Cities is providing an important service today by hosting this roundtable to address the question of a shift in federal policy that until recently has been proceeding mostly under the radar.

Reviewing administration reauthorization and budget proposals earlier this year, I realized that there were a number of recommendations to shift federal program administration from a federal agency to the states. In some cases, these are programs that are now administered by a federal agency allocating and monitoring outcomes after a national competition for funds. In other cases, the shift would transform an individual entitlement—like Medicaid—into a state block grant with capped funding over time. Some of these programs are currently administered by means of a direct grant to local government or nonprofits—like Workforce Investment Act funds, Head Start, and Section 8 vouchers.

The other thing I noticed was that many of these proposals affect programs serving poor or needy populations.

Earlier this year, I made a few phone calls to colleagues in think tanks, advocacy groups, and Congressional offices to ask whether others were tracking these proposals. Mostly, those I spoke to were aware of the proposals in programs impacting their own area of expertise. But, hardly anyone had started to think about the broad and long term impacts of the sum of these administration recommendations.