Block Grants: Perspectives and Controversies
Robert Jay Dilger
Senior Specialist in American National Government
Eugene Boyd
Analyst in Federalism and Economic Development Policy
January 16, 2014
Congressional Research Service
7-5700
www.crs.gov
R40486

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Block Grants: Perspectives and Controversies

Summary
Block grants are a form of grant-in-aid that the federal government uses to provide state and local
governments a specified amount of funding to assist them in addressing broad purposes, such as
community development, social services, public health, or law enforcement.
Block grant advocates argue that block grants increase government efficiency and program
effectiveness by redistributing power and accountability through decentralization and partial
devolution of decision-making authority from the federal government to state and local
governments. Advocates also view them as a means to reduce the federal deficit. For example,
Representative Paul Ryan, chair of the House Committee on the Budget, has recommended that
the federal share of Medicaid be converted into a block grant “tailored to meet each state’s needs”
as a means to improve “the health-care safety net for low-income Americans” and to “save $810
billion over 10 years.”
Block grant critics argue that block grants can undermine the achievement of national objectives
and can be used as a “backdoor” means to reduce government spending on domestic issues. For
example, opponents of converting Medicaid into a block grant argue that “block granting
Medicaid is simply code for deep, arbitrary cuts in support to the most vulnerable seniors,
individuals with disabilities, and low-income children.” Block grant critics also argue that the
decentralized nature of block grants makes it difficult to measure block grant performance and to
hold state and local government officials accountable for their decisions.
Block grants, which have been a part of the American federal system since 1966, are one of three
general types of grants-in-aid programs: categorical grants, block grants, and general revenue
sharing. These grants differ along three dimensions: the range of federal control over who
receives the grant; the range of recipient discretion concerning aided activities; and the type,
number, detail, and scope of grant program conditions.
Categorical grants can be used only for a specifically aided program and usually are limited to
narrowly defined activities; legislation generally details the program’s parameters and specifies
the types of funded activities. There are four types of categorical grants: project categorical
grants, formula-project categorical grants, formula categorical grants, and open-end
reimbursement categorical grants.
Project categorical grants and general revenue sharing represent the ends of a continuum on the
three dimensions differentiating grant types, with block grants being at the mid-point. However,
there is some overlap among grant types in the middle of the continuum. For example, some
block grants have characteristics normally associated with formula categorical grants. This
overlap, and the variation in characteristics among block grants, helps to explain why there is
some disagreement concerning precisely what is a block grant, and how many of them exist.
This report provides an overview of the six grant types, provides criteria for defining a block
grant and uses those criteria to provide a list of current block grants, examines competing
perspectives concerning the use of block grants versus other grant mechanisms to achieve
national goals, provides an historical overview of the role of block grants in American federalism,
and examines recent changes to existing block grants and proposals to create new ones.

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Block Grants: Perspectives and Controversies

Contents
Introduction ...................................................................................................................................... 1
Grant Definitions ............................................................................................................................. 2
The Number of Block Grants ........................................................................................................... 4
Block Grants: Competing Perspectives ........................................................................................... 6
When Should Block Grants Be Considered? ................................................................................. 10
Contemporary Controversies: How to Evaluate Block Grants ...................................................... 11
Contemporary Controversies: Funding .......................................................................................... 12
President George W. Bush’s Community and Economic Development Block Grant
Proposal ................................................................................................................................ 13
Medicaid and SNAP Block Grant Proposals ........................................................................... 13
President Obama’s Block Grant Proposals .............................................................................. 15

Tables
Table 1. Classification of Grant Types by Three Defining Traits .................................................... 3
Table 2. Federal Block Grants in FY2014 ....................................................................................... 5

Appendixes
Appendix. Brief History of Block Grants ...................................................................................... 18

Contacts
Author Contact Information........................................................................................................... 24

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Block Grants: Perspectives and Controversies

Introduction
Block grants have been a part of the American federal system since 1966. They are one of three
general types of grants-in-aid programs: categorical grants, block grants, and general revenue
sharing.1 These grants differ along three dimensions: the range of federal control over who
receives the grant; the range of recipient discretion concerning aided activities; and the type,
number, detail, and scope of grant program conditions.2
Categorical grants can be used only for a specifically aided program and usually are limited to
narrowly defined activities; legislation generally details the program’s parameters and specifies
the types of funded activities. There are four types of categorical grants: project categorical
grants, formula-project categorical grants, formula categorical grants, and open-end
reimbursement categorical grants. There are currently 1,018 categorical grants.3
Block grants are a form of grant-in-aid that the federal government uses to provide state and local
governments a specified amount of funding to assist them in addressing broad purposes, such as
community development, social services, public health, or law enforcement. Although legislation
generally details the program’s parameters, state and local governments are typically provided
greater flexibility in the use of the funds and are required to meet fewer administrative conditions
than under categorical grants. There are currently 21 funded block grants.
General revenue sharing provides state and local governments funds that are distributed by
formula, accompanied with few restrictions on the purposes for which the funding may be spent,
and have the least administrative conditions of any federal grant type.4 The general revenue
sharing program is no longer operational. It distributed funds to states from 1972 through 1980
and to local governments from 1972 through 1986.
Project categorical grants and general revenue sharing represent the ends of a continuum on the
three dimensions differentiating grant types, with block grants being at the mid-point. However,
there is some overlap among grant types in the middle of the continuum. For example, some
block grants have characteristics normally associated with formula categorical grants. This
overlap, and the variation in characteristics among block grants, helps to explain why there is
some disagreement concerning precisely what is a block grant, and how many of them exist.
Block grant advocates view block grants as a means to increase government efficiency and
program effectiveness by redistributing power and accountability through decentralization and
partial devolution of decision-making authority from the federal government to state and local
governments. They also view them as a means to reduce government expenditures without

1 The first block grant, for comprehensive health care services, was created by P.L. 89-749, the Comprehensive Health
Planning and Public Health Services Amendments of 1966, later known as the Partnership for Public Health Act. It
replaced nine formula categorical grants (see Appendix).
2 U.S. Advisory Commission on Intergovernmental Relations (hereafter ACIR), Categorical Grants: Their Role and
Design, A-52, 1978, p. 5, at http://www.library.unt.edu/gpo/acir/Reports/policy/a-52.pdf.
3 For further information and analysis, see CRS Report R40638, Federal Grants to State and Local Governments: An
Historical Perspective on Contemporary Issues, by Robert Jay Dilger.
4 For further information and analysis, see CRS Report RL31936, General Revenue Sharing: Background and Analysis,
by Steven Maguire.
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sacrificing government services. For example, Representative Paul Ryan, chair of the House
Committee on the Budget, has recommended that the federal share of Medicaid be converted into
a block grant “tailored to meet each state’s needs” as a means to improve “the health-care safety
net for low-income Americans” and to “save $810 billion over 10 years.”5 Also, on March 29,
2012, the House adopted its FY2013 Budget Resolution (H.Con.Res. 112). It proposed converting
Medicaid from an open-ended, individual entitlement formula categorical grant into a block grant
and repealing the Patient Protection and Affordable Care Act (ACA; P.L. 111-148, as amended).
Together these provisions were estimated to reduce federal Medicaid expenditures by $1.4 trillion
from FY2013 to FY2022.6
Block grant critics argue that block grants can undermine the achievement of national objectives
and can be used as a “backdoor” means to reduce government spending on domestic issues. They
also claim that the decentralized nature of block grants makes it difficult to measure block grant
performance and to hold state and local government officials accountable for their decisions.
This report provides an overview of the six grant types, provides criteria for defining a block
grant and uses those criteria to provide a list of current block grants, examines competing
perspectives concerning the use of block grants versus other grant mechanisms to achieve
national goals, provides a brief historical overview of the role of block grants in American
federalism, and examines recent changes to existing block grants and proposals to create new
ones.
Grant Definitions
Different federal departments and agencies, including the U.S. Census Bureau, the Government
Accountability Office (GAO), and the U.S. Office of Management and Budget (OMB), use
different definitions to determine what counts as a federal grant-in-aid program. However, there is
agreement on the general characteristics associated with each grant type.
Of the six grant types, project categorical grants typically impose the most restraint on recipients
(see Table 1). Federal administrators have a high degree of control over who receives project
categorical grants (recipients must apply to the appropriate federal agency for funding and
compete against other potential recipients who also meet the program’s specified eligibility
criteria); recipients have relatively little discretion concerning aided activities (funds must be used
for narrowly specified purposes); and there is a relatively high degree of federal administrative
conditions attached to the grant, typically involving the imposition of federal standards for
planning, project selection, fiscal management, administrative organization, and performance.
General revenue sharing imposes the least restraint on recipients.7 Federal administrators have a
low degree of discretion over who receives general revenue sharing (funding is allocated

5 Rep. Paul Ryan, “The President’s Health Care Law,” at http://paulryan.house.gov/issues/issue/?IssueID=9978#3. For
further information and analysis of proposals to convert Medicaid into a block grant, see CRS Report R41767,
Overview of Health Care Changes in the FY2012 Budget Offered by House Budget Committee Chairman Ryan, by
Patricia A. Davis, Alison Mitchell, and Bernadette Fernandez and CRS Report R42893, Proposals to Reduce Federal
Medicaid Expenditures, by Alison Mitchell.
6 See CRS Report R42893, Proposals to Reduce Federal Medicaid Expenditures, by Alison Mitchell.
3 General revenue sharing distributed funds to states from 1972 to 1981 and to localities from 1972 to 1986. The federal
government currently does not have a general revenue sharing program.
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Block Grants: Perspectives and Controversies

automatically to recipients by a formula or formulas specified in legislation); recipients have
broad discretion concerning aided activities; and there is a relatively low degree of federal
administrative conditions attached to the grant, typically involving periodic reporting criteria and
the application of standard government accounting procedures.
Block grants are at the midpoint in the continuum of recipient discretion. Federal administrators
have a low degree of discretion over who receives block grants (after setting aside funding for
administration and other specified activities, the remaining funds are typically allocated
automatically to recipients by a formula or formulas specified in legislation); recipients have
some discretion concerning aided activities (typically, funds can be used for a specified range of
activities within a single functional area); and there is a moderate degree of federal administrative
conditions attached to the grant, typically involving more than periodic reporting criteria and the
application of standard government accounting procedures, but with fewer conditions attached to
the grant than project categorical grants.
Table 1. Classification of Grant Types by Three Defining Traits
Low Medium High
Federal Administrator’s Funding Discretion
Formula Categorical Grant
Block Grant—Formula-Project Categorical Grant
Project Categorical Grant
Open-ended Reimbursement


Categorical Grant
General Revenue Sharing

Range of Recipient’s Discretion in Use of Funds
Project Categorical Grant
Block Grant
General Revenue Sharing
Formula-Project Categorical


Grant
Formula Categorical Grant

Open-ended Reimbursement

Categorical Grant
Extent of Performance Conditions
General Revenue Sharing
Block Grant
Project Categorical Grant


Formula Categorical Grant

Formula-Project Categorical
Grant

Open-ended Reimbursement
Categorical Grant
Source: U.S. Advisory Commission on Intergovernmental Relations, Categorical Grants: Their Role and Design, A-
52, 1978, p. 7, at http://www.library.unt.edu/gpo/acir/Reports/policy/a-52.pdf.
In practice, some block grants have from their inception offered programmatic flexibility within a
narrow range of activities. Others started out with few program restraints, but, over time, have
become “re-categorized” as Congress has chosen to limit state and local government
programmatic flexibility by imposing additional administrative and reporting requirements,
typically to augment congressional oversight. For example, in its examination of 11 block grants
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in 1995, GAO found that in 9 of the 11 block grants Congress added new cost ceilings and set-
asides or changed existing ones 58 times:
These constraints often took the form of set-asides, requiring a minimum portion of funds to
be used for a specific purpose, and cost-ceilings, specifying a maximum portion of funds that
could be used for other purposes. This trend reduced state flexibility. Many of these
restrictions were imposed because of congressional concern that states were not adequately
meeting national needs.8
Congress has also increased programmatic flexibilities for some categorical grants, making them
look increasingly like block grants. This blurring of characteristics can present challenges when
analyzing the federal grants-in-aid system, as agencies and researchers may disagree over
definitions and, as a result, reach different conclusions about block grants and their impact on
American federalism and program performance. This blurring of characteristics should be kept in
mind whenever generalizations are presented concerning the impact various grant types have on
American federalism and program performance.
The Number of Block Grants
Congress has a central role in shaping the scope and nature of the federal grants-in-aid system. In
its deliberative, legislative role, Congress determines its objectives, decides which grant
mechanism is best suited to achieve those objectives, and creates legislation to achieve its
objectives, incorporating its chosen grant mechanism. It then exercises oversight to hold the
administration accountable for grant implementation and to determine whether the grant is
achieving its objectives.9
The following criteria were used to determine the current number of block grants:
• eligibility is limited to state and local governments (not foreign governments or
nongovernmental organizations);
• program funds are typically distributed using a formula that may be prescribed in
legislation or regulations; and
• unlike categorical programs, which target funds for a specific activity, recipients
undertake, at their discretion, a number of activities within a broad functional
category aimed at addressing national objectives.
Most of the 23 block grants (21 funded and 2 authorized, but not currently funded) identified in
Table 2 award funding to state governments.10 Block grants that provide funding to local
governments, including sub-state regional entities, either directly or through “pass-through”
provisions, are identified in the table.

8 U.S. General Accounting Office, Block Grants: Characteristics, Experience, and Lessons Learned, GAO/HEHS-95-
74, February 9, 1995, pp. 8-11, at http://www.gao.gov/assets/230/220911.pdf.
9 ACIR, Categorical Grants: Their Role and Design, A-52, 1978, p.61, at http://www.library.unt.edu/gpo/acir/Reports/
policy/a-52.pdf.
10 The Congressional Research Service (CRS) identified 28 block grants in FY2012. Two block grants are no longer
available, Government Services State Fiscal Stabilization Fund (Department of Education) and Regional Catastrophic
Preparedness Grant (Department of Homeland Security). The State Homeland Security Grant and Urban Area Security
Initiative Grant programs are now within the Department of Homeland Security’s Homeland Security Grant Programs.
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Block Grants: Perspectives and Controversies

Table 2. Federal Block Grants in FY2014
(by Administering Federal Agency)
Federal Agency
Block Grant Program
Department of Education
Innovative Education Program Strategies Block Granta
Department of Energy
Efficiency and Conservation Block Granta
Department of Health and Human Services
Child Care and Development Block Grant
Community Mental Health Services Block Grant
Community Services Block Grant
Low Income Home Energy Assistance Block Grant
Maternal and Child Health Services Block Grant
Preventive Health and Health Services Block Grant
Social Services Block Grant
Substance Abuse Prevention and Treatment Block Grant
Temporary Assistance to Needy Families
Title V Abstinence Education Block Grant
Department of Homeland Security
Homeland Security Grant Programs (State Homeland
Security Programs, Urban Area Security Initiative Grant,b
and Operation Stonegarden)
Department of Housing and Urban Development
Community Development Block Grantb
Emergency Solutions Grant Programc
HOME Investment Partnerships Programb
Indian Community Development Block Grant
Indian Housing Block Grant
Native Hawaiian Housing Block Grant
Department of Justice
Edward Byrne Memorial Justice Assistance Grant
Department of Labor
Workforce Investment Act (Youth, Adult and Dislocated
Workers)
Department of Transportation
Federal Aviation Administration Airport Improvement State
Block Grant Program
Surface Transportation Program
Source: CRS analysis of FY2014 appropriations, federal agency websites, and the Catalog of Federal Domestic
Assistance.
Notes: The table does not include Nutritional Assistance Block Grants for Puerto Rico and American Samoa
(food stamps) because of their status as a commonwealth and unincorporated territory, respectively. Also, the
table does not include Specialty Crop Block Grants authorized under Specialty Crops Competitiveness Act of
2004 (7 U.S.C. 1621) because the program does not meet the criteria used to distinguish a block grant.
a. Not currently funded.
b. Provides funding to local governments either directly or through “pass-through” provisions.
c. Funds awarded only to local governments.
Given disagreements over definitions, the list of block grants presented in Table 2 should be
considered illustrative, as opposed to definitive, of the present number of block grants.
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Block Grants: Competing Perspectives
A federalism scholar has suggested that efforts to enact block grants typically have been based on
the following arguments:
the national government was too large, and its elected officials and appointed officials were
out of touch with grassroots needs and priorities; the federal bureaucracy was too powerful
and prone to regulation; the United States Congress was too willing to preempt states and
localities and to enact mandates without sufficient compensatory funding; the national
government was too involved in domestic activities that were properly state or local affairs;
there were too many narrow, overlapping federal grant-in-aid programs; and state
governments were too often considered mere administrative subunits of the national
government rather than the vital “laboratories of democracy” envisioned by Justice Louis
Brandeis.11
He also suggested that efforts to enact block grants often met resistance in Congress because of
congressional concerns about recipients’ management capacity and commitment to the program,
recipients’ ability to make the “right” allocation choices, and the possibility that converting
categorical grants to block grants might diminish both congressional and executive branch ability
to provide effective program oversight. He also argued that Congress had a tendency to prefer
categorical grants over block grants because they provide greater opportunity for receiving
political credit.12
Another federalism scholar also suggested that block grant advocates have often found it
difficult to gain congressional approval for block grants because their arguments have been
superseded by political considerations:
Why is it so difficult to do block granting? Why is it politically hard? And I think the
answer’s pretty straightforward: it seldom has more friends than it has enemies. Liberals
prefer a categorical approach to intergovernmental grant giving. Essentially for two reasons:
First of all, it locks in - it institutionalizes constituencies; that is, it sets up a pretty sturdy
relationship between client groups; program authorizing committees in Congress; and patron
agencies in the Executive Branch. And this pretty much ensures that intended target
populations get funded, consistently.
But, secondly, unlike block grants, which are often administered by formula, the categorical
system gives politicians more opportunities for credit claiming. I'm going to quote, here from
Yale political scientist David Mayhew on this subject. He says, “The categorical grant is for
modern Democratic Congressmen what the Rivers and Harbors Act and the tariff were for
pre-New Deal Republican Congressmen.”
That’s true, but when the chips were down, conservatives are often not that keen about block
granting, either.... They may like the fact that it may be somewhat easier to trim program
spending, once programs are taken out of their political silos or cease to be entitlements. But

11 Carl W. Stenberg, “Block Grants and Devolution,” in Intergovernmental Management for the 21st Century, eds. Paul
Posner and Timothy Conlan (Washington, DC: The Brookings Institution Press, 2007), p. 263.
12 Ibid., pp. 267, 271-274.
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Block Grants: Perspectives and Controversies

they don't necessarily like the total lack of accountability, the absence of any strings to the
money, once it goes out to the states.13
The following discussion examines in more detail the arguments presented by block grant
advocates and block grant critics.
Block grant advocates argue that federal administrators are often out of touch with grassroots
needs and priorities whereas state and local government officials are “closer to the people” than
federal administrators and, therefore, are better positioned to identify state and local government
needs. They also argue that state and local government officials are more “visible” to the public
than federal administrators and, as a result, are more likely to be held accountable for their
actions. From their perspective, this heightened level of visibility and accountability encourages
state and local government officials to seek the most efficient and cost-effective means to deliver
program services. As a result, they view the added flexibility provided by block grants as a means
to produce both better programmatic outcomes and at a lower cost. Block grant advocates also
argue that the flexibility afforded to states and localities under block grant programs allows them
to innovate and experiment with new approaches to governmental challenges that would not be
possible if the funding were provided through more restrictive categorical grants.14 They argue
that states have a history of learning from one another through the sharing of best practices at
forums sponsored by the National Governors Association, through state and local government
officials’ participation in their respective national organizations’ annual meetings, and through
word-of-mouth.
Block grant advocates also assert that block grants promote long-term planning. Unlike project
categorical grants that require state and local government officials to compete for funding, block
grants use formulas to distribute funds. They argue that the use of formulas provides recipients
greater assurance that funding will be continued, which makes it easier for them to predict the
amount of their grant and to create long-range plans for the funds’ use.
Block grant advocates also claim that block grants help to address what they believe is
unnecessary and wasteful duplication among existing categorical grant programs. They believe
that block grants eliminate this duplication and waste by consolidating categorical grant activities,
and by providing states and localities the ability to set their own priorities and allocate funds
accordingly. Block grant advocates also argue that block grants will generate cost savings by
reducing federal administrative costs related to state and local government paperwork
requirements. However, there has been no definitive, empirical evidence that total administrative
costs have been significantly reduced by converting categorical grants into block grants. Some
federalism scholars have argued that costs related to “administrative overhead burdens may only
have been shifted from the national to the state to the local levels through block grants.”15
Converting entitlement programs into block grants is viewed by some as a means to eliminate
what they view as uncontrollable spending. By design, entitlement program funding responds
automatically to economic and demographic changes. In the short run, enrollment in entitlement

13 Pietro Nivola, Comments at a forum on “Block Grants: Past, Present, and Prospects,” The Brookings Institution,
Washington, DC, October 15, 2003, at http://www.brookings.edu/comm/events/20031015_panel2.pdf.
14 ACIR, Block Grants: A Comparative Analysis, A-60, 1977, pp. 8-11, at http://www.library.unt.edu/gpo/acir/Reports/
policy/A-60.pdf.
15 Carl W. Stenberg, “Block Grants and Devolution,” in Intergovernmental Management for the 21st Century, eds. Paul
Posner and Timothy Conlan (Washington, DC: The Brookings Institution Press, 2007), p. 273.
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programs tends to increase during and shortly after economic recessions. In the long run,
enrollment in entitlement programs tends to increase with overall increases in eligible
populations.16 Because block grants have pre-determined funding amounts, converting
entitlement programs, like Medicaid, into block grants has been seen by some as a means to
impose greater fiscal discipline in the federal budget process.17 As a federalism scholar put it:
We face, as a nation, severe, long-term fiscal problems. We face a collision between rising
costs for elderly entitlements and a shrinking revenue base.... Over time, some things, many
things have to give. And I think block grants are attractive to some policy makers, as a way
over a long period of time to squeeze funding for some of the big low-income programs,
relative to what it would be under the current entitlement funding structures and it enables it
to do it without looking heartless by proposing to throw x-numbers of people over the side in
program A, B, or C.18
Critics of block grants argue that providing state and local government officials increased
flexibility concerning the use of the program’s funds reduces the ability of federal administrators
and Congress to provide effective program oversight. Because block grants purposively minimize
administrative requirements, there are often no federal requirements for uniform data collection,
making it difficult to compare data across states and, in the view of some, rendering whatever
data are available unusable for effective federal agency and congressional oversight of program
performance.19 To address this deficiency, Congress has added reporting requirements to some
block grants and performance incentives that reward states for documented improvements to
others.20
Block grant critics also assert that state and local government officials will use their increased
programmatic flexibility to retarget resources away from individuals or communities with the
greatest need toward those with greater political influence. They cite studies of the Community
Development Block Grant program (CDBG) that found that political considerations did influence
at least some local government officials when they allocated CDBG funds.21
Block grant advocates counter this argument by insisting that even if this was the case block grant
formulas can be designed to adequately target funds to jurisdictions with the greatest need by
including objective indicators of need in the distribution formula. They also point to various
studies that have examined the retargeting issue and have not found evidence of significant
redirection of funds. For example, a GAO study of the five block grants enacted prior to 1981

16 Kenneth Finegold, Laura Wherry, and Stephanie Schardin, “Block Grants: Details of the Bush Proposals,” New
Federalism: Issues and Options for States (Washington, DC: The Urban Institute, April 2004), p. 6.
17 Jeanne M. Lambrew, “Making Medicaid a Block Grant Program: An Analysis of the Implications of Past Proposals,”
The Milbank Quarterly 83:1 (2005), p. 43.
18 Robert Greenstein, Comments at a forum on “Block Grants: Past, Present, and Prospects,” The Brookings Institution,
Washington, DC, October 15, 2003, at http://www.brookings.edu/comm/events/20031015_panel2.pdf.
19 Kenneth Finegold, Laura Wherry, and Stephanie Schardin, “Block Grants: Details of the Bush Proposals,” New
Federalism: Issues and Options for States (Washington, DC: The Urban Institute, April 2004), p. 9.
20 U.S. General Accounting Office, Block Grants: Characteristics, Experience, and Lessons Learned, GAO/HEHS-95-
74, February 9, 1995, pp. 7, 9-11, at http://www.gao.gov/assets/230/220911.pdf.
21 Donald Kettl, “Can the Cities be Trusted? The Community Development Experience,” Political Science Quarterly
94:3 (Autumn 1979), pp. 437-451; and Howard Stern, “Can the Mayors Be Trusted? Using Community Development
Block Grants to Get Re-elected,” Paper presented at the 62nd Annual Meeting of the Midwest Political Science
Association, April 15-18, 2004, Chicago, Il, at http://www.allacademic.com//meta/p_mla_apa_research_citation/0/8/3/
6/1/pages83613/p83613-2.php.
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found that of the three block grant programs that had a stated objective of serving the
economically needy, “there were no consistent differences between the earlier categorical
programs and the pre-1981 block grants in targeting benefits to lower income people or to
minority groups.”22 A study of the block grants enacted during the Reagan Administration also
found that states did not use their flexibility to redirect resources away from poor or low-income
families.23 Block grant critics, however, counter these arguments by pointing out that block grant
formulas often include population as a criterion of need to attract political support. From their
perspective, including population in block grant formulas prevents block grants from adequately
targeting assistance to needy individuals and jurisdictions.
Some block grant critics oppose the consolidation of existing categorical grants into block grants
because they believe that funding for the programs is likely to diminish over time, as it is thought
to be more difficult to generate political support for broad-purpose, state-administered programs
than for categorical programs targeted at specific purposes. For example, they cite a 1995 analysis
of five block grants enacted during the 1980s that found that their real (inflation-adjusted)
funding level decreased from 1986 to 1995, despite a 66% increase in total federal grant funding
during that period; and a 2003 analysis of federal funding for 11 block grants that found that their
inflation-adjusted funding levels fell by an average of 11%.24 Also, in 2006 GAO found that real
per capita funding for the Community Development Block Grant (CDBG) program had declined
since 1978 “by almost three-quarters from about $48 to about $13 per capita.”25 From their
perspective, block grants critics view block grants as a “backdoor” means to reduce government
spending on domestic issues.
Critics of block grants also contend that recipients may substitute federal block grant funds for
their own financial contribution to an activity. Congress has addressed this concern by including
state maintenance-of-effort provisions in grant programs which require recipients to maintain the
level of funding for an activity that existed either before receiving the grant funds or over a
specified period.
A search of federal grants-in-aid programs in the Catalog of Federal Domestic Assistance
revealed that 69 federal grants to state and local governments have state spending maintenance-
of-effort (MOE) requirements to prevent state and local governments from substituting federal
funds for existing state and local government funds. For example, the Temporary Assistance for
Needy Families (TANF) block grant program requires states to maintain spending from their own
funds on specified TANF or TANF-related activities at 75% of what was spent from state funds
in FY1994 in TANF’s predecessor programs of cash, emergency assistance, job training, and
welfare-related child care spending ($10.4 billion in the aggregate for all states). States are
required to maintain their own spending at least at that level, and the MOE requirement increases
to 80% of FY1994 spending for states that fail to meet TANF work participation requirements.

22 U.S. General Accounting Office, Block Grants: Characteristics, Experience, and Lessons Learned, GAO/HEHS-95-
74, February 9, 1995, p. ii, at http://www.gao.gov/assets/230/220911.pdf.
23 George E. Peterson, Randall R. Bovbjerg, Barbara A. Davis, Walter G. Davis, Eugene C. Durham, and Theresa A.
Guillo, The Reagan Block Grants: What Have We Learned? (Washington, D.C.: Urban Institute Press, 1986), pp. 18-
21.
24 Kenneth Finegold, Laura Wherry, and Stephanie Schardin, “Block Grants: Historical Overview and Lessons
Learned,” New Federalism: Issues and Options for States (Washington, D.C.: The Urban Institute, April 2004), p. 4.
25 U.S. Government Accountability Office, Community Development Block Grant Formula: Options for Improving the
Targeting of Funds, GAO-06-904T, June 27, 2006, p. 2, at http://www.gao.gov/assets/120/114275.pdf.
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States failing to meet the MOE requirement are subject to a reduction in the state’s subsequent
year’s block grant funding by $1 for each $1 shortfall from the required spending level.26
When Should Block Grants Be Considered?
Since the first block grant’s enactment in 1966, analysts and policymakers have tried to identify
the circumstances in which block grants are most desirable and circumstances in which it is
appropriate to consider converting existing categorical grants into block grants. A leading
federalism scholar suggested that block grants should be considered if the following conditions
are present:
• when the federal government desires to supplement service levels in certain
broad program areas traditionally provided under state and local jurisdiction;
• when broad national objectives are consistent with state and local program
objectives;
• when the federal government seeks to establish nationwide minimum levels of
service in those areas; and
• when the federal government is satisfied that state and local governments know
best how to set subordinate priorities and administer the program.27
In the past, Congress has consolidated categorical grant programs to create new block grants. The
now–defunct U.S. Advisory Commission on Intergovernmental Relations (ACIR) said that it may
be appropriate to terminate or consolidate categorical programs when
• programs are too small to have much impact or to be worth the cost of
administration;
• programs do not embody essential and clear national objectives;
• programs get (or could get) most of their funding from state and local
governments, or from fees for services, or could be shifted to the private sector;28
and
• in functional areas including health, education, and social services, that have a
large number of programs; or in functional areas including justice, natural
resources, and occupational health and safety, that have a high fragmentation
index score (ACIR devised a fragmentation index that measured the percentage
of grant programs in a functional category [i.e., housing, transportation] relative

26 For further analysis, see CRS Report RL32748, The Temporary Assistance for Needy Families (TANF) Block Grant:
A Primer on TANF Financing and Federal Requirements, by Gene Falk.
27 U.S. Congress, Joint Economic Committee, Subcommittee on Joint Economic Goals and Intergovernmental Policy,
Prepared statement of David B. Walker, Assistant Director, U.S. Advisory Commission on Intergovernmental
Relations, Block Grants and the Intergovernmental System, 97th Cong., 1st sess., July 15, 1981 (Washington: GPO,
1981), pp. 47-48.
28 ACIR, An Agenda for American Federalism: Restoring Confidence and Competence, A-86, 1981, pp. 111-112, at
http://www.library.unt.edu/gpo/acir/Reports/policy/a-86.pdf.
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to the percentage of federal funding allocated to programs in the functional
category).29
Contemporary Controversies: How to Evaluate
Block Grants
Block grants have been praised by some for providing state and local government officials
additional flexibility to meet state and local needs, but are criticized by others because, in their
view, accountability for results can be difficult when funding is allocated based on formulas and
population counts rather than performance or meeting demonstrated need. In addition, block
grants pose performance measurement challenges precisely because they can be used for a wide
range of activities. For example, the obstacles to measuring and achieving results through block
grants were reflected in their Program Assessment Rating Tool (PART) scores.
PART was a set of questionnaires that the George W. Bush Administration developed to assess
the effectiveness of seven different types of federal programs, in order to influence funding and
management decisions. These seven “program types” included direct federal programs;
competitive grant programs; block/formula grant programs; regulatory based programs; capital
assets and service acquisition programs; credit programs; and research and development
programs. The Obama Administration initially announced that it would continue to use PART to
evaluate programs, but would seek changes to the questionnaires to reflect different performance
goals and to ensure that “programs will not be measured in isolation, but assessed in the context
of other programs that are serving the same population or meeting the same goals.”30 It
subsequently decided not to use PART scores to measure program performance. Instead, the
Obama Administration decided to use program evaluations focused on performance improvement
strategies to achieve identified high priority performance goals.31
PART focused on four program aspects: purpose and design (20%); strategic planning (10%);
program management (20%); and program results/accountability (50%).32 Each program aspect
was provided a percentage “effectiveness” rating (e.g., 85%) based on answers to a series of
questions. The scores for the four program aspects were then averaged to create a single PART
score. Programs were then rated, effective (193 in 2008), moderately effective (326 in 2008),
adequate (297 in 2008), ineffective (26 in 2008), and results not demonstrated (173 in 2008).33
Block grants received the lowest average score of the seven PART program types in 2008, 5% of

29 ACIR, Federal Grant Programs in Fiscal Year 1989: Their Numbers, Sizes, and Fragmentation Indexes in
Historical Perspective, SR-14, September 1993, p. 2, at http://www.library.unt.edu/gpo/acir/Reports/staff/SR-14.pdf.
30 U.S. Office of Management and Budget, A New Era of Responsibility: Renewing America’s Promise, 2009, p. 39, at
http://www.whitehouse.gov/omb/assets/fy2010_new_era/A_New_Era_of_Responsibility2.pdf.
31 U.S. Office of Management and Budget, Performance Improvement Guidance: Management Responsibilities and
Government Performance and Results Act Documents, Memorandum from Shelley Metzenbaum, OMB Associate
Director for Performance and Personnel Management, June 25, 2010. For further analysis, see CRS Report R41337,
Independent Evaluators of Federal Programs: Approaches, Devices, and Examples, by Frederick M. Kaiser and
Clinton T. Brass.
32 For further analysis, see CRS Report RL32663, The Bush Administration's Program Assessment Rating Tool (PART),
by Clinton T. Brass.
33 U.S. Office of Management and Budget, “ExpectMore.Gov,” at http://www.whitehouse.gov/omb/expectmore/
about.html.
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block grant programs assessed were rated ‘‘ineffective,’’ and 30% were rated ‘‘results not
demonstrated.’’34
Block grant critics point to PART’s low ratings of block grants as proof that block grants should
be avoided. Block grant advocates argue that PART’s heavy weighting of program
results/assessment in its calculations made PART a poor measure for assessing block grant
performance. As one study concluded,
the federal requirements ... tend to ignore the reality that many programs contain multiple
goals and outcomes, rather than focusing on a single goal or outcome. These multiple goals
and outcomes are often contradictory to each other. Yet PART pushes agencies to focus on
single goals.... The federal efforts dealing with performance move against the devolution
tide.... Efforts to hold federal government agencies accountable for the way programs are
implemented actually assume that these agencies have legitimate authority to enforce the
requirements that are included in performance measures.35
Block grant advocates also note that during his presidency President George W. Bush proposed
several new block grants, despite PART’s low scoring of block grant performance.
Contemporary Controversies: Funding
Historically, the success or failure of block grant proposals has often been determined, in large
part, on stakeholders’ views of the program’s future funding prospects.36 However, in recent
years, this issue has taken on even greater prominence than in the past. Prior to 1995, the primary
rationale provided by block grant advocates for converting categorical grants into block grants
was to eliminate program overlap and duplication and introduce greater program efficiencies by
providing state and local government officials additional flexibility in program management.
Since then, block grant advocates have continued to argue that converting categorical grants into
block grants reduces program overlap and duplication, but they have also increasingly touted
block grants as a means to control federal spending by capping expenditures and closing open-
ended entitlement programs.37
The recent increased emphasis on capping expenditures and closing previously open-ended
entitlement programs has changed the nature of congressional consideration of what some have

34 U.S. Office of Management and Budget, Budget of the United States, FY2009 Analytical Perspectives: Crosscutting
Programs, p. 112, at http://www.whitehouse.gov/omb/budget/fy2009/pdf/apers/crosscutting.pdf.
35 Beryl Radin, “Performance Management and Intergovernmental Relations,” in Intergovernmental Management for
the 21st Century, eds. Paul Posner and Timothy Conlan (Washington, DC: The Brookings Institution Press, 2007), pp.
244, 251.
36 Timothy Conlan, New Federalism: Intergovernmental Reform From Nixon to Reagan (Washington, DC: The
Brookings Institution, 1988), pp. 172-178.
37 For example, see Andrew G. Biggs, Kevin A. Hassett, and Matthew Jensen, “Guide for Deficit Reduction in the
United States Based on Historical Consolidations That Worked,” American Enterprise Institute Economic Policy
Working Paper 2010-04, Washington, DC, December 27, 2010, p. 16, at http://www.aei.org/docLib/20101227-Econ-
WP-2010-04.pdf; and Brian Riedl, “How to Cut $343 Billion from the Federal Budget,” The Heritage Foundation,
Washington, DC, October 28, 2010, pp. 2, 3, at http://www.heritage.org/research/reports/2010/10/how-to-cut-343-
billion-from-the-federal-budget. For a counter-argument see Ed Park, “Medicaid Block Grant or Funding Caps Would
Shift Costs to States, Beneficiaries, and Providers,” Center on Budget Policy and Priorities, Washington, DC, January
6, 2011, http://www.cbpp.org/cms/index.cfm?fa=view&id=3363.
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labeled “new-style” block grant proposals. During their deliberations, instead of focusing
primarily on questions concerning state and local government administrative and fiscal capacity
and commitment to the program, Congress has increasingly focused on the short- and long-term
budgetary implications of block grants, both for the federal budget and for recipients. Some have
argued that the new-style block grants send a mixed message to state and local government
officials, providing them added programmatic authority, flexibility in administration, and greater
freedom to innovate, but at the cost of restrained federal financial support and increased
performance expectations.38
The following are some of the more recent block grant proposals that have received congressional
consideration.
President George W. Bush’s Community and Economic
Development Block Grant Proposal
In his FY2006 budget proposal, President George W. Bush included a Strengthening America’s
Communities Initiative, which would have combined 18 existing community and economic
development programs (including the Community Development Block Grant program) into a
two-part block grant. Administrative responsibility for the 18 programs would have been
transferred from five federal agencies (the Department of Housing and Urban Development, the
Economic Development Administration in the Department of Commerce, the Department of the
Treasury, the Department of Health and Human Services, and the Department of Agriculture) to
the Department of Commerce, which administers the programs of the Economic Development
Administration. Under the proposal, the Department of Commerce would have administered a
core block grant program and a bonus program. The bonus program would have awarded
additional funds to communities that demonstrated efforts to improve economic conditions. The
proposal would have reduced total funding for the 18 programs from $5.6 billion in FY2005 to
$3.7 billion in FY2006. Congress rejected the Administration’s budget proposal and funded all 18
programs at a total level of $5.3 billion.39
Medicaid and SNAP Block Grant Proposals
The National Commission on Fiscal Responsibility and Reform, a bipartisan debt commission
established by President Obama by executive order, recommended in December 2010 that the
federal-state responsibility for Medicaid be adjusted, with consideration given to the use of block
grants for acute or long-term care as a means to contain Medicaid costs.40 In addition, as
mentioned previously, Representative Paul Ryan, chair of the House Committee on the Budget,
has recommended that the federal share of Medicaid be converted into a block grant as a means to

38 Carl W. Stenberg, “Block Grants and Devolution: A Future Tool?” in Intergovernmental Management for the 21st
Century, eds. Timothy J. Conlan and Paul L. Posner (Washington, D.C.: Brookings Institution Press, 2008), p. 271.
39 For further analysis, see CRS Report RL32823, An Overview of the Administration's Strengthening America's
Communities Initiative, by Eugene Boyd et al.
40 National Commission on Fiscal Responsibility and Reform, “The Moment of Truth: Report of the National
Commission on Fiscal Responsibility and Reform,” Washington, DC, December 2010, p. 42, at
http://www.fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/TheMomentofTruth12_1_2010.pdf; and
Executive Order 13531, “National Commission on Fiscal Responsibility and Reform,” 75 Federal Register 7927, 7928,
February 23, 2010 (effective February 18, 2010).
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“improve the health-care safety net for low-income Americans” and to “save $810 billion over 10
years.”41 On March 29, 2012, the House adopted its FY2013 Budget Resolution (H.Con.Res.
112). It proposed converting Medicaid from an open-ended, individual entitlement formula
categorical grant into a block grant and repealing the Patient Protection and Affordable Care Act
(ACA; P.L. 111-148, as amended). Together these provisions were estimated to reduce federal
Medicaid expenditures by $1.4 trillion from FY2013 to FY2022.42
Advocates of converting Medicaid into a block grant argued that
Medicaid’s flawed financing structure has created rapidly rising costs that are nearly
impossible to check. Mandate upon mandate has been foisted upon States under the flawed
premise that the best ideas for repairing this important health care safety net can come only
from Washington. This budget ends that misguided approach and instead converts the
Federal share of Medicaid spending into a block grant, thus freeing States to tailor their
Medicaid programs to the unique needs of their own populations.43
…The exact contours of a Medicaid reform—as well as other policies flowing from the fiscal
assumptions in this budget resolution—will be determined by the committees of jurisdiction.
Nevertheless, the need for fundamental Medicaid reform and other measures to slow the
growth of Federal spending are unquestioned, and one set of potential approaches is
described below.
…Transform and Strengthen the Medicaid Safety Net. One way to secure the Medicaid
benefit is by converting the Federal share of Medicaid spending into an allotment tailored to
meet each State’s needs, indexed for inflation and population growth. Such a reform would
end the misguided one-size-fits-all approach that has tied the hands of State governments.
States would no longer be shackled by federally determined program requirements and
enrollment criteria. Instead, each State would have the freedom and flexibility and to tailor a
Medicaid Program that fit the needs of its unique population.44
Opponents argued that
‘‘Block-granting’’ Medicaid is simply code for deep, arbitrary cuts in support to the most
vulnerable seniors, individuals with disabilities, and low-income children. Medicaid is
already underfunded, yet this budget cuts it by over $800 billion, about a third of the
Medicaid budget by 2022. Claiming to ‘‘repair’’ Medicaid by cutting it by a third is like
saving a drowning person by throwing them an anchor.45
The House’s FY2013 Budget Resolution also would have converted the Supplemental
Nutrition Assistance Program (food stamps) into a block grant, estimating the savings as

41 Rep. Paul Ryan, “The President’s Health Care Law,” at http://paulryan.house.gov/issues/issue/?IssueID=9978#3.
Also, see Rep. Paul Ryan, “The Path to Prosperity: Restoring America’s Promise; Fiscal Year 2012 Budget
Resolution,” House Committee on the Budget, Washington, DC, p. 39, at http://budget.house.gov/UploadedFiles/
PathToProsperityFY2012.pdf.
42 See CRS Report R42893, Proposals to Reduce Federal Medicaid Expenditures, by Alison Mitchell.
43 H.Rept. 112-421, Concurrent Resolution on the Budget – Fiscal Year 2013, p. 9.
44 Ibid., p. 92.
45 Ibid., p. 199.
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$122.5 billion over 10 years.46 It also would have terminated the Social Services Block Grant
indicating that the grant provides services that “…are also funded by other Federal programs.”47
President Obama’s Block Grant Proposals
President Obama has not issued a formal federalism plan and has not advocated a major shift in
funding priorities either within functional categories or from categorical grants to block grants.
However, the expansion of Medicaid eligibility under P.L. 111-148, ACA, which President
Obama strongly endorsed, is expected to retain, and perhaps increase, health care’s position as the
leading category of federal assistance to state and local governments. The ACA also either
authorized or amended 71 federal categorical grants to state and local governments, further
enhancing the role of categorical grants in the intergovernmental grant-in-aid system.48
As evidenced by the enactment of P.L. 111-5, the American Recovery and Reinvestment Act of
2009 (ARRA), which provided states and localities more than $265 billion to assist the national
economic recovery from the “Great Recession” (December 2007-June 2009), the ACA, the
Obama Administration, and Congress has continued to use federal grants to state and local
governments as a means to achieve national goals.49 However, for the most part, President Obama
has not advocated an expansion in the number of block grants or an increase in their share of
outlays for federal grants to state and local governments.
The Obama Administration did support enactment of two, relatively significant temporary block
grants in ARRA: the $53.6 billion Government Services State Fiscal Stabilization Fund
(Department of Education), which provided funding for public elementary and secondary
education and for public institutions of higher education, and the $3.2 billion Energy Efficiency
and Conservation Block Grant (Department of Energy), which provided funding for energy
efficiency and conservation programs and projects within communities, as well as renewable
energy installations on government buildings. The Administration also supported ARRA’s
provision of additional, temporary funding to TANF ($5 billion), the Child Care and
Development Block Grant ($2 billion), CDBG ($1 billion), the Community Services Block Grant
($1 billion), and Native American Housing Block Grants ($510 million).
Since then, the Obama Administration has advocated funding reductions for several block grant
programs as part of an overall effort “to balance federal budget constraints with the difficult fiscal
conditions confronting state and local governments.”50 For example, in his FY2012 budget

46 Ibid., p. 100.
47 Ibid., p.89.
48 U.S. General Services Administration, “Catalog of Federal Domestic Assistance,” at https://www.cfda.gov/.
49 U.S. Government Accountability Office, “Following the Money: GAO’s Oversight of the Recovery Act,” at
http://www.gao.gov/recovery/. ARRA provided state and local governments $52.9 billion in FY2009, $111.9 billion in
FY2010, $68.8 billion in FY2011, $25.6 billion in FY2012, and $5.5 billion in FY2013—through March 8, 2013.
ARRA provided additional funding for a wide range of federal grants to state and local governments, including
Medicaid ($93 billion, primarily for a temporary increase in the Federal Medical Assistance Percentages
reimbursement rate), a State Fiscal Stabilization Fund ($53.6 billion), Build America Bonds ($30 billion), Highways
and Bridges ($27.5 billion), Title 1-A, elementary and secondary education for the disadvantaged, ($13 billion),
Individuals with Disabilities Education Act ($12.2 billion), Public Transit ($8.4 billion), Intercity Passenger Rail
Capital, Congestion, and Corridor Development grants ($8 billion), Temporary Assistance for Needy Families ($5
billion), and Weatherization Assistance Grants ($5 billion).
50 U.S. Office of Management and Budget, Budget of the United States, FY 2012: Terminations, Reductions, and
(continued...)
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request he recommended that CDBG funding be reduced by $299 million, to $3.68 billion
($2.948 billion was appropriated); funding for the Community Services Block Grant program be
cut in half, to $350 million ($677.3 million was appropriated); and funding for the HOME
Investment Partnerships Program be reduced by $175 million, to $1.65 billion ($1.0 billion was
appropriated).51 In addition, President Obama recommended that funding for the Preventive
Health and Health Services Block Grant, then funded at about $102 million, be eliminated
because it “can be more effectively implemented through the new Comprehensive Chronic
Disease Program and the Prevention and Public Health Fund” ($79.545 million was
appropriated).52
In his FY2013 budget request, President Obama recommended that the CDBG program be funded
at $2.948 billion, the same as FY2012 ($2.948 million was appropriated, prior to sequestration);53
funding for the Community Services Block Grant program be cut by nearly half, to $350 million
($677.3 million was appropriated, prior to sequestration), and funding for the HOME Investment
Partnerships Program remain at $1.0 billion ($1.0 billion was appropriated, prior to
sequestration).54 He also recommended, once again, that funding for the Preventive Health and
Health Services Block Grant be eliminated ($79.545 million was appropriated, prior to
sequestration). He argued that the program’s activities “are duplicative of existing activities and
can be more effectively and efficiently implemented through new Comprehensive Chronic
Disease Program and Prevention and Public Health Fund investments.”55
In his FY2014 budget request, President Obama recommended that the CDBG program be funded
at $2.798 billion, a reduction of $150 million; funding for the Community Services Block Grant
program be reduced from $677.3 million to $350.0 million, a reduction of $327.3 million;
funding for the HOME Investment Partnerships Program be reduced by $50.0 million, to $950.0
million; and funding for the Preventive Health and Health Services Block Grant be eliminated,
saving $79.545 million.56 The Obama Administration also recommended that funding for the Low

(...continued)
Savings, 2011, p. 100, at http://www.gpo.gov/fdsys/pkg/BUDGET-2012-TRS/pdf/BUDGET-2012-TRS.pdf.
51 Ibid., pp. 100, 103, 120; P.L. 112-55, the Consolidated and Further Continuing Appropriations Act, 2012; and P.L.
112-74, the Consolidated Appropriations Act, 2012. For further information and analysis concerning the CDBG
program, see CRS Report R41754, Community Development Block Grants: Funding Issues in the 112th Congress and
Recent Funding History, by Eugene Boyd. For further information and analysis concerning the Community Services
Block Grant program, see CRS Report RL32872, Community Services Block Grants (CSBG): Background and
Funding, by Karen Spar.
52 U.S. Office of Management and Budget, Budget of the United States, FY 2012: Terminations, Reductions, and
Savings, 2011, p. 55, at http://www.gpo.gov/fdsys/pkg/BUDGET-2012-TRS/pdf/BUDGET-2012-TRS.pdf.
53 U.S. Department of Housing and Urban Development, FY2013 Budget Justification: Community Development Fund,
at http://portal.hud.gov/hudportal/documents/huddoc?id=CommunityDevelopmentFund.pdf; and U.S. Department of
Housing and Urban Development, FY2014 Budget Justification: Community Development Fund, at
http://portal.hud.gov/hudportal/documents/huddoc?id=COMDEVFUND.pdf.
54 U.S. Department of Housing and Urban Development, FY2013 Budget Justification: HOME Investments
Partnerships Program, at http://portal.hud.gov/hudportal/documents/huddoc?id=HOME.pdf; and U.S. Department of
Housing and Urban Development, FY2014 Budget Justification: HOME Investments Partnerships Program, at
http://portal.hud.gov/hudportal/documents/huddoc?id=FY2014BudgetHOME.pdf.
55 U.S. Office of Management and Budget, Budget of the United States, FY 2013: Cuts, Consolidations, and Savings,
2012, p. 86, at http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/ccs.pdf.
56 U.S. Department of Housing and Urban Development, FY2014 Budget Justification: Community Development Fund,
at http://portal.hud.gov/hudportal/documents/huddoc?id=COMDEVFUND.pdf; U.S. Department of Health and Human
Services, Administration for Children and Families, FY2014 Justification of Estimates for Appropriation Committees:
All Purpose Table, FY 2014 Congressional Justification (including Community Services Block Grant), p. 12, at
(continued...)
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Income Home Energy Assistance Block Grant be reduced from $3.47 billion to $2.82 billion “in
keeping with the President’s commitment to deficit reduction.”57

(...continued)
https://www.acf.hhs.gov/sites/default/files/olab/fy_2014_cj_final_web_4_25_13.pdf; U.S. Department of Housing and
Urban Development, FY2014 Budget Justification: HOME Investments Partnerships Program, at http://portal.hud.gov/
hudportal/documents/huddoc?id=FY2014BudgetHOME.pdf; and U.S. Department of Health and Human Services,
Centers for Disease Control and Prevention, FY2014 Justification of Estimates for Appropriation Committees:
Preventive Health and Health Services Block Grant program, pp. 13, 338, at http://www.cdc.gov/fmo/topic/
Budget%20Information/appropriations_budget_form_pdf/FY2014_CJ_CDC_FINAL.pdf.
57 U.S. Department of Health and Human Services, Administration for Children and Families, FY2014 Justification of
Estimates for Appropriation Committees, p. 2, at https://www.acf.hhs.gov/sites/default/files/olab/
fy_2014_cj_final_web_4_25_13.pdf.
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Appendix. Brief History of Block Grants
H.R. 5686, The Public Welfare Act of 1946, introduced by Representative Aime J. Forand, D-RI,
as an amendment to the Social Security Act, is the first known congressional effort to enact a
block grant. It would have allowed states to continue providing public welfare assistance in “the
present categories of old-age assistance, aid to dependent children, and aid to the blind, or
whether they preferred to provide for these groups as part of a comprehensive assistance
program” with choices about program design left to the states.58
In 1949, the Commission on the Organization of the Executive Branch of the Government, known
as the Hoover Commission in honor of its chair, Herbert Hoover, further raised awareness of the
block grant concept by recommending that “a system of grants be established based upon broad
categories – such as highways, education, public assistance and public health – as contrasted with
the present system of extensive fragmentation.”59 However, Congress did not create the first
block grant until 1966 for comprehensive health care services (now the Preventive Health and
Health Services Block Grant) in P.L. 89-749, the Comprehensive Health Planning and Public
Health Services Amendments of 1966, later known as the Partnership for Public Health Act. It
replaced nine formula categorical grants.60 Two years later, Congress created the second block
grant, the Law Enforcement Assistance Administration’s Grants for Law Enforcement program
(sometimes referred to as the “Crime Control” or “Safe Streets” block grant) in the Omnibus
Crime Control and Safe Streets Act of 1968.61 Unlike the health care services block grant, it was
created de novo, and did not consolidate any existing categorical grants.62
In his 1971 State of the Union speech, President Richard M. Nixon announced a plan to
consolidate 129 federal grant programs in six functional areas, 33 in education, 26 in
transportation, 12 in urban community development, 17 in manpower training, 39 in rural
community development, and 2 in law enforcement into what he called six “special revenue
sharing” programs. Unlike the categorical grants they would replace, the proposed special
revenue sharing programs had no state matching requirements, relatively few auditing or
oversight requirements, and the funds were distributed automatically by formula without prior
federal approval of plans for their use.63

58 U.S. Congress, House Committee on Ways and Means, Amendments to Social Security Act, Hearing on Social
Security Legislation, 79th Cong., 2nd sess., May 6, 1946 (Washington: GPO, 1946), p. 1046; and George E. Peterson,
Randall R. Bovbjerg, Barbara A. Davis, Walter G. Davis, Eugene C. Durham, and Theresa A. Guillo, The Reagan
Block Grants: What Have We Learned? (Washington, DC: Urban Institute Press, 1986), p. 2.
59 U.S. Congress, House Committee on Expenditures in the Executive Departments, Overseas Administration, Federal-
State Relations, Federal Research; Letter from the Chairman, Commission on the Organization of the Executive
Branch of the Government, committee print, 81st Cong., 1st sess., March 25, 1949, H. Prt. 81-140 (Washington: GPO,
1949), p. 36.
60 ACIR, The Partnership for Health Act: Lessons from a Pioneering Block Grant, A-56, January 1977, at
http://www.library.unt.edu/gpo/acir/Reports/policy/A-56.pdf.
61 Carl W. Stenberg, “Block Grants and Devolution: A Future Tool?” in Intergovernmental Management for the 21st
Century, eds. Timothy J. Conlan and Paul L. Posner (Washington, DC: Brookings Institution Press, 2008), p. 266.
62 ACIR, The Future of Federalism in the 1980s, M-126, July 1980, p. 51, at http://www.library.unt.edu/gpo/acir/
Reports/information/M-126.pdf.
63 Claude E. Barfield, Rethinking Federalism: Block Grants and Federal, State, and Local Responsibilities
(Washington, DC: American Enterprise Institute for Public Policy Research, 1981), p. 3.
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The education, transportation, rural community development, and law enforcement proposals
failed to gain congressional approval, primarily because they generated opposition from interest
groups affiliated with the programs who worried that the programs’ future funding would be
compromised.64 Nonetheless, the Nixon Administration’s efforts led to the adoption of three more
block grants; the first was signed by President Nixon and the remaining two were signed by
President Gerald R. Ford.
The Comprehensive Employment and Training Assistance Block Grant program was created by
the Comprehensive Employment and Training Act of 1973. It merged 17 existing manpower
training categorical grant programs. The Community Development Block Grant program (and its
affiliated Indian Community Development Block Grant program which is funded through a set-
aside of the Community Development Block Grant’s formula funds) was created by the Housing
and Community Development Act of 1974. It consolidated six existing community and economic
development categorical grant programs.65 Title XX social services, later renamed the Social
Services Block Grant program, was created de novo and, therefore, did not consolidate any
existing categorical grant programs. It was authorized by the 1974 amendments of the Social
Security Act which was signed into law on January 4, 1975.66
Congress did not approve any additional block grants until 1981. President Ronald Reagan had
proposed consolidating 85 existing elementary and secondary education, public health, social
services, emergency assistance (for low-income energy assistance and emergency welfare
assistance), and community development categorical grants into seven block grants (two in
elementary and secondary education, two in public health, and one each for social services,
emergency assistance, and community development). He also recommended that the programs’
funding be reduced 25%, arguing that the administrative savings brought about by the conversion
to block grants would largely offset the budget reduction. Congress subsequently adopted the
Omnibus Budget and Reconciliation Act of 1981 which consolidated 75 categorical grant
programs and two existing block grants into the following nine new, or revised, block grants:
• Elementary and Secondary Education (37 categorical grants);
• Alcohol, Drug Abuse, and Mental Health Services (10 categorical grants);
• Maternal and Child Health Services (9 categorical grants);
• Preventive Health and Human Services Block Grant (merged 6 categorical grants
with the Health Incentive Grants for Comprehensive Health Services Block
Grant);

64 Timothy Conlan, From New Federalism to Devolution: Twenty-Five Years of Intergovernmental Reform
(Washington, DC: The Brookings Institution, 1998), p. 62.
65 Note: Most sources indicate that CDBG merged 7 categorical grant programs. However, one of the categorical grant
programs initially designated for consolidation, the Section 312 Housing Rehabilitation Loan program, was retained as
a separate program. See ACIR, Block Grants: A Comparative Analysis, A-60, 1977, p. 7, at http://www.library.unt.edu/
gpo/acir/Reports/policy/A-60.pdf.
66 Carl W. Stenberg, “Block Grants and Devolution: A Future Tool?” in Intergovernmental Management for the 21st
Century, eds. Timothy J. Conlan and Paul L. Posner (Washington, DC: Brookings Institution Press, 2008), p. 266;
ACIR, In Respect to Realities: A Report on Federalism in 1975, M-103, April 1976, pp. 16-20, at
http://www.library.unt.edu/gpo/acir/Reports/information/m-103.pdf; and ACIR, Block Grants: A Comparative
Analysis, A-60, 1977, pp. 15-40, at http://www.library.unt.edu/gpo/acir/Reports/policy/A-60.pdf. Note: Title XX
initially had all of the characteristics of a block grant and ACIR counted it as a block grant since its inception, but it
was not formally called a block grant program until 1981.
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• Primary Care (2 categorical grants);
• Community Services (7 categorical grants);
• Social Services (one categorical grant and the Social Services for Low Income
and Public Assistance Recipients Block Grant);
• Low-Income Home Energy Assistance (1 categorical grant); and
• revised Community Development Block Grant program (adding an existing
discretionary grant and 3 categorical grants).67
Overall, funding for the categorical grants bundled into these block grants was reduced 12%,
about $1 billion, from their combined funding level the previous year.68
In retrospect, some federalism scholars consider these block grants as more “historical accidents
than carefully conceived restructurings of categorical programs” because they were contained in a
lengthy bill that was adopted under special parliamentary rules requiring a straight up or down
vote without the possibility of amendment, the bill was designed to reduce the budget deficit not
to reform federalism relationships, and the bill was not considered and approved by authorizing
committees of jurisdiction.69 Nonetheless, largely due to the Omnibus Budget and Reconciliation
Act of 1981, in FY1984 there were 12 block grants in operation (compared to 392 categorical
grants), accounting for about 15% of total grants-in-aid funding.70
During the first six years of his presidency, President Ronald Reagan submitted 32 block grant
proposals to Congress, with 9 created by the Omnibus Budget and Reconciliation Act of 1981 and
the Federal Transit Capital and Operating Assistance Block Grant added in 1982. In addition, the
Job Training Partnership Act of 1982 created a new block grant for job training that replaced the
block grant contained in the Comprehensive Employment and Training Act of 1973.71
Federalism scholars generally agree that President Reagan had unprecedented success in
achieving congressional approval for block grants. However, they also note that most of President
Reagan’s block grant proposals failed to gain congressional approval, primarily because they
were opposed by organizations that feared that, if enacted, the block grants would result in less
funding for the affected programs. For example, in 1982, President Reagan proposed, but could
not get congressional approval for, a $20 billion “swap” in which the federal government would
return to states full responsibility for funding Aid to Families With Dependent Children (AFDC)

67 David B. Walker, Albert J. Richter, and Cynthia Colella, “The First Ten Months: Grant-In-Aid, Regulatory, and
Other Changes,” Intergovernmental Perspective 8:1 (Winter 1982), pp. 5-11.
68 U.S. General Accounting Office, Block Grants: Characteristics, Experience and Lessons Learned, GAO/HEHS-95-
74, February 9, 1995, p. 2, http://www.gao.gov/archive/1995/he95074.pdf. Note: the funding reductions ranged from a
$159 million, or 30%, reduction in the Community Services Block Grant to a $94 million, or 10%, increase in funding
for the Community Development Block Grant program.
69 Carl W. Stenberg, “Block Grants and Devolution: A Future Tool?” in Intergovernmental Management for the 21st
Century, eds. Timothy J. Conlan and Paul L. Posner (Washington, DC: Brookings Institution Press, 2008), p. 267; and
Timothy Conlan, From New Federalism to Devolution: Twenty-Five Years of Intergovernmental Reform (Washington,
DC: The Brookings Institution, 1998), pp. 110-121.
70 ACIR, A Catalog of Federal Grant-In-Aid Programs to State and Local Governments: Grants Funded FY1984, M-
139, 1984, pp. 1-3, at http://www.library.unt.edu/gpo/acir/Reports/information/m-139.pdf.
71 Ibid., p. 3; Timothy Conlan, From New Federalism to Devolution: Twenty-Five Years of Intergovernmental Reform
(Washington, DC: The Brookings Institution, 1998), p. 142; and CRS Report 87-845, Block Grants: Inventory and
Funding History, Sandra S. Osbourn, November 21, 1986, available by request.
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(now Temporary Assistance for Needy Families) and food stamps in exchange for federal
assumption of state contributions for Medicaid. As part of the deal, he also proposed a temporary
$28 billion trust fund or “super revenue sharing program” to replace 43 other federal grant
programs. Both the swap proposal and the proposed devolution of 43 federal grants were opposed
by organizations that feared that, if enacted, they would result in less funding for the affected
programs. For example, the National Governors Association supported the federal takeover of
Medicaid, but objected to assuming the costs for AFDC and food stamps. The economy was
weakening at that time and governors worried that they would not have the fiscal capacity
necessary to support the programs without continued federal assistance.72
From 1983 until 1995, Congress approved six new block grants: the Community Youth Activity
Block Grant (1988), Child Care and Development Block Grant (1990), the HOME Investment
Partnerships Program (1990), the Surface Transportation Program (1991), Substance Abuse
Prevention and Treatment Block Grant (1992), and the Community Mental Health Services Block
Grant (1992).73 Established by the Intermodal Surface Transportation Efficiency Act of 1991, the
Surface Transportation Program had, by far, the largest budget of any block grant program at that
time, with $17.5 billion appropriated in FY1993. Three block grants were terminated during this
period: Community Youth Activity Program, Law Enforcement Assistance, and Alcohol, Drug
Abuse, and Mental Health (which was broken into two new block grants, the Community Mental
Health Services Block Grant and the Prevention and Treatment of Substance Abuse Block Grant,
in 1992). According to the now defunct U.S. Advisory Commission on Intergovernmental
Relations, there were 15 block grants in operation in 1995 (23 block grants had been enacted, 4
were converted into other block grants, and 4 were eliminated), and 618 categorical grants.74 In
FY1995, block grants accounted for about 14% of the $228 billion in federal grants-in-aid
assistance.75
In 1996, the open-ended entitlement categorical grant, Aid to Families With Dependent Children,
was converted into the Temporary Assistance to Needy Families (TANF) block grant by the
Personal Responsibility and Work Opportunity Reconciliation Act of 1996. Funded at $16.7
billion annually, TANF rivaled the Surface Transportation Program for the largest budget of all
the block grants. Like some other block grants, TANF “was a hybrid program balancing stringent
federal standards against significant state flexibility.”76 Funding ($424 million) was also provided

72 Timothy J. Conlan and David B. Walker, “Reagan’s New Federalism: Design, Debate and Discord,”
Intergovernmental Perspective 8:4 (Winter 1983): 6-15, 18-22; and Timothy Conlan, New Federalism:
Intergovernmental Reform From Nixon to Reagan (Washington, DC: The Brookings Institution, 1988), pp. 182-198.
73 For further analysis, see CRS Report RL30785, The Child Care and Development Block Grant: Background and
Funding, by Karen E. Lynch and CRS Report R40118, An Overview of the HOME Investment Partnerships Program,
by Katie Jones.
74 Carl W. Stenberg, “Block Grants and Devolution: A Future Tool?” in Intergovernmental Management for the 21st
Century, eds. Timothy J. Conlan and Paul L. Posner (Washington, DC: Brookings Institution Press, 2008), p. 267; and
ACIR, A Catalog of Federal Grant-In-Aid Programs to State and Local Governments: Grants Funded FY1995, M-195,
1995, pp. iii, 1-3, at http://www.library.unt.edu/gpo/acir/Reports/information/M-195.pdf.
75 U.S. General Accounting Office, Block Grants: Characteristics, Experience and Lessons Learned, GAO/HEHS-95-
74, February 9, 1995, pp. 2, 26 at http://www.gao.gov/archive/1995/he95074.pdf.
76 Carl W. Stenberg, “Block Grants and Devolution: A Future Tool?” in Intergovernmental Management for the 21st
Century, eds. Timothy J. Conlan and Paul L. Posner (Washington, DC: Brookings Institution Press, 2008), pp. 268,
269. For further analysis, see CRS Report RL32748, The Temporary Assistance for Needy Families (TANF) Block
Grant: A Primer on TANF Financing and Federal Requirements, by Gene Falk and CRS Report RL32760, The
Temporary Assistance for Needy Families (TANF) Block Grant: Responses to Frequently Asked Questions, by Gene
Falk.
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for a Local Law Enforcement Block Grant which had been authorized the previous year in the
Local Law Enforcement Block Grant Act of 1995.77
In 1998, the Juvenile Accountability Block Grant program was created by the FY1998
Department of Justice Appropriations Act, and later codified by the 21st Century Department of
Justice Reauthorization Act of 2002. It provides funding for 16 accountability-based purpose
areas, including, but not limited to, implementing graduated sanctions; building or operating
juvenile correction or detention facilities; hiring juvenile court officers, including judges,
probation officers, and special advocates; and hiring additional juvenile prosecutors. The 21st
Century Department of Justice Reauthorization Act of 2002 also consolidated several pre-existing
categorical grant programs into the Juvenile Delinquency Prevention Block Grant program. It
provides funding for a wide array of services, treatments, and interventions, including, but not
limited to projects that provide treatment to juvenile offenders and at risk juveniles who are
victims of child abuse or neglect, or who have experienced violence at home, at school, or in their
communities; and educational projects or support services for juveniles that focus on encouraging
juveniles to stay in school; aiding in the transition from school to work; and encouraging new
approaches to preventing school violence and vandalism.78
Prior to the September 11, 2001, terrorist attacks and the subsequent creation of the Department
of Homeland Security, the federal government had three categorical grants-in-aid programs
pertinent to homeland security: the State Domestic Preparedness program administered by the
Department of Justice, the Emergency Management Performance Grant program administered by
the Federal Emergency Management Agency, and the Metropolitan Medical Response System
administered by the Department of Health and Human Services. In 2011, there were 17 federal
grant programs administered by the Grant Programs Directorate within the Federal Emergency
Management Agency in the Department of Homeland Security, including 14 categorical grant
programs and three block grant programs: State Homeland Security Grants, formerly called the
State Domestic Preparedness Program (created in 2003), Urban Area Security Initiative Grants
(created in 2003), and the Regional Catastrophic Preparedness Grant (created in 2008).79
In 2005, the Violence Against Women and Department of Justice Reauthorization Act of 2005
combined the Edward Byrne Memorial State and Local Law Enforcement Assistance programs
and the Local Law Enforcement Block Grant program into the Edward Byrne Memorial Justice
Assistance Grant program. Its funds can be used for seven broad purposes: law enforcement,
prosecution and court programs, prevention and education programs, corrections and community
corrections programs, drug treatment programs, planning, evaluation, and technology
improvement programs, and crime victim and witness programs (other than compensation).80
P.L. 111-5, the American Recovery and Reinvestment Act of 2009 (ARRA) provided temporary
additional funding for several block grant programs, including $3.2 billion for the Energy

77 U.S. Department of Justice, Office of Justice Programs, Local Law Enforcement Block Grant Program, 1996-2004,
September 2004, p. 1, at http://www.bjs.gov/content/pub/pdf/llebgp04.pdf.
78 For further analysis, see CRS Report RL33947, Juvenile Justice: Legislative History and Current Legislative Issues,
by Kristin Finklea.
79 For further analysis, see CRS Report R40246, Department of Homeland Security Assistance to States and Localities:
A Summary and Issues for the 111th Congress, by Shawn Reese; and CRS Report RL33770, Department of Homeland
Security Grants to State and Local Governments: FY2003 to FY2006, by Steven Maguire and Shawn Reese.
80 For further analysis, see CRS Report RS22416, Edward Byrne Memorial Justice Assistance Grant (JAG) Program,
by Nathan James.
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Efficiency and Conservation Block Grant (EECBG) program. It was authorized by the Energy
Independence and Security Act of 2007, but had not been appropriated any funding. It provides
federal grants to local governments, Indian tribes, states, and U.S. territories to reduce energy use
and fossil fuel emissions, and for improvements in energy efficiency.81 Approximately $2.7
billion of the ARRA funding was allocated through an apportionment formula and approximately
$454 million was allocated through competitive grants.82
ARRA also authorized the temporary $53.6 billion Government Services State Fiscal
Stabilization Fund, which operated as a block grant. Under that program, the Department of
Education awarded states approximately $48.6 billion through an apportionment formula “in
exchange for a commitment to advance essential education reforms” focusing on state support for
education, equity in teacher distribution, data collection, standards and assessments, and support
for struggling schools.83 Most of the $48.6 billion (81.8%) was to be spent “for the support of
elementary, secondary, and postsecondary education and, as applicable, early childhood
education programs” and the remainder (18.2%) “for public safety and other government
services, which may include assistance for elementary and secondary education and public
institutions of higher education, and for modernization, renovation, or repair of public school
facilities and institutions of higher education facilities, including modernization, renovation, and
repairs that are consistent with a recognized green building rating system.”84 The fund’s
remaining $5 billion was awarded competitively under the “Race to the Top” and “Investing in
What Works and Innovation” categorical grant programs.85
In FY2012, there were 28 block grants (26 funded and 2, the Innovative Education Program
Strategies Block Grant and the Juvenile Delinquency Prevention Block Grant were authorized,
but were not funded). In FY2013, there were 25 block grants (22 funded and 3, the Innovative
Education Program Strategies Block Grant, the Energy Efficiency and Conservation Block Grant,
and the Juvenile Delinquency Prevention Block Grant were authorized, but were not funded). The
Government Services State Fiscal Stabilization Fund (Department of Education) and the Regional
Catastrophic Preparedness Grant (Department of Homeland Security) are no longer available. In
addition, the State Homeland Security Grant and Urban Area Security Initiative Grant programs
are now within the Department of Homeland Security’s Homeland Security Grant Programs. In
FY2014, there are 23 block grants (21 funded and 2, the Innovative Education Program Strategies
Block Grant and the Energy Efficiency and Conservation Block Grant are authorized, but are not
funded). The authorizations for the Juvenile Delinquency Prevention Block Grant and the
Juvenile Accountability Block Grant programs have expired, and neither program is currently
being funded through the appropriations process.

81 U.S. Department of Energy, “Energy Efficiency and Conservation Block Grants,” at http://www1.eere.energy.gov/
wip/eecbg.html. For further analysis, see CRS Report R40412, Energy Provisions in the American Recovery and
Reinvestment Act of 2009 (P.L. 111-5), coordinated by Fred Sissine.
82 U.S. Department of Energy, “Energy Efficiency and Conservation Block Grant Program,” at
http://www1.eere.energy.gov/wip/eecbg.html.
83 U.S. Department of Education, “State Fiscal Stabilization Fund,” March 7, 2009, at http://www2.ed.gov/policy/gen/
leg/recovery/factsheet/stabilization-fund.html. For further analysis, see CRS Report R40151, Funding for Education in
the American Recovery and Reinvestment Act of 2009 (P.L. 111-5), by Rebecca R. Skinner, David P. Smole, and Ann
Lordeman.
84 P.L. 111-5, the American Recovery and Reinvestment Act of 2009, Sec. 14002. State Uses of Funds.
85 U.S. Department of Education, “State Fiscal Stabilization Fund,” March 7, 2009, at http://www2.ed.gov/policy/gen/
leg/recovery/factsheet/stabilization-fund.html.
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Author Contact Information

Robert Jay Dilger
Eugene Boyd
Senior Specialist in American National Government
Analyst in Federalism and Economic Development
rdilger@crs.loc.gov, 7-3110
Policy
eboyd@crs.loc.gov, 7-8689

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