GardenShare

GardenShare

Friday, March 3, 2017

THE PROBLEM WITH BLOCK GRANTS


The federal government’s entitlement programs reflect a commitment to meet low-income people’s basic needs in a few essential areas, including health (through Medicaid), food (SNAP,), and support to people with disabilities ( Supplemental Security Income). All people who meet the programs’ eligibility criteria can access them without delay, and funding increases automatically and immediately respond to increased need resulting from economic downturns, natural disasters, or higher-than-expected costs (such as when a new drug increases health care costs). In contrast, block grants are fixed pots of money that the federal government gives to states to provide those benefits or services. Initial block grant funding levels are often inadequate initially, and they typically erode over time due to inflation. Block grants don’t respond rapidly or at all to increased need. And states can shift the federal funds to other purposes or to replace state funding, or they can make program cuts that federal law doesn't permit now.

Source: Center for Budget & Policy Priorities, 2/22/17, Block Grants