No. A-64 in Series, "New Federalism: Issues and Options for States"
The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.
Note: This report is available in its entirety in the Portable Document Format (PDF).
President Bush's FY 2005 budget proposes converting a wide range of federal programs into block grants. Block grants are fixed sums of money given to state or local governments to support program activities and administration. Compared with other grants, block grants give state and local-level recipients more flexibility in program design and implementation with reduced federal oversight and requirements.
Most of Bush's block grant proposals affect existing social welfare programs, including Child Welfare, Head Start, Job Access and Reverse Commute, Job Training, Medicaid, and Section 8 Housing vouchers (table 1). The New Freedom proposal, the only one that provides new federal funding, promotes transportation services for individuals with disabilities. Other proposals streamline existing Justice Assistance and Surface Transportation programs.1
In addition to the Bush proposals, legislation for reauthorizing the Temporary Assistance for Needy Families (TANF) program passed by the House of Representatives in February 2003 authorizes a State Food Assistance Block Grant to replace the Food Stamp program in up to five states.2 Also included in the House reauthorization bill is the Bush administration's proposed "superwaiver" provision that could effectively transform other specified programs into block grants upon application by a state and approval by the secretary of the administering department. The welfare reauthorization bill now on the Senate floor includes a more limited superwaiver provision (Waller 2003; Greenstein, Fremstad, and Parrott 2002).
None of the Bush block grant proposals is entirely new. The proposed Job Access and Reverse Commute, New Freedom, and Surface Transportation block grants were included in the administration's 2003 proposal for reauthorizing surface transportation programs. The Child Welfare, Job Training, and Medicaid proposals were included in the FY 2004 Executive Budget. The Head Start proposal is also repeated from the previous year.3 The proposal to transform the Section 8 Housing Voucher program into block grants to local Public
Housing Authorities (PHAs) replaces an earlier block grant proposal that would have transferred program authority to the states. Also resurfacing from last year's budget, and FY 2003's, is a proposed Justice Assistance Grant that combines funding for the Local Law Enforcement Block Grant, the Byrne Grants, and the COPS Hiring Grants.4
A companion brief traces the history of block grants and the lessons that can be learned from them (Finegold, Wherry, and Schardin 2004). In this brief, we examine the design of the Bush block grant proposals. Legislative details provided by the administration give clues about what will happen if any of the current proposals become law.
Note: This report is available in its entirety in the Portable Document Format (PDF).
1. Not all administration proposals are explicitly described as block grants. Each proposal discussed here, however, includes the defining characteristics of a block grant. See Coalition on Human Needs (2004) for further details regarding Bush administration initiatives in block granting social welfare programs.
2. For simplicity, references in this paper to the current block grant proposals will not distinguish between the Food Assistance block grant proposal and those proposals endorsed by the Bush administration.
3. The current version of the administration Head Start proposal, as discussed in the FY 2005 budget, does not include a provision in FY 2004's proposal that would have transferred program authority from the Department of Health and Human Services to the Department of Education.
4. As proposed in the FY 2003 and FY 2005 budgets, the Justice Assistance Grant included the COPS program, which funds officer hiring, in the list of programs to be consolidated. The FY 2004 version of the proposal did not include the COPS program in the list of consolidated programs. Other language in the FY 2004 budget indicated that the administration was requesting no new funding for the COPS program, but that the Justice Assistance Grants could be used for officer hiring.
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