History Suggests Ryan Block Grant Would Be Susceptible to Cuts

July 28, 2014 at 2:47 pm

At the heart of House Budget Committee Chairman Paul Ryan’s new poverty plan is a block grant — called the “Opportunity Grant” — that would consolidate 11 disparate low-income programs, the largest being SNAP (formerly food stamps).  Ryan says that the block grant would maintain the same overall funding as the current programs.  But even if one thought that current-law funding levels were adequate, they likely wouldn’t be sustained over time under the Ryan proposal:  history shows that block grants that consolidate a number of programs or may be used for a wide array of purposes typically shrink — often very substantially — over time.

The table below shows 11 major block grant programs created in recent decades.  Eight of them have shrunk since their inception, in some cases sharply.  (Our analysis accounts for the effect of inflation.)

Block grants’ very structure makes them vulnerable to cuts.  Block grants generally give state and local governments more flexibility in how to use funds, leading to varied approaches for achieving program goals.  But this variety makes it hard to see how changes in funding levels affect beneficiaries, or even to be sure how the money is being used.  That, in turn, makes it easier for policymakers looking for savings to target block grants rather than other benefit programs for long-term freezes or cuts.  Block grants in general have fared poorly in the competition for resources.

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More About Richard Kogan

Richard Kogan

Richard Kogan rejoined the Center in May 2011 after having served as a Senior Adviser at the Office of Management and Budget since January 2009. During his second tour at the Center, from 2001 to 2009, he served as a Senior Fellow specializing in federal budget issues, including aggregate spending, revenues, surpluses and deficits, and debt. Kogan is also an expert in the congressional and executive budget processes and budget accounting concepts.

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3 Comments Add Yours ↓

Comments are listed in reverse chronological order.

  1. James E #

    The block grant looks good, while on paper, because it provides flexibility for the states to administer the programs as they see fit and that has been advocated by the conservatives in order to devolve the programs from the Federal to the states thereby freeing the Federal involvement in the program.

    The block grant is flawed from the start. Typically, the Federal payments for the programs would come on a fiscal year. If the economy is booming, the states would continue to provide it to those who are in need. When the economy tanks or starts slowing down, the states would cut much of the program funding in order to plug projected budget deficit due to falling revenue so it would lead to cuts. When that happens, the states would have to wait for the next fiscal year to go to Congress to submit proposal for funding (which is not a guarantee they will get it) or use their own money or come up with creative way to obtain more money like they did with the Medicaid program in 1990s until Congress put a stop to it.

    While I praise Ryan (President Obama has proposed it as well) in pushing to consolidate many of the disparate programs that would lead to a better oversight by Congress so the program can work as intended. Considering the fact, the conservatives holds sway in the House in proposing deep cuts in spending programs and if they take the Senate, it would difficult to prevent it from happening. It would cause a downturn in the economy.

  2. ooosillyme #

    Of course there would be cuts…..who are we kidding here. The poor must be punished at all costs….doesn’t matter if you are a child or elderly, the Republicans want to cut cut cut the social safety net. Current funding levels are too low as it is, but that won’t stop Paul Ryan from finding ways to cut more…..

  3. Philip Pascal #

    Rep. Ryan’s proposed poverty plan is another Trojan Horse bill that looks good at first glance but, as the table shows, would have different outcomes when actually implemented. Many of the bills enacted in the last three decades sounded great but, as we can now see, had much different results than promised. If such proposals were looked at more critically, more of them would be stopped before they could do any damage.

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