The Problem with Block Grants


I know. We all like block grants. They give us the flexibility we say we need to effectively implement programs, and they come with few strings attached. Such is the case for the Community Development Block Grant (CDBG); youth, adult, and dislocated programs under the Workforce Innovation and Opportunity Act (WIOA); the Community Services Block Grant (CSBG); and the Low Income Home Energy Assistance Program (LIHEAP) to name a few.

In large part we are not wrong. All 50 states and thousands of localities need flexible funding to address local issues in ways that are not hamstrung by laws, rules, and regulations; and reflect state, region, and local needs.

What we often don’t get is the connection between block grants and funding cuts, and the connection is very strong. According to the Center on Budget and Policy Priorities (CBPP), “overall funding for block grants targeted on low- and moderate-income people—including both discretionary and mandatory programs—has shrunk by 27 percent in inflation-adjusted terms and 37 percent after accounting for inflation and population growth. The Trump cuts would sharply exacerbate those declines” by eliminating four block grants entirely. The programs that the Administration would like to eliminate are the:

  • Low Income Home Energy Assistance Program (LIHEAP), which helps low-income households—including many poor seniors—pay heating bills (with current funding at $3.4 billion);
  • Community Development Block Grant (CDBG), which supports housing, community facilities, economic development, and social service projects, mainly for low- and moderate-income residents ($3 billion);
  • HOME program, which helps develop and preserve affordable rental housing and repair homes of low-income homeowners ($948 million); and
  • Community Services Block Grant (CSBG), which provides anti-poverty services through local non-profit and public agencies ($714 million) and is so important to coordination between faith groups, local governments, private companies, and nonprofits in addressing the needs of the poor.

The Community Service and Employment Program (CSEP) for seniors would also be eliminated and the president’s proposal would likely cause cuts as large as 50 percent to Workforce Innovation and Opportunity Act youth, adult, and dislocated worker programs. Also on the chopping block may be the Social Services Block Grant, which provides much needed funds to states and localities for adult programs and to better connect programs that are not typically configured to work together.

But why do we pay such a high price for programs that Congress and the president initially agreed upon? The answer is rather obvious. It has become the norm for Congress to call for empirical evidence that the programs they fund are actually working. But it is the very flexibility that is built into these block grants that is also their downfall. How do you scientifically evaluate CDBG when every program in every entitlement city and balance of state may develop and implement very different programs that do not produce similar outcomes and are not measureable in the same ways. You can’t. So instead of acknowledging this difficulty and looking at different methods of analysis such as case studies, Congress chips away year after year at these programs until there are insufficient resources to implement successful programs.

So, you may ask, what can I do with this information?

Here is What You Need to Know:

 President Trump’s “skinny” budget would eliminate four discretionary block grants that mainly serve low-income people;

  • These cuts would come on top of years of deteriorating funding for block grants. If these cuts are implemented, your already diminished federal resources would be further reduced, inhibiting implementation  of these very important programs;
  • What has happened and may continue to happen is an indication of the danger of block-granting social programs; and
  • Programs funded through block grants are in a catch-22 situation; the very reason they are so desirable—state and local flexibility and reduced administrative burdens—are the very reason they are likely to be cut. “Scientific evidence” of their success is difficult to develop since states use these grants in very different ways that result in very different outcomes.
And This is What You Need to Do:
  • Monitor the legislative updates that NARC, NACo, and NLC issue, and act on them. Your involvement in our advocacy efforts is the only way we can succeed.
  • Reach out to your senators and representatives to educate them about these programs and how important they are for your region;
  • Document in very specific terms what would happen to your region if these cuts went through. For example, how many people would not be able to heat their homes if LIHEAP were terminated; how many people would be turned away from job training assistance if a 50 percent budget cut went through; or how many significant projects within your region would have to shut down because these CDBG funds would not be available;
  • Invite them to see first-hand the results of these programs. Make them a part of any formal ceremonies such as ribbon cuttings or awards ceremonies, regardless of the magnitude of the project;
  • Meet with them over the upcoming Passover/ Easter recess, which runs from April 10 through 21, to personally share with them your successes stories and educate them about the funding sources you rely on; and
  • Do not allow them to pit one program against another by asking you, “If we fund CDBG, which programs should we cut so that we end up with the same budget reduction as is proposed in the president’s budget.”

The author would like to thank the Center on Budget and Policy Priorities and the Washington Post for much of the data and information that appears in this blog.