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Block Grant Funding Falls Significantly Over Time, Data Show

Funding for housing, health, and social services block grants has fallen significantly over time, our study of recent decades shows.  As we explain in this new paper, the data provide a cautionary tale for proposals to merge large numbers of additional programs — especially those serving low-income or otherwise vulnerable families and individuals — into block grants, as would occur, for example, under House Speaker Paul Ryan’s 2014 proposal to merge 11 low-income programs into a mega-block grant.

Block grants’ basic structure makes them especially vulnerable to funding cuts over time.  Block grants generally give state and local governments very broad flexibility in how to use federal funds, and those governments often use them in diffuse ways, making their impact hard to measure.  That, in turn, makes it easier for policymakers to look to block grants for savings, and it’s made block grants particularly vulnerable to funding reductions for years on end. 

In fact, our analysis of the 13 major housing, health, and social services block grant programs that policymakers have created in recent decades shows that funding for all but one has shrunk in inflation-adjusted terms since their inception, in some cases dramatically.  And since 2000, the combined funding for the 13 block grants fell by 27 percent — or $14 billion in 2015 dollars (see table).

Funding for Many Major Block Grants Has Fallen Over Time
Program Year of inception Obligations in 2015 (in millions of dollars) % change since 2000* % change since inception*
HOME Investment Partnership Program 1992 $935 -59% -61%
Community Development Block Grant 1982 3,000 -49% -63%
Job Training Formula Grants to States (Youth, Adult, and Dislocated Workers) 1982 2,624 -46% -70%
Social Services Block Grant 1982 1,576 -36% -73%
Maternal and Child Health Block Grant 1982 637 -36% -29%
Temporary Assistance for Needy Families (TANF) block grant 1998 16,486 -28% -32%
Native American Housing Block Grant 1998 659 -24% -24%
Substance Abuse Prevention and Treatment Block Grant 1994 1,741 -22% -7%
Preventive Health and Health Services Block Grant 1982 160 -15% -19%
Community Mental Health Services Block Grant 1994 462 -7% -1%
Community Services Block Grant 1982 674 -7% -18%
Child Care and Development Block Grant (discretionary and mandatory components) 1991 5,277 8% 319%
Low Income Home Energy Assistance Block Grant 1982 3,391 32% -25%
Total   $37,622 -27%  

* adjusted for inflation

Job Training Formula Grants to States and Community Development Block Grant figures reflect budget authority.  The figures for the Community Development Block Grant represent the funding levels for CDBG formula grants.  The TANF figures are those for State Family Assistance Grants.

Source: CBPP analysis of data from the Office Management and Budget, Congressional Research Service reports, and appropriations legislation.

This funding trend has occurred while need has risen, despite claims by block grant proponents that if funding proves inadequate, policymakers will step in to provide appropriate additional funding.  Overall funding for the block-grant programs remained essentially unchanged from 2000 to 2002 — despite the 2001 recession — and then fell through 2008.  Although block-grant funding received a boost from the 2009 Recovery Act, it fell sharply in 2010 even as the economy continued to struggle and need for many of these programs remained high.  It fell further through 2015, hitting its lowest level in 15 years.  Overall funding for the 13 block grants has fallen by 37 percent since 2000, adjusted for inflation and population growth. 

That block grant funding generally doesn’t respond to changes in need stands in contrast to entitlement programs such as SNAP (formerly food stamps), which grow immediately and automatically when need rises — a critical function during recessions.  Programs like SNAP would no longer do so if policymakers merge them into block grants.

Policymakers should keep these points in mind when considering new block-grant proposals and claims that merging programs into broad block grants will improve results for the families they serve.  Experience suggests, to the contrary, that the most predictable result of merging social programs into broad block grants is substantial funding erosion over time, with negative consequences for efforts to help people in need.

Click here to read the full paper.