March 1, 2003

by Richard Kogan and Iris J. Lav

PDF of this fact sheet
HTML of full report
PDF of full report

View Related Analyses

If you cannot access the files through the links, right-click on the underlined text, click "Save Link As," download to your directory, and open the document in Adobe Acrobat Reader.

President Bush this week countered criticism that he is not helping the states with their fiscal crises by pointing to increases in grants-in-aid to state and local governments that are included in his fiscal year 2004 budget.  He stated on February 24 that his budget provides a nine percent increase in these grants.  “One of the interesting things about the ’04 budget I’ve submitted is that there’s $400 billion worth of grants to states.  That’s a 9 percent increase,” the President said.[1]

This claim of nine percent increase is, however, highly misleading.

The President also stated that the nine percent increase in grants-in-aid to state and local governments exceeds the four percent overall increase in his budget for spending for discretionary (or annually appropriated) programs.[2]  This statement, as well, is misleading.  Under the President’s budget, grants provided to state and local governments through discretionary programs would decline by 0.6 percent between 2003 and 2004, after adjusting for inflation.

Click here to view full report.

End Notes:

[1] Address to the Governors, February 24, 2003, available at

[2] The President said: “Of the 4 percent increase in discretionary spending, $400 billion, or a 9 percent increase, goes directly to the states.  That's a bigger increase than 4 percent, I guess is the point I'm trying to make to you.”