Goals of This Exercise
- Illustrate the increased use of grants-in-aid in administering national policies.
- Demonstrate the differences between categorical grants and block grants.
- Examine the strategic goals of national and state policy makers in advocating the use of block versus categorical grants.
- Describe the causes and consequences of increased federal aid to the states in recent years.
Federalism and the Politics of Grants-in-Aid
Since the New Deal, the national government has played an increasing role in encouraging and even coercing states to administer federal policies. Central to this evolving relationship has been the federal government’s use of grants-in-aid to encourage states’ cooperation in implementing federal policies.
Increases in federal grant-in-aid outlays throughout the second half of the twentieth century exemplify the increased role of the national government in the federal balance of power. Federal grants have seen a further twofold increase since 2000.
Political actors in the national government establish these grant programs with varying degrees of flexibility and discretion given to state governments.
Categorical Grants
Categorical grants are federal grants given to state and local governments to encourage their cooperation in implementing specific purposes and programs.
- These grants give less flexibility to state governments than block grants.
- Federal officials place significant restrictions on states that accept grants and are quite specific about how funds are to be spent in specific policy “categories.”
Block Grants
Block grants are federal grants-in-aid that allow states considerable discretion (within broad limits) about how the funds will be spent.
- These give greater flexibility to state political actors to tailor programs to the state’s particular needs than do categorical grants.
- The federal government places few restrictions, allowing states to spend funds within broad programmatic areas.
The Politics of Grants-in-Aid: Devolution
When the Republicans took control of Congress after the 1994 elections, their “Contract with America” sought to “devolve” control of many federal programs to the states, often by replacing existing categorical grant programs with block grant programs. Two examples of this approach are welfare reform and crime policy.
Devolution in Welfare Reform
The Republicans replaced the federal Aid to Families with Dependent Children (AFDC) entitlement welfare program with Temporary Assistance for Needy Families (TANF), which provided block grants to state governments to reform welfare.
AFDC: The Federal Role
- Federally administered welfare entitlement program.
- National government imposes standards and requirements.
- Federal assistance is an ongoing entitlement.
TANF: Increased State Power
- Block grants to states to administer aid to the poor.
- States are free to tailor program and impose added restrictions on recipients.
- States expect recipients to move off welfare on a state-determined schedule.
Devolution in Crime Policy
With the Taking Back Our Streets Act, the Republicans replaced the specific programs and grants to state and local governments that characterized the Clinton administration’s crime bill with block grants to states, allowing them to fight crime as they saw fit.
1994 Crime Bill
- Clinton bill: Violent Crime Control and Law Enforcement Act of 1994.
- About $10 billion in grants for specific crime control and social programs.
- States must match 25 percent of federal funds.
Taking Back Our Streets Act
- Contract with America’s crime provisions: Taking Back Our Streets Act of 1995.
- About $10 billion in block grants to states to meet general crime problems.
- States must match 10 percent of federal funds.
Examining the Rationality Principle
The Rationality Principle: all political behavior has a purpose. All political actors engage in instrumental acts designed to further their individual goals.
Answer the following questions:
