Block Grants: A Double Edged Sword

          Hi Bloggers! A grant is federal money used to support a governmental service or bureaucracy.  There are two common types of grants: Block Grants and Categorical Grants.  Many of the grants given to the states used to be Categorical Grants.  These are grants with specific guidelines on what the money should be used for.  The states didn’t like these grants because they couldn’t move money within the program to where they needed it.  Categorical Grants gave the U.S. Federal Government a lot of power and say of how to spend the money.  States argued that the Federal Government was wasting money and should change the rules for spending.  This movement brought more power to the states, but consequently received the financial burden that came with more power.
          This movement for more control on how money was spent led to a different grant.  Block Grants are grants from the federal government that have very few limitations.  These allowed states to spend the money how they wished within the subject of what the money was for.  For example, Block Grants gave the states 30 million dollars for health.  Categorical Grants gave the state one million dollars for flu shots.  The states much rather preferred to determine how much they would spend on flu shots and other small things with their federal money.  Block Grants are used in today’s government with very important entitlements such as Medicare, Medicate, Welfare, and Unemployment.  States enjoyed the power to direct where the federal money was going.
          The states didn’t foreshadow the problems for them with Block Grants.  Many people who were angry with the wasteful government spending turned their anger to the states because they had the control of where the money went.  Every cut and addition they made to the grant brought more scrutiny from the people.  The Federal Government was happy that they could just point the finger at the states and tell people that they make the decisions about where the money goes.  The Federal Government also passed the financial burden onto the states.  Rising costs to support the bureaucracies and projects was now on the states to pay for.  If they didn’t want to pay for it, they would just cut the services to save money.
          Which system is better?  With Categorical Grants, the states we reimbursed for the rising costs.  They didn’t have to spend time on where the money was going to because the Federal Government had already decided it.  Block Grants allowed for more efficient spending but put future costs on the states.  If you were the president, which type of grant would you impose?

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