Calling Paul Ryan: History shows that block grants shrink over time

Jared Bernstein, a former chief economist to Vice President Biden, is a senior fellow at the Center on Budget and Policy Priorities and author of the new book 'The Reconnection Agenda: Reuniting Growth and Prosperity.'

Blocks: they’re more fun than block grants, and less risky too. (Photo by Oli Scarff/Getty Images)

When Rep. Paul Ryan announced his big anti-poverty program last week, I and others argued that its key feature–the consolidation of 11 programs into a block grant to states–would gut the counter-cyclicality of the federal safety net and make the programs an easy target for cuts. I showed how this certainly describes what happened to TANF (cash welfare for families with kids) since the mid-1990s, but that was my only concrete example.

Well, thanks to Richard Kogan at the Center of Budget and Policy Priorities, we now have historical evidence to ponder. The table below shows 11 (what, is “11” the cosmic number for this sort of thing?) major block grant programs since their inception and since 2001, the latter to facilitate a comparison over the same number of years.

Of these 11, eight shrank significantly in real terms (the dollar values are adjusted for inflation), from -18 percent to -87 percent since inception, and from -12 percent to -58 percent since 2001. Two block grants expanded, also significantly, but the general pattern has been to shrink. The average real decline since 2001 has been -23 percent (and that’s just inflation-adjusted; adjusting for population growth would lead to larger losses).

As Kogan writes:

Block grants’ very structure makes them vulnerable to cuts..[they] generally give state and local governments more flexibility in how to use funds, leading to varied approaches for achieving program goals. But this variety makes it hard to see how changes in funding levels affect beneficiaries, or even to be sure how the money is being used. That, in turn, makes it easier for policymakers looking for savings to target block grants rather than other benefit programs for long-term freezes or cuts.

When I first heard about Rep. Ryan’s idea to consolidate this much of the safety net into a block grant, I wrote that “those of us who worry about the poverty effectiveness of the U.S. safety net should be awfully nervous about this idea.” I hadn’t yet seen Kogan’s historical review, but it’s much as I expected. Sure, this time could be different, and there are those two programs in the table that go the other way. But when you combine this historical information with the deep cuts in anti-poverty programs in every Republican budget Rep. Ryan has ever written, you recognize the distinct possibility of what could be in store if we pursue his plan.

At any rate, now I–and I hope you–have the evidence to a) fuel our nervousness and b) block the block grants.

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Source: Richard Kogan, CBPP
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Jared Bernstein · July 28, 2014

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