When lawmakers merge funding for children and youth programs, the total amount of money available to support these programs considerably shrinks, according to a new analysis released by the Center on Budget and Policy Priorities.
The analysis provides a cautionary tale for proposals to merge large numbers of additional programs — especially programs serving families and individuals who are low income or otherwise vulnerable — into block grants, as would occur. Under a proposal that House Speaker Paul Ryan’s (R-MN) made in 2014 to merge 11 low-income programs into a mega-block grant would have dramatically reduced funding in an unspecified number of states, the analysis said.
This new analysis of several decades of budget data strongly suggests, however, that even if the funding a new block grant received in its initial year matched the prior funding for the programs merged into the block grant, the initial level likely wouldn’t be sustained. The analysis shows that when social programs are merged into (or created as) broad block grants, funding typically contracts — often sharply — in subsequent years and decades, with the funding reductions growing deeper over time, the analysis said.
For the 13 block grants, the median change in a block grant’s funding between its inception and 2015 is a decline of one-quarter or $14 billion in 2015 dollars — from 2000 to 2015. For four of the block grants, funding plunged by more than 60%. For example, funding for the job training block grant, focused on improving employment and earnings prospects, has fallen 70% since it was adopted in 1982, the analysis said.
The large funding declines actually understate the drop in funding for these services, because states often substitute some federal block-grant dollars for state dollars they previously spent in these areas, thereby shrinking the total pool of federal plus state resources used for these purposes, the analysis said. For example, the Government Accountability Office documented such substitution under the Temporary Assistance for Needy Families (TANF) block grant.
Partly for this reason, TANF today provides substantially less protection against poverty than AFDC did. In 1996, for every 100 poor families with children, 68 families received AFDC cash assistance. By 1998, TANF’s first full year of implementation, this ratio had fallen to 51, the analysis said. By 2014, only 23 families with children received TANF cash assistance benefits for every 100 poor families.
The marked deterioration in block-grant funding over time controverts a claim that block grant proponents often make, that if funding levels prove inadequate, Congress can and will step in to provide appropriate additional funding, the analysis said.
The general lack of responsiveness of block grant funding to changes in need stands in contrast to the high degree of responsiveness of entitlement programs such as SNAP (formerly known as the Food Stamp Program). Programs like SNAP increase immediately and automatically when need rises, which is of critical importance during recessions to people hit by the economic downturn and which also benefits the economy by helping to restrain the drop in consumer purchasing power that makes recessions deeper. Programs like SNAP would lose this responsiveness if merged into block grants, the analysis said.