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Block-Grant Idea Gaining Friends On Capitol Hill

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In Koshkonong, Mo., population 250, federal block grants mean water pressure. In other Missouri communities, money from the same program may mean sewer lines, housing improvements, or industrial parks.

State and local officials' discretion in choosing how and where to use federal money is the chief selling point for the Community Development Block Grant--and for the block-grant idea generally. It is an approach that has become increasingly appealing on Capitol Hill, where the Republican leadership is pushing for a downsized, decentralized government.

But the same flexibility that proponents of the concept tout has critics worried that a major shift from so-called categorical programs to block grants would lead to declining federal aid, a lack of accountability, and less government help for the disadvantaged.

The House's passage of a bill that would replace school-meals and child-care programs with block grants, for example, has been loudly decried by school and child-advocacy groups, which claim funding would be cut. (See Education Week, 03/29/95.)

'Proclivity' for Paperwork

Lawmakers may go much further, however. A leading target in Congress's push to consolidate and simplify is its K-12 education budget. Some experts argue that state and local officials from Koshkonong to San Jose can get more out of the money than federal lawmakers in Washington can.

"The thinking is that the block grant creates the flexibility that we like to see," said one House Republican aide.

Congress now finances 15 block-grant programs, accounting for $32 billion in fiscal 1993, according to a February report by the General Accounting Office.

Among state officials who already live under block-grant programs, the reviews are mixed. The free hand that arrives with new block grants is often accompanied by reduced funding, they say. And sometimes, as federal funding for the blended program disappears, regulatory requirements creep back in.

"We get quite a bit of flexibility in terms of how we can use federal money, but the busy work that is required is pretty great too," said Joe Driskill, the director of Missouri's economic-development department, the agency that handles federal community-development funds.

"Over time, they have piled on the regulations," he said, noting a recent requirement that preference in housing grants be given to residents suffering from aids. "There is a natural proclivity for government organizations--people who receive and file paper--to want to receive and file more paper."

The Cost of Flexibility

In other cases, the freedom that comes with block grants has been so great that the programs have strayed from their intended goals.

In 1989, Congress amended the Job Training Partnership Act, significantly refocusing the performance standards of the adult- and youth-training programs that are paid for through block grants. The previous standards, which stressed job-placement rates and minimal administrative costs, had led many trainers to recruit and enroll the most able trainees in an effort to win greater federal aid.

Because the program serves only about 5 percent of those eligible to take part, the standards were rewritten to urge trainers to work with youths and adults with the greatest barriers to employment.

The G.A.O. report concluded that any new block grants should clearly spell out the intended results of the federal spending, and that states must be prepared for handling bigger and more complex programs.

Educators have had their own experience with block grants.

In fiscal 1982, the newly minted education block grant then known as Chapter 2 received $470 million, $66 million less than was provided in 1981 for the categorical programs it replaced. By the current fiscal year, 13 years after it was created, Chapter 2, now known as Innovative Program Strategies, received only $347 million.

Many state officials say they are willing to see overall funding decline--and take their chances with the growth of set-asides and bureaucratic tangles--in exchange for less regulation from Washington.

"The current federal programs have about as much flexibility as a cement suit," said Kelly Faro, a spokesman for John Sharp, the Texas comptroller. "I'm sure strings will continue to get attached, but we want more control. We are tired of going with our hat in our hand to Washington every time we want to try to do something."

Winners And Losers

The history of Chapter 2 also illustrates another consequence of increased state and local flexibility: block-grant money tends to get spread thin to please a larger share of constituents.

The program, which replaced small federal programs such as metric education, health education, and school-library resources, as well as a larger program that aided school-desegregation efforts, quickly became a major source of funds for schools to buy computers and library and curriculum materials, and to pay for staff development. (See Education Week, 5/15/91.)

Very little of the funding went to the purposes served by the precursor programs. And because virtually every school district in the nation was eligible for block-grant funds, large urban districts--which received almost all the desegregation funding, and also competed successfully for other categorical grants--lost billions of dollars.

"This is all about where you want the battle to be fought," said Marty Orland, a senior fellow at the Finance Project, a Washington-based think tank studying the provision of services to children and families. "Do you want to fight it in the local community, do you want to fight it at the state level, or do you want to fight it at the federal level?"

"And it's no coincidence that focus on the disadvantaged is at the federal level," Mr. Orland said, noting that many federal rules were adopted to force state and local officials to serve high-need, low-clout populations. "The political forces that were in place 20, 25 years ago are largely in place today, and there are new fiscal restraints."

Many observers remain skeptical that more block grants will lead to vastly improved government programs and services. Some warn that the transition could even set back some existing education-reform efforts.

"Right now, block grants are a crapshoot in which the very structure and nature of the public school enterprise is at stake," said Mark Weston, the state-services coordinator for the Education Commission of the States in Denver. "There is very little discussion at any level about aligning the movement to block grants to state reforms in education."

"I'm concerned that the development of block-grant programs will be handled in a willy-nilly fashion that will be a bust to education reform and not a boon," added Mr. Weston, a former House Republican appropriations aide and an Education Department official under President George Bush.

Exploring Options

While federal officials are showing keen interest in the promise of block grants, the shift to such a strategy still has many hurdles to cross on Capitol Hill.

"There's a major departing point here between the committees and the leadership," said Jeanne Allen, the director of the Washington-based Center for Education Reform. She pointed out that many federal lawmakers like the job of shaping school policy and direction.

"They're used to running the trains, not selling the railroads," she said.

Various block-grant plans could come up in the House Committee on Economic and Educational Opportunities as early as next month.

But the level of interest in the idea in the Senate is unclear. There has been little discussion of the matter in that body, according to Republican aides.

The Clinton Administration, meanwhile, appears willing to cautiously discuss the idea.

President Clinton's 1996 budget proposal includes six "performance partnerships," including a proposal to consolidate numerous job-training programs and give states great leeway in administering programs in exchange for accountability measures.

And the White House has asked department officials "to explore whether there are other programs that can become part of the mix," according to Undersecretary of Education Marshall S. Smith.

Power Plays

The currency of the block-grant idea was illustrated in Secretary of Education Richard W. Riley's recent appearances before Congressional panels, where he referred to the centerpiece of the Administration's education agenda, the Goals 2000: Educate America Act, as a "responsible block grant."

Education lobbyists, meanwhile, are drafting recommendations for how block grants should work.

The Council of Chief State School Officers recently adopted a resolution suggesting the consolidation of the Goals 2000 law with the existing education block grant, as well as backing the Administration's idea for a workforce-preparation block grant.

The chiefs urged, however, that Congress clearly state the objectives and purpose of the grants--asking lawmakers to define a mission beyond paring the federal budget.

"The big issue is the purpose that somebody is 'blocking' the programs," said Gordon M. Ambach, the executive director of the chiefs' council. "If the purpose is reducing funding, we're notinterested."

The National Governors' Association is intent on insuring that block grants come with a reduction of federal encroachment.

"If you don't get rid of those strings and cut administrative funding, it's a losing proposition," commented Patricia F. Sullivan, the director of education legislation for the N.G.A.

But the lobbying battle may focus as much on who will control block-grant money as on the advantages and disadvantages of a new approach to governing.

While the state school chiefs want to see federal education money turned over to state education departments, many governors would like to see their names on the federal checks.

Officials of the National Association of Counties, meanwhile, asked in testimony before the House Budget Committee last week that "general-purpose local governments" get the block-grant money.

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