In recent years, Congressional Republicans have proposed budgets that would attack the fundamental structure of key safety net programs, such as the Supplemental Nutrition Assistance Program (SNAP) and Medicaid, and turn them into “block grants.” They are expected to make similar proposals in 2017. Under a block grant, states receive a fixed amount of funds to spend in a designated area and must choose between competing needs. The history of block grants – particularly the Temporary Assistance for Needy Families (TANF) block grant – shows that they fail to keep up with need, do not respond to economic downturns, allow states to divert funds, and increase disparities between the opportunities offered to residents of different states. CLASP will be writing extensively on the lessons learned from previous block grants in the upcoming months. In the meantime, we have pulled together some of our past key writing on the damaging effects of block grants and the lessons learned.

Medicaid Financing: Dangers of Block Grants and Per Capita Caps Summary and Full Report

CLASP draws on the lessons learned from Temporary Assistance for Needy Families and the Child Care and Development Block Grant to demonstrate the detrimental effect a block grant or per capita cap would have on Medicaid.

Lessons Learned
Since TANF was made a block grant 20 years ago, we have learned several lessons about the block grant. First, we have learned that funding has been eroded over time. Second, state flexibility has led to a patchwork safety net. Third, states have cut benefits in the recession due to budget constraints. Fourth, little is known about the effusiveness of programs. Finally, progress in reducing poverty and increasing work was limited to the boom years of the 1990s.

SNAP, Medicaid Block Grants Would Weaken the Already-Fragile Safety Net
There are important differences between TANF and Medicaid and SNAP that would make block grants even more worrisome in those programs. First, a Medicaid block grant would not keep up with rising health care costs. Additionally, SNAP is increasingly the sole remaining near-cash benefit program available to the poorest households. Finally, as most SNAP recipients are either already employed or are not expected to be working (due to age or disability), it is not plausible that any additional employment services provided under a SNAP block grant could reduce the need for SNAP benefits enough to compensate for the cuts.

Testimony on Renewing Communities and Providing Opportunities through Innovative Solutions to Poverty
CLASP’s Executive Director, Olivia Golden, made four major points testifying before the Senate Committee on Homeland Security and Governmental Affairs. First, there is strong evidence to show that the nation’s core economic security programs are highly effective. Second, changes in the economy mean that high employment rates do not translate into low poverty rates. Third, community-based innovations are most effective when they build on the foundation of a strong safety net. Finally, she outlined the next steps that Congress should take to reduce poverty and expand opportunity by highlighting bad ideas to avoid, such as block grants, and opportunities to seize.

Untangling the Safety Net without Block Grants or Waivers: How States Integrate Programs to Benefit Families
This testimony highlights the experiences of six states – Colorado, Idaho, Illinois, North Carolina, Rhode Island, and South Carolina – in the Work Support Strategies initiative. Through policy changes, technology, training, and business process redesign, they were able to improve the client experience and increase access to the full package of income and work supports. Their experience shows that block grants are not needed to align programs.

Strengthening the Social Safety Net: Building on What Works–and Avoiding Bad Ideas
The safety net works to reduce poverty, improve families’ well-being, and—according to strong emerging evidence—improve the long-term life chances of children who benefit from key programs. Recent rigorous studies of SNAP, public health insurance, and the Earned Income Tax Credit have demonstrated the positive effects of access as a child to these safety net programs on life outcomes into adulthood. TANF’s block grant should not be a model to be republicated to other public assistance programs operating at the federal level. No amount of state flexibility or coordination will substitute for adequate funding of safety net programs.

TANF

TANF 101: Block Grant
Under TANF states are given a fixed block grant that they can spend on a wide variety of activities to further any of the four statutory purposes. Cash assistance now accounts for less than a third of TANF and related state spending. The ambitious goals of the TANF program are not matched by proportionate resources, especially in states with high rates of poverty and low fiscal capacity. The net result is a program under pressure. 

TANF 101: Cash Assistance
This brief provides basic context on TANF benefits, requirements, and the services provided to families who receive assistance. Because of the funding constraints on the TANF program, and the many other ways that TANF funds can be used, cash assistance has declined sharply since TANF was created and now serves less than 1.5 million families. Cash assistance is only one of the many services and programs that states may fund with the TANF block grant, and this assistance accounts for less than a third of TANF and related state spending.

Child Care

Child Care Assistance Spending and Participation in 2018
This fact sheet analyzes national trends for spending and participation in CCDBG- and TANF-funded child care in federal fiscal year (FY) 2018, the latest year for which data are available. In FY 2018, federal funding for CCDBG increased by a historic $2.4 billion, the largest increase in the program’s history. However, improving the health, safety, and quality of child care—as well as addressing the steep decline in the number of children served—will require significantly greater, continuous federal and state investments.