Block Grants: Definition & Examples

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  • 0:01 Definition
  • 2:00 Examples
  • 3:03 Proponents & Opponents
  • 4:20 Lesson Summary
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Lesson Transcript
Instructor: Stephen Benz

Stephen has taught history, journalism, sociology, and political science courses at multiple levels, including the middle school, high school and college levels.

Block grants are large chunks of money given to local governments by the federal government with few strings attached. They are the opposite of categorical grants. In this lesson, we'll look at some examples and discuss arguments for and against block grants.

Definition

Block grants are large chunks of money given to state and local authorities by the federal government for general purposes, such as public enforcement, law enforcement, or community development. They usually have few strings attached to them and give a lot of discretion to the local and state governments in how to spend the money. The opposite of block grants is categorical grants, which are chunks of money given by the federal government to state and local governments that have far more rules attached to them.

Here is an analogy that can help you understand and remember the difference between these grants. Think of the difference between a car loan and a personal loan. With a car loan, you can only use the money lent to you to buy a car. But with a personal loan, you can use the money for whatever purpose you want. Likewise, in a categorical grant, a state or local government can only spend the money in a certain way. But a block grant can be spent any way the state or local government wants so long as it is generally kept within the broader domain of the grant (e.g., healthcare, law enforcement, education, etc.).

Both block grants and categorical grants are the result of the United States' federal system. In a federal system, the federal government is in charge of certain government functions (for example, national defense), and the local and state governments are in charge of other government functions (for example, education). But the federal government often tries to influence state and local governments by offering money grants in exchange for complying with their requirements. For example, all states have adopted 21 as the legal age to drink in large part because the federal government requires the states to enact this rule in order to receive money for their highways. So, even though states are in charge of patrolling their own highways, they must adhere to the federal government's wishes on the drinking age to receive desired funding for their highways.

Examples of Block Grants

In the 2013 fiscal year, the federal government had 25 block grants, as reported by the Congressional Research Service.

One of the biggest block grant programs is called Temporary Assistance for Needy Families, or TANF for short. TANF is commonly called welfare. This block grant replaced an earlier categorical grant called Aid to Families with Dependent Children (AFDC), which placed a lot of requirements on states. Now, under TANF, states have more control over how money is spent.

Another block grant is the Low-Income Home Energy Assistance Block Grant, which provides assistance to low-income families to help pay energy bills. Like TANF, this grant gives a lot of control to states in deciding how to distribute funds across the state. This program is especially important for northern states, where cold winters drive up heating costs.

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