The most obvious reason why block grants save money is because governments have to spend less to fund every program they want to do. The big, expensive programs like the National Science Foundation must go through Congress. For every $1 of block Grants a state can spend through a specific program, they save $1.
The opposite is also true: block grants reduce the amount of money needed for the programs. For every $1 they give, a state has to spend more with less to spare. A new government worker can’t create a new project for $1; the amount of research needed to fund all the programs the state wants to do has to be cut down.
In recent years, the American Legislative Exchange Council has helped push the idea of reducing the amount of research required by public policy. ALEC is a powerful state policy organization that pushes for the repeal of environmental regulations while simultaneously pushing through major right-wing legislation like the health care bill now being considered in Congress. ALEC has even helped co-write the bills that block state and local governments from participating in national environmental protections.
The most common argument that comes out of these two sides is that the money is better spent by the state. They say the federal government is too often slow to respond and too inflexible to make changes to how it spends dollars. We have no say in how much money states spend or who decides what their priorities are. That makes states less accountable to voters. Even a good proposal that saves $100,000 in a new budget would not save the same amount as it would in a flat budget.
What about the people who want to see big corporations get rich? Is that a good reason to oppose block grants?
I’m not sure what your question is about in any case. That’s a legitimate issue for a whole host of reasons, but I think the main idea is that block grants make our democracy worse. You can only create these large public programs if you have a majority of legislators supporting them. That changes very quickly. The only way we get new ideas and new people to do work is to convince people of the necessity of those things. In essence, when you start paying the salaries of people who work on policy, that has a negative impact on their ability to do more of the work.
That being said, I would argue the biggest problem with block grants is that they do actually reduce the amount of spending needed. I think the reason is that in the first place, block grants require lawmakers to approve
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