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Development of Federal Grant programs and policy

Development of Federal Grant programs and policy. 1860s: Land grants to promote higher education 1887: first cash grants for agricultural experiment stations 1930s: grants for health, welfare, labor 1960s-2000s: grant program explosion 1962 – 160 programs 1967 – 379 programs

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Development of Federal Grant programs and policy

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  1. Development of Federal Grant programs and policy • 1860s: Land grants to promote higher education • 1887: first cash grants for agricultural experiment stations • 1930s: grants for health, welfare, labor • 1960s-2000s: grant program explosion • 1962 – 160 programs • 1967 – 379 programs • 1995 – 618 programs

  2. Development of Federal Grant programs and policy • Equal Opportunity Act (1964) “War on Poverty” • Title II-A: Community Action Programs • Purpose: to stimulate local communities to develop programs to attack poverty • Up to 90% federal financing of approved projects • “…developed, conducted, and administered with the maximum feasible participation of residents…”

  3. Development of Federal Grant programs and policy • 1966: Demonstration (Model) Cities Act • “…improving quality of urban life…the most critical domestic problem facing the United States…” • Small number (10-20) of model cities to be designated for generous and assistance. 63 were included. • Demonstration agencies to be closely tied to local elected officials’ discretion

  4. Development of Federal Grant programs and policy • 1966: “Creative Federalism” hearings • duplication and overlap of programs • Lack of uniformity across programs • Failure of federal priorities to recognize local needs • Variety of matching fund requirements • Promoted programs based on “easy money” • Uncertainty about amounts and timing • Grantsmanship more important than needs

  5. Development of Federal Grant programs and policy • 1967: The Green Amendment • Local poverty agencies must be designated by state/local governments • Shift in emphasis from political action to service provision

  6. Develop Development of Federal Grant programs and policy • Nixon’s “New Federalism” • General Revenue Sharing • Block grants • Urban community development (CDBG) • Manpower training (CETA) • Never enacted • Education • Transportation • Rural community development • Law enforcement

  7. CDBG Objectives • Benefit low- and moderate-income persons • Prevent of eliminate slums or blight • Meet urgent community needs

  8. Unique Characteristics of CDBG • Predictable flow of funds to states, localities • Flexible, locally controlled use

  9. Development of Federal Grant programs and policy • Omnibus Budget Reconciliation Act, 1981 • Consolidated 57 categorical grants into 9 block grant programs • “Everything that can be run by state and local governments we shall turn over to state and local governments” • Small Cities Community Development Grants

  10. Distribution of CDBG funds • State and local officials are important in determining redistributive effects of CDBG funds • Tendencies of state/local governments • targeting CDBG funds varies – tend to spread benefits widely • Benefit coalitions shape federal program outcomes • Benefit coalitions with a strong federal partner are more likely to succeed in obtaining targeted funds

  11. Factors affecting CDBG Targeting • Unemployment in the state • Proportion of funds allocated by state officials • Competitiveness of state politics • Changes in other federal aid • Community needs

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