Summary: The 15 block grant programs in effect today, with funding of $32 billion, constitute a small portion of the overall federal aid to states, which totaled $206 billion for 593 programs in fiscal year 1993. In 1981, as part of the Omnibus Reconciliation Act, nine block grants were created from about 50 of the 534 categorical programs in effect at that time. In general, the transition from categorical programs to block grants was smooth. Experience with the 1981 block grants teaches three lessons. First, accountability for results is clearly needed, and the Government Performance and Results Act may provide the appropriate framework. Second, funding allocations based on distributions under prior categorical programs may be inequitable because they do not reflect need, ability to pay, and variations in the cost of providing services. Finally, the transition to block grants may be more challenging today than in 1981 because the programs being considered for inclusion in block grants are much larger and, in some cases, are fundamentally different from programs included in the 1981 block grants.
