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Federal Grants: Design Improvements Could Help Federal Resources Go Further

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Report Type Reports and Testimonies
Report Date Dec. 18, 1996
Report No. AIMD-97-7
Subject
Summary:

Grants-in-aid are payments from the federal government to state and local governments to help them finance various activities, such as public assistance, highway construction, and education. In addition, lesser-known grant programs help to finance public libraries, efforts to restore sport fish, programs to promote boating safety, and other activities. In fiscal year 1995, the federal government earmarked $225 billion for more than 600 grant programs--about 15 percent of all federal spending. This report focuses on the extent to which the grant system meets two goals frequently cited by public finance experts: (1) encouraging the states to use federal dollars to supplement rather than replace their own spending on nationally important activities and (2) targeting grant funding to states with relatively greater programmatic needs and fewer fiscal resources.

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