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
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…”
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
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
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
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
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Education
Transportation
Rural community development
Law enforcement
CDBG Objectives
• Benefit low- and moderate-income persons
• Prevent of eliminate slums or blight
• Meet urgent community needs
Unique Characteristics of CDBG
• Predictable flow of funds to states, localities
• Flexible, locally controlled use
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
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
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