More devolution; I celebrate and cite myself
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endofwelfareSo I wrote a post on devolution and forgot to mention that I actually edited a book on the subject. Which sums up my skills at self-promotion.

Jonathan Chait has a useful post on Ryan and notes something else I forgot — that block grants can be used to substitute for own-source state government funds. Suppose you are spending $10 million for job counseling, and your state’s food stamps cost the Feds $10 million. If food stamps are instead provided to the state government as a block grant, they can use it to fund their job counseling and save themselves the ten million bucks. The food stamp recipients still get job counseling, but no food stamps.

Even with full substitution, the Feds are still out the ten million. I maintain that even with no substitution, the level of the grant would still erode over time, given the likely formula devised and the political dynamics of the Congress. That’s the whole point — to reduce Federal spending. It’s also why I find this statement by JC baffling:

The most encouraging thing about Ryan’s plan is that it is not a plan to cut funding for programs benefiting the poor. Instead, Ryan’s poverty plan would keep that overall level constant while shifting funds from some categories to others.

The entire history of block grants argues otherwise. There’s more in my book.


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