Ron Paul's Texas Straight Talk - A weekly Column

March 9, 1998
Block grants are not the answer
While rhetorically popular, they fail to address real problem

Block grants have become a popular rhetorical device, holding out the promise of restoring local control to lessen the Federal bureaucracy.

Recent legislation marking the first major change to public housing since the Depression, did not cut spending, but actually increased funding paid for with federal taxes, even while holding out that the block grant system was devolving power to the States. A token effort similar to this was made in the early 1970s under Nixon called "revenue-sharing." It did not work and was dropped.

This new method will not work either. Whether the bureaucrats are in Washington or in the state capitols, it will not change the dynamics of public housing. Public ownership, whether managed locally or federally, cannot replace the benefits of private ownership.

Further, the block grant method of allocating funds does not eliminate the need to first collect the revenues nationally and politically distribute the funds to the various state entities. Collection and distribution which has nothing to do with the reality and everything to do with redistributing wealth to the benefit of politicians and special interests. Wealthy states, like Texas, will never get their money back, even if every program is block granted.

And of course, strings will always be attached, no matter how many safeguards are written into the block-grant law. The process of devolution is an adjustment in management and does not deal with the philosophic question of whether or not the federal government - or even the state governments, for that matter - ought to be involved in providing housing.

The high hopes that this process will alter the course of the welfare state will, I am sure, be dashed after many more years of failures and dollars spent.

There is essentially no serious consideration in Washington for abolishing agencies, let alone whole departments. If funding for the obscene, wasteful and wholly-unconstitutional NEA cannot be cut, which agency of government could we expect to be?

The devolution approach is not the first choice of proponents of big government, but it is acceptable to them. Why? The calls for more spending are usually satisfied as the supposed advocates for smaller government agree to more money so as to get the symbolic block grants passed into law. In the end, all the politicians, in spite of the rhetoric, are content, because they can sing both sing pleasant tunes to their special-interests. But the taxpayer loses because the money is still taken, at ever increasing rates, from their wallets.

Devolution is said to be a return to States Rights, since it is inferred that management of the program will be decentralized. This is a new 1990s definition of the original concept of States Rights and will prove not to be an adequate substitute.

At the same time these token efforts were made in welfare, education and human resources reform, Congress gave the federal government massive new influence over adoption and juvenile crime, education and medicine. Block grants to States for specific purposes after collecting the revenues at the Federal level is foreign to the concept that once was understood as States rights.

This process, even if temporarily beneficial, will do nothing to challenge the underlying principle and shortcomings of the welfare State. Time is against the advocates of big-government, but unfortunately, in the meantime it is also against the wallets and well-being of the taxpayers.