Welfare Reform: Block Grants, Expenditure Caps, and the Paradox of the Food Stamp Program

Abstract

According to Contract with America issued by House Republican Conference in September 1994, party's blueprint for welfare reform would include a cap on spending growth of AFDC [Aid to Families with Dependent Children], SSI [Supplemental Security Income], and numerous public housing programs, and mandatory work program established under bill. The cap would equal the amount spent preceding year for these programs with an adjustment for inflation plus growth in poverty population. Food stamps would not be included within cap, but instead would be consolidated with a number of other nutrition programs into a block grant to states, in first year at 95 percent of aggregate amount of individual programs.1 In House version of Personal Responsibility Act passed by new Republican majority in March 1995, AFDC, child and foster care, school meals, and special nutrition aid for pregnant women and young children would all be transformed into block grants to states funded approximately at current levels. Yet block grant option intentionally was rejected for food stamp program, which would be retained as a federal entitlement with its expenditures capped. Unless overridden by explicit legislation, program obligations could not exceed amount of current Congressional Budget Office estimate, adjusted only for provisions of welfare reform act.2