# Block Grant **Status: stub — expand.** A federal grant that gives a state a lump sum for a broad purpose with wide discretion over how to spend it — contrasted with a **categorical grant**, which funds a narrow program under detailed rules, and with an **entitlement**, which pays whatever qualifying claims cost. The design trade is explicit: flexibility for the state, a capped and predictable cost for the federal government. Because block grants are usually fixed in nominal dollars, their real value erodes with inflation and they do not expand automatically in a recession, when demand rises. TANF (1996), which converted AFDC from an open-ended entitlement to a block grant frozen at $16.5 billion, is the canonical case and the model repeatedly proposed for Medicaid and SNAP. Converting an entitlement to a block grant is therefore simultaneously a devolution of authority and a long-run budget cut — which is why the same proposal is described in both terms depending on the speaker. ## See also - [[Cooperative Federalism]] · [[Spending Clause]] · [[Unfunded Mandate]] · [[Federalism Powers Crosswalk]]