Federal Aid-to-State Programs Top 1,100

3 Pages Posted: 9 Mar 2013

Date Written: February 15, 2011

Abstract

The federal government has a large and growing presence in state and local policy activities. This rising intervention has been facilitated by “grants-in-aid,” which are programs that combine federal subsidies with topdown regulations to micromanage state and local affairs. A new analysis finds that the number of federal aid programs for state and local governments totaled 1,122 in 2010, or more than triple the number 25 years ago. Some of the most expensive federal aid programs are in the areas of education, housing, health care, and transportation. With today’s massive deficits, the federal government can no longer afford to fund all of these state and local activities. Federal lawmakers would better serve the nation by focusing on national issues rather than trying to fix potholes and run the schools. Furthermore, aid ties up the states in bureaucratic knots and reduces state policy innovation. The $646 billion aid system should be cut.

Keywords: federal aid to states, government grants, federal assistance programs, states receiving federal money, U.S. budget deficit, income residtribution, United States of America

JEL Classification: H51, H52, H60, H77

Suggested Citation

Edwards, Chris, Federal Aid-to-State Programs Top 1,100 (February 15, 2011). Cato Institute Tax and Budget Bulletin No. 63, Available at SSRN: https://ssrn.com/abstract=2230504

Chris Edwards (Contact Author)

Cato Institute ( email )

1000 Massachusetts Avenue, N.W.
Washington, DC 20001-5403
United States

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