Reduce funding for poor performing grantees in the Community Services Block Grant program

  • Potential 10 Year Savings: $3.2 Billion
  • Sponsor: Rep. Richard Nugent
  • Legislation:
  • Status: Introduced

The Community Services Block Grant provides funds by formula to states for operating programs to reduce poverty by providing low income persons with services targeted to education, housing assistance, nutrition, health, substance abuse and economic self-sufficiency. The program is a legacy of Lyndon Johnson's failed war on poverty and requires that states pass through 90 percent of their funding to specifically designated Community Action Agencies or Community Action Programs. Many of these mandated grantees have remained unchanged since the initial law was enacted in 1964.There is no process for re-competing grant awards or ensuring that grantees are effective providers of services. In fact, states have found it difficult to terminate funds to grantees guilty of fraud or gross mismanagement. The Obama administration's FY 2013 budget proposes to reform the program by establishing performance goals for local grantees, and creating a process where grant awards for poor performing organizations can be terminated and opened up for competition by more effective service providers. The budget also substantially reduces funding for the program, from $677 million in fiscal year 2012 to $350 million in fiscal year 2013. Adopting the President's proposal to reform the CSBG program would save $3.2 billion over the next 10 years.