As you know, the federal grants-in-aid system is elaborate and complex. As such, it is always inviting proposals for reform. Some observers believe that the entire system is inefficient and wasteful and should be abolished. They argue that the federal government should directly operate the current grant programs that are really essential and drop all remaining programs. The states would no longer participate in grant activities. A second group of analysts believe the opposite: they submit that grants-in-aid fit nicely with the historic practices of the federal system, meaning that states share in the management of programs with the federal government. They propose that the federal government should allocate a lump sum of money to each state, not trying to specify the programs for which the moneys should be used.
That shift would mean that categorical grants would be eliminated in favor of a single broad-based grant for each state. A third group of scholars holds to still different view. They maintain that since federal grants are drawn from the federal treasury, Congress should closely guide how they are spent. They would have all federal grants become categorical grants. They would also require a state matching amount of 50 percent for each grant. That change would confine federal grants to those program areas that are most essential for a state since the state would have to bear half the cost.
Finally, other experts say no major changes are needed. They hold that the present federal grants-in-aid system should remain essentially as is.
Where do you stand on the problem of federal grants? Should the system be changed? If so, in what ways? Be sure to explain why you take the position you do.