Don’t go there: Block grants for Medicaid and SNAP could wreck America’s safety net

A fundamental part of the American social contract is that when times get tough, we help our friends and neighbors out. In Oklahoma, the biggest ways that we do this is through the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps) and SoonerCare, Oklahoma’s Medicaid program. Each of these programs help hundreds of thousands of Oklahomans get on their feet and stay there every year.

However, Congressional Republicans are pushing to end these programs and replace them with block grants in order to cut federal spending, possibly by as early as this summer. Block grants would threaten to dismantle effective, efficient anti-poverty programs and leave Oklahoma families without access to adequate food or medical care.

Medicaid and SNAP respond to need

Today, Medicaid and SNAP are entitlement programs. This means that all who qualify have a right to enroll, and the federal government covers some or all of the cost. Entitlement programs are by nature highly responsive to the economy: during hard times, when more families are in poverty, enrollment increases – but as the economy recovers, enrollment decreases. If there are more families on SNAP or Medicaid than we’d like, that says more about our state economy than it does about the programs themselves. Furthermore, entitlements decrease poverty by allowing families to pay other important bills, like rent and electricity. During the Great Recession, SNAP kept 140,000 Oklahomans, including 70,000 children, out of poverty every year.

Block grants would slash the safety net when it’s most needed

Block grants are fundamentally an instrument to cut federal spending on safety net programs by giving states a set amount of money per year for a particular program (or, the case of a per capita cap, a set amount of money per person). After those funds are gone, it doesn’t matter if Oklahoma sees an oil crash or an HIV outbreak – the state is responsible for any additional spending. Because block grants are designed to save federal dollars, a cap or block grant on Medicaid will be increased over time at a level below projected health spending, and thereby below need. This would end these programs’ ability to fight poverty and respond to the economy.

History shows that converting entitlements to block grants destroys the program

Center on Budget and Policy Priorities

Temporary Assistance for Needy Families (TANF) is a clear example of why block grants don’t work. The United States’ primary cash assistance program for low-income families with children was converted in 1996 to the block grant known as TANF. Since then, cash assistance has dwindled to nearly nothing. In 1995, 68 out of every 100 poor families with children nationwide received cash assistance. Today, it’s 23 of every 100 nationwide, and in Oklahoma, as the graph shows, it’s plummeted to just 7. Not only is the funding under a block grant inadequate, it’s also an invitation for states to raid a simple, effective benefit for families and use the money to fill their own budget holes or transfer funding to pet projects — like an ineffective PR campaign about marriage.

If the goal is to get families out of poverty, block grants are a proven failure: converting cash assistance to block grants increased the number of Americans living in deep poverty. We have no reason to expect block-granting SNAP or Medicaid would end differently.

Oklahoma can’t afford to pick up federal slack

Center on Budget and Policy Priorities

Federal programs are just one part of the anti-poverty toolbox — non-profits and businesses play an important role, too. However, these private sector efforts can’t replace the role of government to ensure that people can meet their basic needs. For example, charitable food assistance like the kind provided by Oklahoma’s food bank network – an efficient system that distributes record amounts of food every year – only makes up 6 percent of Oklahoma’s total food assistance, according to a forthcoming report.

The state won’t be able to make up the difference in lost federal funding, either. This year, due to several previous years of economic growth, Oklahoma’s federal Medicaid funding declined by just over one percentage point, putting greater strain on a strapped state budget. Those struggles are small compared to what would happen under a block grant proposal that would ultimately cut federal Medicaid spending 33 percent by 2026, as the graph to the right shows – far beyond what state agencies can make up. 

It’s likely that any block grant proposal in the next few months won’t mean those kind of cuts early on. In fact, Oklahoma might receive more federal funds in the first years of the block grant. But because block grants purposefully decrease federal spending, federal funding to states will ultimately fail to keep pace. The TANF example is instructive here: In 1996, Oklahoma received $148 million in federal TANF block grant funding. Twenty years later, despite two decades of inflation and growing state population, Oklahoma’s federal block grant for TANF is still $148 million.

Despite rhetoric about empowering states with “more flexibility” and “greater control” over these programs, block grants really mean that states receive inadequate funds and the flexibility to decide what taxes to raise or assistance to cut. Should we have a waiting list for food assistance? More than 7 in 10 Oklahoma SNAP participants are in families with children. Should we adopt a work requirement for medical care? The vast majority of SoonerCare enrollees are children or adults who are aged, blind, or have a disability. Should we cut health care provider rates? That could turn the trickle of rural hospitals going out of business in Oklahoma into a flood. These are the choices block grants will force us to make, and they will push us to betray our core commitment to taking care of each other.

The bottom line

In short, block grants won’t decrease the number of families in poverty in Oklahoma – but they will make it less likely that those families can access medical care or get enough to eat. Oklahoma lawmakers should recognize block grant proposals for the failed policy they are and demand better  from federal leadership.  

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Carly Putnam joined OK Policy in 2013. As Policy Director, she supervises policy research and strategy. She previously worked as an OK Policy intern, and she was OK Policy's health care policy analyst through July 2020. She graduated from the University of Tulsa in 2013. As a student, she was a participant in the National Education for Women (N.E.W.) Leadership Institute and interned with Planned Parenthood. Carly is a graduate of the Oklahoma Center for Nonprofits Nonprofit Management Certification; the Oklahoma Developmental Disabilities Council’s Partners in Policymaking; The Mine, a social entrepreneurship fellowship in Tulsa; and Leadership Tulsa Class 62. She currently serves on the boards of Restore Hope Ministries and The Arc of Oklahoma. In her free time, she enjoys reading, cooking, and doing battle with her hundred year-old house.

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