According to the findings of other researchers using state-level data, even SSI participation and expenditures would rise significantly during a recession. Thus, the degree of cyclicality suggested in this Commentary is a conservative estimate. It is safe to say that shifting funding responsibilities from Congress to the nation's statehouses will impose formidable cyclical burdens on the states. With entitlement status for benefits gone, state lawmakers could react to a recession-induced fiscal squeeze by tightening standards or reducing benefits, which would pass cyclical income risk down to households. Return to Index Footnotes 1.
Block grants are funds distributed to states to spend on certain items as they see fit.
Back to commentary 2. This is the most recent year for which data are available. Back to commentary 3. Back to commentary 4. Caseload and expenditure growth rates were regressed on a constant and on the change in the unemployment rate.