The best approach is to base each state's share on the proportion of the nation's poor who reside in that state. A much less desirable approach is currently favored by the Republican leadership in Congress and is reflected in the House bill. This approach would block-grant funds based on current federal spending, rewarding the states that currently spend the most instead of assisting those with the greatest needs. Future Block Grants Independent of Future Needs. Under entitlement programs with shared federal-state financing, the federal government's share averages about 55 percent.
State governments pay the remainder with matching funds.
This structure punishes the states that reduce poverty and rewards those that fail. For example, if a program has a 50-50 match, a state gets to keep only 50 cents out of a dollar of waste it curtails. Conversely, if a state generates a dollar of waste, it pays only 50 cents. The block-grant formula should be based on the initial distribution of pretransfer poverty. If a state reduces its poverty population, the state should be allowed to keep 100 percent of the resultant savings.