block grant

A system of disbursing funds to meet a locality's health, education, and social welfare needs while permitting the recipient organizations to determine how best to distribute the money. Used mostly by the federal and sometimes state governments, the system is designed to consolidate budget itemization and eliminate the necessity of earmarking funds for every individual and categorical program. The system was a major provision of the Omnibus Budget Reconciliation Act (OBRA) of 1981 (P.L. 97-35). Proponents say it increases efficiency and local control, and opponents suggest that it is a covert way of reducing expenditures for social welfare needs.