Final answer:
Block grants give state and local governments more freedom than categorical grants in spending decisions. Categorical grants are more restrictive and designed to ensure federal funds are used for specific national policy goals. Block grants' preferred flexibility has been challenged over time by increasing restrictions imposed by the national government.
Step-by-step explanation:
A block grant gives state and local governments more latitude compared to categorical grants or categorical block grants in deciding how to spend the money. Block grants are provided as chunks of money with fewer restrictions, allowing for broader use. States and local governments prefer block grants as they offer more flexibility and are associated with fewer mandates and regulations. In contrast, categorical grants come with strict conditions and administrative criteria designed to ensure funds are used for specific policy activities that align with national objectives.
During times of national emergencies, like Hurricanes Katrina and Sandy, the national government may choose categorical grants due to the precision they offer in funding local governments. Moreover, these grants often have stipulations such as matching funds, where states contribute a portion of the project cost. The federal government has historically preferred categorical grants, as seen with the 1,078 categorical grants distributed compared to 21 block grants in 2014.
It is critical to note that even block grants can experience creeping categorization, where the national government gradually adds restrictions, which can compromise the conceptual flexibility of block grants. Nevertheless, block grants remain a vital tool for state and local autonomy, allowing these governments to tailor resource allocation to better fit their citizens' needs, a principle notably championed by President Ronald Reagan in the 1980s.