[Congressional Record Volume 141, Number 157 (Wednesday, October 11, 1995)]
[Senate]
[Pages S15034-S15035]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BINGAMAN:
  S. 1308. A bill to amend chapter 73 of title 31, United States Code, 
to provide for performance standards for block grant programs, and for 
other purposes; to the Committee on Governmental Affairs.


               THE BLOCK GRANT PERFORMANCE STANDARDS ACT

  Mr. BINGAMAN. Mr. President, I introduce the Block Grant Performance 
Standards Act of 1995. This legislation is intended to provide a 
minimum set of performance standards for all block grants allocating 
Federal funds to States, localities, and other recipients.
  In the 104th Congress, we have seen a movement toward block grants. 
The idea behind this movement is that we have too many programs 
providing funding to other levels of government, and that these 
programs involve too much paperwork. This reasoning leads to the 
conclusion that if we bundle these programs into broader block grants, 
we will release other levels of government to better allocate these 
resources without wasting time and money filling out paperwork bound 
for bureaucrats in Washington.
  Mr. President, I agree that in many cases some of this reasoning is 
correct. To the extent possible, we should try to reduce paperwork and 
increase flexibility for State and local governments receiving Federal 
funds. I believe, however, that in creating block grants we must be 
responsible to taxpayers and resist the temptation to simply turn over 
blank checks to other levels of government. As the elected officials at 
the Federal level, I believe that we must set up minimal performance 
standards for the block grants we provide.
  I am pleased that some of the block grants we are creating do have 
accountability built in. The Chair of the Senate Committee on Labor and 
Human Resources, Senator Kassebaum, for example, has done an admirable 
job of including planning and performance standards for the States' 
administration of the job training block grants anticipated by S. 143, 
now before the Senate. I was successful in attaching an amendment to 
the welfare reform bill approved by the Senate that will provide 
similar accountability.
  The legislation I am introducing today is intended to provide 
accountability standards for all block grant programs. It requires 
entities receiving block grants to submit a plan to the agency 
administrating the grant program that outlines the goals of the entity 
for the use of the Federal funds, a description of how the goals will 
be achieved, and a discussion of performance indicators that will be 
used to measure progress toward those goals. It also ensures public 
participation in the development of this plan through the creation of 
appropriate community advisory committees. Finally, it provides for the 
provision of penalties for entities receiving block grants who 
consistently do not meet the goals they set for themselves in their 
block grant plans over a period of 2 years.
  Mr. President, I believe that this legislation strikes the right 
balance in ensuring that we meet our fiduciary responsibilities to 
Federal taxpayers and our desire to provide maximum flexibility to 
entities receiving block grants. It builds on the work of others, 
including Senator Roth, the sponsor of the Government Performance and 
Results Act of 1993, Public Law 103-62, which set similar performance 
standards for the Federal Government; and David Osborne, who has 
written on the need to develop performance standards for government. It 
also draws on the work of Senator Hatfield and his legislation to 
implement flexibility within current programs: S. 88, the Local 
Empowerment and Flexibility Act of 1995.
  Mr. President, I ask unanimous consent that the text of the bill and 
an article be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1308

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Block Grant Performance 
     Standards Act of 1995''.

     SEC. 2. ADMINISTRATION OF BLOCK GRANTS.

       Chapter 73 of title 31, United States Code, is amended by 
     adding at the end thereof the following new subchapter:

         ``SUBCHAPTER II--CONDITIONS APPLICABLE TO BLOCK GRANTS

     ``Sec. 7321. Purposes

       ``The purposes of this subchapter are to--
       ``(1) enable more efficient use of Federal, State, and 
     local resources;
       ``(2) establish accountability for achieving the purposes 
     of block grant programs; and
       ``(3) establish effective partnerships to address critical 
     issues of public interest.

     ``Sec. 7322. Definitions

       ``For purposes of this subchapter, the term--
       ``(1) `block grant program' means a program in which 
     Federal funds are directly allocated to States, localities, 
     or other recipients for use at the discretion of such States, 
     localities, or recipients in meeting stated Federal 
     purposes.; and
       ``(2) `plan' means a block grant strategic plan described 
     under section 7324.

     ``Sec. 7323. Requirement of approved block grant strategic 
       plans

       ``No payment may be paid under any block grant program to 
     any eligible entity unless such entity has submitted and 
     received approval for a plan.

     ``Sec. 7324. Block grant strategic plans

       ``The head of an agency administering a block grant program 
     shall designate the criteria that shall be included in a 
     block grant strategic plan. At a minimum, each plan shall 
     contain--
       ``(1) a description of goals and objectives, including 
     outcome related goals and objectives for each of the 
     designated program activities for each of the first 6 fiscal 
     years of the plan;
       ``(2) a description of how the goals and objectives are to 
     be achieved, including a description of the operational 
     processes, skills and technology, and the human, capital, 
     information and other objectives required to meet the goals 
     and objectives for the current fiscal year;
       ``(3) a description of performance indicators to be used in 
     measuring or assessing the relevant output service levels and 
     outcomes of each of the mandatory program activities; and
       ``(4) a description of the program evaluation to be used in 
     comparing actual results with established goals and 
     objectives, and the designation of results as highly 
     successful or failing to meet the goals and objectives of the 
     program.

     ``Sec. 7325. Review and approval of block grant strategic 
       plans

       ``After receipt of a plan, the head of an agency shall--
       ``(1) no later than 90 days after the receipt of the 
     application, approve or disapprove all or part of the plan;
       ``(2) no later than 15 days after the date of such approval 
     or disapproval, notify the applicant in writing of the 
     approval or disapproval; and
       ``(3) in the case of any disapproval of a plan, include a 
     written justification of the reasons for disapproval in the 
     written notice of disapproval.

     ``Sec. 7326. Community advisory committees

       ``(a) An entity applying for a block grant shall establish 
     a community advisory committee in accordance with this 
     section.
       ``(b) A community advisory committee shall advise an 
     applicant in the development and implementation of a plan, 
     including advice with respect to--
       ``(1) conducting public hearings; and
       ``(2) receiving comment and reviews from communities 
     affected by the plan.
       ``(c) Membership of the community advisory committee shall 
     include--
       ``(1) persons with leadership experience in private 
     business and voluntary organizations;
       ``(2) elected officials representing jurisdictions included 
     in the plan;
       ``(3) representatives of participating qualified 
     organizations;
       ``(4) the general public; and
       ``(5) individuals and representatives of community 
     organizations who shall help to enhance the leadership role 
     of the local government in developing a plan.
       ``(d) Before submitting an application for approval, or any 
     reports required as a condition of receiving any payment 
     under a block grant program, the applicant shall submit such 
     application or report to the community advisory committee for 
     review and comment. Any comments of the committee shall be 
     submitted with the application or report to the head of an 
     agency.

     ``Sec. 7327. Technical and other assistance

       ``The head of an agency administering a block grant program 
     may provide technical assistance to applicants for block 
     grants in developing information necessary for the design or 
     implementation of a plan.
     
[[Page S 15035]]


     ``Sec. 7328. Conditional termination or alteration of block 
       grant strategic plan

       ``(a) The head of an agency administering a block grant 
     program shall establish procedures by regulation for 
     implementing penalties of not less than 5 percent of the 
     grant a recipient would otherwise receive for failing to meet 
     the goals and objectives included in the plan for a block 
     grant.
       ``(b) The head of an agency shall establish procedures by 
     regulation for--
       ``(1) suspending the grant a recipient would otherwise 
     receive for a period of 3 years for failure for 2 consecutive 
     years to meet the goals and objectives included in the plan 
     for a block grant; and
       ``(2) reallocating the amount of the grant a recipient 
     would otherwise receive to other governmental or nonprofit 
     institutions within the plan.

     ``Sec. 7329. Administration with other conditions of block 
       grant programs

       ``The provisions of this subchapter (including all 
     conditions and requirements) shall supersede any other 
     provision of law relating to the administration of any block 
     grant program only to the extent of any inconsistency with 
     such other provision.''.

     SEC. 3. TECHNICAL AND CONFORMING AMENDMENTS.

       (a) Table of Sections.--Chapter 73 of title 31, United 
     States Code, is amended by striking out the chapter heading 
     and the table of sections and inserting in lieu thereof the 
     following:

                ``CHAPTER 73--ADMINISTERING BLOCK GRANTS

                  ``SUBCHAPTER I--BLOCK GRANT AMOUNTS

``Sec.
``7301. Purpose.
``7302. Definitions.
``7303. Reports and public hearings on proposed uses of amounts.
``7304. Availability of records.
``7305. State auditing requirements.

         ``SUBCHAPTER II--CONDITIONS APPLICABLE TO BLOCK GRANTS

``7321. Purposes.
``7322. Definitions.
``7323. Requirement of approved block grant strategic plans.
``7324. Block grant strategic plans.
``7325. Review and approval of block grant strategic plans.
``7326. Community advisory committees.
``7327. Technical and other assistance.
``7328. Conditional termination or alteration of block grant strategic 
              plan.
``7329. Administration with other conditions of block grant programs.

                 ``SUBCHAPTER I--BLOCK GRANT AMOUNTS''.

       (b) Chapter References.--Chapter 73 of title 31, United 
     States Code, is amended--
       (1) in section 7301 in the matter preceding paragraph (1) 
     by striking out ``chapter'' and inserting in lieu thereof 
     ``subchapter''; and
       (2) in section 7302 in the matter preceding paragraph (1) 
     by striking out ``chapter'' and inserting in lieu thereof 
     ``subchapter''.

     SEC. 4. EFFECTIVE DATE.

       This Act shall take effect on October 1, 1997, and shall 
     apply to payments under block grant programs on and after 
     such date.
                                                                    ____


                [From the Washington Post, June 1, 1995]

                A Federal Challenge for Local Ingenuity

                           (By David Osborne)

       In the new Republican Congress, block grants are breaking 
     out all over. And heaven knows, they're superior to narrow 
     categorical grants. But as the time for decisions draws near, 
     it's worth stopping for a moment to ask: Are block grants the 
     best we can do?
       There is one simple idea missing from the block grant 
     debate of 1995. It's called accountability for results. In 
     their heat to downsize the federal government, the 
     Republicans may miss the best opportunity in a generation to 
     create a federalism that works.
       We all know that the current federal system, with its 550-
     plus categorical grant programs, is a mess. We also know from 
     every poll on the issue that the public supports devotion of 
     responsibilities to state and local governments.
       What we don't know is that block grants are the best 
     solution.
       Congress's inability to resist creating new categorical 
     grant programs--they sprout up almost like weeds in a 
     garden--has been a problem since the 1960s. By 1991 Congress 
     funded almost 100 social service grant programs, more than 80 
     health care grant programs and close to 30 grant programs 
     that dealt with housing or development in poor communities.
       Many of these were for absurdly small amounts--$3 million 
     or $4 million nationally. More than half of the Education 
     Department's 90-odd programs were for less than $15 million.
       When one department administers so many tiny grant 
     programs, something is wrong. Thousands of public employees, 
     in Washington and in state and local governments, spend 
     countless hours publicizing programs, writing and reviewing 
     grant applications, reporting on how money was spent and 
     audited. Billions of dollars go to the professionals and 
     bureaucrats who do this, rather than the intended recipients: 
     students, poor people, urban residents and the unemployed.
       For 25 years, the knee-jerk response has been the block 
     grant, which consolidates many categorical grant programs 
     into one grant with--at least theoretically--few strings 
     attached.
       There is just one problem with this. Block grants are blind 
     to performance. They shower as much money on wasteful, 
     ineffective programs as they do on innovative, cost-effective 
     approaches.
       We need a third way: block grants in which state and local 
     governments compete in part based on the results they 
     achieve. This kind of model has become common at the state 
     level. Pennsylvania's highly regarded Ben Franklin 
     Partnership, for instance, invented what it calls ``challenge 
     grants'' to fund local economic development centers.
       The concept is simple, and Congress would be wise to adopt 
     it. Consider the idea of a community development challenge 
     grant, administered by the Department of Housing and Urban 
     Development. Under this approach, the federal government 
     would establish broad guidelines, objectives and performance 
     measures. State and/or local governments would then compete 
     for challenge grants based on three criteria:
       Need: This could be determined by a community's 
     unemployment rate, poverty rate and median income.
       Quality of strategy: Does the proposed strategy leverage 
     private sector involvement? Does it empower communities to 
     solve more of their own problems? Does it encourage 
     competition and choice? Does it measure and reward results?
       Results: The federal government would measure the number of 
     jobs created, changes in the poverty and unemployment rates, 
     job placement rates, private investment leveraged, changes in 
     indicators of family health, incidence of graft or corruption 
     and so on.
       The higher a government ranked on these criteria, the more 
     funding it would receive. Eventually, only two criteria would 
     be necessary: need and results. Until data on results build 
     up, however, HUD could use quality criteria to drive state 
     and local governments toward strategies that have proven more 
     effective than traditional service delivery by public 
     bureaucracies.
       This approach would cause states and localities to attack 
     the problems federal programs are designed to solve, without 
     dictating the approaches they use. It would tap state and 
     local ingenuity without abandoning federal responsibility.
       By setting goals, measuring outcomes and rewarding success, 
     challenged grants would push lower levels of governments to 
     come up with strategies that worked. Local entities could 
     focus on their own areas of greatest need and craft their own 
     initiatives, without micromanagement from above. They could 
     not, however, continue to collect their full grants without 
     producing results.
       The Clinton administration is already testing a version of 
     this model through its ``Oregon Option''--a performance-based 
     contract between the state and several federal departments, 
     first proposed last year by the Alliance for Redesigning 
     Government. HUD Secretary Henry Cisneros has also proposed 
     three performance-based block grants. Yet few Republicans in 
     Congress are listening.
       The Republicans' impulse to hand money to the states 
     regardless of their performance is particularly ironic given 
     the public's intense demand for more efficient and effective 
     government. Remember, this is federal money, raised through 
     federal taxes to attack national problems that state and 
     local governments will never solve on their own.
       It is easy to wax poetic about the virtues of state 
     government. But as the author of a book on the subject, 
     ``Laboratories of Democracy,'' I feel compelled to inject 
     some reality.
       State and local romantics often forget one fact: States, 
     cities and counties must compete to keep their taxes low, 
     lest they drive businesses and wealthy residents away. This 
     is why no state has ever made a sustained investment in 
     combating poverty of crating a viable training system. It is 
     also why no state save Hawaii--separated by thousands of 
     miles of ocean from its neighbors--has ever funded universal 
     health insurance.
       It is equally ironic that Congress wants to give block 
     grants only to the states. The fact that current proposals 
     ignore local governments is perhaps the most obvious sign of 
     how little thinking their authors have done.
       Again, a dose of reality: The typical state bureaucracy 
     performs a little better than the typical federal 
     bureaucracy--but not much. Most of the real improvement in 
     performance over the past two decades has come at the local 
     level. In addition, most public services are provided by 
     local governments, not state governments. And the level of 
     government Americans trust most is--you guessed it--local 
     government.
       If Congress wants to make government work better and cost 
     less, it will control its jerking knee and craft challenge 
     grants aimed at both state and local governments. If it 
     simply wants to make the federal government smaller, it will 
     create block grants for the states. The choice will be 
     revealing.
                                 ______