Categorical grants are the main source of federal aid to state and local government, can only be used for specific purposes and for helping education, or categories of state and local spending.
Categorical grants are distributed either on a formula basis or a project basis. For project grants, states compete for funding; the federal government selects specific projects based on merit. Formula grants, on the other hand, are distributed based on a standardized formula set by Congress.
During the development of the Interstate Highway System, congressional grants provided roughly 90% of the funding. Categorical grants may be spent only for narrowly defined purposes and 33% of categorical grants are considered to be formula grants. Examples of categorical grants include Head Start, the Food Stamp Program, and Medicaid.
This type of grant differs from block grants in that block grants are issued in support of general governmental functions such as education or law enforcement. State and local recipients have more leeway in determining how best to use the money.
Famous quotes containing the words grant and/or categorical:
“America had no use for Adams because he was eighteenth-century, and yet it worshipped Grant because he was archaic and should have lived in a cave and worn skins.”
—Henry Brooks Adams (18381918)
“We do the same thing to parents that we do to children. We insist that they are some kind of categorical abstraction because they produced a child. They were people before that, and theyre still people in all other areas of their lives. But when it comes to the state of parenthood they are abruptly heir to a whole collection of virtues and feelings that are assigned to them with a fine arbitrary disregard for individuality.”
—Leontine Young (20th century)