Look at what happened with welfare, or the Temporary Assistance for Needy Families (TANF) program, which was turned into a fixed block grant to the states during the Clinton administration and has become a Republican exemplar of the efficiency argument ever since. “In 1996, we block-granted money for welfare reform, and it worked like a charm,” Graham said at a news conference this month, making the case for his health-care legislation. “We put governors in charge of the program. We held them accountable.”
But the welfare rolls shrank mostly because states kicked people off of the program, not because the program got more effective and efficient. An initiative that used to cover 68 of every 100 families in poverty now reaches just 23 of every 100 with cash benefits, the Center on Budget and Policy Priorities has found. Plus, given more flexibility and authority, states started using the money for initiatives other than cash benefits for poor mothers, such as early-childhood education and job training. That led to wide state-by-state differences in program outcomes. California covers 65 out of every 100 families in poverty with cash benefits under TANF, for instance, while Louisiana covers just four.From The Atlantic.
It also notes that Social Security and the IRS are both extremely efficient at what they do compared to either the states or other countries.