Inside Report (3)

Those who feed at the federal trough are worried that their diets will be leaner in the next few years. Block grants are federal funds that give states an annual lump sum with no strings attached. The states like them.

The Republicans who are about to come to power in Washington are thought to favor block grants in the name of decentralization. But some government workers and program administrators are growing edgy because the grants can be cut without much political fallout -- since it is totals that are trimmed, not specific programs.

"If they want to increase military spending and cut taxes, even though they can't even talk about a balanced budget, they'll cut back the block grants," says one official of a public employees' union.m