Republicans and their allies continue to advocate transforming Medicaid into a block-grant program. The original House Republican budget called for it explicitly; the Cut, Cap, and Balance plan, which passed the House two days ago, called for it implicitly. And for those who don't remember, turning Medicaid into a block grant would be a major change: Under such a scheme, federal contributions to Medicaid would no longer rise automatically as more people become eligible for the program. Instead, those federal contributions would rise according to a pre-determined formula. States could then figure out how best to spend the money.

Conservatives insist that states would use the opportunity to make Medicaid more efficient, thus addressing the same level of need with a lot less government money. As proof, they frequently point to welfare reform, which entailed a similar change. The old Aid to Families with Dependent Children program was an entitlement, with federal contributions rising to match eligibility. Temporary Assistance to Needy Families, AFDC's replacement, is a block grant. Upon enactment, critics predicted dire consequences. But the dire consequences didn't ensue, at least in any obvious way. If it worked for TANF, conservatives now say, why couldn't it work for Medicaid?

Well, one reason is that the circumstances are a lot different: The economy was unusually strong when TANF became law, easily absorbing new workers and reducing the demand for cash assistance. The real test is how TANF performs when the economy is in trouble, like it has been for the last few years. And a report from the Center on Budget and Policy Priorities suggests it hasn't responded well at all.

The report, by LaDonna Pavetti and Liz Schott, finds that TANF caseloads increased by only 13 percent between December 2007 and December 2009, a time during which the number of unemployed people doubled. It's not a given that TANF should rise proportionally to unemployment, but that's a huge gap. The food stamp program, which remains a federal entitlement, grew by 45 percent during that time. The caseload levels have not varied uniformly across the country. But even many states that expanded their programs in the last two years are now contracting them, in part because extra assistance that the federal government had provided through the Recovery Act is now gone.