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Two government budget practices that can have significant implications for lower levels of government are block grants and unfunded mandates.

Higher levels of government should provide adequate resources when mandating functions to lower levels of government.

Services should be implemented and operated by the level of government that can most appropriately and efficiently deliver them.

Federal and state governments have tried to change budget rules to control government spending. Budget rules have also been used to impose fiscal discipline.

Efforts to reform entitlement spending should recognize the following factors:

When economic conditions permit, states should accumulate budget reserves adequate to maintain services during recessions.

Deficit-reduction efforts should avoid cuts in programs that serve low- and moderate-income populations.

The federal government must strive for long-term fiscal balance.

At the federal level, there are two categories of budgetary expenditures: entitlement and discretionary spending.

Passing responsibilities down to lower levels of government should be undertaken primarily to place services closer to the people being served and to maximize administrative