President Reagan's Administration began a strong movement to reduce substantially the federal government's support for domestic social programs.  They proposed to consolidate most federally funded human human needs programs into several large, general purpose block grants; to reduce the total amount of funding by 25 percent; and to delegate the responsibility for administering these block grants to the states.

The proposal was partially successful.  Congress created eight new block grants consolidating over 200 federal programs, reduced the core funding, and turned administrative authority over to the states.  However, it did not accept the elimination of federal funding for CAAs.

On Sept. 30, 1981, the CSA was abolished and the Economic Opportunity Act was rescinded.   Approximately 1,000 CSA staff were fired.  The Community Services Block Grant ensured the continued funding of the 'eligible entities"; i.e., the CAAs, migrant programs and certain other organizations that had been financed through local initiative funds by CSA.

Even with reduced core funding, CAAs have been able to leverage additional funds.   One survey showed that with a CSBG budget over $300,000, the average community action agency was able to leverage more than $2.9 million, a ratio of $9.50 for every dollar of core funding.  Agencies also recruited an average of eight volunteers for every paid staff person.

Whatever the specific approach taken by individual states and the block grant, the number of CAAs has increased since 1981 from about 932 to nearly 1,000; the number of counties covered by a CAA has increased from 2,300 to 2,700 of the nation's 3,300 counties; and the number of dollars administered by CAAs has increased from about $1.9 billion in 1981 to about $3.5 billion in 1992.

Budget cuts in poverty programs continue, but CAAs still provide a "hand up, not a hand out."  The philosophy of eliminating "the paradox of poverty in the midst of plenty" remains the key concept that motivates CAAs today.