The need for a new approach to federal support of education by reducing the number of narrow categorical aid programs is developed through a case study of the 1976 Ford Administration proposal for a consolidated block grant of 24 separate authorities. The merits of block grant funding are examined both in terms of the administration-sponsored bill and in the broader context of school financing and national education policy. The history of federal aid and the constitutional issues involved are discussed along with the political processes and an appraisal of the constituent forces and their degree of participation in the failure of the proposal. The study is based on a review of the literature, examination of previous education legislation, congressional testimony, hearings, conference reports, and government studies. Personal interviews were conducted with congressional aides and staff members, bureaucrats in executive agencies, and members of educational lobby groups. A position supporting the concept of block grant funding as a means of reform for federal education programs is provided. Recommendations are made for actions by educators and administrators to secure the conditions that will allow focus on level of federal support for education rather than competition for categorical aid programs. (Author/JM)