Senate Democrats

The Bush Budget Would Slash Key Housing Programs . . . Again

President Bush has once again proposed deep cuts for critical federal housing programs. While the President often speaks of his commitment to affordable housing opportunities and home ownership for all Americans, his budget proposals for the Department of Housing and Urban Development (HUD) tell a different story.  Overall, the Bush Administration’s Fiscal Year 2008 budget proposes $36.150 billion in discretionary spending authority for HUD, as compared to $36.615 billion in the H.J.Res.20, the Funding Resolution for Fiscal Year 2007 – a cut of $465 million, or 1.3 percent.

The President’s budget would drastically reduce funding for programs that assist Americans in the greatest need.  At a time when more and more Americans are being squeezed by high rent, high home heating costs, and high oil prices, the Bush budget proposes to cut funding for programs to assist lower income Americans with their housing needs.  For example, the President’s fiscal year 2008 budget would:

·        Cut $174 million, or 23 percent, from the Housing for the Elderly program, which supports the creation of housing facilities for lower income elderly Americans aged 62 years and above;

·        Cut $117 million, or 48 percent, from the Housing for Persons with Disabilities program, which provides construction grants, operating subsidies, and housing vouchers for lower income Americans with disabilities;

·        Cut $37 million, or 24 percent, from the Lead Hazard Reduction program, in which the main grant program assists state and local governments and Indian tribes in eliminating lead hazards in low-income and owner-occupied housing; and   

·        Cut $384 million, or 6.2 percent, from the Project-based Rental Assistance program, including under-funding the Section 8 Tenant-based assistance program by not accounting for inflation and the cost of renewing existing vouchers.  The result may be that certain low-income families will lose vital housing vouchers.

The budget would also decrease funding for key public housing programs.  These programs serve more than one million children and more than one million families with seniors in residence, yet the budget proposes to:

·        Eliminate the HOPE VI program by rescinding the $99 million anticipated in fiscal year 2007 and providing no funds for fiscal year 2008.  This program pays for the rehabilitation or replacement of run down public housing projects and is the only significant source of federal money for capital improvements of public housing; and

·        Cut $461 million, or 18 percent, from the Public Housing Capital Fund, which carries out capital and management activities for Public Housing Authorities (PHA).  This funding is needed to ensure that PHA’s can finance new housing construction.

The President’s budget would drastically cut funding for the Community Development Fund.  The President is asking Congress to:

·        Cut $736 million, or 20 percent, from the Community Development Block Grant (CDBG) program, which provides eligible metropolitan areas with annual direct grants that can be used to revitalize neighborhoods, expand affordable housing and economic opportunities, and improve community facilities and services; and

·        Provide zero funding for:

·        The Rural Housing and Economic Development program, which assist states and localities with housing and economic development in rural areas.  Under H.J.Res.20, the program is funded at $17 million; 

·        The Brownfields Economic Redevelopment Development Initiative, which promotes economic development in abandoned and under-used industrial and commercial facilities where redevelopment is burdened by environmental contamination.  Under H.J.Res.20,the program is funded at $10 million;

·        Community Development Loan Guarantee program, which provides communities a source of financing for economic development, housing rehabilitation, public facilities, and large-scale physical development projects.  Under H.J.Res.20,the program is funded at $4 million; and

·        Self-Help and Assisted Homeownership programs, including National American Indian Housing Council, Special Olympics, National Council of La Raza, and National Housing Development Corporation.

 NOTE: Budget cuts are calculated relative to H.J.Res.20, the Funding Resolution for Fiscal Year 2007, which has passed the House of Representatives and the Senate, adjusted for inflation.