The Bush administration's proposal to abolish the Community Development Block Grant program, replacing it and 17 other programs with a new, less well-funded block grant program administered by the Department of Commerce, faces an uphill battle in Congress, sources said yesterday.
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The proposal, unveiled two weeks ago, would eliminate the Department of Housing and Urban Development's $4.7 billion CDBG program and replace it and 17 other federal development programs with a $3.7 billion Strengthening America's Communities Grant Program that would be administered by a yet-to-be-created agency within the Commerce Department.
Congress funded the 18 programs that would be combined at more than $5 billion in the current fiscal year that began Oct. 1. Currently, CDBG funds can be leveraged in municipal bond transactions.
Brian M. Riedl, an analyst at the conservative-leaning Heritage Foundation, said the proposal is "great" because it eliminates "a lot of diverse, failing community development programs," but was skeptical about how the plan would fare in Congress.
"At this point lawmakers have expressed more interest in protecting their turf than in enacting the necessary reforms to save tax dollars and make programs more effective," Riedl said. Nonetheless the proposal is a good one, he said. "CDBG is so overly earmarked by Congress than it serves as little more than a congressional slush fund for favored interests ... it funds local projects that local governments would not spend their own tax dollars on," Riedl said.
Barbara Sard, director of housing policy at the liberal-leaning Center on Budget and Policy Priorities, said the proposal would probably not pass Congress, at least not this year. Despite the slim chance of it being enacted, the proposal has implications for the HUD budget in general, she said.
Even if Congress rejects the proposal, which she said would in effect move CDBG from HUD to Commerce, "I am concerned about the effects of the proposal on programs that affect low-income people," Sard said. The administration has proposed deep cuts in the HUD budget in fiscal 2006 and if CDBG remains under that department, funding levels will suffer, she said.
Plans for actually creating the proposed program do not appear to have advanced far. A lobbyist who met with senior administration officials to discuss the program last week said details were scant. "The administration doesn't seem to have thought through how it is going to implement the proposed changes," he said.
An official told him a process by which lobbyists and advocates can participate in shaping the implementing legislation would soon be created. Commerce Department spokesman Matt Crow did not return telephone calls for this article.
Although lawmakers are still awaiting specific details of the proposal from the Bush administration, which expects to unveil implementing legislation for the proposed Strengthening America's Communities Grant Program in the summer, a handful have expressed support for the plan, while others have criticized it.
However, the heads of the Senate and House committees that have jurisdiction over the current CDBG program have yet to weigh in on the proposal. Sen. Richard Shelby, R-Alabama, chairman of the Senate Banking, Housing, and Urban Affairs Committee, is keeping an open mind on the proposal, said Andrew Gray, communications director for the committee.
Shelby wants to see more details of the plan before commenting on it, Gray said. A panel of Shelby's committee is expected to begin examining the proposal as part of the fiscal 2006 appropriations process, but no date for a hearing has yet been scheduled, Gray said.
House Financial Services Committee chairman Michael Oxley, R-Ohio, has not yet taken a position on the proposal, said Oxley spokeswoman Sarah Morgan. A spokesman for Rep. Bob Ney, R-Ohio, chairman of the committee's housing and community opportunity panel, did not return telephone calls.
But Rep. Don Young, R-Alaska, chairman of the House Transportation and Infrastructure Committee, has endorsed the proposal. "The administration's focus on job creation, economic development, and accountability is a good one," Young said.
Rep. Bill Shuster, R-Pa., chairman of the same committee's panel on economic development, said he supports the proposal in principal. Both Young and Shuster said the new program should be modeled on the Economic Development Administration, an agency in the Commerce Department.
However, most lawmakers who have expressed opinions on the proposal have criticized it, some in scathing terms. Sen. Kit Bond, R-Mo., chairman of the Senate Appropriations Committee's panel on housing and urban development, denounced the plan, which he said would wipe out "HUD's flagship program for funding urban and economic development activities."
Under the proposal HUD is "being neutered as a significant partner to state and localities in terms of economic and urban development projects," and Commerce would likely make the proposed program a "low priority," Bond said.
Sen. Charles Schumer, D-N.Y., a member of the Senate Banking Committee, said CDBG is an "important tool" for growth. Sen. Hillary Rodham Clinton, D-N.Y., said the program "is a lifeline for many individuals already struggling to make ends meet."
Rep. Barney Frank of Massachusetts, the senior Democrat on the House Financial Services Committee, has repeatedly criticized the proposal. Rep. Maxine Waters, D-Calif., a member of the same committee, said the president's proposals are "designed to decimate the CDBG program, to end it as we know it, not to improve the program."
Rep. Carolyn Kilpatrick, D-Mich., a member of the House Appropriations Committee, and Rep. Mel Watt, D-N.C., a member of the House Financial Services Committee, have also criticized the plan.
