Lawmakers from both parties yesterday strongly criticized the Bush administration's proposal to eliminate the $4.7 billion Community Development Block Grant program and replace it and 17 other programs with a new $3.7 billion block grant program.
And some members of the House Financial Services Committee went further, lashing out at the president's top housing official for not pressing hard enough to stop the plan.
U.S. Department of Housing and Urban Development Secretary Alphonso Jackson underwent aggressive questioning yesterday at a hearing held by the panel as he defended the administration's proposed $28.5 billion budget for the department for fiscal 2006 and the plan that would consolidate HUD's CDBG program with other programs that would be administered by a yet-to-be-created agency within the Department of Commerce.
Although CDBG is popular on Capitol Hill there is intense political pressure on President Bush and lawmakers to reduce federal spending, and affordable housing advocates fear that the HUD budget will bear the brunt of the federal austerity effort. Critics of CDBG have said that it amounts to little more than a congressional slush fund for favored interests, and that grants given under it fund local projects on which local governments would not spend their own tax dollars.
At times during the oversight hearing yesterday and in recent weeks Jackson has appeared ambivalent about CDBG and the proposal to end it. Two weeks before the administration unveiled the plan in early February, Jackson praised the existing CDBG program that HUD currently administers. In a speech at a U.S. Conference of Mayors meeting here, the secretary called CDBG "a very important program [that] has worked and continues to work in this country."
Even yesterday, Jackson spoke glowingly of the program. In response to a question from Rep. Michael Fitzpatrick, R-Pa., the secretary said "most of the cities have done a very excellent job" of leveraging CDBG dollars.
Jackson said yesterday that he now supports the administration's plans but had not initially favored the CDBG proposal when he learned of it. Jackson said he argued within the administration that CDBG should remain at HUD, but did not ultimately prevail. "We made what we thought was a logical argument...but the decision was made," Jackson said.
During the hearing, Rep. Christopher Shays, R-Conn., said abolishing CDBG would be "a big mistake." The proposed overall HUD budget for fiscal 2006, which is $3.7 billion below the $32.2 billion that Congress appropriated for the department in the current fiscal year, would be "very harmful to our cities," Shays said.
Rep. Gary Miller, R-Calif., said Jackson's department was "doing a good job at community development" and that he saw no "reason at all to send [CDBG] over to Commerce." Miller said he had never heard "a greater uproar" from community leaders than he heard after news of the CDBG proposal spread last month. "There is not a better use of" federal dollars than CDBG, Miller said. "We shouldn't throw the baby out with the bathwater because somebody thinks it's a good idea."
Miller asked Jackson why he now supported the plan when he had previously opposed it. But Jackson said he lost the fight to keep CDBG at HUD. Miller then acknowledged that Jackson was in a politically difficult position. "You're stuck," Miller said.
The senior Democrat on the committee, Rep. Barney Frank of Massachusetts, said that the reduced HUD budget proposal for fiscal 2006 and the CDBG proposal represented the true face of President Bush's "ownership society" philosophy. "This is the 'you're-on-your-own society,'" Frank said. The administration is moving forward with the proposals in order to preserve billions of dollars in tax cuts, he said, adding that funding one month of the current war in Iraq costs more than the whole CDBG program.
Rep. Maxine Waters, D-Calif., said she was "very disappointed" with the HUD budget blueprint, which she called "patently inadequate." Gutting CDBG would have a "devastating impact" on communities, Waters said. Some small cities depend on CDBG monies for funding infrastructure projects, she said.
Rep. David Scott, D-Ga., called HUD's HOPE VI program, which Bush has also proposed abolishing, "arguably the foremost Republican housing program ever created," and said the plan to eliminate it was akin to "cruel and unusual punishment."
"We need you to be a fighter for these programs," Scott told Jackson. Jackson responded that the HOPE VI program, which pays for the elimination or rehabilitation of severely distressed public housing units, is not working and that the department currently estimates there are about $3 billion in unspent HOPE VI grants outstanding. Bush has tried several times in recent years to eliminate the program, which the administration calls inefficient, but each time lawmakers have refused his request. Congress appropriated $143 million for HOPE VI in the current year. CDBG and HOPE VI funds can be leveraged in municipal bond deals.
In the written version of his testimony, Jackson said that the administration is also drafting legislation that would implement a proposed $2.5 billion tax credit that could be used in conjunction with municipal bonds in order to promote the construction or rehabilitation of affordable single-family homes for low-income homebuyers. Bush has been promoting the idea since his 2000 election campaign.
