WASHINGTON - House Financial Services Committee members blasted Housing and Urban Development Secretary Alphonso Jackson yesterday over the Bush administration's plans to reduce funding for the Community Development Block Grant program and kill the HOPE VI program for fiscal 2009, arguing that the cuts do not make sense for a country rife with housing troubles.

Jackson faced harsh words from committee members at the hearing as he testified on President Bush's proposed $38.5 billion HUD budget request for fiscal 2009, which would start Oct. 1.

The administration is proposing a 30% cut in funding for the CDBG program, which provides grants to state and local governments to fund economic development projects and can be used in projects financed by municipal bonds.

It is also proposing to eliminate the HOPE VI program, which provides grants to public housing authorities to demolish severely distressed public housing units and replace them with mixed-use, mixed income developments. The grants are often used as leverage for projects that are financed with tax-exempt bonds.

While Bush's HUD budget request would boost funding for Section 8 tenant-based housing vouchers by $336 million, committee members said that the increase is a sop to brush over the cuts in the other two programs.

"There are certain cities that do not need CDBG funds," Jackson said, pointing to Palm Beach, Fla., in particular. Jackson said Congress should reform the "dated" program to direct funds to needy cities.

"Directing the money doesn't mean we have to have a cutback [in CDBG funds]," said Rep. Joe Baca, D-Calif.,. "Shouldn't we increase funding when we're going into a recession?"

Committee chairman Barney Frank, D-Mass., interrupted Jackson repeatedly, asking whether the cuts would benefit the cities that need funding. "If we adapt your change, if we cut out the cities that do not need the funds." he said. "Nothing goes to increase money for [the cities actually in need]?"

Jackson eventually answered that no such increase has been proposed.

The proposed funding for HUD for fiscal 2009 would be $1.07 billion more than the amount the administration proposed for fiscal 2008, according to budget documents the administration released last month. However, it is unclear whether any of the proposals will be approved by Congress, as Bush approaches his final year in office.

The cuts to the CDBG program mark the fourth consecutive year the administration has tried to weaken it. Last year, Bush's proposal included a 28% cut in the grants, and the year before that, the administration attempted to replace the program with another, less well-funded program called the Strengthening America's Communities Initiative.

Lawmakers rebuffed the administration both times. They provided nearly $1.0 billion more than the administration requested for fiscal 2008 , and saved the CDBG program in fiscal 2007, agreeing only to a 10% funding cut.

The administration also has repeatedly tried to abolish the HOPE VI program, which also has been salvaged by lawmakers. The Bush administration maintains that the program is inefficient.

Jackson said yesterday that public housing authorities have not spent $1.4 billion in the HOPE VI pipeline.

Rep. Keith Ellison, D-Minn., argued that zeroing out the HOPE VI program, which has helped many cities in his state, including Minneapolis, would not make sense.

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