National Low Income Housing Coalition calls Congressional Proposals Anti-Poor

Leading Advocacy Group Calls on HUD to Withdraw Bill

• Forthcoming bill will harm neediest Americans.
• Legislation represents a poor use of scarce federal resources.

“From what we have learned about HUD’s plans, their legislation would negate significant elements of national housing policy that have had bipartisan support for many years,” said Sheila Crowley, NLIHC President. Crowley wrote to Secretary Jackson that “NLIHC believes that the program changes proposed by the bill would be devastating to those currently participating in HUD affordable housing programs as well as to the millions most in need of such assistance.”

The proposed bill will substantially change income targeting for the voucher program (and for public housing residents in agencies participating in the Moving to Work program), and would allow housing authorities to serve much higher income families. Currently, 75% of vouchers must go to households with incomes at or below 30% of the area median. HUD’s bill would give 90% of vouchers to households with incomes at or less than 60% of the area median.  In Washington, D.C., 60% of the area median income is $54,000 a year, while 30% is just $27,000 a year. Nationally, 30% of area median income is roughly $15,000, representative of the income of most voucher recipients today; however, 60% of area median income is nearly $30,000.

Additionally, the bill will allow time limits in the voucher program, would change rent setting policies in both the voucher and public housing programs and remove current protections for project-based Section 8 residents, among other troublesome features.

NLIHC and its members, including a wide range of housing advocates and providers, take the position that federal housing resources should be targeted to those with the most serious housing problems. Nationally, 84% of those households that spent more than half of their income on housing are households with incomes at or less than 30% of the area median.

“HUD’s legislation would direct federal housing assistance away from families most in need of affordable housing, an unsound and indefensible use of scarce federal resources,” says Crowley wrote.

On House and Senate Budget Resolutions

(March 21, 2005)  In action on their respective budget resolutions last week, neither the U.S. House of Representatives nor the U.S. Senate did little to reduce the mounting federal deficit, but, at the same time, cut domestic discretionary spending that will be felt most by low income Americans. Both the House and Senate budget plans contain costly tax cuts that combined with increased defense spending will make the federal deficit worse.

The House agreed to $843 billion in discretionary spending and five-year caps on domestic discretionary and entitlement programs that President Bush proposed in his budget in February. The Senate approved $848 billion in discretionary spending and will impose three-year caps on domestic discretionary programs.

In action on the Community Development Block Grant and programs in the President's Strengthening American Communities Initiative (SACI), the Senate approved an amendment by Senator Norm Coleman (R-MN) to add $2 billion above the President's request and opposing the transfer of the program from the Department of Housing and Urban Development to the Department of Commerce.

However, the offsets for this $2 billion will come from other discretionary programs. Earlier the Senate defeated on an amendment by Senator Paul Sarbanes (D-MD) that would have restored funding with offsets from closing corporate tax loopholes.

In its resolution, the House adopted an amendment to restore $1.1 billion to CDBG, to be offset by a reduction in the spending account for other low income programs. Moreover, the House amendment did not take a position on where the program should be housed.

"While we think the Sarbanes amendment was far preferable to the other attempts to save CDBG, the National Low Income Housing Coalition is pleased that Congress made it clear to the President that low income communities should not be expected to bear such a heavy cost in any deficit reduction strategy," said Sheila Crowley, President of the National Low Income Housing Coalition. "But Congress did not take up the cuts to the rest of the HUD budget that the President wants, and with the budget caps, will cause more hardship for people who are struggling in our low wage economy and on fixed incomes. That they can make these cuts in the same vote that they give more tax breaks to the well-to-do is astounding."

The Senate defeated the Feingold (D-WI)/Chafee (R-RI) pay-as-you-go amendment on a 50-50 vote that would require offsets for both tax cuts and spending increases. The Senate increased tax cuts in its resolution to $129 billion in tax cuts, well above the $106 billion in tax cuts in the House plan and the President's proposal. However, the Senate voted to restore $14 billion to the Medicaid program that the President had cut. The passage of this amendment, offered by Senator Gordon Smith (R-OR), is a rebuke of the President's plan to cut health care for the poor, ostensibly as deficit reduction.

"The differences between the House and Senate budget resolutions are substantial and do not bode well for a joint budget blueprint this year. But under any scenario, the needs and interests of Americans who have the least are clearly not priorities of this Congress, while the needs and interests of Americans who have the most are at the top of the Congressional agenda," said Crowley.

Proposed HUD Budget is Grossly Inadequate

• Huge cuts will be felt in every low income community
• Unwarranted changes to essential programs will undermine past successes and planned solutions

Housing for people with disabilities is cut. Housing for people with AIDS is cut. Public and assisted housing are cut. Fair housing is cut. Lead safety is cut. Indian housing is cut. Rural housing is cut. The housing block grant to cities and states is cut.

The most drastic cut is the complete elimination of the Community Development Block Grant, and the reallocation of 60% of its funding to the Department of Commerce for yet to be defined economic development activities. CDBG was a $4.1 billion program last year, with 25% going to affordable housing, another 33% used for public improvements in poor communities, and 11% funding the operating costs of day care programs, homeless shelters, senior centers, and similar programs.

The voucher program is spared the large cuts of past years, but the program today is only serving 95% of the number it served at the beginning of last year. Further, additional funds proposed for the voucher program are for the purpose of “vouchering out” public and assisted housing units that will be lost to the affordable housing stock.

While an additional $200 million that is proposed to be added to the HUD homeless program to provide permanent housing and supportive services to chronically homeless people with disabilities appears to indicate a commitment to the homeless programs, these funds are more than offset by the $120 million cut to housing for people with disabilities and the cut of CDBG funds used for homeless services.

“While NLIHC is relieved that there appears to be no further damage to the Housing Choice Voucher program in the FY06 budget proposal,” said Sheila Crowley, National Low Income Housing Coalition President, “we strongly object to the harsh cuts to other programs and the promise by HUD officials that they will push, later in the year, for a block grant resembling last year’s widely rejected, flexible voucher proposal.”

“The President is trying to appear to be getting tough on spending, but is pushing $1.3 trillion extension of his tax breaks for the rich. These are the wrong priorities at the wrong time,” said Ms. Crowley, “Congress must reject these lopsided priorities and adopt a budget this year that reflects the real needs and right priorities of the country.”

Katie Fisher, is a member of the National Low Income Housing Coalition, 202-662-1530 x222, Katie@nlihc.org

See Our Contributors list for more about the author

Political
Social
Economics
Religious
Science