REPORT SHOWS CUTS TO HUD BUDGET WOULD HAVE DEVASTATING IMPACT

• Details of Impact of Budget Cuts on Over 1,000 Communities
• Comments on HUD Budget Cuts

WASHINGTON - A new report issued today by the Department of Housing and Urban Development says $1.6 billion in cuts that Congress is considering to HUD's budget would have a devastating impact on the poorest people and communities in America.

President Clinton said today that increases are needed in HUD's budget. The President said: "We have worked very hard and made great strides to reverse decades of decline in our cities, transform public housing, and create new jobs and opportunities for millions of Americans. But the job is not done. Our nation needs the budget I proposed for HUD so we can move forward to help even more hard-working families get the jobs and housing they need to build better futures."

HUD Secretary Andrew Cuomo said: "Cuts that Congress is considering to HUD's budget would deprive 97,000 people of jobs, 156,000 families of affordable housing, and 16,000 families and individuals who are homeless or have AIDS of vital housing assistance. At a time of unprecedented national prosperity, Congress shouldn't rob the poorest Americans to provide reckless tax cuts and create a new deficit. Now is the time to invest in a brighter future for people and places left behind."

The House Appropriations Committee made the cuts in July, reducing spending on HUD programs by $1.6 billion in Fiscal Year 2000 below the current year's level. The full House is expected to vote on the HUD budget in September. The Senate has not yet acted.

Cuomo was joined at a news conference today by representatives of a wide range of organizations whose members would be hurt by the cuts. Speakers at the news conference included: Martin Luther King III, President of the Southern Christian Leadership Conference; Cedar Rapids, Iowa, Mayor Lee Clancy, representing the U.S. Conference of Mayors; National Association of County Officials President Vernon Gray, who is a councilman in Howard County, Maryland; and Cushing Dolbeare, who heads the group Meeting America's Housing Needs.

Groups expressing opposition to cuts in HUD's budget include: the National Association of County Officials, the U.S. Conference of Mayors, the Southern Christian Leadership Conference, the NAACP, the National Hispanic Leadership Agenda, the National Low-Income Housing Coalition, the National Urban League, the National Council of Senior Citizens, the National Council of La Raza, the National Association of Latino Elected and Appointed Officials, the Public Housing Authorities Directors Association, the Child Welfare League, Meeting America's Housing Needs, and the Mortgage Bankers Association of America. (See attachment for statements by organizations.)

The new HUD report is called Losing Ground: The Impact of HUD Budget Cuts on America's Communities. The report says cuts to HUD's budget that were approved by the House Appropriations Committee would:

• Fail to fund the Clinton Administration's request for 100,000 rental assistance vouchers at a time when worst case housing needs remain at an all-time high and time on waiting lists for housing assistance is growing. Despite a booming economy, a record 5.3 million families have worst case housing needs -- defined as paying over 50 percent of their income on rent. The families are made up of 12.5 million individuals, including 4.5 million children and 1.5 million senior citizens.

• Fail to fund the rehabilitation of almost 28,000 housing units to create quality housing for low- and moderate- income renter and owner families.

• Slow down the fight against housing discrimination. The 6 percent cut in the Fair Housing Assistance and Fair Housing Initiatives programs would deny the assistance needed by state and local fair housing agencies to process fair housing complaints and would deny funds to local communities that want to establish new private fair housing organizations where local public agencies do not exist.

• Increase disadvantaged children's exposure to lead paint poisoning. Lead poisoning is the foremost environmental health risk to American children, especially poor children and those living in older, poorly-maintained housing. The $10 million cut in the Lead Hazard Control Grant program will mean that about 900 private homes will not be made lead safe, putting at least 600 low-income children under 6 years of age at risk of permanent developmental and health problems from elevated blood lead.

• Deny assistance to almost 16,000 homeless families and people with AIDS, including transitional and permanent housing, mental health counseling, job training and drug treatment.

• Significantly under-fund job creation nationwide. Community economic development activity under the Community Development Block Grant program would be cut by $250 million from the level enacted in 1999, and $5 million would be cut from the job-generating Brownfields Economic Development Initiative. This means that approximately 97,000 jobs that could be created by these programs would not be created. CDBG is a flexible source of funds used by local officials to create jobs, construct or rehabilitate shelters for the homeless and battered spouses, make buildings accessible to the elderly and handicapped, help working families become first-time homeowners, and fund other community development activities. The Brownfields program provides grants that leverage private dollars to redevelop formerly contaminated commercial and industrial sites.

• Cut the Administration's requests for critical programs under CDBG, including: the Community Empowerment Fund to develop and expand businesses in distressed areas; Youthbuild to train young people for careers in home construction and rehabilitation; and the Community Outreach Partnership Centers Program that allows colleges and universities to act as community building partners.

• Deny funding to the proposed America's Private Investment Companies program. Modeled after a highly successful Small Business Administration program, APIC would stimulate $1.5 billion in private investment in large-scale businesses in distressed areas, both urban and rural, every year - at cost of just $37 million for credit subsidy and program operations

Cuomo said now is the time to invest in building a stronger, more prosperous America through HUD programs because:

• America has the best economy in the world today. This is a contrast to just six and a half years ago, when the budget deficit was $290 billion and rising. Wages were stagnant, economic inequality was growing, social conditions were worsening.

• In the 12 years before President Clinton took office, unemployment averaged more than 7 percent and the national debt quadrupled. Since then the Clinton Administration has shrunk unemployment to a 29-year low and replaced record deficits with a surplus of $99 billion.

• America has a responsibility to carry out its domestic priorities. The massive tax cut approved by the Congress would lead to deep, across-the-board cuts in domestic priorities. In order to pay for their risky tax cut and fund the military at the same level as the President, Republicans would have to cut more than $700 billion from domestic spending. In 2009, that would mean roughly a 50 percent cut in domestic programs across the board.

COMMENTS ON HUD BUDGET CUTS

Vernon Gray, President, National Association of County Officials: "Counties across the nation depend on HUD to help fund vital programs that benefit millions of families. Cuts in proposed funding for HUD will hurt our efforts to increase the supply of affordable housing, create jobs and revitalize communities."

Steve Protulis, Executive Director, National Council of Senior Citizens: "Cuts to HUD's budget would reduce housing assistance available to older Americans struggling to get by on fixed incomes. Congress should not endanger the security and safety of the poor, the disabled and the elderly who simply cannot afford to pay the costs of housing."

Kweisi Mfume, President, National Association for the Advancement of Colored People: "The NAACP opposes Congress' attempts to cut HUD's budget. These cuts would deprive low-income families around the country of needed housing assistance, would slow the economic recovery of our cities, and would weaken efforts to fight housing discrimination."

Raul Yzaguirre, Executive Director, National Council of La Raza: "The National Council of La Raza has worked with HUD on a variety of housing and economic development projects and we know firsthand the positive impact that these programs have had in the Latino community. For that reason, we are strongly opposed to the proposed cut in HUD's budget which would eliminate much needed housing, employment, and other economic opportunity programs for families around the country."

Arturo Vargas, Executive Director, National Association of Latino Elected and Appointed Officials: "The National Association of Latino Elected and Appointed Officials strongly opposes Congress' attempt to cut HUD's budget. Cities and communities around the country would be forced to cut back on programs for housing and economic development that are vital to extending the progress and prosperity of the Hispanic community. We urge Congress to reconsider these cuts."

Content Archived: January 20, 2009