On Thursday, July 21, the Senate Appropriations Committee voted 28 to 0 to approve a bill that would fund a variety of housing and community development programs for fiscal year 2006. The Senate bill, (H.R. 3058) provides funds for the Departments of Housing and Urban Development (HUD), Treasury, and Transportation. The House passed a similar but not identical bill on June 30.
The total size of the bill approved by the Appropriations Committee yesterday is $446 million larger than what was approved by the subcommittee on Tuesday. Subcommittee Chairman Kit Bond (R-MO) included provisions to step up IRS tax enforcement in order to generate the extra funds. Committee members voted to put some of the additional $446 million into Amtrak funding, but they also increased certain housing programs over the levels approved by the subcommittee. (The White House has threatened a veto of the bill over the Amtrak spending level.)

In his budget released earlier this year, the President recommended slashing HUD’s budget by 11.5 percent, eliminating the Community Development Block Grant (CDBG) and making deep cuts to public housing, housing for people with disabilities and other programs. For the most part, Representatives and Senators appear to have rejected the more draconian aspects of President’s housing recommendations. The overall budget for HUD approved by the Senate committee yesterday is $2.8 billion more than last year. Nonetheless, both the House and Senate bills contain some serious shortfalls for housing and community development programs.

Section 8 is the cornerstone of affordable housing programs, providing subsidies to help two million low-income families afford rental housing. Like the House-passed bill, the Senate subcommittee bill boosts spending for Section 8 vouchersover last year’s levels. Both bills provide about $15.6 billion for tenant-based assistance and $5.1 billion for project-based assistance – a total increase of about $660 million. While that increase is important, the National Low Income Housing Coalition finds that in order to replace the vouchers lost in fiscal years 2004 and 2005, funding for housing vouchers would have to be increased by at least $1.1 billion.

The Senate subcommittee bill reduces funding for the Public Housing Capital Fund by $252 million (a 9.7 percent decrease) to $2.327 billion and increases funding for the Public Housing Operating Fund by $969 million to $3.557 billion (a 40 percent increase). Those programs fare slightly better under the House-approved bill — $2.6 billion for the Capital Fund and $3.6 billion for the Operating Fund. Public housing agencies use the capital fund to provide for capital and management needs of public housing, including modernization and rehabilitation. Operating funds are used to pay for utilities, provide resident services and pay for salaries of public housing authority employees.

Senate appropriators added $7 million to HOPE VI , a housing program that revitalizes distressed public housing, bringing funding to $150 million. President Bush requested eliminating the program and the House funded it at just $60 million.

The President ignited a firestorm when he proposed eliminating the $4.671 billion Community Development Block Grant (CDBG) from the HUD budget and merging it with 17 different community development programs into a smaller block grant based at the Treasury Department. The Senate appropriations subcommittee rejected that approach, funding CDBG at $4.324 billion, a reduction of $347 million. The House funded CDBG at $4.217 billion.

The House provided a $100 million increase for Homeless Assistance Grants , while the Senate committee added $175 million (a 14 percent increase), which would bring the total to $1.415 billion. Section 811 Disabled Housing was funded at $238 million in fiscal year 2005. The House would keep that amount for 2006; the Senate committee bill would increase it by just $2 million. The Native American Housing Block Grant would be level-funded at $622 million under the Senate bill; the House would cut it to $600 million. The $281 million Housing Opportunities for People with AIDSprogram would grow under the House bill to $290 million (a 3.2 percent increase); the Senate committee funds it at $287 million. Both the House and Senate bills would level fund the Section 202 Housing for the Elderly program at $742 million.

Visit the National Low Income Housing Coalition web site for more information and a chart detailing proposed fiscal year 2006 housing funding: www.nlihc.org .

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