Obama's Budget Creates Rift with Mayors, a Core Constituency
President Obama proposed cutting $300 million from CDBG, a favorite program among mayors. Saving it had been one of their biggest priorities for 2011.
Over the last two years, the country’s mayors have considered President Obama an ally in Washington. His days as a community organizer in Chicago illustrated his commitment to local issues. His Recovery Act helped cities weather difficult financial times. And his regular meetings with mayors were seen as proof that he took their concerns seriously.
Now Obama – who has touted himself as the mayors’ partner in the White House – finds himself in stark opposition to the very local leaders who have been among his staunchest supporters.
Obama’s budget director Jacob Lew wrote in Sunday’s New York Times that the Community Development Block Grant program would face a 7.5 percent, $300 million cut in the president's 2011-2012 budget. CDBG provides $4 billion annually to local governments for programs such as affordable housing and job training, among other things, that are specifically targeted to aid low- and moderate-income residents. It's especially attractive mayors because, unlike other federal grants, CDBG sends money directly to cities instead of through the states.
Preserving funding for CDBG had been one of the highest priorities this year for groups representing mayors and other local leaders.
Lew also said the budget would include a 50 percent cut -- about $350 million -- to the Community Service Block Grants, which provide funding for anti-poverty programs. The president’s full budget will be released next week.
Mayors across the country say that, if it's enacted, the administration’s proposed CDBG cut will be devastating to their residents and will compound the budgetary struggles city halls everywhere are experiencing. “The impact is going to be tremendous on all cities across America,” Baton Rouge, La. Mayor-President Kip Holden told Governing. “This ... is something we cannot tolerate, and if this happens, you’re going to watch the slow demise of a lot of projects that have been worthy.”
Lew wrote in the Times that Obama’s budget will propose a five-year freeze on discretionary spending, aside from national security programs, and the president had to make tough decisions as the budget was crafted. “While we know from mayors and county leaders how important these grants are for their communities, and are very aware of the financial difficulties many of them face, the sacrifices needed to begin putting our fiscal house in order must be broadly shared,” Lew wrote.
But mayors and groups representing them say those who seek to cut the program are trying to balance the nation's budget on the backs of its most vulnerable residents. Holden also says the decision could have the unintended effect of actually furthering job losses, since cash-strapped cities will increasingly lay off employees if they lose funding, as will the non-profit organizations funded with CDBG money that gets funneled through cities.
Mayors and councilmembers argue that at a time of elevated unemployment, CDBG funding is needed now more than ever; some had even hoped the administration would increase its funding. “I think it’s not fair, it’s not right, and these problems we address with the money are not going to go away,” Akron Mayor Donald Plusquellic told Governing.
In a statement following the CDBG announcement, the National League of Cities responded that the move will have a “very real impact” on thousands of worthwhile projects. And in a letter to Obama last month, the league and other groups representing county and city leaders said they were "puzzled" that the CDBG cuts were even under consideration, given the president’s campaign promises to fully fund the program.
“We didn’t see this level of cut even under some previous administrations who were not perceived as having such strong constituent support in big cities,” Rolf Pendall, director of the Metropolitan Housing & Communities Policy Center at the Urban Institute, told Governing. “While I understand the need to exercise fiscal discipline, it’s a very difficult time to impose that discipline on cities and states.”
Pendall said the administration’s decision to slash CDBG funds is particularly troubling because it does not appear to have been based on any studies of the program’s effectiveness. And because cities have already cut their budgets to the bone, services funded with CDBG money will likely be scaled back or eliminated if the grants shrink. “I don’t think this is money that can easily be made up elsewhere” in city budgets, Pendall said.
The Office of Management and Budget communications staff declined to discuss the CDBG cuts with Governing.
Originally, CDBG advocates had speculated that the program could face a 25 percent cut in the White House budget, so they recognize the situation might have been worse. But mayors feared anything short of full funding would send a dangerous message to conservatives in Congress. The House Republican Study Committee – which counts nearly three-fourths of House Republicans among its members – has proposed eliminating the program entirely.
“What bothers me is, if my own president who worked in the neighborhoods doesn’t understand and appreciate the importance of this… then when we get to the Tea Party -- who doesn’t know and doesn’t care (about CDBG) -- they’re liable to say ‘even the president doesn’t support it,’” said Plusquellic, of Akron, who is a Democrat.
Local leaders also are not pleased that the administration highlighted the CDBG cut in the Times piece. Tom Cochran, who heads the U.S. Conference of Mayors, called that decision “ill advised” and said from a political perspective, it would have been better for the program's advocates if the administration had not chosen to tout its cuts to that program in particular.
In an effort to mitigate the sting of Sunday’s news, administration officials held a conference call Saturday with members of organizations representing local government to give them a preview of the budget and let them know CDBG would be cut, before they would see it in the newspaper. And in the weeks leading up to the decision to cut CDBG, Obama met with local leaders to inform them that the program could be on the chopping block.
“We were not caught by surprise,” said James Mitchell, a Charlotte, N.C. city council member and president of the National League of Cities. Until Saturday, Mitchell said, “they never told us a percentage, but they did tell us CDBG was a likely candidate. (Obama) did not operate in a vacuum.” While Mitchell said he understands the president’s desire to reduce the deficit, he believes other programs besides CDBG should have faced cuts instead.
On Tuesday, leaders from the National Policy Alliance, a public policy institute that focuses on issues of concern to African-Americans, met with Obama. East Orange, N.J. Mayor Robert Bowser attended the meeting, but he told Governing discussion of the budget was "limited." Still, he was optimistic of the program's future.
"I think there's enough folks in Congress ... that also understand the value of CDBG funds in particular," said Bowser, who is also president of the National Conference of Black Mayors. "It will take a hit. It may not be as big as what it is (in the prosposed budget)."
Salt Lake City Mayor Ralph Becker said the CDBG cuts are not a reflection of Obama’s view of cities, and he emphasized that the president has already proven his commitment to municipalities.
Still, he said, that doesn’t lessen the sting of Sunday’s announcement. “It’s a program that has proven itself in its effectiveness, and that makes it particularly painful to think about reducing that investment,” Becker said.