Proposed HUD Budget Would Preserve CDBG

After proposing cuts a year ago, Obama's proposed budget seeks to preserve the popular grants program.
by | February 14, 2012

After advocating for cuts to the popular Community Development Block Grants program a year ago, President Barack Obama has proposed keeping the program at level funding in his FY 2013 budget.

In the proposed budget for the Department of Housing and Urban Development, Obama proposes nearly $3 billion for CDBG and $1 billion for the HOME program. That's level funding compared to FY 2012, but it maintains the steep cuts -- 12 percent for CDBG and 38 percent for HOME -- approved by lawmakers last year.

CDBG is a favorite among city leaders because it provides extremely flexible funding to localities that can be used for everything from infrastructure projects to affordable housing to job training. Unlike many other federal grants, it doesn't pass through the states.

The HOME program provides grants to states and localities to provide rental assistance to low-income residents and to build, buy and repair affordable housing.

Last year, Obama proposed a 7.5 percent, $300 million cut to CDBG's budget. He cited the country's difficult financial situation and the program's tendency to distribute money without "clear or focused impact" as his rationale for the cut.

The move riled mayors, who had been among Obama's biggest supporters, since with tight budgets of their own, they're increasingly unable to plug holes left by federal cuts.

But with Monday's budget, Obama expressed support for both CDBG and HOME, saying that the administration's proposal for level funding reflects its "commitment in a constrained federal budget to supporting municipalities and states as they navigate through their challenging fiscal climate."

The budget drew quick praise from the U.S. Conference of Mayors. Los Angeles Mayor Antonio Villaraigosa, the group's president, said in a statement that Obama  "has come through for our nation's cities" and called on Congress to pass his budget.

The president's proposed budget also seeks to restore funding for the Sustainable Communities grants program. A cornerstone of the administration's urban policy, the effort called for a new level of coordination between HUD, the Transportation Department and the Environmental Protection Agency in the area of regional urban and regional planning.

Those efforts were supported by a new Sustainable Communities grant program offered by each of those agencies, but the FY 2012 budget passed last year eliminated HUD's portion of the Sustainable Communities grants. HUD's new budget would restore the $100 million grant, but it could face an uphill battle, given its defeat in Congress just a few months ago.

Overall, HUD's budget calls for $44.8 billion in spending -- an increase of 3.2 percent over FY 2012 levels.

In a conference call with reporters Monday, HUD Secretary Shaun Donovan emphasized the agency's commitment to protecting low-income families in need of housing assistance, despite the fiscal challenges.


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