Congress Rejecting Cuts in Community Development Funds

From the LISC e-newsletter,

Federal Budget News: Senate, House Budgets Reject Some CD Funding Cuts
The House and Senate have approved budget resolutions that assume rejection of some or all of the $2 billion in funding cuts for community development that the Bush Administration proposes. However, the budget resolution sets only broad guidelines and is not binding. It is only the first step in a process that will take most of the year to resolve. As previously reported, the Administration proposes termination of 18 federal community development programs (see list below) now providing a combined $5.7 billion, replacing them with a single new $3.7 billion Commerce Department program -- a $2 billion cut.

LISC and others lauched grass-roots advocacy with significant early success. Thanks to the many of you who contacted members of Congress:

In the Senate, 58 Senators wrote in opposition to the proposal. Senators Paul Sarbanes (D-MD) and Norm Coleman (R-MN) offered amendments to restore the full $2 billion. First the Senate rejected the Sarbanes amendment, which would have cut tax loopholes to cover the difference, 49-51. Then, the Senate approved Coleman's amendment to add back $2 billion while cutting all other federal programs across the board, by 68-31.

In the House, 181 members led by Reps. Christopher Shays (R-CT) and Barney Frank (D-MA) the Budget Committee wrote in opposition to the proposal. The Budget Committee recommended an additional $1.1 billion, enough to restore more than half of the proposed cuts. The full House approved this level. The House and Senate will now try to work out their differences on their budget. Then the Appropriations Committees in the House and Senate will begin to consider specific funding levels for each program. It is unclear whether the House and Senate will move forward with replacing the 18 programs with a new Commerce Department program, although there is strong sentiment in Congress against it. We will keep you informed.

Note: The Administration's proposal would terminate these 18 programs.

HUD: Community Development Block Grants ($4.11 billion); CDBG set-asides ($302 million); Section 4 community capacity building grants ($30 million); Rural Housing and Economic Development grants ($24 million); Brownfields ($24 million); Section 108 loan guarantees ($6 million); Urban Empowerment Zones ($10 million).

Treasury: CDFI grants; Bank Enterprise Awards; and CDFI Native Initiatives ($55 million).

USDA: Rural Business Enterprise Grants ($40 million); Economic Impact Grants ($21 million); Rural EZs/ECs ($12 million); Rural Business Opportunity Grants ($3 million).

HHS: Community Services Block Grant ($727 million); Urban and Rural Community and Economic Development ($33 million); Rural Community Facilities ($7 million).

Commerce: Economic Development Administration ($255 million).