by Eugene T. Lowe
March 6, 2006

Representatives Christopher Shays (CT) and Barney Frank (MA) have initiated action in the U.S. House of Representatives to oppose the Administration’s proposed FY07 cut in the Community Development Block Grant (CDBG) program.

In a letter to House Budget Committee Chairman Jim Nussle (IA) and Ranking Member John Spratt (SC), Shays and Frank express strong opposition to the CDBG cut “by a net $1.502 billion – a 36 percent reduction – and within that function (a) cut of CDBG formula funding by $736 million – a 20 percent cut.” Shays and Frank have circulated their letter and ask other Congressmen to co'sign the letter. With a similar letter last year (also spearheaded by Shays and Frank), 181 representatives co'signed in opposition to the elimination of CDBG.

The Shays-Frank letter is being sent to Nussle and Spratt to influence the Budget Resolution, which will set a funding recommendation for the Community and Regional Development budget function 450, where the CDBG program is funded. Last year, the Budget Committee provided $1.1 billion more than the President’s request. The CDBG Coalition, a group of national organizations including the Conference of Mayors, is working to oppose the budget cuts in CDBG. This coalition was successful last year in opposing proposed cuts and also the transfer of CDBG to the Department of Commerce.

While the Shays-Frank letter opposes the Administration’s cut, and says that the “CDBG formula allocation was funded at $4.41 billion in FY01,” it does not ask the Budget Committee for a specific funding level. The letter concludes by urging Nussle and Spratt to “provide full funding for CDBG, at a level adequate to meet the important and growing needs of our communities.”

The CDBG Coalition, on the other hand, has sent a letter to Nussle and Spratt, urging “a Budget Resolution that will allow for full funding of CDBG formula grants at $4.5 billion as well as full funding for other critically important affordable housing and community and economic development programs.” The letter informs the budget committee that CDBG formula funding was cut nearly 10 percent in FY2006, and since FY2001, the reduction has been close to 16 percent. The Coalition letter asserts: “These reductions have real and harmful consequences for the efforts of states, counties and cities to strengthen our nation’s communities and improve the quality of life for low- and moderate-income Americans.”

An identical letter sent to the House from the CDBG Coalition was also sent to Senate Budget Committee Chair Judd Gregg (NH) and Ranking Member Kent Conrad (ND). The House Budget Committee is expected to consider the Budget Resolution on March 8; the Senate Budget Committee will also consider its Budget Resolution on March 8.

In addition, the CDBG Coalition is working on a CDBG Survey that has been completed and returned by several hundred communities. The survey results will be released within the next couple weeks at the National Press Club in Washington (DC).