By Eugene T. Lowe
March 7, 2005

Opposition to the Administration's proposal to eliminate the Community Development Block Grant (CDBG) program increased dramatically during the opening days of March, with Conference of Mayors President Akron Mayor Don Plusquellic testifying before the House Subcommittee on Federalism and the Census on the morning of March 1. He also spoke to a room full of Senate staff in the afternoon. On March 2, Housing and Urban Development Secretary Alphonso Jackson testified before the House Financial Services Committee where the CDBG budget proposal was criticized by both republicans and democrats. Also on March 2, 55 Senators signed and sent a bi-partisan letter to the Chair and Ranking Member of the Senate Budget Committee supporting full funding for the CDBG program and opposing the program's transfer to the Department of Commerce. On the same day the Senate Democrats also sent a letter to the Chair and Ranking Member of the Budget Committee with strong support for the CDBG program. And as the week closed, the House began to circulate a bi-partisan letter which will go to its Budget Committee supporting full funding for CDBG.

the Chair and Ranking Member of the Budget Committee with strong support for the CDBG program. And as the week closed, the House began to circulate a bi-partisan letter which will go to its Budget Committee supporting full funding for CDBG.

Plusquellic, testifying along with Angelo D. Kyle, President of the National Association of Counties (NACo), James C. Hunt, First Vice President of the National League of Cities NLC), and Chandra Western, Executive Director of the National Community Development Association (NCDA), told the House Subcommittee that the Conference of Mayors "is 100 percent opposed to the budget proposal that would eliminate the CDBG program by merging it with 17 other programs, moving the function to the Commerce Department, and cutting overall funding" to $3.71 billion.

The oral remarks of all four stakeholders — Plusquellic, Kyle, Hunt and Western — expanded and embellished a joint written statement by the groups that was submitted to the subcommittee. In general the written statement argued that CDBG has performed at a high level for 30 years which is substantiated by HUD program data. For example in FY2004, "78,000 jobs were created or retained. In addition ... 159,703 households received housing assistance from CDBG. Of this amount, 11,000 became new homeowners, 19,000 rental housing units were rehabilitated and 112,000 owner occupied homes were rehabilitated."

The joint statement also described several outstanding examples of CDBG at work in the community. The projects were award winners during the 30th Anniversary Celebration of the CDBG program last year. They projects came from the Jacksonville (FL), Los Angeles County, and Portland (OR), Yuma (AZ) , and Dayton (OH).

The joint statement took issue with the Office of Management and Budget (OMB) review of CDBG in its Performance Assessment Rating Tools (PART) process. In that review, OMB concluded that the CDBG program lacks performance outcome measures. The local government joint testimony argued: "Our analysis of the PART suggests that it is an in appropriate measure of a block grant program's performance. Instead, it lends itself to an assessment of categorical programs" The joint statement also noted that a framework had been agreed to by local governments and OMB that would fairly evaluate the outcomes of CDBG, but OMB had ignored that effort and recommended the budget proposal to eliminate CDBG. Mayor Plusquellic said: "I know that national organizations representing appointed officials worked for a year with OMB to develop a new performance outcome measurement system. We are very disappointed that OMB turned aside an agreed-upon framework of sound performance measures and instead proposed the elimination of CDBG."

The joint statement also questioned the Commerce's Department's capacity to administer a multi-billion dollar program. The statement said that the Commerce Department's "$257.4 million economic development grant and loan programs are dwarfed by HUD's $4.7 billion CDBG program." In his opening remarks, Representative Michael R. Turner, Chairman of the Subcommittee, also echoed these concerns: "There are several aspects of this proposal that concern me. Most significantly, the Administration is proposing a massive realignment of programs associated with longstanding and complex problems such as housing, job creation, business, community and economic development. We do not have specific details on this reorganization plan, or a transition plan to move these programs to the Department of Commerce. Finally, the Administration has not spelled out a clear rationale for reducing the historic role of HUD in addressing these issues. The Department of Commerce does not have historical successes in urban revitalization."

Also testifying in the House Subcommittee hearing were Roy A. Bernardi, Deputy Secretary, HUD; Clay Johnson, III, Deputy Director for Management, Office and Management and Budget (OMB), and David A. Sampson, Assistant Secretary for Economic Development, Department of Commerce.

On the afternoon of March 1, Plusquellic along with Jackson (MS) Mayor Harvey Johnson briefed Senate staff on the importance of CDBG to communities and our opposition to the Administration's budget proposal to eliminate CDBG. Joining the mayors in the briefing were Joe Gray, City Manager of Portland, Maine, Larry Segal, Executive Director, Governor Rendell's Office of Housing and Community Revitalization, PA, Paula Sampson, Executive Director, Fairfax County, Department of Housing and Community Development, VA, Peter Carey, President, Self Help Housing, Visalia, CA, Amy Lockwood, Executive Director, Concord Area Trust for Community Housing, NH, and Doug Woodruff, Senior Vice President, Community Development, Bank of America.

On March 2, HUD Secretary Alphonso Jackson told the House Financial Services Committee in a hearing on the 2006 HUD Budget that with respect to CDBG "we made our case. We believe that clearly Housing and Urban Development could manage the program. Commerce was decided to be the agency." During the hearing, Representative Gary Miller (R-CA) said of CDBG: "As far as I'm concerned, there's a huge difference" between the missions of Commerce and HUD. "I don't see any reason at all to send it (CDBG) over to Commerce."

On March 2, 55 Senators sent a letter to the Chair of the Budget Committee, Senator Judd Gregg (NH), and Ranking Member, Senator Kent Conrad (ND). The letter urged the Budget Committee "to maintain the federal government's current commitment to community development programs at the Department of Housing and Urban Development and support a budget allocation of $4.732 billion in Function 450 for CDBG, Section 108 economic development loan guarantees, and the Brownsfields Economic Development Initiative."

Senate Democrats on the Committee on Banking, Housing and Urban Affairs also sent a letter on March 2 to Senators Gregg and Conrad in opposition to the elimination of CDBG. The letter said: "We want to point out that, just last year, HUD Deputy Secretary Bernardi called the CDBG program -a great program- that -ranks among our nation's oldest and most successful programs.- We hope you will maintain the funding for the CDBG program and keep it in its current location at HUD."

Finally, on March 2, Representatives Christopher Shays (CT) and Barney Frank (MA) began circulation of a letter to House Budget Committee Chair Jim Nussle (IA), and Ranking Member John M. Spratt( SC). The letter concludes: "CDBG is a program that works. Therefore, we support full funding for CDBG, and believe it is premature for the Budget Resolution to even address such a far-reaching change to the program before the committees of jurisdiction have even had an opportunity to hold hearings on the topic."

Both the Senate and House Budget Committees are expected to consider Budget Resolutions the week of March 7.