The Department of Housing and Urban Development (HUD): FY2006 Budget

Publication Date: August 2005

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Social conditions

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Abstract:

In February 2005, a House Appropriations Committee reorganization plan abolished the Veterans Affairs, Department of Housing and Urban Development (HUD), and Independent Agencies Subcommittee, sending HUD to a new Treasury, Transportation, Judiciary, Housing and Urban Development, District of Columbia and Related Agencies Subcommittee. A similar but not identical change was made in the Senate, creating the Transportation, Treasury, HUD Subcommittee.

On February 7, 2005, the Administration submitted a $29.1 billion FY2006 budget request for HUD, which is 9% less than was provided in FY2005. The most controversial part of the budget proposal would eliminate the Community Development Block Grant program in HUD and transfer its purposes to the Department of Commerce, combining it with 17 other programs (that had approximately $5.6 billion of appropriations in FY2005) into a new $3.7 billion Strengthening America's Communities Initiative (SACI) grant program. According to the Administration, the initiative is intended to consolidate the delivery of federal community and economic assistance and to better target the spending to areas with the greatest needs. Other HUD programs affected by this proposal include rural housing and economic development, Brownfields, and Empowerment Zones. While funding for Section 8 tenant-based rental vouchers would be increased by close to $1.1 billion under the President's budget, the HOPE VI program is again slated for elimination, with the Administration also asking for a rescission of $143 million in HOPE VI funds that were appropriated for FY2005. Funding for Homeless Assistance Grants would be increased by $200 million, but funding for the Housing for Persons with Disabilities program (Section 811) would be cut by nearly 50%. The Lead-Based Paint Hazard Reduction Program would be reduced by $48 million and Native American Block Grants would be cut by $39 million.

On June 30, 2005, the House approved an FY2006 Transportation-TreasuryHUD (TTHUD) appropriations bill, H.R. 3058, funding HUD at more than $4 billion above the President's requested level. The bill rejects the President's SACI initiative and funds CDBG at HUD. It increases funding above the President's request for the Section 811, HOPE VI, CDBG, Brownfields, HOPWA, Lead-based Paint Hazard Reduction, and Fair Housing programs.

On July 21, 2005, the Senate Appropriations Committee passed its version of H.R. 3058, providing over $5 billion more for HUD than the President requested and over $1 billion more than the House version allocates. Like the House bill, the Senate version rejects the President's SACI initiative and funds CDBG and related programs within the HUD budget. It also increases funding above the President's request and the House approved level for HOPE VI, CDBG-related programs (including Section 108 loan guarantees), Native American Housing Block Grants, and Rural Housing and Economic Development. Floor action on the bill is expected sometime after the August recess.

This report will be updated as legislation proceeds in the 109th Congress.