HUD budget woes are nothing new. Federal budget authority for low-income housing assistance took a deep plunge in the early 1980s, and ever since, success has been measured largely by how much damage to housing programs could be prevented. Despite major housing legislation in 1990 that, among other things, created the HOME program, federal investment in low-income housing remained anemic through much of the 1990s.
Two factors allowed for some gains in the late 1990s – modest, but forward movement nonetheless. The first was intense budget advocacy by HUD Secretary Andrew Cuomo, who fought hard for more investment in low-income housing both within the Clinton Administration and on Capitol Hill. Veto threats over unacceptable HUD budgets in the last two years of the Clinton Administration were strong evidence that Secretary Cuomo was doing his job.
The second factor was the state of the economy in general and the promise of federal budget surpluses for the first time in four decades, both of which made Cuomo’s arguments more powerful. The contention that we could not afford to fund low-income housing programs no longer applied, and the debate shifted to how much of the surplus should be directed to new spending. In this context, bipartisan enthusiasm for new production of rental housing for the lowest-income families gained momentum into the fall of 2000. At long last, renewed investment in housing programs was both financially and politically thinkable.
As of this writing, we await the Bush Administration’s second budget proposal, but it doesn’t look promising. The economy is in a slump of unknown duration. The ruinous tax cut of 2001 made the surplus disappear before our very eyes, and we have returned to the bad old days of federal budget deficits.
And just when they need it most, housing programs no longer have a champion at HUD. The first Bush budget proposal for HUD was largely recognized as the product of the powerful Bush Office of Management and Budget, rather than a reflection of a thoughtful analysis of housing needs by the new HUD Secretary Mel Martinez. To give him the benefit of the doubt, Secretary Martinez had barely arrived in Washington when his first budget was sent up to the Hill. However, as the appropriations process dragged on through 2001, there was little evidence that the Secretary or any other HUD official was making the case for funding the programs they administer. The department kept its focus on management improvements, which, while useful, result in savings nowhere near the scale of needs.
Now, a year into the Bush Administration, housing advocates are bracing for what are rumored to be major cuts to HUD. After all, when budget deficits are coupled with popular new spending on war and “homeland” defense, discretionary programs without powerful supporters are likely to be where budgeters go for extra funds. And it seems HUD is not going to be a strong advocate for itself. In October 2001, HUD Chief Financial Officer Angela Antonelli was asked about plans for the FY2003 HUD budget submission to the White House in a meeting with NLIHC members. We will all have to make sacrifices, she responded.
Real, meaningful increases in federal housing investment cannot be left to negotiations with the appropriators. By then, it is too late, especially without a champion at HUD. We need to alter the dimensions and the locus of the debate. One rationale for establishing a National Housing Trust Fund capitalized by dedicating profits from the FHA program is that it moves the discussion about low-income housing funding outside of the narrow parameters of the annual appropriations process. (For more information on the National Housing Trust Fund proposal, see www.nhtf.org.)
We need to be talking about lots more money. Even if the Bush budget proposal contains incremental increases to programs, rather than cuts, the amounts that would be left for distribution by the HUD-VA-Independent Agencies Subcommittees would still be so inconsequential relative to the need that appropriations would remain a contest among people who should be partners. Talking about single digit increases to existing housing problems is wholly inadequate.
And we need to do our talking much earlier in the budget process. Now, when the Senate and House Budget Committees are developing their FY2003 proposals, is the time to be talking to them about where housing is in the budget resolution priorities and how to elevate it higher. Representative Barney Frank (D-MA), Ranking Member of the Housing and Community Opportunity Subcommittee of the House Financial Services Committee, has also called for a major new infusion of federal dollars into low-income housing programs in this year’s budget resolution.
Let’s not succumb to the deficit-by-design excuse for HUD budget-slashing. We have better arguments and other choices.