Budget Constraints May Prove Difficult for House Appropriators
The Senate Appropriations Committee unanimously approved the fiscal year 2003 appropriations bill for the Veterans Affairs, Housing and Urban Development (VA-HUD) Departments on July 25, clearing the way for full Senate approval after the August recess. The measure (S 2797) appropriates $32.1 billion overall for HUD, $634 million more than the President requested.

The House Appropriations Committee is expected to mark up its version of the VA-HUD fiscal year 2003 spending bill in September. However, staying within an overall VA-HUD discretionary spending limit of $91.8 billion – set by House GOP leadership – may prove difficult for some House appropriators who feel this figure is too low. The Senate Appropriations Committee version allocates $91.4 billion in discretionary spending.

The Senate Appropriations Committee-approved VA-HUD spending bill appropriated the following levels of funding for these select programs:

· The Housing Certificate Fund received $17.4 billion – a funding level which would cover the costs of renewing all expiring Section 8 contracts and 15,000 new vouchers. New housing vouchers would receive $90 million, $20 million of which would be reserved for approximately 3,400 new welfare-to-work vouchers and $40 million of which would fund roughly 8,000 new vouchers for disabled families. The committee funded far fewer vouchers than the President’s request of 34,000 new vouchers, advising HUD to “make voucher reform a priority.”

· The committee lauded Project-based housing assistance, urging the President to go to greater lengths to preserve project-based units. As opposed to Section 8 tenant-based assistance – which provides a rental assistance directly to renters – project-based Section 8 subsidies are paid to private owners of real estate who ensure that their rental units remain affordable to low-income families for a designated period of time. The committee directed HUD to take $100 million of contract authority over the amount needed for payments in fiscal year 2003 to rehabilitate HUD-assisted properties.

· Funding for the Public Housing Capital Fund was approximately $60 million less than last year’s funding levels, a vast improvement over the President’s request of $2.4 billion, which would amount to a cut by more than $400 million. The committee rejected HUD’s proposal to convert some public housing into project-based public housing units (see above) in order to leverage private financing. The committee cited concerns that public housing units would be lost, and that the proposal would not benefit public housing with the greatest capital needs. Public Housing Capital Fund monies may be used for modernization of public housing units, including developing, rehabilitating, and demolishing units, replacement housing, and management improvements.

· The bill provides $3.5 billion for the Public Housing Operating Fund, matching the Administration’s request and exceeding last year’s level by $35 million.

· HOPE VI, a federal program that aims to change the physical shape and isolation of “distressed” public housing developments by integrating them into surrounding neighborhoods and establishing support services, was level funded. The committee also extended the program’s expiration date to September 30, 2003.

· Community Development Block Grants (CDBG) received $4.6 billion, and $140 million was provided for Economic Development Initiative earmarks. The committee provided $22 million to the Self-Help Homeownership Program, a figure far below the President’s request of $65 million. CDBG is used to fund a wide variety of community development activities including public works and infrastructure, housing, public services, and economic development.

· The HOME program – a federal block grant that provides resources and flexibility to states and localities to meet what they determine are their most pressing low-income housing needs – was funded at $1.9 billion. This amount was below the Administration’s request of $2.1 billion. No funding was provided for the President’s American Dream Downpayment Fund. The bill provides $40 million – $5 million above the President’s request – for housing counseling.

· The measure provides $1.2 billion for Homeless Assistance Grants, $85 million above the Administration’s request and $92.5 million more than last year. Shelter Plus Care renewals would receive $193 million. The committee included a requirement that at least 30 percent of the Homeless Assistance Grants go toward permanent housing.

· Section 202 elderly housing, which subsidizes the operating expenses of senior developments, was funded at $783 million. This funding level is $9 million over the President’s request. Funding for Section 811 housing for people with disabilities was at $250 million, matching the President’s request.

· The bill allows for $1.8 billion in Federal Emergency Management Agency (FEMA) disaster relief money, $1.5 billion of which is designated as “emergency funding.” While this funding level is below the Administration’s request of $3.5 billion for FEMA, the committee did provide an additional $2 billion for similar programs under the Commerce, Justice, and State Departments. Within FEMA, the committee funded the Emergency Food and Shelter Program (EFSP) – which provides food for hungry and homeless people – at $153 million, a 9 percent increase over last year.

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