Contact: Rob Ostrander 202.224.7627 Shana Stribling 202.224.0309
Thursday, March 2, 2006

WASHINGTON, DC – U.S. Senator Kit Bond, Chairman of the Senate Appropriations Subcommittee on Transportation-Treasury-HUD, today held a hearing on the fiscal year 2007 federal Housing and Urban Development (HUD) budget. While Bond recognized the challenges in balancing the funding decisions in a very tight budget year, he also admonished the Administration for undermining HUD programs that are critical to the nation’s housing and community development needs.

“We should not be trying to balance the cost of the deficit on the backs of our communities and most vulnerable citizens. I am an infrastructure Republican and many of these programs are not only critical to recipients, communities and states but are critical in the creation of jobs, in helping to leverage new private and public investments and in increasing the tax base of our communities. This is a good investment for the federal government and it is an investment I support,” said Bond.

Bond heard testimony today from Alphonso Jackson, Secretary of HUD, who he praised for fighting for critical HUD programs. While praising Jackson and the Administration for recognizing the importance of the Section 8 program in this year’s budget, Bond was critical of plans for the CDBG, Section 8 and Public Housing, HOME, and FHA Mortgage insurance programs. Bond pointed out that these are the three flagship areas of housing and community development assistance.

First, Bond expressed his displeasure with reductions to the Community Development Block Grant program (CDBG). The Administration proposed a $1.15 billion reduction from last year’s funding. CDBG is a program supported by every mayor and governor in the nation. This program reflects the important principle of deferring to state and local decision making in how to address local housing and community development needs, instead of relying on some nameless bureaucrat in Washington, Bond said. The Administration’s continuing efforts to slash the important program is troubling, Bond told Secretary Jackson.

While the Administration did reduce the program’s funding, the Public Housing Operating fund is flat funded this year, which does not meet the nation’s needs, Bond pointed out. Also, the Administration proposed the elimination of the HOPE VI program, going so far to rescind last year’s funding as well. Bond, who developed the program in the early 1990’s to address the many problems posed by Public Housing Authorities (PHAs), said the Administration’s policy towards this successful program makes no sense.

Bond also expressed concerns about the viability and future of the FHA Single Family Mortgage Insurance Program, a concern Bond has continued to raise over the last several years. Bond stressed the importance to evaluate the program in today’s market before the Administration moves forward with their new FHA model.

The Administration’s funding proposals undermine a number of other important programs as well said Bond, particularly for low-income groups. The Senator cited the Section 202 elderly housing program, Section 811 housing for the disabled program, the Lead Hazard Reduction program and the Rural Housing and Development program as casualties of the Administration’s HUD budget this year.