Proposed Budget Cuts Would Leave Little for Poor People

An aerial photo displays people living in tents on the sidewalk of a city.

Photo courtesy of Nathan Dumlao/

President Bush’s proposed budget for fiscal year 2006 was marked by deep cuts to domestic programs. And an overwhelming amount of these cuts touch the most vulnerable communities, including homeless people, those in public housing, people with AIDS, rural Americans, and those living in rundown urban areas. 

In total, the U.D Department of housing and Urban Development ‘s budget was cut 11.5% to $28.5 billion for FY06. 

“Overall, the budget sends a daunting message that the president is trying to balance his budget on the backs of poor people,” according to Katie Fisher of the National Low Income Housing Coalition (NLIHC). 

She said that the most drastic cut is the complete elimination of the Community Development Block Grant, and the reallocation of 60% of what would have been the grands funded to the Department of Commerce for “yet-to-be-defined economic development activities.” Housing, though, was not even mentioned in the Department of Commerce priorities for these grants. 

Last year, the Block Grant program received $4.1 billion, with 25% going to affordable housing, 33% for public improvements in poor communities, and 11% funding the operating costs of day care programs, homeless shelters, senior centers, and similar programs. 

According to the NLIHC, the good news is that transferring the Block Grant program to the Department of Commerce would be difficult since it requires hard-to-pass legislative action by the committees that have jurisdiction over the program – namely, the Senate Banking, Housing and Urban Affairs Committee. 

Fisher said that it is still too early to know how this cut would affect Washington D.C., directly, though she said that the populations that would suffer the most are extremely low-income residents who make below $20,000 a year. However, she could not say if this cut would contribute to more people becoming homeless, but that “the result could be that people might do extreme things, like pay 80% of their income on housing.” 

Another hard-hit group in the Washington area will be people living with AIDS. The president’s proposed budget cuts funding to the Housing Opportunities for Persons with AIDS (HOPWA) program from $281 million in FY05 to $268 million in FY06. “AIDS seems to be on the rise in D.C., so the cut in the AIDS [housing program] will affect D.C.,” Fisher said. 

Another program that the president proposes to change is the Section 8 vouchers the government provides low-income individuals to cover a portion of housing costs. According to the National Alliance to End Homelessness (NAEH), changes to the funding structure of the Section 8 program could lead to lower funding levels down the road, Specifically, funding would be similar to a block grant, which tends to remain level over time and not keep up with inflation or other additional costs. In addition, the Bush administration plans to introduce changes that would eliminate the requirement that at least 75% of vouchers must go to people with “extremely low incomes.” 

Still, the proposed budget does include some increases affecting the poorest of the poor. An additional $200 million would be added to the HUD homeless program to provide permanent housing and supportive services to chronically homeless people with disabilities. However, these funds would be offset by the $120 million cut to housing for people with disabilities and the cut of Community Development Block Grant funds used for homeless services. 

In the budgets for the Departments of Health and Human Services, Labor, Education, and Veterans Affairs, programs that assist homeless people – other than an increase in funding for Community Health Center – are mostly frozen, according to NAEH. Nan Roman, of NAEH, said that while the budget cuts are designed to decrease the deficit, they will actually cost more money in the long run. 

“It is less expensive to provide housing than to accommodate what happens when people don’t have adequate housing,” she said. 

Additionally, Fisher, of the Low-Income Housing Coalition, said that the housing funding that does remain would be ineffective without other supportive programs in place. ” If they are putting money into housing, but not developing a community, then they are running in circles because it cannot be sustained,” Fisher said. 

Nonetheless, housing and homeless advocates remain optimistic and hope to convince Congress to vote down the proposed budget and restore funding. 

“It is important for people to know that this is only a proposed budget. It still needs to be approved by Congress,” Roman said. “It is important for people to make their opinions [on the proposed budget] known to members of Congress.” 

Issues |Community|Health, Physical|HIV|Housing|Public Housing

Region |Maryland|Virginia|Washington DC

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