Congressional Budget for the United States Government for the Fiscal Year 2006

CONGRESSIONAL BUDGET FOR THE UNITED STATES GOVERNMENT FOR THE FISCAL YEAR 2006 -- (Senate - March 17, 2005)

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Mr. REED. Mr. President, today many Americans in communities across the Nation are being left behind in our economy. Federal community and economic development programs, such as Community Development Block Grants, Community Development Financial Institutions, and Economic Development Administration grants, have a history of ``being there'' for communities--providing funding for housing rehabilitation, job creation, and infrastructure. I thank Senator Sarbanes for offering his amendment to save these important programs from elimination, and I am glad to be a cosponsor. Senator Sarbanes' amendment will restore funding to these vital programs by closing tax loopholes that the majority of the Senate supported closing in the FSC/ETI bill.

The President's Strengthening America's Communities Initiatives, SACI, would fundamentally change Federal economic and community development programs serving our communities. The President's fiscal year 2006 budget eliminates 18 successful programs serving low-income urban, rural, and Native American communities. It reduces the Federal commitment to funding community development by 33 percent, cutting funding from $5.6 billion to $3.71 billion. And the President's proposal will also reduce the number of communities served. A program that serves fewer Americans with less resource can only place more families and low-income neighborhoods at risk, rather than create vibrant and strong economies as CDBG, CDFI, EDA, the Brownfields Economic Development Initiative and Section 108 loan guarantees are doing.

The real issue with federal community development assistance is the lack of financial resources for the thousands of communities struggling to remain economically competitive, not the current structure of the existing programs. While the budget resolution includes funding for tax loopholes that the Senate voted to close last year, it fails to adequately fund programs that provide affordable housing to American workers, programs that create or retain jobs in the economy, and programs that provide vital public services to our senior citizens.

In fiscal year 2003, the economy lost 486,000 jobs. CDBG projects created or retained 108,700 jobs for Americans. CDBG also has a strong record in business retention. While businesses have left American shores for other countries, CDBG ensured that over 80 percent of the businesses assisted through this program were still in operation after 3 years.

There is overwhelming opposition to the Strengthening America's Community Initiative. Mayors, local and State community development agencies, housing assistance agencies, and others from Rhode Island to Utah, and from Michigan to Texas, have written letters to Congress and to the administration opposing these devastating cuts and changes to Federal economic and community development assistance. They know that CDBG, CDFI, and EDA programs are the foundation of strong communities--these programs are literally the building blocks of community development. A unified grant program, as proposed by the administration, will leave gaping holes in community and economic development assistance.

CDBG is the glue that holds other Federal programs serving low-income communities together. On the 30th Anniversary of CDBG in 2004, HUD Deputy Secretary Roy Bernardi said the following about the program:

HUD has a long history of 'being there' and providing help for people, particularly those with the greatest needs--our lower income constituents. CDBG has certainly been there, during boom years and most importantly in times of tightening budgets, which place greater demands on existing services. We must continue to support and build upon programs that work, those that have a proven record of flexibility and the ability to fit in with locally determined needs. CDBG is such a program and ranks among our nation's oldest and most successful programs. It continues to set the standard for all other block grant programs.

I want to tell my colleagues about CDBG's history of ``being there.'' In Rhode Island, CDBG was there when the West Elmwood Housing Development Corporation, a not-for-profit community based organization, needed to build and renovate affordable homes. CDBG gave Rhode Island families, who would otherwise be unable to achieve the American dream of homeownership, the chance to own their own home. In Florida, Congress turned to CDBG to provide relief after last year's devastating hurricane season, and in New York City, CDBG helped the city rebuild after the September 11 tragedy. In New Hampshire, CDBG is there for the Concord Area Trust for Community Housing to layer with Low-Income Housing Tax Credits to build affordable housing. In Ohio, Community Development Financial Institutions are there for communities across the State helping to finance businesses and microenterprises that support new jobs in the economy. And EDA was there to provide planning and technical assistance to help save 466 existing jobs and create 78 new jobs near Billings, MT. There are no other Federal programs or tax loophole that have the history of ``being there'' like CDBG, CDFI, and EDA.

Senator Sarbanes' amendment to restore funding to these programs deserves the full support of my Senate colleagues, whether Republican or Democratic, representing an urban state such as Rhode Island or a rural state such as Montana. I hope my colleagues will join me in voting for Senator Sarbanes' amendment so that all workers, families, neighborhoods, and communities can participate in our Nation's economic growth.

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