Affordable Housing and Tax Credit Developments NationallyPresident Obama’s Upcoming Budget Blueprint to Include Steep Cuts to Community Programs

February 10, 2011by George Danneman

In less than a week, President Obama’s budget blueprint for fiscal 2012 will be released, which will possibly slash funding for two leading community programs that administer important services to underprivileged people.  In his recent State of the Union address, President Obama stated that community groups should prepare to tighten their belts.  Then on February 5, Jacobs Lew, the head of the White House Office of Management and Budget, provided a preview of the Administration’s budget plans in an op-ed piece in the New York Times titled “The Easy Cuts Are Behind Us.”  Lew laid the following budget items on the chopping block:

  • 50 percent cut in the $700 million Community Service Block Grants (CSBG) program under the Department of Health and Human Services (HHS).  These grants are passed on to community action organizations across the country and fund community education, health and social service programs in low-income areas. Obama is proposing to make the remaining funds on a competitive basis.  According to Lew, “these are the kinds of programs that President Obama worked with when he was a community organizer, so this cut is not easy for him.  Yet for the past 30 years, these grants have been allocated using a formula that does not consider how good a job the recipients are doing.”
  • 7.5 percent reduction to the Community Development Block Grants (CDBG) program under the Department of Housing and Urban Development (HUD), which will reduce its funding by $300 million.  The CDBG program subsidizes housing, sewer and street projects and economic development in low- and moderate-income neighborhoods.  CDBG is used by almost 1,100 social service agencies across the country and is currently funded at approximately $4.4 billion.  Philadelphia’s Mayor Michael Nutter told Reuters that the CDBG program “is literally the lifeblood for creating affordable housing in Philadelphia.”

President Obama’s budget blueprint will be submitted to Congress on February 14.  The proposal is for the budget year that begins Oct. 1.

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