Bush Administration Unveils Proposed Budget

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THE BUSH ADMINISTRATION on 2/4/08 issued its proposed federal budget for Fiscal Year 2009, which begins 10/1/08.
         The FY 2009 budget request proposes $38.5 billion for the U.S. Department of Housing and Urban Development (HUD), $1 billion over the enacted FY 2008 appropriation. Highlights include a proposed:

  • $16 billion for HUD’s tenant-based Housing Choice Voucher program, $336.3 million over FY 2008, and $7.4 billion for project-based Section 8 rental assistance (including a $400 million advanced appropriation to ensure timely payments to owners), an increase of nearly $1.2 billion over FY 2008.
  • $2 billion for the HOME Investment Partnerships Program (+$263 million over FY 2008) and $1.636 billion for homeless assistance grant programs (+$50 million).
  • $415 million reduction for public housing capital funds, to $2.024 billion, with no new funding proposed for the HOPE VI public housing revitalization program (-$100 million). Proposed funding for public housing operating subsidies would be $4.3 billion, up $100 million.
  • A set of cuts, to $540 million (-$195 million) for the Section 202 supportive housing program for the elderly, and to $160 million (-$77 million) for the Section 811 supportive housing program for disabled persons. HUD plans to propose the use of $15 million in 202 funds and $10 million in 811 funds for leveraged financing demonstration projects under both programs. Goals are to remove barriers to use of low-income housing tax credits with the 202 and 811 programs.
  • A cut, to $3 billion from $3.866 billion in FY 2008, for Community Development Block Grants.

Rural Housing

         The Administration has proposed no new funding for the Rural Housing Service’s Section 515 rural rental housing loan program (-$70 million), multifamily preservation and revitalization demonstration program (-$31 million), rental preservation revolving loan program (-$3 million), or Section 514/516 farm labor housing loan/grant programs (-$28 million/-$ 10 million).
         It has, though, proposed to boost funding to $300 million, from $129 million, for the Section 538 rural rental housing guaranteed loan program, and to $997 million, from $479 million, for rural rental assistance. The latter would include $100 million for vouchers for a new pilot program.

Other Proposals
         The Administration has proposed various tax law changes, including a one-year extension of the new markets tax credit program, through 2009, with $3.5 billion in allocation authority for another funding round.
         Also proposed is a new fiveyear pilot program to expedite sales of unneeded surplus buildings and real estate owned by the federal government. Federal agencies owning the properties would keep 20% of net sales proceeds; the rest would go to the U.S. Treasury. The budget proposal would aim to get some surplus properties to market in 30-90 days, and provide for cash sales of properties at no less than fair market value.
         A 2007 report identified more than 20,000 properties, some vacant, that federal agencies don’t use but pay to maintain.