Opening salvos in the budgetary wars

January 13, 2005 | Government, Housing, US News

In early February, the newly re-inaugurated President will submit his proposed FY 06 (to begin 1-Oct-05) budget to Congress.  It will make housing advocates unhappy: 

The Bush administration is preparing a budget request that would freeze most spending on agriculture, veterans and science, slash or eliminate dozens of federal programs, and force more costs, from Medicaid to housing, onto state and local governments, according to congressional aides and lawmakers. 

To be clear, forcing costs onto state and local government means simply that the Federal government will either pay less: 

Community Development Block Grants, funded this year at nearly $5 billion, could be cut by as much as 50 percent, aides said. The Home Investment Partnerships Program, a housing program that was trimmed by 4 percent this year, is expected to take a larger hit in the president’s 2006 budget. 

Or …


… cap what it pays: 

Congressional aides have been told to expect virtually the same level of spending in fiscal 2006 as this year in programs unconnected to defense and homeland security. 

Or simply turn the funding into a block grant: 

The same approach [block granting] probably will be repeated for public housing, a Senate leadership aide said.  

Most significantly, the Administration is proposing to re-enact the deficit reduction law, known variously as the Balanced Budget Act or Gramm-Rudman-Hollings, that was the principal driver in reducing deficits during the

Clinton era: 

Bush last year sought to reimpose expired budget limits that in the 1990s forced lawmakers to offset increased entitlement benefits with entitlement cuts elsewhere in the budget. The proposal also would require the cost of any entitlement changes to be projected out beyond the five- or 10-year window of most congressional budgets. That legislation is likely to be resubmitted, congressional aides said.  

Budget-omics, as they play it in

Washington, is an extremely complicated game with its own language, one that will take eight to ten months to play out, 

A president who originally campaigned for small government then presided over one of the biggest expansions in spending in American history.  Now, evidently, he intends to tack back toward the fiscal conservatives.  It is hard to see how this can be good for US affordable housing programs, and it’s easy to see it being very painful.

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