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House Plan for Budget Cuts Impact on NJ

Speaker Boehner’s Budget Cut Could Cost
NJ Hundred’s of Millions in HUD Funds

House Speaker John Boehner

House Speaker John Boehner

With the January 5, 2011, start of the 112th Congress a week away, it is becoming clear that the House of Representatives will seek significant cuts in the FY11 Budget.

“I don’t know what’s going to happen here today, or tomorrow, or Sunday in terms of how we keep the government funded,” said soon-to-be House Speaker John Boehner at his weekly press conference last week. “But what I can tell you is all you have to do is go to the Pledge to America and we outline pretty… clearly that we believe that spending at ’08 levels is more than sufficient to run the government.”

In addition, the House is expected on a party-line vote to approve rule changes that will make it easier to cut spending. The new rules announced December 22 would replace pay-as-you-go with a much weaker, one-sided “cut-as-you-go” rule, under which increases in mandatory spending would still have to be paid for but tax cuts would not. In addition, increases in mandatory spending could be offset only by reductions in other mandatory spending, not by any measure to raise revenues such as by closing unproductive special-interest tax loopholes.

The budget reductions to ’08 would require reductions of almost 21% in current funding levels.

This chart indicates the possible impact on several HUD programs. This illustration of the potential impact on individual programs was based on a report prepared by CBPP. They assumed that such cuts would be applied uniformly, that is, that funding for every non-defense program would be reduced by 21 percent below the 2010 level, adjusted for inflation.

Impact of a 21% Uniform Reduction in HUD Programs

Program

Current Funding Level

Reduction

McKinney-Vento

$35,823,119

$7,522,855

Section 811

$3,876,800

$814,128

Section 202

$21,002,200

$4,410,462

CDBG

$109,303,706

$22,953,778

HOME

$48,910,540

$10,271,213

ESG

$4,410,683

$926,243

HOPWA

$14,361,213

$3,015,855

Public Housing

$270,840,486

$56,876,502

Totals

$508,528,747

$106,791,036

Housing Choice Vouchers (Families Assisted)

94,329

19,809

Notes: The Boehner proposal does not specify how the $101 billion in proposed funding reductions would be distributed among non-defense programs. This illustration of the potential impact on individual programs was based on a report prepared by CBPP. They assumed that such cuts would be applied uniformly, that is, that funding for every nondefense program would be reduced by 21 percent below the 2010 level, adjusted for inflation. The figures in this table assume that funding reductions would be distributed to states in the same proportion as regular program funding was distributed or awarded in fiscal year 2010. The figures for Housing Choice vouchers assume that state and local housing agencies would address budget shortfalls primarily by terminating families from the program, rather than by taking other steps to cut costs, nearly all of which would also harm low-income families. 

by Richard W. Brown

Richard W. Brown, has more than forty-two years experience in both housing development and community organizing. Since 1991 Mr. Brown has been the Chief Executive Officer of Monarch Housing Associates, the 1995 Governor’s Excellence in Housing Award winner in the organization category.. To read more about Richard and all of our staff click here. Click here to send Mr. Brown an email.

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