FROM THE PRESIDENT
Milton Lopes is an Adjunct Faculty Member with the School of Public and International Affairs at the University of Georgia and a Professor at the Fielding Graduate Institute in California. He can be reached at mlopes@uga.edu
The theme of our 37th Annual Conference in Baltimore is “Linking Community Development Practice to Public Policy.” With the submission of President Bush's budget to Congress, this theme takes on considerable significance. Consider the following headlines: from the Gotham Gazette, “The Death of the Community Reinvestment Act” (Aug 22, 2003); from the Business Journal of Milwaukee, “City officials decry Bush's plan to cut block grants” (Jan. 24, 2005); from The Cleveland Free Time, “Community Development Fallout: Local officials fear the effects of reported Bush plan to cut community services” (Jan. 26, 2005); and from the Washington Post, “Bush Plans Sharp Cuts in HUD Community Efforts” (Jan 13, 2005). Does this sound like an administration for which community development is a priority?
Large corporate interests are once again the beneficiaries of federal largess at the expense of low and moderate income communities. Let's look at two of these news reports. According to the Gotham Gazette, in 2003 the Community Reinvestment Act (CRA) was effectively killed by a Republican dominated Congress with the merger of banking, securities and insurance institutions under the rubric of the Financial Modernization Act. The CRA was one of the first acknowledgements by the federal government of the discriminatory banking practice known as "redlining." By creating regulatory criteria and standards for how banks conducted business in poor areas, and by providing public access to this information, the law established the basis for a bank's accountability to low-income areas. In doing so, it helped to create the idea that banks have financial responsibilities, if not moral obligations, in poor neighborhoods. The legislation prompted more than an estimated trillion dollars in loans in low- and moderate-income neighborhoods and billions of dollars in community development grants. But the law had powerful enemies, particularly in the form of the banking lobby who blamed it for hampering banks with unnecessary compliance burdens and red tape. In 1999 then Senator Phil Gramm, the prime sponsor of the 1999 Financial Modernization Act, accused community organizations of being "extortionists," because they used CRA challenges to win concessions and services from banks.
On another front, Jonathan Weisman of the Washington Post on Friday, January 14, 2005 reported that the White House will seek to drastically shrink the Department of Housing and Urban Development's $8 billion community development budget, purging dozens of economic development projects, scrapping a rural housing program and folding high-profile anti-poverty efforts into the Labor and Commerce departments. The plan was detailed in a December 2004 memo from the White House Office of Management and Budget to HUD. The document provides one of the first concrete examples of the types of cuts in the works as the administration comes to grips with a soaring deficit. The proposal in the upcoming 2006 budget would make good on President Bush's vow to eliminate or consolidate what he sees as duplicative or ineffective programs.
The $4.7 billion Community Development Block Grant (CDBG) program -- the bulk of the community planning budget -- could be cut by as much as 50 percent. The CDBG program, the seventh largest federal aid program, was signed into law under President Nixon in 1974. One of its goals was to eliminate slums and blight. It stipulated that benefits would go to “low- and moderate-income families.” Through the decades large sums of money have been deployed to lower-income communities. Yet over the years, there have been numerous attacks on the program. In 1996, Newt Gingrich argued that the “weak political constituencies” of the poor would make HUD programs “prime candidates for cuts.” “I would argue that you could abolish HUD tomorrow morning and improve life in most of America,” Gingrich said then. Despite the attacks from the right, city lobbyists, along with the Clinton Administration, pushed for more or at least level funding. But Bush's “mandate,” coupled with a Republican-dominated Congress and Senate, could spell trouble for cities throughout the nation.
Under the plan, the CDBG program -- which provides multipurpose development grants to state and local governments -- would be sent to the Commerce Department. The Urban Empowerment Zones and the Renewal Community programs -- both of which offer tax incentives for development in urban or other troubled areas -- would also go to Commerce, as would the Brownfields Economic Development Initiative, designed to revitalize abandoned industrial sites. Youthbuild USA , a $62 million program to teach teens home-construction skills, would be sent to the Labor Department. The $24 million rural housing and economic development program would probably be eliminated.
HUD would maintain the Home Investment Partnerships to build or buy affordable housing, homeless assistance programs and housing assistance for AIDS sufferers. The budget would eliminate $260 million in economic development projects earmarked for this year by lawmakers. HUD could ultimately lose a quarter of its $31 billion budget.
The Post article goes on to quote Barney Frank, Democrat Representative from Massachusetts . He called the proposal "just appalling." "With budgets tight, vested interests in the Commerce and Labor departments would be expected to favor their programs over the newcomers from HUD. It wouldn't even be a fair fight. Moreover, HUD has evolved into an agency designed to support urban interests and low-income citizens, while Commerce and Labor are more receptive to business needs. HUD's city focus may be why the White House is dismantling the HUD programs. HUD is the place where mayors and urban interests can put up the strongest fight."
In sum this administration has a community development policy that is devastating to both urban and rural communities. Hence, it is important that the Community Development Society be in the Washington area for our conference this year. It is important that while here we take the initiative to go out and visit those agencies and congressional oversight committees that impact our constituents and our issues. This is not to say that we advocate any particular community development policy, but that we let these entities know that we represent a sizeable and important group of Americans who will be adversely affected by this Administration's positions. May I suggest that this circumstance be a rallying cry within our respective communities? There is a very real reason to come to Baltimore. There are life and death issues at stake.
Milton E. Lopes |
