The major focus of this meeting was the President’s FY 2010 Budget, which was released last Thursday. It must be remembered that this is just the start of the budget negotiation, especially because the Congressional budget was $10 billion less than President Obama’s budget. Here are a few highlights:
Housing and Urban Development
The budget includes big increases in the Department of Housing and Urban Development (HUD) programs. The Community Development Block Grant (CDBG) program increased $600 million to $4.5 billion. $4.1 billion of the CDBG total is funded through formula. The Administration is going to change the CDBG formula because it is outdated. The new formula model will be one of two formulas.
(1) Formula 4’s guidance can be viewed by going to the HUD webpage and then the PDR section. This formula is modern, but will detrimentally affect New England states;
(2) the second formula is being examined by the Administration, but they will not divulge details.
Regardless of which formula President Obama selects, there will be counties and cities that will lose funding while others gain. Therefore, HUD is going to “hold harmless” the counties and cities that lose funding for a couple years while the local entities transition to the new formula. It will take an additional $500 million more in the overall pot to hold everyone harmless. A side note on the CDBG funding is that the section 108 loan guarantee, where a grantee can pledge future CDBG money, is going to be amended because the Administration doesn’t think this clause is necessary anymore.
In addition, there are three new HUD programs:
(1) Choice Neighborhoods: this program would be funded at $250 million to provide comprehensive grants to transform neighborhoods experiencing extreme poverty. This program replaces HOPE VI, which provides assistance to local communities to revitalize severely distressed public housing;
(2) Housing Trust Fund: this program would be funded at $1 billion for the production, preservation, and rehabilitation of housing for extremely low-income and very low-income families;
(3) Sustainable Communities Initiatives: this program would be funded at $150 million to improve coordination of transportation and housing investments that result in more regional and local sustainable development patterns, reduce greenhouse gas emissions, and more transit-accessible housing choices for residents.
Last week, HUD released guidance for three different streams of funding. The Neighborhood Stabilization Program (NSP) II guidance for competitive grants was released for non-profits and state and local governments. The general funding deadline for NSP is July 17th. CDBG was released the day after NSP II and applications are due June 5th. The Public Housing Capital Grants program released $1 billion and its application deadline is from June 1st to July 21st. With the release of this guidance, HUD has now made available all Recovery Act funds.
Law Enforcement
The FY 2010 budget provides for an increase in law enforcement. The COPS hiring grants would be funded at $298 million, which is a large increase since it was not even funded in FY 2009. There will also be funding available for prisoner reentry programs.
High Speed Rail
The budget also calls for a $1 billion increase in high speed rail, to be distributed as capital grants.
Water Programs
Additionally, the Clean Water State Revolving Loan Fund would be dramatically increased from $689 million in the current fiscal year to $2.4 billion in FY 2009. The Drinking Water State Revolving Loan Fund would also be increased from $829 million to $1.5 billion.
Energy
There is no funding in the President’s FY 2010 budget for EECBG funding. This has been justified by the administration on the fact that there was a great deal of funding for EECBG in ARRA. The EECBG application deadline for Recovery Act funding is June 25th.
On May 7th, 2009, President Obama officially sent the U.S. Government's budget for FY 2010 to the Congress. Earlier this year, the President sent the Congress a budget framework, A New Era of Responsibility: Renewing America’s Promise. The full budget may be found at the Office of Management and Budget website below, along with fact sheets for each agency and each state:
http://www.whitehouse.gov/omb/budget/
U.S. House of Representatives Budget Committee Chairman John Spratt (D-SC) released a statement following the release of additional budget materials by the Obama Administration. In part, it stated, "While the Congress is unlikely to agree with all the changes proposed by the Administration, the process and the resulting proposals are a step in the right direction, and a sign of fiscal discipline.” The full statement can be found here:
http://budget.house.gov/PRArticle.aspx?NewsID=1690
In addition, Senate Budget Committee Chairman, Kent Conrad (D-ND), released a statement observing that "[w]e are now beginning to see the results of the Obama administration’s line-by-line review of the federal budget. This effort will help make our government more efficient, eliminate programs that aren’t working, and shift resources to initiatives that benefit the middle-class. It is at the heart of good government." The full statement and additional information can be found at the Senate Budget Committee website:
http://budget.senate.gov/democratic/
U.S. Secretary of Energy Steven Chu announced on May 5th, plans to provide $786.5 million from the American Recovery and Reinvestment Act to accelerate advanced biofuels research and development and to provide additional funding for commercial-scale biorefinery demonstration projects. A full overview can be found here:
http://www.energy.gov/news2009/7375.htm
Meanwhile, two days later (on May 7th), Transportation Secretary Ray LaHood announced that transit projects in nine states around the country will receive $742.5 million in American Recovery and Reinvestment Act of 2009 (ARRA) funds. An overview can be found here:
http://www.dot.gov/affairs/2009/dot6409.htm
During a visit to the WMATA Carmen Turner Maintenance and Training Facility in Landover, Maryland, Vice President Joe Biden announced $300 million in funding from the American Recovery and Reinvestment Act for state and local governments and transit authorities to expand the nation's fleet of clean, sustainable vehicles and the fueling infrastructure necessary to support them.
"For city and state governments across this country, every day is Earth Day thanks to the ambitious commitments they are making to green their vehicles and transit systems. Now it's time for Washington to help them deliver on those promises," said Vice President Biden. "From advanced battery cars to hybrid-electric city buses, we're going put Recovery Act dollars to work deploying cleaner, greener vehicles in cities and towns across the nation that will cut costs, reduce pollution and create the jobs that will drive our economic recovery."
Full Story: http://transportation.house.gov/subcommittees/highways_transit.aspx
On Tuesday, April 28, 2009, the Subcommittee on Highways and Transit held a hearing to discuss specific High Priority Project ("HPP") requests of Members of Congress. The hearing was an opportunity for Members to provide information to the Subcommittee and to the public about the type, location, total cost, and benefits of the HPPs that they will request in the upcoming authorization. The hearing is part of the Committee's effort to ensure greater transparency and accountability in the upcoming surface transportation authorization legislation, an update to Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA–LU). Earlier in April, the Subcommittee released Reform Principles for High Priority Projects, which may be found here:
http://transportation.house.gov/subcommittees/highways_transit.aspx
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