| Washington, DC--House Financial Services Committee Ranking Member Barney Frank (D-MA) Friday said attempts by the U.S. Department of Housing and Urban Development (HUD) to "clarify" its proposed funding cuts for Public Housing Authority (PHA) operating expenses are "of little real help."
HUD has notified PHAs that they will have to accept a 30% cut in their FY2003 budgets to make up for a $250 million shortfall in the operating subsidy program budget discovered at the end of FY 2002. In a letter sent Thursday to HUD Secretary Mel Martinez, 100 Democratic Members of Congress objected to the unprecedented cuts and urged the agency to request emergency funds to cover the shortfall. Almost simultaneously HUD issued a "clarification" of its proposal that claims that PHAs will only be subject to a 10% cut.
"HUD’s latest proposal does little to solve the problem," said Rep. Frank, who spearheaded the letter from the Democrats. "Among other things, their letter is merely a statement of intent and makes any lesser reduction contingent on future Congressional action and submission of PHA budgets. The result is that for the foreseeable future PHA funding will remain at 70% of prior levels."
HUD has attempted to explain the shortfall as an accounting problem stemming from changes made in 1999-during the Clinton Administration.
"I am disturbed not simply by HUD’s decision to cut these funds so drastically but also by its incredible effort to blame the prior Administration," Rep. Frank noted. "If this were January 2001 that might be plausible, but it is extremely disappointing that two years into the Bush Administration - half of its term in office - the major tactic for explaining funding shortfalls for essential public housing services is to blame the prior Administration. HUD should get on with the business of doing whatever is necessary to solve this problem.
It must be emphasized that the under-funded 2002 budget, which is causing the current crisis, is a Bush Administration budget. Failure to correct this shortfall in the current fiscal year would be an irresponsible act based on misplaced fiscal priorities and a desire to provide additional tax breaks to the wealthy at the expense of our neediest citizens."
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The House Financial Services Committee oversees the U.S. financial services sector including the banking, insurance, real estate, and securities industries. The Committee is also responsible for housing and urban development agencies, Government Sponsored Enterprises (GSEs), as well as agencies engaged in international development and finance. As part of its jurisdiction, the Committee ensures enforcement of landmark consumer protection statutes such as the Truth In Lending Act, the Fair Credit Reporting Act, the Real Estate Settlement Procedures Act, the Community Reinvestment Act, and financial privacy laws. <http://www.house.gov/banking_democrats> |
