Block grants could face major cuts as federal funds to fight poverty tighten

Eric Myer of Eshenaurs Fuels delivers heating fuel to a home in Harrisburg, Pa.
Eric Myer of Eshenaurs Fuels delivers heating fuel to a home in Harrisburg, Pa. (Associated Press)
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Washington Post Staff Writer
Thursday, March 3, 2011; 9:36 PM

Community development block grants have been a vital source of federal anti-poverty money for decades, supporting affordable housing, job training and an array of other programs serving low-income communities.

When President Obama, in his 2012 budget, proposed cutting funding for CDBGs, as they are known, by about $300 million, local officials across the country worried about their already-battered finances.

Then House Republicans offered their take on the nearly $4 billion grant program.

Not only did they urge cutting the program by more than half, to $1.5 billion, they also endorsed making the cuts in the middle of the current fiscal year, part of the $61 billion in proposed cuts that have helped set up the budget battle.

Even with Congress having voted this week on smaller cuts to keep the government funded through March 18, the far bigger trims proposed by the Republicans are still on the table.

Cuts might not be finalized, but their seeming inevitability has made clear to America's cities that they face a new reality in Washington.

Since the GOP's election victories last fall, the Obama administration has been under greater pressure to reduce the deficit, and some anti-poverty programs are slated for significant cuts in the president's budget.

One is the Low Income Home Energy Assistance Program, which would shrink 50 percent, to $2.6 billion. The administration has said the impact of the cut would not be significant because the program's funding was increased in 2009 to address a spike in energy prices, which have since fallen. But critics have noted that energy prices are forecast to sharply increase again next year.

Another program facing cuts is the Special Supplemental Nutrition Program for Women, Infants and Children. Known as WIC, it would be cut by about 10 percent, or about $752 million, which could lead to waiting lists. The extent of the impact, though, is hard to predict. Some unspent funds from last year are available, but food prices are rising.

Obama's budget avoids cutbacks in some of the government's central anti-poverty initiatives, including Temporary Assistance for Needy Families, which provides cash stipends; the Supplemental Nutrition Assistance Program, better known as food stamps; and the Housing Choice Voucher Program, or Section 8, which provides housing subsidies.

Cities' choice

For nearly 40 years, what has distinguished block grants is the autonomy they offer cities to spend the funds on initiatives they choose. But with the Obama administration increasingly demanding assurances that federal money is being spent on projects with a successful track record, block grants have come under more scrutiny.

The president's budget also proposes a $350 million, or 50 percent, cut in a similar but smaller block-grant program aimed at human services. Such a reduction could affect groups such as the United Planning Organization, the District's designated recipient of human services block-grant money.

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