Housing and Urban Development Secretary Samuel R. Pierce Jr. has proposed a $14.3 billion fiscal 1984 budget that would freeze the government's main housing program for the poor almost in its tracks and turn instead to a new, less costly and less generous voucher system.
The administration proposed a similar shift this year for fiscal 1983. Congress put aside the voucher idea but has yet to decide what to do about the main, existing subsidized housing program, called Section 8. Its cost has risen mightily over the last 10 years: Subsidized housing is now the government's third largest welfare program, behind only Medicaid and food stamps, and the Office of Management and Budget has been trying feverishly to curtail it.
Fiscal 1984 will begin next Oct. 1; the president will send Congress his 1984 budget early next year. He has indicated it will involve further spending cuts, and the White House has discouraged talk of these until after the Nov. 2 election. But all federal agencies are now sending their spending requests to OMB. The Washington Post obtained a copy of HUD's request, dated Sept. 15, yesterday.
The Section 8 program involves rent subsidies for newly constructed and rehabilitated housing units for the poor. The voucher proposal would simply give poor people federal chits which they could use to help pay rent in existing housing that they would find themselves. It would be the housing equivalent of food stamps.
Section 8's defenders say the federal government has an obligation to expand the stock of housing available to the poor, which the voucher program would not do; they also say the voucher program as outlined would give qualifying households smaller subsidies than Section 8 does.
But Pierce said in a 28-page letter to Budget Director David A. Stockman that the administration should propose the voucher plan a second time because "the most cost-effective method of providing housing is through the use of existing housing stock."
The secretary said Congress rejected the voucher program because it was not judged "on its own merits," but "confused with . . . 'gimmicks' for budget reduction."
In order to make the program more palatable, Pierce suggested:
Lifting the administration's proposed cap on the number of federal subsidized housing units in the country from the 3.8 million proposed in the 1983 budget to 4.1 million, allowing small further increases over the next few years. The number of subsidized units had been growing at a rate of a quarter million or more a year until Reagan came to office.
Dropping a proposal made for 1983 that food stamps be counted as part of a household's income when calculating how much of its rent will be paid by the government and how much the household will pay. This was one of a number of interrelated cuts in welfare benefits the administration proposed for 1983.
Indexing the voucher system so the value of vouchers would rise automatically with housing costs.
He called all three proposals "modest" but said they would "significantly enhance the chances of the program's enactment" and would help "remove the misunderstanding on the part of Congress that the certificate voucher program is being introduced solely as a means of reducing the inventory of assisted units."
The increases would allow HUD to assist about 130,000 more units. By comparison, in 1977, HUD was adding 388,000 units per year to its subsidy program.
Pierce also said a reorganization plan under review at HUD will enable the agency to reduce [its current 14,000 permanent full-time staff] to 13,165 by fiscal 1984. He is proposing another cut of 744 positions during 1984. Such cuts will not hurt HUD programs, Pierce said, because of "organization restructuring and management and procedural improvements" and because of a greater use of outside contractors.
Pierce proposed that the community development block grants program ($3.4 billion) and urban development action grant program ($440 million) be funded at their 1983 levels during 1984. He also proposed an expansion of activities that communities can fund under the community development program. "By allowing new construction within the CDBG program, local governments will be free to address their special housing problems within a framework established by the community," he said.
In the past, HUD critics have fought such an expansion because they believe it will dilute the spending of CDBG funds for the poor.
HUD is asking that operating subsidies for public-housing projects be funded at $1.67 billion, significantly more than the $1.075 billion proposed by the administration for fiscal 1983. Public-housing authorities had said the administration-proposed level would mean that projects would rapidly deteriorate and might have to be abandoned. Congress appropriated $1.35 billion for these operating funds for fiscal 1983.
The budget request also calls for scrapping the Solar Energy and Energy Conservation Bank created by Congress in 1980 and scuttling the agency's New Communities program.