Housing and Urban Development Secretary Samuel R. Pierce Jr. has won one and lost one in his effort to fend off cuts in the government's main forms of aid to cities.
He is one of several Cabinet members who have appealed proposed budget cuts. They have been more successful this year than they were last, another indication of the trouble the White House is likely to have in holding down next year's deficit.
Pierce recently convinced the Office of Management and Budget to drop its proposal for a $221 million cut in community development block grants. Nearly all cities are entitled to these grants, which officials now expect to remain at the current level of $3.45 billion when the fiscal 1984 budget is proposed next month.
But Pierce failed to overturn OMB's proposal for a two-thirds reduction in the $440 million urban development action grant (UDAG) program. President Reagan has told Congress that he will defer spending $234 million in action grants already approved for this year until fiscal 1984. The OMB then would ask for just $156 million in new money.
Either house of Congress can vote to force the administration to spend the action grants this year, or the full Congress can increase the 1984 appropriation beyond the president's request.
Urban leaders, who had criticized the proposed cuts sharply, are pleased with Pierce's success in overturning a similar deferral planned for community development grants. Most cities use these grants to refurbish old houses, build new sewers and fix up aging streets.
"Pierce appealed it, and evidently he persuaded us," said OMB spokesman Edwin L. Dale Jr. He said deferral of the urban action grants would not have that great an effect. Mayors compete for these funds, which they use to attract private investment for hotels, convention centers, industrial parks and other projects. "No one loses any cash, they just lose projects," Dale said.
HUD has failed to commit much of this year's action grant money because the private investment needed to complete many deals has dried up, officials say. "The economy and high interest rates have made some deals unfeasible," said Jack Stokvis, HUD's deputy assistant secretary for community development.
In addition, most of the unspent money is in the 25 percent of the grants that by law must be set aside for small cities with populations under 50,000.
On a related issue, Stokvis said that HUD would continue to give out community development grants after Jan. 1 despite a continuing disagreement with Congress over the rules of the program. Some city officials say they were told their payments might be delayed because of the controversy.
HUD had proposed to eliminate a regulation requiring that 75 percent of the grants be spent on projects that mainly benefit low- and moderate-income people. HUD later modified its position, but not enough to satisfy many members of Congress, who have refused to grant a waiver to allow the new rule to take effect.
One of the leading opponents, Rep. Henry B. Gonzalez (D-Tex.), wrote Pierce this month that he is "more convinced than ever . . . that substantial revisions must be made" in HUD's proposal. Pierce responded with a conciliatory letter, but the two sides have failed to agree.
Stokvis said HUD would continue to abide by the old rules while the dispute drags on. "We want to make sure the money flows uninterrupted," he said.