Two federal departments have housing programs for the poor -- Agriculture and Housing and Urban Development. The president proposes in his budget to halt all further commitments through the Agriculture programs and to shift future responsibility for subsidized rural housing to HUD. Then he also proposes to halt all further commitments under the existing HUD programs. They would be replaced by a voucher system. The government would add 50,000 units a year to its subsidized urban and rural housing portfolios combined. That is only a third as many as even in most of the Reagan years so far. For a time in the 1970s the government was adding more than 400,000 units a year.
The president has been trying to cut these housing programs since he took office. His reason is their cost. Thanks largely to the expansion in the 1970s under administrations of both parties, the various HUD expenditures are threatening to become the government's second most expensive welfare program; only Medicaid would be larger. Their cost will be $12 billion next fiscal year if no changes are made in the law; the Agriculture programs will cost an additional $3 billion. By 1991, combined expenditures will be $18 billion. The president would reduce that by a third, and longer- term spending authority by two-thirds.
The president said in his State of the Union address, in urging spending cuts instead of a tax increase, "it's time we reduce the federal budget and left the family budget alone." The problem is that these spending cuts affect family budgets, too. For poor people, housing has become the killer cost. More than half of the "very low-income" families that are the special targets of the government's housing programs now spend more than 40 percent of their incomes for housing; over a third spend more than 50 percent. The subsidized units now in place -- over 4 million -- help only about a third of these people. At best, congressional experts say the administration's proposed expansion rate for the programs in the next five years would keep up with population growth; the level of unmet need would stay the same.
Meanwhile, the president insists as part of tax reform that not a hand be lifted against the mortgage interest deduction (although its value would be reduced by the cuts in tax rates he proposes). The mortgage deduction will save homeowners, who mostly are not poor, an estimated $29.6 billion next fiscal year. The higher a person's income and the larger his house, the larger his subsidy under this provision. Who wants to make the case in these terms -- that it is fair to cut the poor but not the rich?
The voucher proposal is in several ways a better idea than its suspicious critics in Congress have so far allowed (nor is it that different except in name from the rent supplement program, which has now become the accepted form of aid). But 50,000 new units a year are too few. The problem is that there is no housing policy here, only a budget policy. That is a foolish way to deal with a serious problem.