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PRESIDENT PROPOSES AN ALMOST 30% INCREASE IN HUD'S FY '98 BUDGETWASHINGTON -- President Clinton's budget would increase funding for the Department of Housing and Urban Development by $5.6 billion to a total of $24.8 billion in the 1998 fiscal year, a nearly 30 percent rise, Secretary Andrew Cuomo said today. The increase was necessary to avert a crisis that could threaten 4.4 million Americans with homelessness.
The HUD budget initiates tough reforms to save outlay costs and sharply expands budget authority to renew all expiring Section 8 contracts, Cuomo said. The Section 8 program, under which contracts for 1.8 million affordable housing units would expire in FY 1998, subsidizes housing for low-income people, primarily disabled, elderly and families that work.
Other priorities in the President's proposed HUD spending plan would expand affordable housing opportunities, help make welfare reform work by creating new jobs, and take steps to restore public trust in HUD by making management improvements.
"This budget reflects the President's deep commitment to revitalizing America's communities by expanding housing and job opportunities," Cuomo said. "It meets the twin goals of balancing the budget and helping build strong communities. I look forward to working with Congress on a bipartisan basis to avert the threatened housing crisis and strengthen communities."
"The greatest challenge the Department and Congress will face in 1998 -- perhaps the largest challenge the agency has faced since its inception -- is the expiration of rental assistance contracts that provide housing for 4.4 million people, over 90 percent of whom are elderly, disabled, or families with children," Cuomo said. "Most of those families have at least one member who works, is in job training, or in school."
"For these families, Section 8 is more than a contract or subsidy," Cuomo said. "It is often the foundation from which they can build lifelong economic self-sufficiency."
"Renewing these contracts, within the framework of a balanced budget, is thus an essential, bipartisan task," Cuomo said. "If done right, renewing contracts will prevent many families from being put out on the street, averting an unprecedented explosion of homelessness nationwide."
The budget proposes a $5.6 billion increase in budget authority and generates $2.4 billion in outlay savings, which together ensure the renewal of the Section 8 contracts. The $2.4 billion in savings reflects a cut in the cost of renewing housing subsidy contracts under the Section 8 program by 12 percent from projected levels in the 1998 fiscal year. The reforms would reduce the overall growth in Section 8 outlays by more than $14 billion between 1998 and 2002.
The cost-saving Section 8 reforms would: cut excessive subsidies and lower rent increases permitted for private landlords; lower administrative fees to local housing authorities; tighten income verification procedures in assisted housing programs to ensure that tenants pay their required share of rent; and set the subsidy level for a single person based on the rent for an efficiency apartment rather than for a one-bedroom apartment, among other changes.