Statement of Secretary Alphonso Jackson
April 6, 2005
United States House of Representatives
Committee on Financial Services
Chairman Oxley, Ranking Member Frank, and Members of the Committee:
I want to thank you for the opportunity to appear today, as the Committee
begins its deliberations on the Strengthening America's Communities
Initiative, which the Administration has proposed within its FY
I am pleased to be joined by Secretary Guitierrez. Let
me briefly outline for the Committee the motivation guiding the
Administration proposal, and how the Initiative will make the federal
government a better partner in meeting the Nation's community and
economic development needs.
potential grantees seeking funds for community and economic development
projects must navigate a maze of 35 federal programs spread across
seven different departments. Each program operates under a separate
set of standards, and each has its own reporting requirements. These
programs at times duplicate and overlap one another. They can be
inconsistent in how they determine eligibility.
The goal of the Strengthening America's Communities Initiative is
to consolidate 18 community and economic development programs into
a single program. The new program will be more flexible and easier
for communities to access than the current set of programs. It will
be administered by the Department of Commerce. It will build on
the experience of HUD, Treasury, and the other departments with
strongly support the concept of consolidation as a catalyst for
delivering more funding to communities in need.
CBDG program is the federal government's largest single grant program
to assist local governments in undertaking a wide range of community
development activities. In the course of its 30-year history, CDBG
has provided a ready source of flexible funding for housing rehabilitation
programs, public services, public facilities and infrastructure,
and economic development activities benefiting millions of low-
and moderate-income persons.
time, the CDBG formula has become less targeted to the communities
with high community development need. While the formula has changed
from time to time since 1974, the core variables have not been changed
since 1978. In February 2005, HUD issued a report that offers four
alternative formulas that would substantially improve targeting
to community development need. This study will provide Congress
and the Department of Commerce with formula options as it fashions
the legislation for the new Strengthening Americas Communities Initiative.
However, I would hope that this new Initiative embrace the flexible
use of funds that grantees under the current CDBG program have come
to depend upon.
In addition to CDBG, the Administration's proposal would consolidate
and replace smaller HUD programs, including Brownfields development
grants, grants to Round II Empowerment Zones, Rural and Economic
Development grants, and the Section 108 guarantee program. The Section
108 program has been used by a relatively small fraction of CDBG
recipient communities to leverage their CDBG funds; working with
Secretary Gutierrez, I will seek ways to ensure that jurisdictions
with previously awarded Section 108 loan guarantees are not adversely
affected by the transition to a new program.
I will work closely with Secretary Gutierrez, my colleagues within
the Administration, and the other agencies affected by the consolidation
to develop a legislative plan for implementing the Strengthening
America's Communities Initiative.
closing, let me say that by consolidating programs, we will better
target limited federal resources to places without the fiscal ability
to meet their own needs. By ensuring the flexible use of funds,
we will empower our grant partners to meet local needs with local
solutions. And in the end, the federal government will more effectively
serve America's communities.
would like to thank all the members of this Committee for your support
of our efforts at HUD. We welcome your guidance as we continue our
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