Budget Analysis: Proposal Would Gut Rural Housing and Development Programs
For the third year in a row, the Trump administration has proposed major cuts in key federal programs serving rural communities. The plan is unlikely to survive Congressional deliberation.
President Trump’s proposed fiscal 2021 federal budget, released on February 10, once again proposes deep cuts and many outright eliminations for housing and other programs serving rural America. Rural housing programs in the Department of Agriculture (USDA) would be nearly eliminated. Key programs in the Department of Housing and Urban Development (HUD) that are important in rural areas also would get zero dollars next year, and many social safety-net programs would be cut. On a bipartisan basis, Congress has rejected similar cuts proposed each year during the Trump administration.
As the Housing Assistance Council points out in an analysis, “For the third year in a row, the Administration proposes to eliminate most USDA rural housing programs and many HUD programs…. Also, for the third year in a row, Congress is expected to develop its own funding proposals…. Congress has not been inclined to accept cuts to housing aid.”
Read More: Budget Proposal Cuts USDA by 8%
Several key USDA housing programs would receive zero dollars in 2021 funding under the Trump budget. These programs include USDA Sec. 502 direct home loans for low-income borrowers, the self-help housing loans set-aside within Sec. 502, Sec. 515 rental housing loans, Sec. 504 very low-income repair grants and loans, and Sec. 514/516 farm labor housing funds. As their titles indicate, many of these unique initiatives are loans that are repaid to the federal government. For example, the Sec. 502 direct program between 1950 and 2018 has provided loans to help 2.17 million low-income rural families become homeowners.
In other areas for USDA, the Supplemental Nutrition Assistance Program (formerly the Food Stamp program) continues to be a major target for Trump and company. The 2021 budget would cut SNAP by $182 billion over the next 10 years. Many observers think of SNAP as mostly an urban anti-poverty program, but investigations by the Food Research and Action Center found that 16 percent of rural and small-town households receive SNAP benefits, compared to 13 percent of metro-area households.
USDA’s Economic Research Service, which the Trump administration succeeded in moving from Washington, D.C., to the Kansas City region, would see its budget fall by 27 percent, from $85 million in 2020 to $62 million in 2021. If there is no research or data on certain issues and problems, then maybe they don’t exist.
HUD and Other Programs
Despite its name, the U.S. Department of Housing and Urban Development is a vital source of funding for rural areas and suburbs as well as cities. The Trump 2021 budget would provide zero funds for Community Development Block Grants and the HOME program, cutting from 2020 levels of $3.43 billion for CDBG and $1.35 billion for HOME. These are two of HUD’s most important initiatives and are used extensively in rural areas and small cities. Also cut to zero would be HUD’s public housing capital fund, the Choice Neighborhoods Initiative, and supportive housing for veterans. One of the federal government’s most important and largest social safety net programs, tenant-base rental assistance, would be cut from $23.8 billion to $18.8 billion. Overall, according to the National Low-Income Housing Coalition, HUD would be cut by $8.6 billion.
The Treasury Department’s Community Development Financial Institutions (CDFI) Fund would also be cut to zero. It is a program that supports urban and rural nonprofit loan funds.
The bottom line? Another draconian proposal, the third in a row from the Trump budget writers, would decimate many rural and other domestic programs. Fortunately, Congress has the last word, and in the past, both Republican- and Democratic-led Congresses have rejected such cuts.
Joe Belden is a writer and consultant based in Washington, D.C.