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Wednesday, July 11, 2012

Community Development Block Grants: Funding Issues in the 112th Congress and Recent Funding History

Eugene Boyd
Analyst in Federalism and Economic Development Policy

The FY2013 budget debate will take place within the context of growing concerns about the need to address federal budget deficits, the national debt, and a sluggish economic recovery following the longest and deepest recession since the Great Depression. The 112th Congress will continue to consider and debate a number of approaches to spur economic activity and job growth, including federal public works and community and economic development programs.

On February 13, 2012, the President released the Administration’s proposed federal budget for FY2013. The Administration’s budget proposal includes $3.143 billion for activities funded under the Department of Housing and Urban Development’s (HUD) Community Development Fund (CDF) account. This includes $2.948 billion for Community Development Block Grant (CDBG) formula grants awarded to states, entitlement communities, and insular areas; and $60 million for Indian tribes. The Administration is also requesting $100 million for its Sustainable Communities Initiative (SCI), which did not receive an appropriation for FY2012, and $35 million for capacitybuilding grants awarded to three national intermediaries to provide technical assistance to local community development organizations. The President’s budget request included $500 million in CDBG Section 108 loan guarantee authority. On April 19, 2012, the Senate Appropriations Committee reported S. 2322, a bill recommending appropriations for the Departments of Transportation and Housing and Urban Development and Related Agencies for FY2013 (THUD). The bill recommends $3.210 billion for activities funded under the CDF account, including $3.100 billion for CDBG formula grants. The House Appropriations Committee reported the THUD Appropriations act on June 20, 2012. The bill recommends $3.404 billion for activities funded under the CDF account, including $3.344 billion for CDBG formula grants.

On April 15, 2011, the President signed into law P.L. 112-10, the Department of Defense and Full-Year Continuing Appropriations Act for FY2011. The measure, which passed the House and Senate on April 14, 2011, after months of intense budget negotiations, appropriated $3.508 billion for activities in the CDF account, including $3.343 billion for CDBG formula funds. P.L. 112-10 included two provisions that reduced the account’s overall appropriations: (1) a 0.2% mandatory across the board rescission of all appropriated funds; and (2) a 1% discretionary transfer from designated HUD funds, including CDF activities, to HUD’s Transformation Initiative (TI). The mandatory across-the-board rescission reduced the CDF account by $7 million to $3.501 billion, while the 1% discretionary transfer moved up to $35 million from the CDF account to the Department’s Transformation Initiative. The act also appropriated $98 million for the SCI.

Having completed action on the FY2011 appropriations, Congress began consideration of the Obama Administration’s FY2012 budget proposals during the Spring of 2011.The President’s proposed FY2012 budget recommended $3.804 billion for the CDF account. Unable to enact final FY2012 appropriations before the end of FY2011, Congress enacted a series of continuing resolutions to maintain funding for government activities. On November 1, 2011, the Senate approved S.Amdt. 738 to H.R. 2112, a bill consolidating recommended appropriations of three appropriations subcommittees: Transportation, Housing, and Urban Development; Agriculture; and Commerce, Justice, and Science. A conference report accompanying this “Minibus” was filed on November 14, 2011 (H.Rept. 112-284). The bill was passed by the House and Senate on November 17, 2011, and signed by the President, as P.L. 112-55, on November 18, 2011. P.L. 112-55 included an appropriation of $3.408 billion for CDF activities, including $400 million in CDBG disaster relief supplemental funding and $2.948 billion for CDBG formula grants to states and local governments.

Date of Report: June 28, 2012
Number of Pages: 37
Order Number: R41754
Price: $29.95

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