Save America's Communities Coalition

    Mr. SARBANES. Madam President, first, let me say at the outset, because I neglected to do so the other day in the general debate, that I commend both the chairman of the Budget Committee and the ranking minority member of the Budget Committee for the fair and expeditious way in which consideration of this resolution was conducted in the committee. We have a new chairman. It is always a challenge, and I want to express to him my recognition of the fair process conducted in the committee, which is, of course, essential to the Senate working through controversial issues and trying to reach a solution.

    This amendment would restore approximately $1.89 billion in cuts that are in the administration’s proposed budget to the <Community> <Development> <Block> <Grant> Program and a number of other development programs that have been proposed for elimination. It would bring all of those programs back to the 2005 level. It is my view, and the view of a majority of the Members of the Senate expressed in a letter sent to Chairman Gregg and Senator Conrad, that the administration of these 18 programs should remain as they are currently constituted.

    In other words, the <community> <development> <block> <grant> should continue to be housed at HUD, the rural programs at USDA, and this effort to shift all of them over to the Department of Commerce, an idea which has not been considered, not examined, not brought to the floor of the Congress, ought not to be carried through.

    I am going to focus on the CDBG Program primarily because very substantial cuts have been proposed in the budget.

    Roy Bernardi, the Deputy Secretary of HUD, a former mayor of Syracuse, has said that the foundation of virtually all community and economic development occurring across the Nation is CDBG. This is the Deputy Secretary of HUD, formerly mayor of Syracuse. He said:

    We must continue to support and build upon programs that work, those that have a proven record of flexibility and the ability to fit in with locally determined needs. CDBG is such a program and ranks among our Nation’s oldest and most successful programs.

    I have two letters strongly supporting full funding for the CDBG Program at HUD, signed by a host of State, city, and county organizations, such as the National League of Cities, the U.S. Conference of Mayors, National Association of Counties, and the National Governors Association.

    I ask unanimous consent those two letters be printed in the RECORD.

    There being no objection, the material was ordered to be printed in the RECORD, as follows:

March 4, 2005.

Hon. JUDD GREGG,

Chairman, Committee on the Budget, U.S. Senate, Washington, DC.

Hon. KENT CONRAD,

Ranking Member, Committee on the Budget, U.S. Senate, Washington, DC.

    DEAR CHAIRMAN GREGG AND RANKING MEMBER CONRAD: As you prepare to consider the FY 2006 Budget Resolution, we the undersigned organizations want to convey our opposition to proposed cuts in the FY 2006 Department of Housing and Urban Development (HUD) budget. We respectfully request that you craft a Budget Resolution that will provide adequate budget authority for all HUD programs and maintain important community and economic development functions and funding at HUD.

    Of particular concern to us is the proposed elimination of the <Community> <Development> <Block> <Grant> (CDBG) program along with 17 other federal community and economic development grant programs. We oppose in the strongest terms the elimination of CDBG, and we urge you to reject the proposed “<Strengthening> <America>’<s> <Communities>” (SAC) Initiative and support full funding for the CDBG program at HUD.

    As you know, the FY 2006 Budget would effectively eliminate 18 community and economic development programs, including CDBG, and create an entirely new initiative to be operated by the Department of Commerce. Proposed funding for this “consolidated” program would be $3.7 billion, a 35% reduction in funding when compared to total FY 2005 appropriations for the 18 programs targeted for elimination under the initiative. Consider that Congress funded the CDBG program alone at $4.7 billion in FY 2005, $1 billion more than the entire proposed budget for the SAC initiative.

    Eliminating these 18 programs and substantially reducing the federal investment in community and economic development would have a devastating impact on state and local governments. Each of these existing programs is an important and necessary component of urban, suburban, and rural communities’ efforts to revitalize neighborhoods, expand affordable housing opportunities and create economic growth. We believe that CDBG is the glue that holds these efforts together.

    For 30 years, the CDBG program has served as the cornerstone of the federal government’s commitment to partnering with state and local governments to strengthen our nation’s communities and improve the quality of life for low- and moderate-income Americans. Since its inception, CDBG has made a real and positive difference in communities across America, and there is no shortage of CDBG success stories. Many of the groups that signed this letter have been working in partnership with HUD and the Office of Management and Budget (OMB) in a good faith effort to improve the CDBG program’s ability to measure performance. As a result of this effort, HUD plans to unveil a new outcome-based measurement system in early 2005. As recently as November 2004, OMB endorsed this undertaking. We believe this new system will verify what is already obvious: CDBG works.

    CDBG’s emphasis on flexibility and local determination of priority needs through citizen participation is allowing state and local governments to achieve real results. According to HUD’s “Highlights of FY 2004 CDBG Accomplishments,” CDBG funding led to the creation or retention of more than 90,000 jobs in the last year alone. Thanks to CDBG, in 2004 over 130,000 rental units and single-family homes were rehabbed, 85,000 individuals received employment training, 1.5 million youth were served by after-school enrich-ment programs and other activities, and child care services were provided to 100,065 children in 205 communities across the country. CDBG also funded nearly 700 crime prevention and awareness programs. Additionally, more than 11,000 Americans became homeowners last year thanks to CDBG funding. CDBG remains a smart, efficient form of investment, as it continues to leverage around three dollars for every dollar of federal investment. It certainly did not come as a surprise to us when HUD Secretary Alphonso Jackson, in a March 2nd appearance before the House Financial Services Committee, stated, “The program works.”

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    The CDBG program’s design is especially successful at targeting resources to those who need them most. In 2004, 95 percent of funds expended by entitlement grantees and 96 percent of state CDBG funds expended were for activities that principally benefited low- and moderate-income persons. A full half of persons directly benefiting from CDBG-assisted activities were minorities, including African Americans, Hispanics, Asians, and American Indians. Despite the fact that economic challenges and pockets of poverty exist in almost all American communities, adoption of the SAC initiative would almost certainly result in a complete loss of funding for a significant number of communities.

    For all of the reasons detailed above, we believe that CDBG should remain at HUD and receive full funding of at least $4.7 billion in FY 2006. We also believe it is premature for the Budget Resolution to even address such a far-reaching change to the program before the numerous committees of jurisdiction have had sufficient opportunity to hold appropriate hearings on the topic. We urge you to craft a Budget Resolution reflecting those sentiments. More specifically, we strongly encourage you to include hnguage in your Resolution clearly stating that the Resolution “does not assume enactment of the proposed ‘<Strengthening> <America>’<s> <Communities>’ Initiative nor the proposed reduction in funding for the CDBG program included in the Administration’s FY 2006 budget.”

    We thank you for your favorable consideration of this request.

    Council of State Community Development Agencies.

    The Enterprise Foundation.

    Habitat for Humanity International.

    Housing Assistance Council.

    Local Initiatives Support Corporation.

    National Association for County Community and Economic Development.

    National Association of Counties.

    National Association of Housing and Redevelopment Officials.

    National Association of Local Housing Finance Agencies.

    National Community Development Association.

    National Conference of Black Mayors.

    National League of Cities.

    National Low Income Housing Coalition.

    United States Conference of Mayors.

March 15, 2005.

Hon. BILL FRIST,

Majority Leader, Office of the Senate Majority Leader, Capitol Building, Washington, DC.

Hon. HARRY REID,

Minority Leader, Office of the Senate Minority Leader, Capitol Building, Washington, DC.

    DEAR MAJORITY LEADER FRIST AND MINORITY LEADER REID: As a diverse coalition of organizations representing the nation’s community and economic development practitioners, elected officials and constituency groups, we are writing to express our overwhelming opposition to the Administration’s proposal to eliminate 18 federal community and economic development programs and reduce federal grant assistance for distressed and underserved local communities by $2 billion each year. We strongly urge you to restore these vital resources as part of the FY2006 congressional budget resolution.

    At a time when nearly every American business and community is confronting intense competition from emerging and developing nations, the federal government should be expanding its resources and assistance for local community and economic development. Instead, the Administration is recommending a 34 percent funding cut and more unfunded mandates for our nation’s state and local governments. The President’s plan would also significantly diminish and eviscerate the federal role in community development projects such as providing first-time access to clean and drinkable water, affordable housing and community facilities for our nation’s poorer areas and citizens.

    From our perspective as the constituencies at the frontlines of community and economic development, we feel strongly that the current federal investment of $5.7 billion each year is a solid, wise and effective investment in our nation’s local communities. While we understand and recognize the current federal budget climate, we must point out that the proposed funding cut represents less than one-half of a percent of last year’s federal deficit. More importantly, the $2 billion reduction in federal investments will result in the loss of at least $18 billion in matching and leveraging investments by the private sector and other governmental and nonprofit programs at the state and local level.

    Our nation’s distressed regions, communities and neighborhoods need national leadership, models of innovation and matching funds for locally-led projects and initiatives. Instead, we fear the Administration’s proposal will result in more communities marking time in the land of lost opportunity.

    American Planning Association.

    American Public Works Association.

    Association for Enterprise Opportunity.

    Center for Rural Affairs.

    Coalition of Community Development Financial Institutions.

    US Conference of Mayors.

    Council of State Community Development Agencies.

    Local Initiatives Support Corporation.

    National Association of Counties.

    National Association of Development Organizations.

    National Association of Regional Councils.

    National Association of RC&D Councils.

    National Association of Local Housing Finance Agencies.

    National Community Capital Association.

    National Community Development Association.

    National Farmers Union.

    National Low Income Housing Coalition.

    National Rural Funders Collaborative.

    National Rural Housing Coalition.

    Northeast-Midwest Institute.

    Rural Community Advancement Program.

    The Enterprise Foundation.

    Mr. SARBANES. Madam President, the private sector strongly supports CDBG.

    Doug Woodruff, Senior Vice President of the Bank of America, said at a recent Hill briefing:

    From the perspective of the private sector, the CDBG program provides a valuable and irreplaceable function in the continuum of efforts that surround many revitalization projects.

    The success of CDBG is unquestionable. It has produced over 2 million jobs in its 30-year history, and generated more than $50 billion in personal earnings.

    I want to address one other point; that is, how do we restore the funding? That is always a question. It is a matter of priorities.

    This amendment proposes to restore the funding by eliminating tax loopholes that were closed by this body in the last Congress. Ninety-two Members voted to do this. A lot of those provisions were dropped in conference.

    Just 2 weeks ago, colleagues supported closing these loopholes in the context of the minimum wage debate. Obviously, these loopholes should be closed. The headlines are screaming “abusive tax shelter schemes.” The GAO recently reported that 60 of the Nation’s largest corporations used and abused tax shelter services in recent years.

    Some want to cut other programs but this would mean taking from Peter to pay Paul. We have a perfect opportunity here to recoup valuable revenues that are now being lost through these tax shelter schemes. That is the tradeoff in this amendment.

    I urge my colleagues to support it.

    How much time do I have remaining?

    The PRESIDING OFFICER. Two minutes forty seconds.

    Mr. SARBANES. I yield half of that time to the Senator from Michigan.

    Ms. STABENOW. Madam President, I appreciate very much having an opportunity to support this amendment and to be a cosponsor. I thank my colleague from Maryland for his leadership.

    This is a small way in which we support local communities to create jobs, revitalize neighborhoods, support infrastructure, water, sewer, roads—those things that help create jobs.

    From the highlights of the 2004 CDBG accomplishments, they show very specifically that they created or had the retention of more than 90,000 jobs last year. In a State like Michigan, this is incredibly important. Over 130,000 rental units and single-family homes were rehabbed, 85,000 individuals received employment training, 1.5 million children were served with afterschool enrichment programs, childcare services were provided to over 100,000 children and their families, 700 crime prevention and awareness programs, and 11,000 Americans became homeowners.

    What is more important to each of us as parents than to be able to make sure we have shelter and a home for our children?

    These are partnerships with local communities, small amounts of revenue that we bring together with our communities to make major impacts on the quality of life. That is what we are about—to partner with our local communities.

    I urge the support of the amendment.

    Mr. KENNEDY. Mr. President, I strongly support the Sarbanes amendment, which will prevent one the greatest failings of this President’s Budget—its elimination of more than $2 billion from critically needed economic development and social service programs and the proposed consolidation of 18 valuable Federal programs into a single block grant under the so-called “<Strengthening> <America>’<s> <Communities> Initiative.”

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    I am heartened that so many of my colleagues have come together in opposition to these cuts—55 Senators wrote to the Budget Committee in an important show of bipartisanship 2 weeks ago.

    Under the President’s plan most American cities can expect at least a 35 percent cut in assistance from the Federal Government to help secure investment, house the poor, provide health care to the uninsured, and counsel the abused.

    If the administration dislikes helping cities, they should have the decency to say so, instead of this charade where they try to hide massive cuts under the cloak of streamlining.

    Their proposal insults the intelligence of mayors, community development officials, and social service agencies across the country—by cynically suggesting that somehow these cuts are going to make life better and be helpful to cities across America.

    What makes these cuts so objectionable is they come at a time of great stress and difficulty for Americans who live in poverty. 1We are the wealthiest nation on earth. We are blessed with great abundance. Yet despite our great wealth, too many of our fellow citizens remain in the shadows, the prisoners of persistent and increasing urban and rural poverty.

    The numbers are alarming. Today, nearly 36 million Americans live in poverty, and 3 million more working Americans live in hunger or on the verge of hunger today than in 2000. One out of five American children goes to bed hungry each night. We have it in our power to eliminate so much of this poverty.

    At the very least, we shouldn’t do anything to make it worse which is exactly what this “<Strengthening> <America>’<s> <Communities>” plan from the White House would do. In the powerful words of the Gospel, “To whom much is given, much is required.”

    We need to pass the Sarbanes amendment, so that the work of tens of thousands of public officials, health officials, educators, community development experts toiling to improve living conditions in our cities isn’t made any more difficult.

    Mayors across the country on the front lines every day are struggling to create new jobs and attract capital investment. They are struggling to educate and house the children of the poor, and they are not fooled by this administration’s misleading slogan “<Strengthening> <America>’<s> <Communities>,” because they know it is the exact opposite.

    My friend, Mayor Clare Higgins of Northampton isn’t fooled. She recently wrote me urging Congress to save <Community> <Development> <Block> <Grants>, one of the very few tools she has to meet Northampton’s needs and one of the biggest programs on the President’s chopping block.

    Most recently, Northampton invested $300,000 of these Federal funds to acquire the Interfaith Cold Weather Emergency Homeless shelter—the only cold weather shelter serving Hampshire County. It is a collaborative effort between area church groups and ServiceNet Inc., a local human service provider. Without these funds, there would be no cold weather shelter in Hampshire County.

    Mayor Higgins wrote:

    Without CDBG funds, the City will be unable to develop a planned senior center, public services that provide emergency food, homeless services, child care and after school programming, literacy skills and health care would not be funded; the City’s ability to promote and develop affordable housing will be severely limited, parks and playgrounds will not be improved, and the City’s ability to provide funding for the redevelopment of the former Northampton State Hospital will cease.

    Mayor Tom Menino of Boston—the former head of the U.S. Conference of Mayors—isn’t fooled. He knows what’s at stake and recently conducted an analysis of the budget cuts on his city.

    Since 1998 alone—

    Mayor Menino stated at a recent press conference—

    the City of Boston has permitted almost 5,000 new units of affordable housing and permitted more than 12,000 other units. We have invested a total of $7.8 million in CDBG funds in 19 large developments that have created a total of 1,175 apartments including 517 units for the formerly homeless.

    He went on to say that this budget for housing, community development, and social services threatens to “throw the nation into the dark ages.”

    That doesn’t sound like he believes his community will be “strengthened” by the Bush administration’s cuts.

    Mayor Menino believes the President’s budget will mean the loss of $8 million in <Community> <Development> <Block> <Grant> funding for Boston and the loss of $5.5 million in Community Services Block Grant funding.

    On any given night in the City of Boston, there are nearly 6,000 homeless men, women, and children in the city. Shelters in Massachusetts have been overflowing for 6 straight years, with 4 beds available for every 5 adults.

    Yet the very support he has relied on to help build 133 units of affordable housing for homeless people, to help 500 low-income homeowners rehabilitate their properties, and to provide 130 first-time homebuyers with their down payments is now in grave danger.

    How exactly is the mayor supposed to strengthen Boston when the support he needs to do it is getting the axe under this budget?

    Other local officials tell the same story.

    A letter I recently received from Elizabeth Cohen, Executive Director of Rape Crises Services of Greater Lowell, says:

    Dear Senator Kennedy:

    We need your help . . . We use CDBG Funds to support multilingual sexual assault support services. We are the only program in the Greater Lowell area and the only agency to have certified rape crisis counselors who speak Spanish and Khmer. With the elimination of this funding, we will have to cut back on these services, which will result in 100 Khmer-speaking clients being unable to have a counselor in their language . . .

    As you know, immigrants and refugees already have many struggles when they move to a new city or new country. Having to deal with the trauma of sexual violence on top of the difficulties in housing, education, food and school can paralyze a family . . . Please don’t let the President take away this funding for Lowell.

    I ask the Senate, does this sound like we are strengthening communities with this budget?

    In Lawrence—one of Massachusetts’ and the Nation’s poorest cities—CDBG funds have been used to amazing effect to leverage nearly $110 million of investment in the remedation and redevelopment of an abandoned industrial brownfield site known as the Lawrence Gateway Project.

    The city has invested nearly $6 million of its CDBG funds in the project and formed a model partnership with GenCorp, a private company that has invested $75 million so far in the redevelopment.

    Today, Lawrence is continuing to use its CDBG funds to meet debt service payments on loans made to clean the properties.

    Without these Federal funds, the partnership with GenCorp could not exist, and the City would not be able to do anything about this 15-acre, fenced-in, desolate property, which would stand as a stark reminder of the city’s industrial past rather than as a symbol of the kind of innovative development needed to build a stronger future for the city.

    How will we be strengthening Lawrence by eliminating one of the best ways they have to create investment partnerships with private businesses?

    In addition to the <community> <development> <block> <grant>, the Sarbanes amendment will also preserve the community services block grant. These funds strengthen communities by funding local agencies, which provide services such as literacy, child health care, after school activities, low-income housing, food stamps, emergency shelter, and other support.

    In Worcester, Patsy Lewis of the Worcester Community Action Council sent me a letter on just how devastating the President’s plans to eliminate this program are.

    Simply put, Patsy wrote, they would have to reduce or close their GED classes and partnerships for at-risk students in the public schools. The agency may even be forced to close.

    Perhaps the President can explain how a community can be “strengthened” by eliminating GED programs.

    Another person who isn’t fooled about the effect of the President’s devastating “<Strengthening> <America>’<s> <Communities>,” budget cuts is Steve Teasdale, executive director of the Main South Community Development Corporation in Worcester, which is doing incredible work attacking poverty in one of Massachusetts most economically distressed neighborhoods.

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    The Main South Community Development Corporation was formed in 1986, when concerned citizens came together to revitalize the neighborhood surrounding Clark University, which was reeling from the economic and social devastation wrought by the loss of Worcester’s industrial base.

    The obstacles in Main South’s path are considerable:

    Between 1960 and 2000, the population of the neighborhood fell 35 percent from 5,600 to 3,700. The housing stock fell by 29 percent.

    Over 40 percent of the population lives below the poverty line—and 17 percent have incomes lower than 50 percent of the poverty level.

    At 11.4 percent, unemployment is double the city’s rate of 6.3 percent. Over half of neighborhood households are headed by single parents.

    The challenges confronting the community are great, and Federal funds made available through the community services block grant, the <community> <development> <block> <grant>, and HUD’s section 108 loan program have been absolutely essential to the extraordinary successes of Main South in recent years.

    CDBG funds were used at the outset to match a challenge grant from the Ford Foundation that provided for the creation of the entity, and enabled Main South to attract outside investment. The result is numerous accomplishments for the neighborhood.

    Since 1988, Main South has acquired and rehabilitated 246 units of low and moderate income housing—137 of which had been abandoned, and 78 of which were fire-damaged, many from arson. The new homes added $500,000 annually to Worcester’s tax rolls.

    In addition, as a direct result of Main South’s housing rehabilitation, over $20 million of investment has flowed back into the community. Three ongoing private developments represent another $40 million of capital brought into the area.

    Because of this Federal support, Main South has been able to be a true partner to Clark University, providing greater educational opportunity to neighborhood families—through a homework center, computer training classes, and career placement services.

    In fact, because of the success of the partnership, Clark University lets neighborhood high school students take college classes and provides full tuition to neighborhood students who make the grade academically. This is extraordinary.

    All of this has been made possible by the commitment and dedication of concerned community leaders—and the relatively modest sums of Federal support that are in danger with this budget before us.

    Now Main South is taking on its greatest project, the Kilby-Gardner-Hammond Neighborhood Project.

    This partnership between the Boys and Girls Club, the City, Clark University, and Main South will revitalize 30 acres of distressed industrial property consisting of over 40 vacant, trash-strewn lots.

    It aims to transform the neighborhood through the construction of a $7 million new Boys and Girls Club, between 70 to 80 affordable housing units, and a new outdoor track and field complex for Clark University students and neighborhood children alike.

    It is a transformative project, with a total investment impact of $30 million, much of that made possible by Section 108 loan guarantees that this budget would eliminate.

    Without Section 108, Teasdale and Main South would never have been able to acquire the properties to put this project together. This fact alone should cause us to reject the administration’s “strengthening communities” proposal—because it will do nothing of the sort.

    The question has to be asked, [Teasdale recently wrote] is what would happen in these neighborhoods if such funding was severely restricted or cut back. The answer can only be assumed to be that the current problems in these areas would get worse as capital investment once again withdraws to safer havens and the social service needs of the resident populations are stripped away. Crime, substance abuse, lack of recreational and educational opportunities for the youth of these areas and the incidence of poverty can all be expected to increase if CDBG funding is no longer available.

    The long-term social and financial costs associated with such cut backs would be deeply damaging and although the immediate impact would be most severely felt in our poorer urban communities the resulting social distress would eventually affect everyone.

    Steve Teasdale and the leadership of the Main South Community Development Corporation know more about the day-to-day challenges affecting our poorer urban communities and the difficulties associated with urban economic revitalization than any of us, because they live it every day.

    I ask my colleagues to consider his words and vote for the Sarbanes amendment, so we can save these critically important poverty prevention and economic development programs.

    The Senate has a moral obligation not to make it harder for communities to solve the complicated issues of poverty and community development they face. Without the Sarbanes amendment, that is exactly what the Senate will allow to happen.

    Mrs. FEINSTEIN. I rise today in support of Senator Sarbanes’ amendment to the Budget resolution that would restore funding to the <Community> <Development> <Block> <Grant>, CDBG, program and 17 other community and economic development programs proposed to be eliminated.

    These programs are vital to our Nation’s low and moderate income neighborhoods, as these are the communities who need these programs the most.

    Despite the proven results of the CDBG program and the other 17 community and economic development programs, the fiscal year 2006 budget proposes to consolidate these programs into a single Commerce Department program, resulting in a $1.89 billion cut.

    In fiscal year 2005, the total budget for all 18 community and economic development programs proposed to be consolidated, including CDBG, was $5.6 billion.

    The administration’s proposal only provides $3.7 billion for all 18 programs, leading to a $1.89 billion cut in community development funds.

    This major reduction would have a devastating impact on our Nation’s neediest communities and families who rely on these programs.

    The loss of funds would also impact our Nation’s economy, affecting small businesses who receive loans to finance projects that lead to the creation and retention of jobs.

    The Sarbanes’ amendment would restore the proposed $1.89 billion cuts to the CDBG program and 17 other community and economic development programs, such as the Community Development Loan Guarantees Program and Community Development Financial Institutions Fund; retain the administration of these important programs at their current agencies. For example, the CDBG program would remain at HUD and not be transferred to the Department of Commerce; accomplish this by closing tax loopholes that an overwhelming majority of Senators voted to close in the last Congress.

    While the vote to close tax loopholes was not enacted, it offers us a bipartisan way to save community and economic development programs.

    The <Community> <Development> <Block> <Grant> Program is one of the most effective Federal domestic programs to revitalize urban and rural communities.

    Over the past 30 years, cities, counties, and States have used more than $105 billion in CDBG funds.

    Over 95 percent of CDBG funds have gone to projects and activities principally benefiting low- and moderate-income individuals and families such as housing development, recreation centers, clinics, day-care facilities, and job creation and training.

    According to HUD’s “Highlights of Fiscal Year 2004 CDBG Accomplishments,” CDBG funding led to the creation and retention of more than 90,000 jobs and 85,000 individuals received employment training nationwide in the last year alone.

    In 2004, CDBG funds also helped with the rehabilitation of over 130,000 rental units and single family homes, and allowed more than 11,000 Americans to achieve the American Dream and become homeowners.

    Additionally, nearly 700 crime prevention and awareness programs were funded and child care services were provided to 100,065 children in 205 communities across the country.

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    In my State of California, CDBG grants are critical to both urban and rural cities who rely on these funds to serve many low-income neighborhoods.

    In fiscal year 2005, California received over $526 million in CDBG funds, accounting for 12.8 percent of the total $4.1 billion grant program.

    Of these funds, for example, California cities and counties received $82.8 million to the city of Los Angeles and $34.6 million to Los Angeles County; $24.6 million to the city of San Francisco; $11.5 million to Riverside County; $8.4 million to San Bernardino County; and $5.5 million to Fresno County.

    Over the past 5 years, the diverse use of CDBG funds have allowed Los Angeles County to develop almost 9,000 affordable housing units, to create and preserve over 2,000 jobs, to remove over 32 million square feet of graffiti, and to provide loans and technical assistance to over 5,000 businesses among other programs.

    Cuts to the CDBG program would greatly hurt Los Angeles County’s low income residents, the primary beneficiaries of CDBG-funded services.

    According to 2000 Census data, 17.9 percent of Los Angeles County residents had incomes below the poverty level, a far higher poverty rate than the 12.4 percent national average.

    CDBG funds have not only benefited large urban counties like Los Angeles, but rural counties and cities in California as well. Here are a few examples:

    The city of Porterville in the Central Valley, which has a population of over 39,000 and an unemployment rate of 12.3 percent, has utilized CDBG funds to rehabilitate over 50 homes and assist more than 200 first time homebuyers purchase their first home. Many of these first time homebuyers are farm worker families.

    The city of Victorville, located in San Bernardino County, served over 2,900 senior citizens, youth, homeless, disabled, victims of domestic violence, and low-income families in 2004 with CDGB funds. Over $551,550 in CDBG grants were provided to low-income senior and disabled homeowners to rehabilitate their homes, ensuring that Victorville citizens have a safe place to live.

    As you can see, CDBG funds are crucial to closing the disparity between rich and poor in so many communities in California and throughout the country.

    As a former mayor, I know that CDBG resources are the most flexible dollars within city government, making them extremely valuable to the economic vitality of local communities.

    We cannot allow these funds to be cut.

    To do so would send the wrong message to our country’s neediest communities and families who rely on these funds the most.

    Although CDBG is one of the main community development programs slated for consolidation and cuts in the fiscal year 2006 budget, there are 17 other important programs that would be impacted as well.

    Specifically, I would like to touch on a few of the following programs that have had a substantial benefit to counties and cities:

    Community Development Loan Guarantees, section 108 loan program, funded at $7 million in fiscal year 2005, is used often with CDBG funds to finance the construction of new facilities and economic development activities such as business loans.

    Through the section 108 Loan Program, the city of San Francisco has been able to construct 13 new childcare facilities which created 599 new slots for children of low-income families, and created 200 new jobs through 8 business start ups and expansions.

    Brownfields Economic Development Initiative, which received $24 million in fiscal year 2005, used with the section 108 loan program, helps finance the redevelopment of seriously contaminated sites.

    Cities throughout California and the Nation have received assistance through these funds to conduct environmental engineering assessments for site cleanup activities.

    This amendment would also restore funding for the Community Development Financial Institutions, CDFI, which provides private sector investors with tax credits to raise money for hard to finance development projects in low-income areas, as well as other economic development programs. CDFI received $55 million in funding this year.

    These community and economic development programs proposed to be cut in the fiscal year 2006 budget put Federal dollars where they are needed most by funding projects that are unique to the problems they address.

    The proposed cuts to the CDBG program and 17 other programs would result in higher unemployment, diminish business creation and retention, increase the number of blighted buildings, and the number of homeless people who cannot find affordable housing.

    The loss of these dedicated funds would profoundly affect our country’s low and moderate income communities and residents.

    We must not allow this to happen.

    I urge my colleagues to vote for the Sarbanes amendment to restore funding for CDBG and the 17 other community and economic development programs proposed to be eliminated.

    Mr. LEAHY. Mr. President, I rise today to address shortfalls in the budget resolution for key community and economic development programs. The budget before us includes a reduction of roughly $2 billion in Federal assistance to distressed and underserved communities. These cuts are shortsighted, ill-advised and represent a significant retreat from our long-standing commitment to invest in our Nation’s communities. I join Senator Sarbanes in offering an amendment to restore funding for these programs to their fiscal year 2005 levels.

    Last year the Federal Government invested $5.7 billion in communities across the country through a network of community and economic development programs. These programs were used to enhance social services, invest in infrastructure, promote affordable housing, provide public services and revitalize our downtowns. These investments changed the face of our cities and helped improve the standards of living across the Nation.

    Unfortunately, the President has proposed to eliminate this network of programs and replace them with a single block grant at the Department of Commerce. Eighteen programs are on the chopping block, including the <Community> <Development> <Block> <Grant>, CDBG, the Community Development Financial Institutions Fund, CDFI, the Community Services Block Grant, CSBG, Brownfields Economic Development Initiatives and the Economic Development Agency, EDA. I find this proposal underwhelming and unacceptable. To add insult to injury the President has proposed, and this budget includes, only $3.7 billion for community and economic development activities covered under this initiative—a 34-percent reduction in all programs combined. This is simply not adequate.

    Each of the programs slated for elimination was created for a specific purpose, each serves targeted constituencies and addresses distinct needs. Consolidating and under funding these programs would leave critical gaps in the web of support for our Nation’s cities and towns. I question the President’s assertion that these programs are ineffective or inefficient and I question the wisdom of starting a new program at a new agency when the old system is not broken.

    I am particularly concerned with the elimination of the <Community> <Development> <Block> <Grant> program. CDBG is the centerpiece of the Federal government’s efforts to help States and localities meet the needs of low-income communities. CDBG funds vital housing rehabilitation, supportive services, public improvements and economic development projects in communities across the Nation. It serves more than 1,100 entitlement communities, urban counties and States, and more than 3,000 rural communities.

    Last year over 95 percent of CDBG funds went to activities benefiting low and moderate income persons. CDBG housing projects assisted over 160,000 households, public service projects benefited over 13 million individuals, and economic development projects helped create or retain over 90,000 jobs. Vermont used CDBG grants to rehabilitate over 270 units of affordable housing and help create or preserve over 150 jobs.

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    I recently led a bipartisan letter with Senator Coleman to the Budget Committee attesting to the effectiveness of CDBG and urged that it be fully funded and retained at the Department of Housing and Urban Development. Fifty-seven members of the Senate joined me in this letter.

    I ask unanimous consent to print this letter in the RECORD.

    There being no objection, the material was ordered to be printed in the RECORD, as follows:

U.S. SENATE,

Washington, DC, March 2, 2005.

Hon. JUDD GREGG,

Chairman, Committee on the Budget,

U.S. Senate, Washington. DC.

Hon. KENT CONRAD,

Ranking Member, Committee on the Budget, U.S. Senate, Washington, DC.

    DEAR CHAIRMAN GREGG AND RANKING MEMBER CONRAD: The <Community> <Development> <Block> <Grant> (CDBG) Program funds housing rehabilitation, supportive services, public improvements and economic development projects in communities across the nation. CDBG serves more than 1,100 entitlement communities, urban counties and states, and more than 3,000 rural communities. We urge the Budget Committee to maintain the Federal government’s current commitment to community development programs at the Department of Housing and Urban Development and support a budget allocation of $4,732 billion in Function 450 for CDBG, Section 108 economic development loan guarantees, and the Brownfields Economic Development Initiative.

    HUD is the Federal Department principally responsible for community economic development. CDBG is the center piece of the Federal government’s efforts to help states and localities meet the needs of low-income communities. Section 101 of the Housing and Community Development Act created the CDBG program to consolidate a number of complex and overlapping programs of financial assistance in order to encourage community development activities which are consistent with comprehensive local and areawide development planning; to further the national housing goal of a decent home and a suitable living environment for every American family; and to foster the undertaking of housing and community development activities in a coordinated and mutually supportive manner by Federal agencies and programs, as well as by communities. HUD’s community development programs coupled with HUD’s housing and homeless programs and supportive services, provide communities with a comprehensive approach to serving the needs of residents. CDBG is the glue that holds other Federal programs serving low-income communities together.

    The <Strengthening> <America>’<s> <Community> proposal aims to create strong accountability standards, offer flexibility to communities and create a more unified federal approach. These goals are already hallmarks; of the CDBG program. On the 30th Anniversary of CDBG in 2004, HUD Deputy Secretary Roy Bernardi said the following about the program: “HUD has a long history of ‘being there’ and providing help for people, particularly those with the greatest needs—our lower income constituents. CDBG has certainly been there, during boom years and most importantly in times of tightening budgets, which place greater demands on existing services. We must continue to support and build upon programs that work, those that have a proven record of flexibility and the ability to fit in with locally determined needs. CDBG is such a program and ranks among our nation’s oldest and most successful programs. It continues to set the standard for all other block grant programs.”

    The <Strengthening> <America>’<s> <Communities> proposal would recreate a block grant program similar to CDBG within the Deparment of Commerce. The Department of Commerce, however, does not have the vital infrastructure or institutional capacity to provide a comprehensive approach to neighborhood development. Replicating HUD’s CDBG program within the Department of Commerce would require rebuilding HUD’s “infrastructure” and would result in inefficiencies, greater complexity and less aid to fewer cities, an approach which does not serve America’s communities or taxpayers. CDBG’s success depends on a locally driven, citizen participation process that provides flexibility and does not take a “one-size-fits-all” approach. The needs of Nashua, New Hampshire; Bismarck, North Dakota; Cincinnati, Ohio and Kansas City, Missouri are very different from the needs of Miami, Florida; El Paso, Texas; Pueblo, Colorado; or San Diego, California. CDBG is capable of addressing the diverse needs of these communities whether it is housing rehabilitation, homeownership, supported services for the elderly or children, business development or infrastructure improvements.

    CDBG is one of the most effective Federal domestic programs to revitalize neighborhoods with proven results. Over 95 percent of CDBG funds went to activities principally benefiting low- and moderate-income persons. Twenty-eight percent of CDBG funds supported housing activities in distressed communities, 24 percent supported public improvements, 15 percent went to the provision of public services, and 7 percent supported economic deve1opment activities. In FY2004, CDBG housing projects assisted 168,938 households. Public service projects funded with CDBG served 13,312,631 individuals. Economic development programs funded by CDBG in fiscal 2004 created or retained 90,637 jobs for Americans and public improvement projects benefited 9,453,993 persons. CDBG also has a strong record in business retention: CDBG ensured that over 80 percent of the businesses assisted through the program were still in operation after three years.

    Thank you for your consideration. We look forward to working with you to ensure that communities across the country can provide good jobs, affordable housing, and public services to meet the needs of all Americans.

    Mr. LEAHY. Mr. President, I believe you will find similar support for each of the other programs under this umbrella.

    I challenge each Member to go back to their State and find one community that has not reaped the benefits of a CDBG investment. I challenge each member to visit with their local community action groups and hear how they use the Community Services Block Grant to support the neediest in their communities. These programs fill a real need and have proven results. A cut of $2 billion in Federal funds will result in the loss of at least $18 billion in matching funds from local and State governments and nonprofit and private sector investments. I fail to see the wisdom in dismantling programs that are so vital to our communities.

    Our amendment would restore nearly $2 billion for community and economic development programs and urges the Senate to retain the administration of these programs at their current agencies. We fully pay for the increase in funds by closing egregious tax loop holes that over 90 Members of this Chamber has already gone on record in support of closing.

    I encourage my colleagues to join me in support of this amendment and express their support for these important programs.

    Mr. BAUCUS. Mr. President, I rise to speak in support of the amendment of my friend and to express my support of the <Community> <Development> <Block> <Grant> Program, the Economic Development Administration, and the 16 other economic and community development programs that are dramatically underfunded in this budget. It is no surprise to see this amendment coming from my distinguished colleague from Maryland. I thank him for his work on this issue, both now and in the past. Throughout his career in the Senate he has been a powerful advocate for CDBG and similar community development programs.

    The CDBG Program has for 31 years provided vital funding to communities all over the United States and throughout my home State of Montana. CDBG is especially valuable to economically distressed communities that often lack basic public infrastructure. It funds a diverse range of projects. Just last year, CDBG dollars helped fund head start facilities in Havre and Kalispell, and money to help Dodson modernize their wastewater system.

    A CDBG grant helped Big Horn County renovate Memorial Hospital. In Anaconda, where we have a Jack Nicklaus-designed golf-course, a CDBG loan helped renovate the Old Works Hotel, dramatically improving the region’s tourism industry.

    These CDBG investments leveraged millions of State and local dollars. In Montana, CDBG dollars are primarily administered at the State level, so local officials can direct the funding to the areas of greatest need. CDBG is a program that works. It is a good investment of taxpayer money that communities leverage to fund vital projects they could not complete on their own.

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    And the CDBG Program has been supporting community development for the past 30 years with great success. Providing small infusions of Federal funding to jumpstart projects, CDBG has touched hundreds of Montana communities, and thousands of lives.

    Unfortunately, CDBG isn’t the only program on the chopping block. The Economic Development Administration is a small but crucial program that invests to help communities—particularly economically distressed communities—get ready for new businesses. EDA has a documented record of success. Since its inception in 1964, the EDA has created more than 4 million jobs and leveraged more than $18 billion in private sector investment in thousands of communities all across the country.

    EDA investments in Montana have helped Montana farmers, suffering from years of draught. The Bear Paw economic development district in northern Montana used an EDA planning grant to help farmers study the feasibility of growing carrots and other vegetables in a region dominated by wheat growth for more than a century. The study demonstrated the viability of these crops, and farmers are excited to have a variety of crops to choose amongst.

    Why, then, does this budget propose to eliminate it? At a time when it is critical for our country to maintain competitiveness in the global economy a proposal to eliminate a successful catalyst for economic growth is a mistake.

    The growing budget deficit is a concern. But continued economic growth is central to everyone’s plan to reduce the deficit. Why then are we cutting programs that spur economic growth? EDA creates jobs, more than 4 million in its history. It is essential that we preserve this job creating agency.

    Our economy is in recovery, and as this recovery continues, EDA is working to make sure that all of America recovers. EDA targets its funding at economically disadvantaged communities. Areas that have recently experienced a factory closure, or a military base closure. The people who benefit the most from EDA are those who have been hurt the most by outsourcing.

    States, counties, and cities are experiencing ever greater demands on their budgets. The choices they make, just like the choices we make here in the Senate, are tough, and getting tougher. The rising costs of health care, education, and other investments programs are straining local budgets to the breaking point. In some communities they have been forced to raise local taxes so high the benefits from recent tax cuts are all but gone.

    We are robbing Peter to pay Paul. And it doesn’t make sense to do it with agencies that have the ability to leverage their funds and ripple through their communities. For us here in Washington to eliminate Federal programs like the CDBG and EDA would devastate communities.

    Cities will be forced to choose between school for our children or housing for our seniors, between improving decaying infrastructure needed to create new jobs and providing health coverage for our children. This amendment doesn’t solve all of these problems, but it is a giant step to improving our communities.

    Once again, I thank my colleague from Maryland, as well as all of our other cosponsors. I urge my colleagues to support this amendment. These programs create jobs and improve lives and communities all over our country. Let’s not shortchange our communities that need this help the most.

    Mr. REED. Mr. President, today many Americans in communities across the Nation are being left behind in our economy. Federal community and economic development programs, such as <Community> <Development> <Block> <Grants>, Community Development Financial Institutions, and Economic Development Administration grants, have a history of “being there” for communities—providing funding for housing rehabilitation, job creation, and infrastructure. I thank Senator Sarbanes for offering his amendment to save these important programs from elimination, and I am glad to be a cosponsor. Senator Sarbanes’ amendment will restore funding to these vital programs by closing tax loopholes that the majority of the Senate supported closing in the FSC/ETI bill.

    The President’s Strengthening America Communities Initiatives, SACI, would fundamentally change Federal economic and community development programs serving our communities. The President’s fiscal year 2006 budget eliminates 18 successful programs serving low-income urban, rural, and Native American communities. It reduces the Federal commitment to funding community development by 33 percent, cutting funding from $5.6 billion to $3.71 billion. And the President’s proposal will also reduce the number of communities served. A program that serves fewer Americans with less resource can only place more families and low-income neighborhoods at risk, rather than create vibrant and strong economies as CDBG, CDFI, EDA, the Brownfields Economic Development Initiative and Section 108 loan guarantees are doing.

    The real issue with federal community development assistance is the lack of financial resources for the thousands of communities struggling to remain economically competitive, not the current structure of the existing programs. While the budget resolution includes funding for tax loopholes that the Senate voted to close last year, it fails to adequately fund programs that provide affordable housing to American workers, programs that create or retain jobs in the economy, and programs that provide vital public services to our senior citizens.

    In fiscal year 2003, the economy lost 486,000 jobs. CDBG projects created or retained 108,700 jobs for Americans. CDBG also has a strong record in business retention. While businesses have left American shores for other countries, CDBG ensured that over 80 percent of the businesses assisted through this program were still in operation after 3 years.

    There is overwhelming opposition to the <Strengthening> <America>’<s> <Community> Initiative. Mayors, local and State community development agencies, housing assistance agencies, and others from Rhode Island to Utah, and from Michigan to Texas, have written letters to Congress and to the administration opposing these devastating cuts and changes to Federal economic and community development assistance. They know that CDBG, CDFI, and EDA programs are the foundation of strong communities—these programs are literally the building blocks of community development. A unified grant program, as proposed by the administration, will leave gaping holes in community and economic development assistance.

    CDBG is the glue that holds other Federal programs serving low-income communities together. On the 30th Anniversary of CDBG in 2004, HUD Deputy Secretary Roy Bernardi said the following about the program:

    HUD has a long history of ’being there’ and providing help for people, particularly those with the greatest needs—our lower income constituents. CDBG has certainly been there, during boom years and most importantly in times of tightening budgets, which place greater demands on existing services. We must continue to support and build upon programs that work, those that have a proven record of flexibility and the ability to fit in with locally determined needs. CDBG is such a program and ranks among our nation’s oldest and most successful programs. It continues to set the standard for all other block grant programs.

    I want to tell my colleagues about CDBG’s history of “being there.” In Rhode Island, CDBG was there when the West Elmwood Housing Development Corporation, a not-for-profit community based organization, needed to build and renovate affordable homes. CDBG gave Rhode Island families, who would otherwise be unable to achieve the American dream of homeownership, the chance to own their own home. In Florida, Congress turned to CDBG to provide relief after last year’s devastating hurricane season, and in New York City, CDBG helped the city rebuild after the September 11 tragedy. In New Hampshire, CDBG is there for the Concord Area Trust for Community Housing to layer with Low-Income Housing Tax Credits to build affordable housing. In Ohio, Community Development Financial Institutions are there for communities across the State helping to finance businesses and microenterprises that support new jobs in the economy. And EDA was there to provide planning and technical assistance to help save 466 existing jobs and create 78 new jobs near Billings, MT. There are no other Federal programs or tax loophole that have the history of “being there” like CDBG, CDFI, and EDA.

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    Senator Sarbanes’ amendment to restore funding to these programs deserves the full support of my Senate colleagues, whether Republican or Democratic, representing an urban state such as Rhode Island or a rural state such as Montana. I hope my colleagues will join me in voting for Senator Sarbanes’ amendment so that all workers, families, neighborhoods, and communities can participate in our Nation’s economic growth.