(IPS) Obama’s 2013 Budget Slashes Aid for Working Families

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This article first appeared on the Inter-Press Service website at: http://ipsnews.net/news.asp?idnews=106894

ATLANTA, Georgia, Feb 29, 2012 (IPS) – The federal budget for fiscal year 2013 proposed by President Barack Obama severely cuts aid for working families by targeting at least two programmes, the Community Services Block Grant (CSBG) and Project-Based Rental Assistance (PBRA), that aid the nation’s most vulnerable working families.

First, Obama has proposed a 50-percent cut to the CSBG programme that funds an array of services – which differ in each county – including emergency rental and utliity assistance, dental clinics, Head Start (pre-kindergarden education), home weatherisation, job training, GED (high school diploma equivalency) classes, and entrepreneurship training.

In 2012, Congress funded CSBG at 677 million dollars. For 2013, President Obama has proposed funding the programme at only 350 million dollars, a cut of nearly one half.

Obama has also proposed additional cuts to the Low-Income Heating Assistance Program (LIHEAP).

“This is the second year that the administration has made these recommendations,” David Bradley, executive director of the National Community Action Foundation, told IPS regarding CSBG.

“Congress in 2012 rejected them for a number of reasons. Number one, economic recovery, particularly in low-income communities, has not happened yet. Eleven hundred community action authorities in 98 percent of U.S. counties are still at record levels of people coming for services, and record levels for new individuals and families. People who have fallen into economic hardship, who previously may have been middle class, the demand is still there,” Bradley said.

“Particularly in rural areas, there’s no one else who can pick this up,” Bradley said.

Bradley said the cuts would be devastating to millions of U.S. families.

If Congress enacts the cuts to CSBG as proposed by Obama, “Over five million individuals and families would not have access to these services. In a 3.7-trillion-dollar budget, this is an example of penny-wise and pound-foolish,” Bradley said.

These cuts are tiny in proportion to the federal budget, and yet right-wing organisations and the Tea Party still blast Obama for failing to cut the federal budget to their satisfaction, meaning that there is little political benefit to the president – only harm to the people who have largely supported him electorally.

“Obama has some good words about restraining the budget and reducing the rate of deficit, but little of long-term substance in his 2013 budget proposal,” Joe Cobb, policy advisor in economics at the right- wing Heartland Institute, said in a press release. Cobb said Obama’s budget proposed is “dead on arrival”.

“The vision of an America that enjoys economic growth is not going to come from the European welfare-state ideals of President Obama and his social Democrats in the Congress, Sen. Harry Reid (D-NV) and Rep. Nancy Pelosi (D-CA). They believe in that great fiction that everyone might live at the expense of everyone else, if we only transfer wealth from successful to unsuccessful people,” Cobb said.

So what does Obama have to gain from these cuts if the right-wing Republicans are still unhappy?

“It’s symbolically, (Obama is saying) we’re not going to defend all poverty programmes, here’s a programme we like, but were going to cut it, as he said in the (2011) State of the Union. If he’s calling on Republicans in Congress to make sacrifices on tax extenders or tax breaks he’s showing he’s willing to make tough choices too, this is a choice he’s willing to make. Find another one, Mr. President,” Bradley said.

Meanwhile, Obama has also proposed a complete elimination of the PBRA programme, which means that hundreds of thousands of low-income renters in the U.S. – many of whom were displaced from demolished public housing projects with the promise of affordable housing opportunities elsewhere – will now lose their rental subsidies.

Currently, nearly 1.2 million households benefit from PBRA, where the amount of rent they pay is based on a portion of their income, while the rest is paid by the federal government, through local housing authorities, to property owners.

Unlike the voucher programme, where the U.S. Department of Housing and Urban Development (HUD) provides monthly checks to property owners on behalf of tenants who select where they want to live, under PBRA, the low-income apartment building or complex itself is subsidised.

“HUD proposes renewing just a third of project-based Section 8 contracts for a full year, and turning the rest into short-term contracts,” Amy Clark, spokesperson for the National Low-Income Housing Coalition (NLIHC), told IPS.

“We are very concerned that this would cause investors to question the stability of the programme, putting tenants’ housing at risk,” Clark said.

“HUD has tried this budget gimmick before,” Sheila Crowley, president of the NLIHC, said in a press release. “And it wrecked havoc in the lives of hundreds of thousands of vulnerable people.”

Obama also wants to raise the minimum rents paid by the very poorest HUD-assisted households. Raising the minimum rents from 25 or 50 dollars per month to at least 75 dollars per month would create a savings of 150 million dollars, or only .003 percent of the total HUD budget.

“The federal government is reduced to picking the pockets of the poorest of the poor. It is Scrooge-like,” Crowley said.

(END/2012) 

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