Trump’s Annual Budget Proposal Bad for Economic Justice

Today, the Trump Administration released its FY 2021 budget proposal, which would either eliminate or drastically reduce funding for numerous federal housing and community development programs that help lower-income families climb into the middle class. Among other things, the budget proposes $4.4 trillion in spending reductions over the next decade. Half of those cuts would come at the expense of social safety net programs such as Medicaid and affordable housing.

“It is worse than irresponsible for the president to issue tax cuts to corporations and the wealthy in 2017, leading to the nation’s largest deficit ever, and then propose a budget that takes direct aim at the people and communities that most need federal assistance,” said Jesse Van Tol, CEO of the National Community Reinvestment Coalition (NCRC). “This is a cynical, selfish and mean-spirited proposal, a dark vision for a country that’s supposed to be the land of opportunity. This isn’t a plan to make government smaller. It’s a plan to help the rich get richer and push more people into poverty.”

NCRC opposes these draconian budget cuts, which will have a disproportionate impact on both people of color and low- and moderate-income communities. We also expect Congress to reject the administration’s harmful proposals and come up with more thoughtful plans.” 

Here is a shortlist of programs proposed for elimination:

  • Community Development Block Grants (CDBGs)
  • Community Development Financial Institutions (CDFI) grants (leaves $14 million for existing commitments)
  • HOME Investment Partnership
  • Choice Neighborhood Initiative
  • Self-Help and Assisted Homeownership Opportunity Program (SHOP)
  • Neighborhood Reinvestment Corporation
  • Sec. 4 Capacity Building for Community Development and Affordable Housing

The budget also irresponsibly proposes to eliminate funding for both the Housing Trust Fund and Capital Magnet Fund, which provides Federal funding for affordable low-income housing. It would restructure the independent Consumer Financial Protection Bureau (CFPB), placing it under the federal appropriations structure. The FY 2021 budget proposal would also increase the guarantee fees charged by Fannie Mae and Freddie Mac.  

Once again the budget would woefully underfund programs such as the Housing Counseling program at $45 million, far less than the $65 million needed to run the program efficiently, and the Minority Business Development Agency, down from $42 million in FY2020 to a mere $10 million in this proposal. The FY 2021 Budget also proposes a $3.5 billion reduction to HUD’s rental assistance programs (Housing Choice Vouchers, Public Housing, Project-Based Rental Assistance, and Housing for the Elderly and Persons with Disabilities) which target low-and moderate-income Americans and seniors. 

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