February 04, 2008


Washington, DC – Senator Chris Dodd (D-CT), Chairman of the Committee on Banking, Housing, and Urban Affairs, today issued the following statement on Bush’s misguided budget proposal: “The budget fails to take into account the needs of low- and moderate-income families all across our nation. “Given the economic downturn that our country is currently experiencing and indications that the economy will continue to slow down, President Bush should have proposed a budget that demonstrated a real commitment to solving the challenges facing the middle class instead of a commitment to ideology and rhetoric. The President squandered his opportunity to set the American economy back on track. Instead of making the tough and smart decisions needed to grow the economy and create jobs, the President’s budget uses make-believe assumptions about growth. Even under this rosy economic scenario, the nation would continue to run almost record budget deficits – of over $400 billion a year – this year and next. “Critical housing and community development programs are once again under-funded, which will hurt job growth and increase homelessness. In addition, cuts to improving our nation’s transit security take a step backward from protecting Americans from the risk of terrorism. I will do everything in my capacity as Banking Committee Chairman to protect the working Americans whose future is compromised by this year’s budget proposal.” -30- Below please find some background information prepared by Banking Committee majority staff: General Economic Assumptions and Impact The President’s proposed FY09 budget assumes economic growth of 3.0% in 2009, a rose-colored opinion of the nation’s economic prospects when compared to estimates by the Federal Reserve (2.5%), Congressional Budget Office (2.8%) and most leading economists – the Wall Street Journal's consensus estimate of over 50 economists had an average prediction of 2.0% growth. • Even under the President’s economic scenario, the nation would continue to run almost record budget deficits – of over $400 billion a year – this year and next ($410 billion in '08, $407 billion in '09), resulting in higher interest rates, slower economic growth and a greater share of Americans’ hard earned dollars going towards paying interest on the debt. Using the President’s own FY09 budget assumptions, our nation will spend more money – $28 billion – paying for the increase in interest payments on our nation’s debt than the entire amount proposed by the President towards solving our nation’s energy crisis through the Department of Energy (total DOE budget is $26 billion FY09). Transit Security The President proposes only $175 million for transit security grants, despite signing legislation last year that called for $750 million in transit security grants this year. By funding less than 25% of what the Congress and the President himself recognized to be the appropriate level of investment in our nation's transit system, this budget does far too little to protect Americans from the risk of terrorism during their daily commutes. Housing The HUD budget for critical housing and community development programs is once again under-funded and fails to take into account the needs of low-and moderate-income families all across the nation. • CDBG is cut by over $865 million (down 22% from FY08). At a time when our nation’s cities are struggling to address rising foreclosures which are decreasing housing values and threatens to decay entire communities, funding for flexible programs like CDBG should be increasing for states and municipalities. • Section 8 housing voucher renewals are under-funded, cuts that would undermine a successful public-private housing program which houses approximately 2 million low-income families. • Public Housing Capital Fund is cut by $469 million (23% decrease from FY08), which threatens the viability of the housing stock and the significant federal investment made in housing made available for the lowest-income Americans. • HOPE VI: The Administration once again proposed to eliminate funding for the HOPE VI, a program that has traditionally garnered bipartisan support, which has successfully transformed distressed public housing into vibrant mixed income communities. • Section 202, Senior Housing, is cut by almost $200 million (27% from FY08), a trend that lacks compassion and ignores the growth of America’s senior population. • Section 811, Housing for People with Disabilities, is cut by $77 million (32%).