Transportation, Housing and Urban Development, and Related Agencies (THUD): FY2009 Appropriations
Transportation, Housing and Urban Development,
and Related Agencies (THUD):
Updated September 9, 2008
David Randall Peterman and John Frittelli
Resources, Science, and Industry Division
Appropriations are one part of a complex federal budget process that includes budget
resolutions, appropriations (regular, supplemental, and continuing) bills, rescissions, and
budget reconciliation bills. The process begins with the President’s budget request and is
bound by the rules of the House and Senate, the Congressional Budget and Impoundment
Control Act of 1974 (as amended), the Budget Enforcement Act of 1990, and current
This report is a guide to one of the regular appropriations bills that Congress considers each
year. It is designed to supplement the information provided by the Subcommittees on
Transportation, Housing and Urban Development, and Related Agencies of the House and
Senate Committees on Appropriations. It summarizes the current legislative status of the
bill, its scope, major issues, funding levels, and related legislative activity. The report lists
the key CRS staff relevant to the issues covered and related CRS products.
This report is updated as soon as possible after major legislative developments, especially
following legislative action in the committees and on the floor of the House and Senate.
NOTE: A Web Version of this document with active links is
available to congressional staff at [http://beta.crs.gov/cli/
Transportation, Housing and Urban Development,
and Related Agencies (THUD): FY2009 Appropriations
The FY2009 Transportation, Housing and Urban Development, and Related
Agencies appropriations bill (THUD) provides funding for the Department of
Transportation (DOT), the Department of Housing and Urban Development (HUD),
and five independent agencies related to those two departments.
The Bush Administration requested net budgetary authority of $102.5 billion
(after scorekeeping adjustments) for FY2009, a cut of $36 million (less than 1%)
from the comparable FY2008 level. DOT would receive a net total of $63.5 billion,
a cut of $1 billion from the comparable FY2008 level. HUD would receive $39.1
billion, an increase of 4% ($1.4 billion) over the comparable FY2008 level.
However, the requested increase in net budget authority for HUD is largely
attributable to a decline in the amount available to offset new funding in the HUD
budget. The President’s budget request would actually result in an overall decline
in non-emergency appropriations for HUD’s programs and activities of just over 1%
from the FY2008 level.
The House Committee on Appropriations Subcommittee on THUD reportedly
marked up a draft FY2009 THUD appropriations bill on June 20, 2008. The details
of that draft have not been made public. The full committee has not yet marked up
the bill, and it is not clear that it will do so. The Senate Committee on Appropriations
marked up an FY2009 THUD bill, S. 3261, on July 10, 2008. The Senate committee
recommended $109.4 billion, $6.6 billion more than the Administration requested.
Congressional leaders have been quoted in press reports indicating that they will
not try to enact most of the FY2009 appropriations bills, including the THUD bill,
until sometime after the next Administration has taken office in 2009. In the
meantime, they reportedly intend to provide FY2009 funding for most federal
agencies, including those in the THUD bill, through one or more continuing
Among the THUD appropriation issues facing Congress is the impending deficit
in the Highway Trust Fund. The portion of the Fund that provides money for federal
highway programs has long been projected to have a $3 billion deficit by the end of
FY2009; the portion that provides money for transit projects is projected to run a
deficit in FY2011. The House passed separate legislation (H.R. 6532) to transfer $8
billion from the general fund to the Highway Trust Fund to prevent the FY2009
shortfall. This legislation was opposed by the Administration. However, on
September 5, 2008, the Administration announced that revenues to the Fund had
declined more than expected in recent months, resulting in the Fund facing a shortfall
as early as October 2008. The Administration is now urging Congress to immediately
pass the legislation transferring money to the Highway Trust Fund.
This report will be updated.
Housing and Urban Development, and Related Agencies
Area of ExpertiseNameTelephoneE-Mail
Department of Transportation
Aviation Safety, Federal AviationBart Elias7firstname.lastname@example.org
Ad mi ni str a tio n
Airport Improvement Program,John W.
Transportation Infrastructure Policy,Fischer7email@example.com
Transportation Trust Funds
Federal Railroad Administration,John
Maritime Administration, SurfaceFrittelli7firstname.lastname@example.org
Airport Improvement Program, FederalRobert S.email@example.com
Surface transportation policy, transitWilliam J.firstname.lastname@example.org
p o licy Mallett
Amtrak, Federal Motor Carrier Safety
Administration, Federal TransitDavid
Administration, National HighwayRandall7email@example.com
Traffic Safety Administration, SurfacePeterman
Transportation Safety, Surface
Department of Housing and Urban Development
Low-income housing programs andMaggie
issues and general HUD: Section 8,McCarty7firstname.lastname@example.org
Public Housing, HOPE VI, HOME
Community Development programs and
issues: Community Development BlockEugene7email@example.com
Grants (CDBG), EZ/EC, BrownfieldsBoyd
Housing programs and issues for specialLibby
populations: Elderly (202), DisabledPerl7firstname.lastname@example.org
(811), Homeless, AIDS housing
Homeownership and other housingBruce E.
issues: FHA, Rural, Indian housing,Foote7email@example.com
Architectural and TransportationNancy7firstname.lastname@example.org
Barriers Compliance BoardLee Jones
Federal Maritime CommissionJohn7email@example.com
National Transportation Safety BoardBart Elias7firstname.lastname@example.org
Co rporatio n Boyd
United States Interagency Council onLibby7email@example.com
Ho me le ssne ss Perl
Most Recent Developments..........................................1
The President’s Budget Request..................................2
Changing Appropriations Subcommittee Structures...................3
Department of Transportation Budget and Key Policy Issues............7
Highway Trust Fund Status..................................8
Federal Aviation Administration (FAA)........................9
Federal Highway Administration (FHWA).....................10
Federal Motor Carrier Safety Administration (FMCSA)...........11
National Highway Traffic Safety Administration (NHTSA)........12
Federal Railroad Administration (FRA).......................12
Federal Transit Administration (FTA).........................13
Maritime Administration (MARAD)..........................13
Housing and Urban Development Appropriations........................14
Tenant-Based Rental Assistance: Renewal Funding..................18
Project-Based Rental Assistance: Renewal Funding..................20
HOPE VI: No New Funding....................................20
Community Development and the Community Development
Block Grant: Funding Reductions............................21
Increased Funding for HOME...................................22
Housing for the Elderly and Disabled: Funding Reductions............22
Federal Housing Administration (FHA): Declining Receipts...........22
List of Tables
Table 1. Status of FY2009 Transportation, Housing and Urban
Development, and Related Agencies Appropriations..................3
Table 2. Transportation, Housing and Urban Development, and
Related Agencies Appropriations, FY2008-FY2009...................3
Table 3. Funding Trends for Transportation, Housing and Urban
Development, and Related Agencies, FY2004-FY2009................5
Table 4. Department of Transportation Appropriations,
Table 5. Appropriations: Housing and Urban Development,
Housing and Urban Development,
and Related Agencies (THUD):
Most Recent Developments
On September 5, Department of Transportation (DOT) Secretary Mary Peters
announced that the Highway Trust Fund faced a shortfall as soon as October 2008,
due to lower than expected revenues in 2008, and called on Congress to immediately
pass legislation transferring general fund revenues to the Trust Fund, a step that the
Administration had previously opposed.
On July 10, the Senate Committee on Appropriations approved S. 3261, the
FY2009 THUD appropriations bill, and ordered it to be reported. The committee
recommended $109.4 billion in funding, $6.6 billion more than the amount requested
by the Administration.
On June 20, 2008, the House Committee on Appropriations, Subcommittee on
Transportation HUD (THUD) marked up an unnumbered draft FY2009 THUD
appropriations bill. The date of a full committee markup is unknown, and no bill has
yet been reported. According to the subcommittee’s press release, the bill would
increase funding for a number of housing and transportation programs over the
President’s request, including the Community Development Block Grant (CDBG)
program, housing for the elderly and disabled, public housing (including HOPE VI),
Amtrak, the Federal Transit Administration, and grants to airports.1
On February 5, 2008, the Administration submitted its budget request for
FY2009 to Congress. The budget request for both DOT and HUD represented a
reduction in funding compared to the non-emergency funding enacted for those
agencies in FY2008.
Congress faces a difficult challenge in the FY2009 appropriations process. The
nation is facing a variety of economic challenges — including a general slowdown
1 A summary table published on the website of the House Committee on Appropriations
provides selected figures from the marked-up version of the draft bill; [http://appropriations.
house.go v/ pdf / 09T HUDT abl e SubMar kup.pdf ] .
in the economy, record high oil prices, and a decline in housing values. The budget
deficit for FY2008 is expected to be around $400 billion.2 The President presented
a constrained budget to Congress — the THUD request represented no net increase
over the FY2008 level (excluding FY2008 emergency appropriations) — and
threatened to veto any appropriations bills that exceed the requested level of funding.
Citing last year’s appropriations experience, when some in Congress contended
that the President refused to negotiate with Congress over the final level of FY2008
appropriations, congressional leaders have been cited in press reports indicating that
Congress may not pass many — if any — regular appropriations bills before the end
of the 2008 calendar year. Instead, reports indicate that Congress will pass one or
more continuing resolutions to keep the government operating after the end of
FY2008, and complete the FY2009 appropriations process in calendar year 2009,
when it will be dealing with a new Administration.
The President’s Budget Request
The President’s net FY2009 request for the programs covered by this
appropriations bill is $102.5 billion (after scorekeeping adjustments). This is $36
million (less than 1%) below the comparable total enacted for FY2008.
The DOT request was $63.5 billion, $1.2 billion (2%) below the amount
provided for FY2008. It provided a 7% increase for transit funding ($644 million),
though that is less than the authorized funding level.
The President’s FY2009 Budget requests $39.1 billion, a less than 4% increase
in total, regular (non-emergency) budget authority for HUD. Following recent trends,
the requested increase in budget authority is largely driven by declines in the amount
available for rescission (88% decline from FY2008) and projected to be available in
offsetting receipts (23% decline from FY2008). The FY2009 request for regular
(non-emergency) appropriations — which is the amount available for HUD’s
programs and activities — represents a slight decline (1.4%) from FY2008.
The Administration’s FY2009 budget request included funding reductions that
had also been proposed by the Administration in previous budget requests, without
success. Among the programs proposed for reductions or elimination were
!DOT highway funding (-$1.8 billion), airport grants (-$764 million),
Amtrak (-$525 million), and subsidies for air service to small
communities (-$60 million) programs;
!HUD’s Community Development Fund (-$866 million), Housing for
the Elderly (-$195 million), and Housing for the Disabled (-$77
million) programs; and
!HUD’s HOPE VI, Rural Housing and Economic Development,
Brownfields Redevelopment, and Section 108 Loan Guarantees
programs, for which no funding was requested (-$132 million total).
2 Congressional Budget Office, Monthly Budget Review, August 6, 2008.
Table 1 notes the status of the FY2009 THUD appropriations bill.
Table 1. Status of FY2009 Transportation, Housing and
Urban Development, and Related Agencies Appropriations
Subcom m i t t e e Conf erenceRe por t
Bill Markup HouseRe por t HouseP assage Senat eRe por t Senat eP assage Conf .Re por t Approval PublicLaw
House Senate H ouse Senate
Draft 6/20/08 7/9/08 S.Rept.110-
Table 2 lists the total funding provided for each of the titles in the bill for
FY2008 and the amount requested for that title for FY2009.
Table 2. Transportation, Housing and Urban Development,
and Related Agencies Appropriations, FY2008-FY2009
(millions of dollars)
F Y 2008a F Y 2009 F Y 2009 F Y 2009 F Y 2009 F Y 2009
Ti t l e Enacted Re que s t House Senat e Conf . Enacted
Title I: Department of$64,708$63,494$66,796
Title II: Housing and37,63739,07642,364
Title III: Related415270279
Total $102,560 $102,840 $109,439
Source: Budget table published in S.Rept. 110-418. “Total” represents total budgetary resources after
scorekeeping adjustments. Totals may not add up due to rounding and scorekeeping adjustments.
a. FY2008 total does not include $3.2 billion in emergency funding.
Changing Appropriations Subcommittee Structures
Since 2003, the House and Senate Committees on Appropriations have
reorganized their subcommittee structure three times. In 2003, a new subcommittee
(Homeland Security) was added; in order to maintain the existing number of
subcommittees at 13, the Transportation appropriations subcommittees were
combined with the Treasury, Postal Service, and General Government appropriations
subcommittees, becoming the Subcommittees on Transportation, Treasury, and
In early 2005, the House and Senate Committees on Appropriations again
reorganized their subcommittee structures. The House Committee on Appropriations
reduced its number of subcommittees from 13 to 10. This change included combining
the Transportation, Treasury, and Independent Agencies subcommittee with the
District of Columbia subcommittee; to the resulting subcommittee, in addition,
jurisdiction over appropriations for the Department of Housing and Urban
Development and the Judiciary, as well as several additional independent agencies,
was added. The subcommittee was then known as the Subcommittee on
Transportation, Treasury, Housing and Urban Development, The Judiciary, District
of Columbia, and Independent Agencies (or TTHUD).
The Senate Committee on Appropriations reduced its number of subcommittees
to 12. The Senate also added jurisdiction over appropriations for the Departments of
Housing and Urban Development and the Judiciary to the Transportation, Treasury,
and Independent Agencies subcommittee. The Senate retained a separate District of
Columbia Appropriations subcommittee. As a result, the areas of coverage of the
House and Senate subcommittees with jurisdiction over this appropriations bill were
almost, but not quite, identical; the major difference being that in the Senate the
appropriations for the District of Columbia originate in a separate bill.
At the beginning of the 110th Congress in 2007, the House and Senate
Committees on Appropriations again reorganized their subcommittee structures. The
House and Senate committees divided the responsibilities of the TTHUD
subcommittees between two subcommittees: Transportation, Housing and Urban
Development, and Related Agencies (THUD); and Financial Services and General
Government, whose jurisdiction included the Treasury Department, the Judiciary, the
Executive Office of the President, the District of Columbia, and many of the
independent agencies formerly under the jurisdiction of the TTHUD subcommittees.
These changes make year-to-year comparisons of Transportation and Housing
and Urban Development appropriation bills complex, as their appropriations appear
in different bills in combination with various other agencies. Other factors, such as
supplemental appropriations for response to disasters (such as the damage caused by
the Gulf Coast hurricanes in the fall of 2005) and changes in the makeup of the
Department of Transportation (portions of which were transferred to the Department
of Homeland Security in 2004), also complicate comparisons of year-to-year funding.
Table 3 shows funding trends over the five-year period FY2004-FY2008, and the
amounts requested for FY2009, for the Departments of Transportation and Housing
and Urban Development. The purpose of Table 3 is to indicate trends in the funding
for these agencies. Emergency supplemental appropriations are not included in the
Table 3. Funding Trends for Transportation, Housing and
Urban Development, and Related Agencies, FY2004-FY2009
(billions of current dollars)
Depa rtment FY2004 a FY2005 b FY2006 c FY2007 FY2008 d Request Ena c t e d
Title I: Transportation$58.4$59.6$59.5$63.2$64.7$63.5
Title II: Housing and31.231.934.036.237.639.1
Source: United States House of Representatives, Committee on Appropriations, Comparative
Statement of Budget Authority tables from fiscal years 2004 through 2009.
a. FY2004 figures reflect a 0.59% across-the-board rescission.
b. FY2005 figures reflect a 0.83% across-the-board rescission.
c. FY2006 figures reflect a 1.0% across-the-board rescission, but do not reflect emergency
supplemental appropriations provided for DOT and HUD. DOT and HUD received emergency
funding for response to the effects of the Gulf Coast hurricanes; DOT’s total FY2006 funding,
including emergency funding, was $62.3 billion; HUD’s total FY2006 funding, including
emergency funding, was $45.5 billion.
d. FY2008 figures reflect a 2.0% rescission applied to most programs that included designated
earmarks, but do not reflect emergency funding. DOT received $195 million in emergency
funding; HUD received $3.0 billion.
e. FY2009 figure for Title I: Transportation reflects proposed rescission of $3.9 billion.
Table 4. Department of Transportation Appropriations,
(in millions of dollars; totals may not add)
Department or Agency (Selected Accounts)FY2008EnactedFY2009RequestFY2009 Sen.Comm.
Office of the Secretary of Transportation$157$130$189
Essential Air Servicea11050110
Federal Aviation Administration (FAA)
Operations (trust fund & general fund)8,740NA9,070
Facilities & Equipment (F&E) (trust fund)2,514NA2,750
Grant-in-aid for Airports (AIP) (trust fund) (limit. on3,5152,7503,515
o b lig .)
Research, Engineering & Development (trust fund)147171171
Federal Highway Administration (FHWA)
(Limitation on Obligations)41,21639,39941,200
Additional funds (trust fund) — — —
Additional funds (general fund)30 — 199
Department or Agency (Selected Accounts)FY2008EnactedFY2009RequestFY2009 Sen.Comm.
Rescissions of contract authority(4,107)(3,885)(4,105)
Federal Motor Carrier Safety Administration (FMCSA)530541541
National Highway Traffic Safety Administration838851855
Federal Railroad Administration (FRA)1,5611,0911,816
Amtrak 1,325 800 1,503
Federal Transit Administration (FTA)
Capital Investment Grants (New Starts)1,5691,6211,809
Formula and Bus Grants (Trust Funds)7,7688,3618,261
St. Lawrence Seaway Development Corporation173227
Maritime Administration (MARAD)307313345
Pipeline and Hazardous Materials Safety Administration (PHMSA)
Pipeline safety program809393
Emergency preparedness grants282828
Research and Innovative Technology Administration121212
Office of Inspector General667072
Surface Transportation Board252226
Total, Department of Transportation$64,708$63,494$66,796
Source: Figures are from a budget table published by the Senate Appropriations Committee in
S.Rept. 110-418. Because of differing treatment of offsets, the figures for “FY2008 Request” will not
always match the Administration’s budget figures from other sources. The figures within this table
may differ slightly from those in the text due to supplemental appropriations, rescissions, and other
funding actions. Columns may not add due to rescissions, rounding, and exclusion of smaller program
a. The total comes from a $50 million annual authorization for the Essential Air Service program to
be funded out of overflight fee collections and an additional amount (if any) appropriated for
b. FHWA was appropriated $42.2 billion for FY2008. The $38.1 billion figure represents the
budgetary total after subtraction of a $3.5 billion rescission of previously provided contract
authority and the transfer of $121 million to NHTSA. The House and Senate committees
recommended $41.0 billion for FHWA for FY2008; rescissions of contract authority resulted
in those proposals being scored as $37.6 billion and $37.9 billion, respectively.
The economic and political context within which the FY2009 transportation
appropriations process is taking place is tumultuous. The significant rise in the price
of fuel for cars, trucks, and commercial jets is having a major impact on components
of the transportation industry. The commercial passenger aviation industry is
projecting a loss of several billion dollars, and is cutting the number of flights offered
and even eliminating some routes, reducing and in some cases eliminating air
connections to some communities. Legislation reauthorizing the FAA’s programs
and activities continues to be debated in Congress. The authorization of the taxes
and fees that support the airport and airway trust fund — the primary source of
funding for federal aviation programs — was scheduled to lapse at the end of
FY2007; these taxes and fees have been kept in force through a series of short-term
At the same time, there is widespread concern about the condition of the
nation’s infrastructure, a significant component of which is transportation
infrastructure. The collapse of an Interstate Highway bridge in Minnesota in August
2007 created concern over the conditions of the nation’s bridges. Portions of the
Interstate Highway system are reaching the end of their projected 50-year lifespan.
These factors, combined with concern over growing levels of traffic congestion, have
led to calls for significant increases in spending on transportation infrastructure. The
National Surface Transportation Policy and Revenue Study Commission has
recommended that the federal surface transportation program be extensively
restructured, and that surface transportation investment from all sources be more than
doubled from its present level to $225 billion annually.3
While some in Congress are calling for greater levels of federal spending on
transportation infrastructure, the primary source of federal highway funding, the
Highway Account of the Highway Trust Fund, is projected to run short of money
before the end of FY2009. This was foreseen in SAFETEA-LU, which called for a
multi-billion dollar rescission of contract authority at the end of September 2009 to
balance the account. But rising gas prices have led consumers to reduce their
consumption of fuel,4 which is reducing the revenues coming in to the Highway
Account. Congress is considering legislation that would provide money from the
general fund to the Highway Account in order to forestall the Highway Account
deficit in FY2009.
Department of Transportation Budget and Key Policy Issues
The President’s FY2009 budget requested a total of $64.5 billion for the
Department of Transportation (DOT).5 That was $1.2 billion (-2%) below the level
provided for FY2008. The major funding changes requested from the FY2008
enacted levels were
!an increase of $644 million (7%) for transit;
!a decrease of $1.8 billion (-4%) in highway funding;
3 Transportation for Tomorrow: Report of the National Surface Transportation Policy and
Revenue Study Commission, December 2007, available at [http://www.transportation
4 According to the FHWA, yearly cumulative vehicle miles traveled (VMT) through April
2008 has decreased 2.1% (more than 20 billion VMT) compared to 2007 and the total figure
of VMT in April 2008 marks the sixth consecutive month that driving has declined
compared to the prior year.
5 This total represents $68.1 billion in new appropriations and $3.9 billion in rescissions.
!a decrease of $525 million (-40%) in Amtrak funding (similar to
requested decreases in FY2007 and FY2008 that were rejected by
!a decrease of $765 million (-22%) in the Federal Aviation
Administration’s Airport Improvement Program (similar to
requested decreases in FY2007 and FY2008 that were rejected by
!a decrease of $60 million (-54%) in funding for the Essential Air
Service Program (similar to requested decreases in FY2007 and
FY2008 that were rejected by Congress).
The Administration request also proposed restructuring the FAA budget, reflecting
the Administration’s reauthorization proposal for the FAA.
The Administration’s request, including as it does over $3 billion in cuts that
have been repeatedly requested and repeatedly rejected by Congress, creates a
difficulty for appropriators. If the appropriators restore the funding for those
programs, even to just the level provided in FY2008, the resulting bill will likely
exceed the President’s request. Meanwhile, the President has threatened to veto
FY2009 appropriations bills that provide more than the requested level of spending.
Highway Trust Fund Status. The Highway Trust Fund is the funding source
for most federal surface transportation programs. The Fund receives around $38
billion annually, about 90% of which comes from federal taxes on gasoline and diesel
The Fund has two accounts: the Highway Account and the Mass Transit
Account. The Highway Account receives about 87% of the revenues to the Fund.
The Highway Account provides funds for federal highway programs; the Mass
Transit Account provides funds for federal transit programs.
The Highway Account was expected to run short on money before the end of
FY2009. Nor was this a temporary dip; the Highway Account deficit is projected to
increase in subsequent years. This was foreseen in 2005, at the passage of
SAFETEA-LU, which authorized more highway funding during the authorization
period than projected revenues could support. SAFETEA-LU provided for a
rescission of highway funding at the end of FY2009 to prevent the Highway Account
from going into the red.
However, on September 5, 2008, DOT Secretary Mary Peters announced that6
the Highway Account was expected to run short of funding as early as October 2008.
Since passage of SAFETEA-LU in 2005, expenditures from the Highway Account
have exceeded the levels initially authorized, and the revenues to the Account have
not kept pace with the revenues forecast, with a sharp drop in revenues during 2008
6 Mary Peters, Secretary, Department of Transportation, “Trust Fund Solvency Media
Briefing,” September 5, 2008, available at [http://www.dot.gov/affairs/highwaytrustfund/
as record-high gas prices have led motorists to reduce their amount of driving. These
events have exacerbated the extent of the deficit projected in 2005.
The Highway Account will still be receiving revenues in 2009, but the
expenditures from the account will exceed the level of revenues received. The
Administration has announced that beginning in September it will slow the rate at
which highway funds are transferred to the states to a level that the Highway Account
On July 14, 2008, the Senate Committee on Appropriations reported out an
FY2009 THUD appropriations bill, which included a recommendation that $8 billion
be transferred from the general fund of the Treasury to the Highway Trust Fund to
cover the shortfall.7 The House passed separate legislation (H.R. 6532) on July 23,
2008, to do the same. The Administration threatened to veto the House bill on the
grounds that it unnecessarily increases the federal deficit, alters the “user-fee”
principle of the Highway Trust Fund, and jeopardizes any hope of constraining future
federal highway spending.8 However, in the face of the immediate shortfall in
funding, the Administration has now called on Congress to pass legislation
transferring funds to the Highway Account as soon as possible.
Federal Aviation Administration (FAA). The FAA budget provides both
capital and operating funding for the nation’s air traffic control system, and also
provides federal grants to airports for airport planning, development, and expansion
of the capacity of the nation’s air traffic infrastructure. The President’s budget
requests $14.6 billion in new funding for FY2009. This is $152 million (-1%) less
than the amount of new funding provided in FY2008.9
The Senate Committee on Appropriations recommended $15.4 billion for
FY2009, an increase of $788 million over the amount requested. Most of that
increase is for the Airport Improvement grant program.
It is difficult to compare the requested funding level for operations (the largest
FAA account) and facilities & equipment with the previous year’s funding, because
the budget request categorizes the FAA funding differently than the FY2008
appropriation, reflecting the Administration’s FAA reauthorization proposal. The
Administration request does include a cut to the Airport Improvement grant program.
7 The $8 billion figure comes from an arrangement reached in 1998, when highway
authorizers agreed to transfer $8 billion in Highway Trust Fund monies (derived from
interest received on the balance in the Fund) to the general fund in exchange for the
creation of a budget “firewall” and other mechanisms that made possible higher levels of
highway spending. “Ten Questions and Answers on the Highway Trust Fund Default,”
Transportation Weekly, v. 9, no. 26, July 10, 2008, p. 4.
8 Office of Management and Budget, Executive Office of the President, Statement of
Administration Policy on H.R. 6532, July 23, 2008, available at [http://www.whitehouse.
gov/ omb/legi slative/sap/110-2/saphr6532-h.pdf].
9 The net new funding for FY2008 appears to be $118 million less than the FY2009 request,
due to a rescission of contract authority in the FY2008 appropriation. However, that
rescission did not actually reduce the amount of new funding provided in FY2008.
Airport Improvement Program (AIP). The President’s budget proposed
a cut of $764 million to AIP funding, from $3.51 billion in FY2008 to $2.75 billion
for FY2008. A similar cut was proposed by the Administration for FY2007 and for
FY2008; neither cut was supported by Congress. AIP funds are used to provide
grants for airport planning and development, and for projects to increase airport
capacity (such as construction of new runways) and other facility improvements.
The Senate Committee on Appropriations rejected the proposed cut,
recommending $3.5 billion, the same amount as provided in FY2008.
Essential Air Service. The President’s budget requested $50 million for the
Essential Air Service program, a $60 million (54%) reduction from the $110 million
provided for FY2008. A similar decrease was proposed by the Administration for
FY2007 and FY2008; both were rejected by Congress. The Senate Committee on
Appropriations recommended $110 million, the same amount provided for FY2008.
This program seeks to preserve air service to small airports in rural communities
by subsidizing the cost of that service. Supporters of the Essential Air Service
program contend that preserving airline service to rural communities was part of the
deal Congress made in exchange for deregulating airline service in 1978, which was
expected to reduce air service to rural areas. Some Members of Congress have
expressed concern that the proposed cut in funding for the Essential Air Service
program could lead to a reduction in the transportation connections of rural
communities. Previous budget requests from the current Administration, as well as
budget requests from previous Administrations, have proposed reducing funding to
Federal Highway Administration (FHWA). The President’s budget
requested $40.1 billion in new funding for federal highway programs for FY2009, a
cut of $1.8 billion (-4%) below the comparable level of $42.0 billion provided in
FY2008.10 This is also $800 million below the $41.2 billion authorized funding level
for FY2009 that is “guaranteed” by SAFETEA-LU (P.L. 109-59).
The $1.8 billion proposed reduction is made up of two components. First,
SAFETEA-LU provides a mechanism, known as RABA (‘Revenue Aligned Budget
Authority’), for adjusting the authorized highway funding level up or down to reflect
the level of income received by the Highway Trust Account. In FY2008, the
authorized level was increased by $631 million as a result of the RABA adjustment.
The Administration estimates that RABA calls for a $1.0 billion reduction in the
authorized level for FY2009, reflecting declining receipts to the Account. Second,
based on the FHWA Administrator’s overview, it appears that $800 million of the
difference was FHWA’s share of a $1 billion reduction to adjust for the extra $1
billion in Highway Bridge Program obligations provided by appropriators in
10 The FY2008 enacted figure and FY2009 request were reduced, for accounting purposes,
by rescissions of contract authority, resulting in net budgetary totals of $38.1 billion for
FY2008 and $36.3 billion for the FY2009 request. An additional $195 million in emergency
funding was provided in FY2008.
FY2008.11 The overview argues that without the reduction, the total obligation level
provided over the full life of SAFETEA-LU would have exceeded the $286.4 billion
grand total of guaranteed funding provided for in the act and agreed to by the
The Senate Committee on Appropriations rejected both the $1.0 billion called
for by the RABA mechanism in SAFETEA and the $800 million cut requested by the
Administration, recommending $42.1 billion for FY2009. The committee also
rejected the Administration proposal to cover the projected FY2009 Highway
Account deficit by transferring funds from the Mass Transit Account; instead, the
committee recommended $8 billion from the general fund to the Highway Account.12
Federal Motor Carrier Safety Administration (FMCSA). The
Administration requested the authorized level of funding for FMCSA, $541 million.13
This is $11 million (2%) over the amount provided for FY2008. $307 million of
the request is for grants to states to enforce commercial truck and bus safety
regulations. The Senate Committee on Appropriations recommended the same level.
The FY2008 THUD appropriations act included a provision (Section 136) that
prohibited any funds in the act from being used to “establish” a cross-border trucking
demonstration program allowing Mexican trucking companies to operate beyond the
commercial zone (a zone extending 20 miles into the United States from the U.S.-
Mexico border). The DOT had implemented such a program on September 7, 2007,
shortly before the beginning of the 2008 fiscal year. DOT continued to operate the
program after passage of the FY2008 act, contending that FY2008 funding used for
the program would not be used to establish the program, but to continue its operation.
The Sierra Club and the Teamsters Union have sued to stop the pilot program; the
case is under consideration. Congress has reiterated its opposition to the program;
the Senate Committee on Appropriations recommended language that would
terminate funding for the program. The DOT has announced that so far Mexican
trucks and drivers participating in the program have safety compliance rates equal to
or better than U.S. commercial truckers, and that it intends to continue the program14
for two more years, as allowed under law. The DOT notes that participation in the
program has been less than expected, due to the reluctance of trucking companies to
make the necessary investments in the face of uncertainty about the pilot program’s
length, and expects that the extension will encourage more companies to participate.
11 The remaining $200 million of the reduction is to be taken from the proposed Federal
Transit Administration funding for FY2009.
12 The $8 billion figure reflects the amount that was transferred from the Highway Account
to the general fund in 1998 as part of an agreement that created the “guaranteed funding”
structure of the highway program and established the RABA mechanism.
13 The net total for FY2008 was reduced, for budgetary purposes, to $479 million, as a result
of $50 million in rescissions of contract authority.
14 Federal Motor Carrier Safety Administration, “Demonstration Project on NAFTA
Trucking Provisions,” Federal Register, v. 73, no. 152 (Wednesday, August 6, 2008), p.
National Highway Traffic Safety Administration (NHTSA). The
Administration requested $851 million for NHTSA, the amount authorized for
FY2009. This is an increase of $13 million (2%) over the amount provided for
FY2008.15 $600 million of this amount is for grants to states for highway safety
programs to reduce deaths and injuries from motor vehicle crashes. The Senate
Committee on Appropriations recommended $855 million, adding $4 million to the
Administration request for the operations and research account.
NHTSA’s primary mission is to improve highway safety. Highway fatalities are
the leading cause of death for Americans between the ages of 3 and 34. There were
42,642 highway fatalities in 2006, but since the number of drivers and the number
of miles driven increases almost every year, the standard measure for highway safety
is the fatality rate — the number of fatalities per 100 million vehicle miles traveled
(VMT). The committee noted that NHTSA does not appear to be on track to achieve
its goal of reducing the rate of highway fatalities to 1.0 fatality per 100 million VMT
by 2011. The rate has gone down, from 1.51 fatalities per 100 million VMT in 2001
to 1.41 in 2006, but remains above NHTSA’s target for each year.
One category of highway fatality — motorcycle fatalities — has been increasing,
rather than decreasing, since 2001. The most effective motorcycle safety policy is
requiring that all motorcyclists wear helmets meeting safety standards. Some
motorcyclists are strongly opposed to being required to wear helmets. At times
Congress has penalized states that did not have mandatory helmet laws by
withholding or restricting the use of some of their federal highway funding, which
resulted in near-universal adoption of mandatory helmet laws by states. Congress
repealed such a provision in 1995; now about twenty states have universal mandatory16
helmet laws. In 1998 Congress also forbade DOT from lobbying states to adopt
traffic safety laws.17 The Senate Committee on Appropriations recommended that
an exception be made to this prohibition for the purpose of reducing motorcycle
fatalities (Section 104).
Federal Railroad Administration (FRA). The Administration requested
$1.091 billion for FRA for FY2009. This is a cut of $471 million (-30%) from the
$1.561 billion provided for FY2008. The Senate Committee on Appropriations
recommended $1.816 billion.
The largest portion of FRA’s budget goes to support Amtrak. Amtrak funding
was also the source of almost all the variance in the Administration’s proposal and
the Senate committee’s recommendation. The Administration requested $800
million for Amtrak, a cut of 40% ($525 million) from FY2008. The Senate
committee recommended $1.5 billion for Amtrak, plus another $100 million for an
incentive grant program to encourage states to make investments in improving
15 The $838 million in new funding for FY2008 was reduced, for budgetary purposes, to
$815 million by rescissions of contract authority.
16 Universal mandatory helmet laws require all motorcyclists to wear a helmet. Most of the
other states require minors to wear a helmet when riding a motorcycle.
17 P.L. 105-178, Section 7104 (“Restrictions on Lobbying Activities”).
passenger rail service (Congress provided $30 million for this program in FY2008,
its first year of funding; the Administration did not request any funding for this
program for FY2009).
Congress is also considering reauthorization of Amtrak; reauthorization
legislation has been passed by both the House and the Senate. Both bills would
authorize considerably more funding for Amtrak and intercity passenger rail activities
than Congress has provided in recent years — between $2 and $3 billion annually,
compared to $1.3 billion. Authorizing funding is not the same as appropriating the
money, however, and it is not clear that additional funding on that scale would be
available. Most DOT funding comes from the aviation and highway trust funds;
within the THUD bill, Amtrak has to compete with a few other transportation
programs and with the HUD programs for general funds, and these programs are also
seeking increased funding
The next largest portion of FRA’s budget is for safety programs intended to
reduce railroad accidents. The Administration requested $157 million, $7 million
(4%) more than provided for in FY2008; the Senate committee recommended $159
million. The other component of the FRA budget is research and development of rail
safety improvements. The Administration requested $34 million for this, $2 million
(6%) less than the $36 million provided for in FY2008; the Senate committee also
recommended $34 million.
In FY2008 Congress also provided $20 million for a rail line relocation and
improvement program established in SAFETEA-LU that had not previously been
funded. The Administration did not request any money for this program in FY2008
or in FY2009. The Senate committee recommended $25 million for FY2009.
Federal Transit Administration (FTA). The Administration requested
$10.135 billion for FTA for FY2009. This is an increase of $644 million (7%) over18
the amount provided for FY2008, but is $203 million below the authorized FY2009
funding level of $10.338 billion. The Senate Committee on Appropriations
recommended $10.226 billion.
Virtually all of FTA’s funding goes to state and local transportation authorities
to support bus, commuter rail, subway, and light rail transit services; most of this
goes out through formula grant programs. The Senate committee recommended $100
million less than the requested level for the formula grant programs and the bus grant
program (the largest transit discretionary grant program), and $188 million more than
requested for the New Starts program, which funds new fixed-guideway transit
systems and extensions to existing systems.
Maritime Administration (MARAD). The Administration requested $313
million for MARAD for FY2009, $7 million (2%) above the $307 million enacted
for FY2008. The Senate Committee on Appropriations recommended $345 million.
18 The net FY2008 total was reduced, for budgetary purposes, to $9.4 billion by a $133
million rescission of contract authority.
The primary change from the requested level was the Senate committee’s
recommendation of $20 million for assistance to small shipyards; Congress provided
$10 million for this in FY2008 — its first year of funding, after being authorized in
2006 — and the Administration did not request any funding for this program for
FY2009. The program provides grants and loans to small shipyards for capital
MARAD supports the maritime transportation sector. The largest components
of its budget are the Maritime Security Program and Operations and Training. The
Administration requested $174 million for the Maritime Security Program, an $18
million (12%) increase over FY2008. This program provides payments of roughly
$2.6 million per ship to retain a fleet of 60 active, militarily useful, privately owned
vessels to be available to the federal government in the event they are needed for
security purposes. A total of $118 million was requested for Operations and
Training, $4 million (-3%) less than provided for FY2008. This program funds the
U.S. Merchant Marine Academy, State Maritime Schools, and MARAD’s operations.
Housing and Urban Development Appropriations
Most of the funding for the activities of the Department of Housing and Urban
Development (HUD) comes from discretionary appropriations provided each year in
the annual appropriations acts enacted by Congress. HUD’s programs are primarily
designed to address housing problems faced by households with very low incomes
or other special housing needs. These include several programs of rental assistance
for the poor, elderly, and/or disabled. Three rental assistance programs — Public
Housing, Section 8 Vouchers, and Section 8 project-based rental assistance —
account for the majority of the Department’s non-emergency funding (more than 75%
in FY2008). Two flexible block grant programs, HOME and Community
Development Block Grants, help communities finance a variety of housing and
community development activities designed to serve low-income families. Other,
more specialized, block grants help communities meet the needs of homeless
persons, including those with AIDS. In recent years, HUD has also focused more
attention on efforts to increase the homeownership rates for lower-income and
minority households, with programs providing funding for downpayment assistance
and housing counseling. HUD’s Federal Housing Administration (FHA) insures
mortgages made by lenders to lower-income home buyers, many with below-average
credit records, and to developers of multifamily rental buildings containing relatively
affordable units. FHA collects fees from insured borrowers, which are used to
sustain the insurance fund and offset its administrative costs. Surplus FHA fees have
been used to offset the cost of the HUD budget.
HUD’s budget is comprised of several types of funding. Regular, annual
appropriations fund the activities of the Department. Offsetting collections and
receipts (such as those from FHA) and rescissions of unobligated balances from prior
years’ funding offset the cost to Congress of the appropriations. In some years,
Congress also provides emergency appropriations (such as in response to disasters)
through HUD. The total of appropriations, offsetting receipts and collections,
rescissions, and emergency appropriations determine HUD’s net budget authority.
This section of the report provides an overview of FY2009 funding for HUD.
It is largely summarized from a more detailed report, CRS Report RL34504, The
Department of Housing and Urban Development: FY2009 Appropriations. Readers
seeking an expanded discussion of HUD funding issues, including an overview of
recent trends, should see CRS Report RL34504.
Table 5 presents the President’s FY2009 budget request for HUD compared to
the prior year’s enacted budget authority and the Senate Appropriations Committee-
reported funding levels. (Housing Appropriations Subcommittee-passed figures are
not currently publicly available and are therefore not included in Table 5.) Four
totals are given in Table 5: “budget authority provided” and “available budget
authority,” both including and excluding emergency appropriations. Total budget
authority provided includes current year appropriations, plus advance appropriations
provided in the current fiscal year for use in the next fiscal year; total available
budget authority includes current year appropriations, plus advance appropriations
provided in the prior fiscal year for use in the current fiscal year. Congress is scored
by the Congressional Budget Office (CBO) for the amount of available budget
authority in an appropriations bill; however, the Appropriations Committees’
documents often discuss budget authority provided.
The President’s FY2009 Budget requested $39,075 million, a less than 4%
increase in total, regular (non-emergency) budget authority for HUD. Following
recent trends, the requested increase in budget authority is largely driven by declines
in the amount available for rescission (88% decline from FY2008) and projected to
be available in offsetting receipts (23% decline from FY2008). The FY2009 request
for regular (non-emergency) appropriations — which is the amount available for
HUD’s programs and activities — represents a slight decline (1.4%) from FY2008.
Table 5. Appropriations: Housing and Urban Development,
(budget authority in billions of dollars)
C o mm.
Appro pria t io ns
Management and Administrationa1.2121.2901.304
Tenant Based Rental Assistance (Sec. 8 vouchers)
(includes advance for subsequent year)16.39115.88116.703
Project Based Rental Assistance (Sec.8)
(includes advance for subsequent year)6.3827.4008.450
Public Housing Capital Fund2.4392.0242.444
Public Housing Operating Fund4.2004.3004.400
Native American Housing Block Grants0.6300.6270.650
Indian housing loan guarantees0.0070.0090.009
Native Hawaiian Housing Block Grant0.0090.0060.010
Native Hawaiian housing loan guarantees0.0010.0000.001
Housing for Persons with AIDS (HOPWA)0.3000.3000.315
Rural Housing Economic Development0.0170.0000.030
Community Development Fund (including CDBG)3.8663.0003.889
Sec.108 loan guarantee; subsidy0.0050.0000.006
HOME Investment Partnerships1.704a1.967a1.967
Homeless Assistance Grants1.5861.6361.667
Housing for the Elderly (Sec. 202)0.7350.5400.765
Housing for Persons with Disabilities (Sec. 811)0.2370.1600.250
Manufactured Housing Fees Trust Fundc0.0160.0210.021
Housing Counseling Assistanceb0.065b0.065b
Rental Housing Assistancec 0.0280.0280.028
Research and Technology0.0510.0550.060
Federal Housing Administration (FHA) Expensesc0.1690.1870.145
Fair housing activities0.0500.0510.056
Lead Hazard Reduction0.1450.1160.200
Working capital fund0.1550.2240.211
Office of Federal Housing Enterprise Oversightc0.0660.0670.067
Appropriations Subtotal 40.68340.10843.994
C o mm.
Re sc issio ns
Economic Developments Initiative rescission0.000-0.1800.000
Rental housing assistance rescission-0.038-0.028-0.038
Tenant-Based Rental Assistance (Sec. 8 voucher)
rescission -0 .723 0.000 -0 .800
Offsetting Collections and Receipts
Manufactured Housing Fees Trust Fund-0.016-0.016-0.016
Office of Federal Housing Enterprise Oversight-0.066-0.067-0.067
FHA -0.250 -0 .140 -0 .140
Government National Mortgage Association
(GNMA) -0 .163 -0 .170 -0 .170
CDBG Appropriations for the Gulf Coast3.0000.0000.000
Emergency Funding Subtotal3.000d0.0000.000
To t a ls
Total Budget Authority Provided,
excluding Emergency Appropriations37.63739.07542.364
Total Available Budget Authority,
excluding Emergency Appropriations37.67238.83340.572
Total Budget Authority Provided,
including Emergency Appropriations40.63739.07542.364
Total Available Budget Authority,
including Emergency Appropriations40.67238.83340.572
Source: Prepared by CRS on the basis of tables provided by the Appropriations Committee, the
President’s FY2009 Budget documents, HUD Congressional Budget Justifications, S. 3261 and
Note: The Transportation-HUD subcommittee of the House Committee on Appropriations approved
its version of the FY2009 HUD appropriations bill on June 20, 2008. The subcommittee has not made
the bill publicly available at this time. This table will be updated to reflect House action once the
legislation is available.
Note: Total budget authority provided includes advance appropriations provided in the current fiscal
year for use in the subsequent fiscal year; available budget authority includes the advance
appropriations that were provided in the prior fiscal year for use in the current fiscal year.
a. Includes funding for several management, personnel, and administrative accounts, including
Executive Direction, Administration and Operations Management, and Personnel Compensation
and Benefits for the Offices of Public and Indian Housing, Community Planning and
Development, Housing, GNMA, Policy Development and Research, Fair Housing and Equal
Opportunity, Healthy Homes, and Lead Hazard Reduction.
b. In FY2008, funding for housing counseling assistance was provided as a set-aside within the
HOME account; for FY2009, the President’s budget requested that funding for housing
counseling assistance be provided in a separate account.
c. Funding for this account is generally offset through collections, receipts, or rescissions shown later
in Table 5.
d. An additional $300 million in CDBG disaster assistance was appropriated in FY2008 by P.L. 110-
252 for the Midwest floods of 2008 and other disaster relief activities. Those funds were not
reflected in the committees’ estimates of FY2008 enacted funding that were used to develop this
The following section of the report provides a summary of key issues in HUD’s
FY2009 budget. For a more detailed examination, readers should see CRS Report
RL34504, The Department of Housing and Urban Development: FY2009
Tenant-Based Rental Assistance: Renewal Funding
The tenant-based rental assistance account funds the Section 8 Housing Choice
Voucher program. The Section 8 voucher program funds rental assistance for low-
income families that they can use to reduce their housing costs in the private market.
The program is funded by HUD, but administered at the local level by quasi-
governmental local public housing authorities (PHAs). This account funds the
annual renewal of the roughly 2 million vouchers authorized by Congress, as well as
their associated administrative costs, and, in some years, new vouchers. (For more
information on the Section 8 voucher program, see CRS Report RL32284, An
Overview of the Section 8 Housing Programs and CRS Report RL34002, Section 8th
Housing Choice Voucher Program: Issues and Reform Proposals in the 110
Congress, by Maggie McCarty, Libby Perl, Bruce E. Foote, Eugene Boyd, and Oscar
The tenant-based rental assistance account is the largest in HUD’s budget. In
recent years, it has also been the source of the most contention in HUD’s budget.
Primarily, attention has been focused on whether the amount of funding provided for
voucher renewals is sufficient to fund all of the vouchers authorized by Congress
and/or in use by families, and how that renewal funding is to be allocated to PHAs.
(While there is a statutory formula for allocating voucher funds to PHAs, it has been
overridden in recent years by formulas adopted by Congress in the appropriations
The amount available for voucher renewals each year is made up of two parts:
current year appropriations, and advance appropriations provided in the prior year
that become available in the current year. For FY2009, the President requested
$11,881 million in current year funding for voucher renewals as well as $4,000
million in advance appropriations for use in FY2010. This request represents a
decrease from the $12,233 million in current year funding provided in FY2008 and
a decrease from the $4,158 million in advance appropriations provided in FY2008
for use in FY2009.
Combined, the President’s request would result in $16,039 million in available
budget authority for FY2009 (current year funding plus prior year advance) and
$15,881 million in budget authority provided for FY2009 (current year funding plus
advance for subsequent year). This represents an increase from the $15,703 million
available in FY2008, but a decrease from the $16,391 million provided in FY2008.
HUD’s FY2009 budget documents estimate that the amount of funding requested
would be sufficient to renew all of the vouchers in use. (For a more detailed
discussion, see CRS Report RL34504, The Department of Housing and Urban
Development: FY2009 Appropriations.)
The President’s FY2009 budget also requested that Congress change the way
that it provides renewal funding to PHAs. Specifically, it requested that PHAs be
provided funding based on the amount of funding they received in the previous year.
This would be a change from the FY2008 funding formula, which funded PHAs
based on their costs and voucher usage (referred to as utilization) over the prior year.
This debate — over whether to fund PHAs based on the budget they received in the
prior year or based on their expenses — has gone back and forth since FY2003. For
a detailed discussion of this issue, see CRS Report RL33929, Recent Changes to the
Section 8 Voucher Renewal Funding Formula.
Finally, the President’s budget requested $39 million to fund new incremental
vouchers for elderly and disabled families who were displaced by the 2005 hurricanes
and whose FEMA-funded rental assistance will be ending in March 2009. The
budget also requested $75 million for new incremental vouchers for homeless
veterans. The combined total for new vouchers ($114 million) would be less than the
amount provided in FY2008 ($125 million).
S. 3261, as reported by the Senate Appropriations Committee, would provide
$12,503 million in current year funding for the tenant-based rental assistance account
and $4,200 million in advance appropriations for use in FY2010. S. 3261 would also
rescind $800 million from the advance appropriation provided in FY2008 for use in
FY2009. Combined, the Senate bill would result in $15,861 million in available
budget authority for FY2009 (current year funding plus prior year advance, less
rescission) and $16,703 million in budget authority provided for FY2009 (current
year funding plus advance for subsequent year). This represents an increase from the
$15,703 million available in FY2008 and an increase from the $16,391 million
provided in FY2008. It represents a decrease from the $16,309 million in available
budget authority requested by the President for FY2009, but an increase from the
$15,881 billion in budget authority that would be provided by the President’s
FY2009 budget request.
S. 3261 would allocate renewal funding using a formula similar to the one in
place in FY2008, rather than the formula requested by the President. It also includes
$134 million in funding for new incremental vouchers, more than requested by the
President and provided in FY2008.
Project-Based Rental Assistance: Renewal Funding
The project-based rental assistance account provides funding to renew, amend,
and cover administrative expenses for the more than one million rental assistance
contracts between private property owners and HUD. These contracts allow low-
income tenants that live in the assisted properties to pay reduced rents. The program
under which these contracts are authorized is commonly referred to as project-based
In July 2007, HUD stopped making payments to property owners with project-
based contracts. Due to a change in interpretation regarding how HUD was to
provide renewal funding, HUD determined it did not have sufficient funding to meet
its contractual obligations. A negotiation with the Office of Management and
Budget, and revisions to the contract language between HUD and property owners,
allowed HUD to resume payments (including retroactive payments). However, this
“shortfall” raised concerns among some Members of Congress — several committees
held hearings on the topic — and industry groups representing property owners.
For FY2009, the President’s budget requested $7,000 million for the project-
based rental assistance account, an increase from the $6,382 million provided in
FY2008. Further, the budget requested $400 million in advance appropriations to be
provided in FY2009 for use in FY2010. If approved, it would be the first time an
advance appropriation was to be used in this account. HUD’s budget documents
indicate that the Department believes that its request ($7,400 million) would be
sufficient to meet the Department’s contractual obligations; industry groups contend
that in order to “fully fund” its contractual obligations, HUD would need another
roughly $2,000 million in FY2009.
S. 3261, as reported by the Senate Appropriations Committee, included $6,700
million in current year appropriations for the project-based rental assistance account
(less than the President’s request; more than FY2008) and $1,750 million in advance
appropriations to become available in FY2010 (more than four times the amount
requested by the President). The Senate committee report (S.Rept. 110-415) noted
that the increased funding would not be sufficient to fund all contracts for 12 months,
but would “restore some stability to the program by allowing the Department to enter
into longer-term contracts with owners.” For an expanded discussion of this issue,
see CRS Report RL34504, The Department of Housing and Urban Development:
HOPE VI: No New Funding
Each year since FY2003, the President has requested no new funding for the
HOPE VI public housing revitalization program. In response, each year, Congress
has continued to fund the program. Up until FY2003, the program was generally
funded at just under $600 million, although in recent years its funding level has
generally been around $100 million. HUD’s Congressional Budget Justifications
criticize the program for a slow expenditure of grant funds and also note that PHAs
are able to use their capital fund grants to leverage resources in much the same way
HOPE VI grants are used to leverage additional resources, making HOPE VI less
necessary. Proponents of HOPE VI cite the program’s transformative effects on
severely distressed communities.
S. 3261, as reported by the Senate Appropriations Committee, rejects the
President’s proposal to eliminate funding and would provide $100 million for HOPE
VI in FY2009. The bill would also extend the statutory authorization for the program
through the end of FY2009; it is currently slated to sunset at the end of FY2008. (For
additional information, see CRS Report RL32236, HOPE VI Public Housing
Revitalization Program: Background, Funding, and Issues.)
Community Development and the Community Development
Block Grant: Funding Reductions
The Community Development Fund (CDF) account funds the Community
Development Block Grant (CDBG) program, a formula grant to states and localities
that funds community development activities. In addition, the CDF has funded other
community development-related programs in past years, including the Economic
Development Initiatives and Neighborhood Initiative demonstrations.
The President’s FY2009 budget recommendation of $2,927 million for the
formula portion of CDBG is $659 million (18.4%) less than the $3,586 million
appropriated for distribution to communities and states in FY2008. In addition, the
President’s FY2009 budget request stated that the Administration would seek toth
reform the CDBG program during the 110 Congress by again offering Congress a
proposal that was first unveiled during the 109th Congress, namely, the Community
Development Block Grant Reform Act.
S. 3261, as reported by the Senate Appropriations Committee, would provide
$3,586 million for CDBG formula grants, more than the President’s request and the
same as the FY2008 funding level.
In addition to requesting reduced funding for CDBG formula grants, the
Administration’s FY2009 budget proposed eliminating funding for several other
community development related programs, including Rural Housing and Economic
Development Grants, Community Development Block Grant Section 108 loan
guarantees, and Brownfields Economic Development Initiatives. The budget
characterized these programs as duplicative of the activities funded by the CDBG
formula grant program. The President’s budget also requested no new funding for
the Economic Development Initiatives (EDIs) and Neighborhood Initiatives (NIs)
demonstration programs — which Congress has used to fund congressionally-
directed projects in recent years — and asked that Congress rescind the funding
provided to these projects in FY2008.
S. 3261, as reported by the Senate Appropriations Committee, would reject most
of the President’s proposals to eliminate funding for community and economic
development programs. It would fund Rural Housing and Economic Development
Grants, Section 108 loan guarantees, and EDI and NI earmarks. However, S. 3261
would not provide any new funding for the Brownfields Economic Development
Increased Funding for HOME
The HOME Investment Partnerships Program provides formula-based block
grant funding to states, units of local government, Indian tribes, and insular areas to
fund affordable housing initiatives. The President’s FY2009 budget requested a $275
million increase in funding for HOME formula grants. HUD’s Congressional Budget
Justifications identify the HOME program as key to the President’s goal of increasing
homeownership opportunities, especially for minorities. They also cite the program’s
relatively strong rating from the Office of Management and Budget’s (OMB)
Program Assessment and Rating Tool evaluation. According to HUD’s
Congressional Budget Justifications, OMB found that the program “has a clear
purpose, strong management, and can demonstrate results.”
S. 3261, as reported by the Senate Appropriations Committee, would provide
$34 million more for HOME formula grants than the President’s request.
Housing for the Elderly and Disabled: Funding Reductions
Formerly known together as Housing for Special Populations, the Section 202
Housing for the Elderly program and the Section 811 Housing for Persons with
Disabilities program provide capital grants and ongoing project rental assistance
contracts (PRAC) to developers of new subsidized housing for these populations. In
FY2009, the Administration’s budget recommended reducing the overall funding
level for the programs that provide housing and services for elderly households
(defined by HUD as those with a head of household or spouse age 62 or older). The
President’s request would cut funding for these programs by nearly $200 million,
from $735 million in FY2008, to $540 million in FY2009. The President’s budget
also proposed to reduce funding for the Section 811 Housing for Persons with
Disabilities program in FY2009 to $160 million, down from $237 million in FY2008.
S. 3261, as reported by the Senate Appropriations Committee, rejected the
President’s proposed funding cuts and would provide $765 million for Section 202
and $250 million for Section 811.
Federal Housing Administration (FHA): Declining Receipts
The FHA administers a variety of mortgage insurance programs that insure
lenders against loss from loan defaults by borrowers. Through FHA insurance,
lenders make loans that otherwise may not be available, and enable borrowers to
obtain loans for home purchase and home improvement, as well as for the purchase,
repair, or construction of apartments, hospitals, and nursing homes. The programs
are administered through two program accounts: the Mutual Mortgage
Insurance/Cooperative Management Housing Insurance fund account (MMI/CMHI)
and the General Insurance/Special Risk Insurance fund account (GI/SRI). The
MMI/CMHI fund provides insurance for home mortgages. The GI/SRI fund provides
insurance for more risky home mortgages, for multifamily rental housing, and for an
assortment of special-purpose loans such as hospitals and nursing homes. (For more
information, see CRS Report RS20530, FHA Loan Insurance Program: An
In past years, receipts to the MMI fund have exceeded expenses, so the MMI
fund did not need appropriations for a credit subsidy, and had excess receipts that
were used to offset the cost of the HUD budget. The FY2009 Budget estimates that,
if no programmatic changes are made, the MMI fund would need either a credit
subsidy or increases in insurance premiums to continue operation. The Budget
proposes to permit FHA to set insurance premiums based on the risk that the
borrowers pose to the insurance fund, and it proposes to set the rate at a level that
would avoid the need for subsidy appropriations. Barring the authority to establish
risk-based premiums, the President’s budget proposed that FHA would use its
existing authority to increase the insurance premiums charged to borrowers. The
budget assumes that the increased premiums coupled with legislative and
programmatic changes would avoid the need for credit subsidy appropriations. (For
an expanded discussion, see CRS Report RL34504, The Department of Housing and
Urban Development: FY2009 Appropriations.)