The President's FY 2012 Budget Proposal: A Sneak Preview

In an Op-Ed piece published in the New York Times over the weekend, White House Office of Management and Budget Director Jacob Lew provides a preview of President Obama's FY 2012 budget, which will be released on Monday, February 14. 

"As the president said in his State of the Union address, now that the country is back from the brink of a potential economic collapse, our goal is to win the future by out-educating, out-building and out-innovating our rivals so that we can return to robust economic and job growth. But to make room for the investments we need to foster growth, we have to cut what we cannot afford. We have to reduce the burden placed on our economy by years of deficits and debt...

"In the budget, the president will call for a five-year freeze on discretionary spending other than for national security. This will reduce the deficit by more than $400 billion over the next decade and bring this category of spending to the lowest share of our economy since Dwight Eisenhower was president...

"Make no mistake: this will not be easy... [To] achieve the deeper cuts needed to support this spending freeze, we have had to look beyond the obvious and cut spending for purposes we support. We had to choose programs that, absent the fiscal situation, we would not cut.

"Since they were instituted, community service block grants have helped to support community action organizations in cities and towns across the country. These are grassroots groups working in poor communities, dedicated to empowering those living there and helping them with some of life’s basic necessities. These are the kinds of programs that President Obama worked with when he was a community organizer, so this cut is not easy for him.

"Yet for the past 30 years, these grants have been allocated using a formula that does not consider how good a job the recipients are doing. The president is proposing to cut financing for this grant program in half, saving $350 million, and to reform the remaining half into a competitive grant program, so that funds are spent to give communities the most effective help.

"Another difficult cut is a reduction of $125 million, or about a quarter of current financing, to the Great Lakes Restoration Initiative, which supports environmental cleanup and protection. And a third is a reduction in the Community Development Block Grant program. These flexible grants help cities and counties across the nation finance projects in areas like housing, sewers and streets, and economic development in low- and moderate-income neighborhoods.

"While we know from mayors and county leaders how important these grants are for their communities, and are very aware of the financial difficulties many of them face, the sacrifices needed to begin putting our fiscal house in order must be broadly shared, and we are proposing to cut this program by 7.5 percent, or $300 million."

Congress provided $3.948 billion for Community Development Block Grant (CDBG) formula allocations for FY 2010 (after accounting for a transfer of funding to HUD's Transformation Intitiative).   Because the FY 2011 appropriations process remains unresolved, the ultimate funding level for CDBG for the current federal fiscal year has yet to be determined.  However, reducing CDBG formula grant funding by 7.5 percent compared to FY 2010 (without adjusting for inflation) would result in a program funding level of $3.652 billion for FY 2012.

The Community Services Block Grant (CSBG) program is administered by the Department of Health and Human Services.  NAHRO does not issue an annual funding recommendation for this program, but we recognize that CSBG funding is a critically important resource for many NAHRO members.