Duo Defends Wasteful Community Development Block Grant Program

(Washington, D.C.) – Citizens Against Government Waste (CAGW) today named New York Sens. Hillary Clinton (D) and Charles Schumer (D) the Co-Porkers of the Month for February for pledging to fight the President’s reforms of the Community Development Block Grant (CDBG) program.  Sens. Clinton and Schumer lashed out at the President, with Sen. Clinton describing the federal grants as “a lifeline” for New Yorkers.

President Bush’s fiscal 2006 budget includes 154 program cuts or terminations, saving more than $15 billion.  The CDBG program, which is providing $4.7 billion to cities and towns nationally in fiscal 2005, is on that list.  The budget proposes transferring CDBG from the Department of Housing and Urban Development to the Department of Commerce, merging it with 17 other economic development programs with total funding of $3.7 billion.  The administration has focused its program reductions and consolidations in part on its Program Assessment Rating Tool, which concluded the CDBG program is “ineffective,” citing an “unclear purpose, loose targeting requirements, and lack of results.”  The Bush plan would require cities to submit their proposals in advance and compete for funds.

Sen. Schumer called the plan a “meat axe approach” to reducing the deficit, saying CDBGs “are the single most important tool that cities like New York have to grow.”  Sen. Clinton said the CDBG program “is a lifeline for many individuals already struggling to make ends meet.  And now the President wants to leave them out in the cold.”

But it has been taxpayers who have been left out in the cold, footing the multi-billion bill for a program that lacks accountability and is rife with waste and mismanagement.  Localities have wide latitude in using the grants and Congress does a poor job of tracking where the money gets spent.  Past grants in New York have included $25,000 for construction of the Music Conservatory of Westchester (one of the wealthiest counties in the nation) and $500,000 for “streetscape improvements,” also in Westchester.  Beneficiaries of CDBGs are often served by other state, local, for profit, and nonprofit programs.  Last fall, the Buffalo News reported that Buffalo had squandered much of the block grant money it had received over the past 30 years.  Far from being an essential tool for combating poverty, CDBGs have become just another budgetary channel for pork and waste.

Sen. Schumer makes the absurd contention that federal handouts are the engine of New York’s economy.  With a gross state product of $826 billion in 2001, “losing” $150 million in CDBGs would hardly constitute a catastrophic blow to the state’s economy.  The real issue in New York is the negative economic impact of the highest tax burden of any state.  In addition, New York City’s rent control laws cause landlords to neglect capital improvements or abandon properties altogether.  Sen. Clinton’s comment that budget cuts will leave residents “out in the cold” is ironic considering that recipients of CDBGs often drive local stores and real estate investors out of business.

For resisting much-need reforms in a wasteful program, for exaggerating the supposed benefits of CDBGs, and for leaning on federal grants to cover up local problems, CAGW names New York Sens. Hillary Clinton and Charles Schumer its February Porkers of the Month.

Citizens Against Government Waste is the nation's largest nonpartisan, nonprofit organization dedicated to eliminating
waste, fraud, abuse, and mismanagement in government.