Jobs, Taxes & Benefits

WomenMatter will continuously post updates on all this and other issues as we monitor the continuing philosophical and practical debates nationwide. Please check back often for updates. Past updates are available for reference on the Jobs, Taxes & Benefits Archives page.

Families on Edge: Low-Income Residents must Weather Budget Cuts

Families who use the national Housing Choice Voucher Program to help pay their rent costs have been nervous since April 22, 2004, when the Department of Housing and Urban Development (HUD) announced decreased funding for the program.

The Housing Choice Voucher Program, formerly known as Section 8, helps low-income families to rent from any willing private landlord. Tenants in the program pay about 30 percent of their income in rent, while the vouchers pay the rest, up to a limit determined by the federal government that reflects local housing markets.

The program is popular with both tenants and government officials because it provides an alternative to large public housing developments. Although the program got a 14 percent funding increase in 2004, local housing authorities will still have to cut back the vouchers.

The details

Voucher values will now be pegged to August 2003 rent costs, with an adjustment for inflation. This rule change will gravely affect tenants who live in housing markets where rent costs outpace inflation. According to The New York Times, the National Association of Housing and Redevelopment estimates that 900 of the nation’s 2,500 public housing agencies will be affected.

New York City is likely to be one of the hardest hit; it issues more vouchers than any other city, around 118,000 each year. Historically, the cost of vouchers has gone up faster than inflation in NYC, and the city estimates a shortfall of $55.5 million for 2004, according to The New York Times. The Times also reports that about 83 percent of the New York City Housing Authority’s voucher recipients have incomes of less than $16,320/year. NYC’s median voucher value is $670 per month, and the median contribution from tenants is $216 per month. New York officials fear that the voucher cuts will leave some families without housing.

Senator Hillary Rodham Clinton wrote a letter to Alphonso R. Jackson, the secretary of housing, to voice her concern and disdain for the funding change. Yet, Congress is itself responsible for decreasing the value of the vouchers.

Who gave the order?

Local housing authorities are complaining loudly to HUD, but the organization claims it is just following Congress’ orders.

Congress passed the Consolidated Appropriations Act, which was signed into law January 30, 2004 and enacts the changes to the Housing Choice Voucher Program. In a press release, HUD explains that its April 22, 2004 announcement was merely an attempt to help public housing authorities comply with the change. Proponents of the change say that the new rules more closely reflect actual funding needs and local rent market changes.

Representative James T. Walsh (R-NY) explained to the Times that the program continues to be well funded, despite the scarcity of federal dollars. He suggested that the tight federal budget is the cause for the voucher cuts.

Block grants?

The Bush administration has wanted to alter HUD housing vouchers for some time. In 2003, the administration tried to turn the Housing Choice Voucher Program into a block grant program for states, in which a complicated formula would be used to determine aid. Congress did not pass this proposal. Overall, the administration would like public housing authorities to be more fiscally disciplined and, if necessary, to cut services to accommodate the shrinking federal reserve.

A clear case

The voucher cutbacks clearly present how federal budget cuts are affecting America’s neediest families.

Since the United States is experiencing record deficits, the Bush administration has proposed decreased funding to or the elimination of a variety of programs. (For more on Bush’s budget, click here.) Many economists feel that government must drastically reduce its spending to decrease the deficit and balance the high cost of Iraq, which is approaching $6 billion per month, according to Bloomberg media.

The United States’ tight fiscal situation has forced lawmakers to prioritize. The Bush administration and many Republicans top their list with military spending and broad tax cuts. Many Democrats, including presidential hopeful John Kerry, recommend repealing corporate tax cuts to help pay down the deficit and fund federal programs.

The changes to the Housing Choice Voucher Program are but one example of the way that the national debt, Iraq spending, decreased tax revenue, and budget cuts are affecting the everyday lives of Americans. Read more about the budget’s affect on women and discuss with other WomenMatter readers in one of our online forums. Then, express your opinion to decision makers: register to vote and contact your representatives. Your voice matters.

Article Posted on: 5/6/2004

click here to go to next section

return to top