Trump proposes zeroing-out HUD's Community Development Block Grant program
The same program gears up to deliver congressional appropriations after disasters
More than $3 billion for 9/11 recovery efforts. More than $15 billion to rebuild after Hurricane Sandy. Nearly $20 billion to help victims of Hurricanes Katrina, Rita and Wilma.
They’re huge sums of money – all approved by Congress, then handed down to states and cities, which use the cash under strict federal rules.
But under President Donald Trump’s 2018 budget blueprint, the program that put those dollars into local hands would be zeroed-out, raising questions about how readily the cash would be available when the next disaster strikes and what oversight would be in place to ensure it is not misused.
“Is the administration actually sun-setting the entire program and cutting staff? Because there is no alternative federal program that exists to fund complete community recovery in the aftermath of a disaster,” said Jeffrey Thomas, an attorney who served as a special assistant to New Orleans’ recovery and development office after Hurricane Katrina.
FEMA responds, then HUD steps in
When disaster happens, all eyes turn to FEMA, the Federal Emergency Management Agency. It’s that department that foots the bill for immediate response efforts, such as bottled water and hotel vouchers. FEMA also covers the longer-term costs of repairing public assets, from water pipes to public schools.
But helping private property owners is another matter. Federal money to help homeowners and business operators rebuild and to build new infrastructure not covered by FEMA traditionally has been funneled through the Community Development Block Grant Program, dubbed CDBG. It’s run by the US Department of Housing and Urban Development.
Another $715 million went toward long-term community redevelopment; in New Orleans, the money was used to buy land for a new Veterans Affairs hospital, provide incentives for fresh grocers to set up in storm-ravaged areas and fund dozens of similar projects, Thomas said.
“That money comes quick,” said retired Lt. Gen. Russel Honoré, an expert in emergency preparedness and disaster recovery, who spearheaded efforts to secure New Orleans in the days after Katrina. “People have relied on those block grants to get those communities back up. The availability of that money, I cannot overstate it.”
And there’s the rub.
Trump’s plan proposes eliminating the CDBG budget, an estimated savings of $3 billion. The administration claims “the program is not well-targeted to the poorest populations and has not demonstrated results.” Federal resources would be redirected to “other activities,” the blueprint says.
Delivering federal disaster money
In an ordinary year – one without a major disaster – local governments use CDBG money to supplement their operating budgets in ways that are supposed to help the disadvantaged. Some give a portion to community organizations, such as Meals on Wheels, to achieve that goal.
But after an earthquake or a terror attack, the same federal apparatus gears up to deliver enormous congressional appropriations to communities in need.
“We’re talking billions of dollars that are instantly allocated,” Thomas said. “When you zero-out CDBG, that’s one thing. If you dismantle the program entirely, you’re dismantling any ability to move that money through to disaster-affected areas.”
That doesn’t mean federal money wouldn’t be available for communities in need, Honoré said.
“Congress would find another way to do it,” he said. “They’ll find another way to get that money to communities.”
But until the Trump team provides more details, it’s not clear how recovery dollars would get to people in need.
“What’s going to happen? Have the staff twiddling their thumbs until a disaster?” Thomas said. “It doesn’t suggest they’ve thought this through.”