Draining a Slush Fund: Community Development Blocks Grants
DRAINING A SLUSH FUND: COMMUNITY DEVELOPMENT BLOCK GRANTS
House Chamber, Washington, D.C.
June 27, 2012
Mr. Chairman:
This amendment saves $3.4 billion by eliminating funding for the Community Development Block Grant program.
This program was created in 1974 with the stated objective of eliminating blight and providing affordable housing. In the nearly four decades since then, it has degenerated into a federal slush fund for pet projects of local politicians and politically connected businesses. It is plagued by profligate waste and outright fraud.
This is an unauthorized expenditure – the legal authority for it expired in 1994 – 18 years ago – and Congress has not bothered to renew it ever since. But we keep shoveling money at it.
Three and a half billion dollars averages to almost $50 from the earnings of a family of four, and they have a right to know where the $50 taken from their family budgets is going. Senator Coburn gave some examples in his “Back in Black” report:
“Summit County, Ohio spent $100,000 of CDBG funds to create a “doggie day care” and kennel last year and Nyack, New York directed $10,000 of CDBG funds to Amazing Grace Circus, inc. in 2009 to put on “A Day at the Circus.” CDBG funds are being spent creating a hip atmosphere for employees of an LA architectural firm, providing decorate sidewalks in a wealthy Virginia community and upgrading Victorian cottages in Alabama.”
Indeed, some communities use these funds to pay off federal loans they have taken out on projects that are now defaulting because they have failed to produce the promised benefits.
Even in the best of circumstances, these are all projects that exclusively benefit local communities or private interests and ought to be paid for exclusively by those local communities or private interests. They are of such questionable merit that no city council is willing to face its constituents and say, this is how we’ve spent your local taxes. But they are more than happy to spend somebody else’s federal taxes.
So we end up robbing St. Petersburg to pay St. Paul for projects so dubious that the purported beneficiaries won’t pay for them.
And that’s all before we enter the realm of fraud. This program is replete with individuals directing six figure sums to their personal bank accounts or political activities.
The Office of Management and Budget has repeatedly branded the program as “ineffective,” its official designation for government programs that cannot ascertain how their funds are spent.
HUD’s own Inspector General found that in relatively short two-year time span, over one hundred fifty criminal indictments were issued for false claims, bribery, fraudulent contracts, theft, embezzlement and corruption in connection with this program.
This slush fund cries is a give-away for abolition, and should be one of the first places we look to bring spending under control and stop wasting our constituents’ money.
Once again, though, this unauthorized program is not targeted for elimination by the Appropriations committee. It is not even targeted for even a token reduction in spending.
No, the Appropriations committee proposes spending $400 million more than we spent last year – indeed, $400 million more than even the President requested.
Let’s be very clear on this. The House Appropriations Committee, with a Republican majority that has a clear mandate to stop wasting money, is about to appropriate $400 million more than requested by the most spendthrift administration in our nation’s history on a program with no federal nexus, with a sullied history of fraud, and that funds the most unworthy of local projects and special-interest hand-outs.
The rules of the House were specifically written to prevent this type of unauthorized expenditure – and they provide for a point of order to be raised if it’s included in an appropriations bill. That’s exactly what we have here. But alas, that rule is routinely waived when these measures are brought to the floor, making this amendment necessary.
Mr. Chairman, this is another critical test of the Republican majority’s intention to stand by the promises it made to the American people in the most dangerous fiscal crisis in our nation’s history.
I pray we rise to the occasion.
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