Statement Of Senator Patrick Leahy
On Threats To Affordable Housing And The Section 8 Voucher Program
May 11, 2004

Mr. President, today I express my extreme disappointment with the Administration’s recent announcement on Fiscal Year 2004 Section 8 voucher renewals that threatens to end a long standing commitment to fully fund all Section 8 vouchers in use.  Coupled with its budget proposal for Fiscal Year 2005 that would slash funding for Section 8, the Bush Administration has given the Nation’s communities ample reason to be concerned about the future of the Housing Choice Voucher Program. 

The Section 8 voucher program has been the cornerstone of federal housing policy for nearly 30 years.  The program provides the Nation’s most vulnerable families with vouchers to help them cover the cost of modest apartments and homes in the private market.  It serves more than 2 million families nationwide who are trying to make ends meet.  In my home state of Vermont it helps nearly 6,000 households – more than 60 percent of them are elderly or disabled members and 24 percent of them are working families. 

Unfortunately the Administration has chosen to shortchange the program in a way that will almost guarantee that the poorest of families lose their support.  They recently announced the intention to move from a funding formula based on the actual cost of vouchers to a model that calculates voucher costs based on last year’s costs, pegged to a regional rent inflation index – which may or may not reflect local market conditions -- and despite the fact that they may have access to more recent and accurate data on voucher costs.

The new formula does not take into consideration potential changes in personal incomes, and it does not provide definitive safeguards for public housing authorities (PHAs) that have seen rising voucher costs over the last year or that will be unable to meet their obligations to voucher holders once this policy is enacted.  What I find even more troubling is that HUD will apply this formula retroactively, leaving many public housing authorities shortchanged by millions of anticipated dollars. 

Without the necessary funds to support all vouchers they have issued, many PHAs are either going to have to scale back subsidies or revoke vouchers completely.  Already we are seeing the effects.  PHAs are starting to realize massive gaps in their budgets.  They are considering course corrections to plug these holes and in some cases have stopped accepting additional applicants for the Section 8 waiting list.  If the Administration’s policy is carried out, it will be the first time since 1974 that the federal government walks away from our commitment to honor all authorized voucher contracts. 

Mr. President, this new policy goes against the intent and will of Congress.  We made it clear in the Fiscal Year 2004 Omnibus Appropriations Bill that the Department of Housing and Urban Development (HUD) should do everything in their power to ensure that all vouchers were fully funded, and we gave HUD the resources and tools they needed to do so.   The Appropriations Committee added more than $1 billion dollars to the Administration’s request for Section 8 vouchers, we gave HUD access to a central reserve fund to supplement voucher payments in the event that costs exceeded expectations, and the Senate passed Sense of the Senate language reaffirming our commitment to the voucher program and to those that it serves.  The intention of Congress could not have been clearer. 

As a member of the VA-HUD Appropriations Subcommittee, I am not without concern for the rising cost of the Section 8 program, and I understand the need to look for creative solutions to contain those costs.  But this new funding formula is irresponsible and shortsighted.  Simply serving fewer people, or people with higher incomes – the almost certain outcome of this approach -- is the wrong response to the rising cost of Section 8.  Instead, we should be looking at measures to reduce the cost of housing and to raise the average wage.  We should look at policies which will enable families to afford a place to live without federal assistance.

This new ruling is contrary to the Administration’s own goal to eliminate chronic homelessness in 10 years and will put a strain on other support services such as homeless care providers who are already stretched beyond their means.  If it is not reevaluated, it will leave thousands of families nationwide at risk of losing their housing.  It lacks specificity needed for PHAs to accurately predict how they are going to be affected and leaves considerable discretion to the department on how to interpret renewals. 

This announcement fell on a housing community already reeling from the news that the Administration wants to cut $1.6 billion dollars from the program in the next Fiscal Year and convert Section 8 into a block grant program.  If this proposal goes through, an additional 250,000 people could be faced with the loss of their housing assistance.  My home state of Vermont would lose more than $4 million in anticipated funds and could be forced to cut nearly 740 low-income, elderly and disabled families out of the program.

Mr. President, this is the wrong time to walk away from some of our Nation’s most vulnerable populations.  I find it outrageous that the President can stand behind policies that threaten the safety and wellbeing of thousands of American families while continuing to advocate for corporate tax cuts and tax cuts for the wealthiest Americans.  There is a fiscal crisis in this county, of that I am sure.  Our federal debt continues to rise and the federal treasury continues to shrink, but it is not caused by the modest assistance we give families on Section 8. 

This program has proven itself to be one of the most cost-effective housing programs.  This was confirmed by two separate reports in 2002 – one by the General Accounting Office, and reinforced by the Millennial Housing Commission.  It has been shown to have positive effects on families and children, many of whom are able to move out of high poverty areas to areas of lower poverty and lower crime rates and better schools.  Studies have shown that it helps promote success in the workplace performance -- by providing reliable housing while families are trying to get established, many of whom have moved off welfare. 

We cannot expect low-income families to improve their situations, hold steady jobs and move out of poverty if they do not have access to reliable, safe and affordable housing.  We cannot expect the elderly and the disabled who are on meager fixed incomes to fend for themselves in rental markets that have spiraled out of the reach of even moderate-income families.  Section 8 provides temporary assistance to those who need it.  It helps families avoid the choice between a roof over their heads or food on the table.  

Congress gave the HUD the resources they needed to fully fund all vouchers under contract, and I would expect them to use those resources.  This is not the place to try and reap meager savings to make up for a federal deficit caused by questionable tax cuts and irresponsible fiscal policies. 

Mr. President, I urge the Administration to reevaluate this policy and to restore our commitment to the Section 8 program. 

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