WASHINGTON -- The Reagan administration proposed Monday a $700 million spending cut for the Department of Housing and Urban Development in fiscal 1988 and sought to move virtually all new housing assistance for the poor to a controversial voucher system.
The administration again asked Congress to end funding for the popular Urban Development Action Grant program and said it would seek approval not to spend $205 million of the $225 million appropriated last year by Congress, canceling the January round of UDAG awards to cities.
It also sought authority not to spend $375 million of the $3 billion in Community Development Block Grants appropriated in fiscal 1987 by Congress, as well as $239.6 million earmarked for rehabilitation of Section 8 housing for the poor, nearly $100 million in Housing Development Grants and $125 million in funds for the rehabilitation of rental housing.
Housing and Urban Development Secretary Samuel Pierce Jr. said his department's overall fiscal 1988 budget request of $13.9 billion -- a 4.8 percent reduction from the current fiscal year -- is 'driven by the same imperative' as the Gramm-Rudman-Hollings deficit reduction law requiring progressively lower deficit levels until the budget is balanced.
Under the proposed budget, HUD will seek $3.9 billion to fund an additional 79,000 rental housing vouchers -- the keystone of Pierce's low-income housing program -- rather than seek any new construction of subsidized housing for the poor.
Pierce and low-income housing groups have long been at odds over the administration's commitment to vouchers -- the equivalent of cash subsidies that recipients can use in the private market -- as opposed to construction of subsidized housing.
'What low-income families need are vouchers that give them access to private market housing, not new construction programs which are slow and three times more expensive,' Pierce said.
'Vouchers allow for freedom of choice, do not isolate poor people from the rest of the neighborhood and do not stigmatize families or communities.'
HUD also proposed major changes in the government's FHA mortgage insurance programs, seeking a credit limit of $70 billion in fiscal 1988.
'Although this is $30 billion less than 1987, we feel it is sufficient to keep up with demand,' Pierce said.
