Domestic Policy Watch — September 2011

The Stakes Are High in Washington

By W. Paul Farmer, FAICP
Chief Executive Officer
American Planning Association

For more than a year, Congress has lurched from budget crisis to budget crisis. Starting with the prolonged debate that culminated in the 2011 spending agreement and midnight deal to avert a government shutdown through the mostly manufactured debt ceiling drama, Washington has been consumed with federal debt and deficits — with all other legislative business stuck in neutral.

With Capitol Hill paralyzed by budget issues, items like renewing federal transportation policy have had little hope of action. For weeks this summer, the Federal Aviation Administration was practically shut down due to congressional inaction. Meanwhile, dedicated public servants continued to go to work while not being paid. (The handful of elected leaders who engineered the shutdown did not miss a single paycheck.) Even though we have been waiting more than three years for new surface transportation authorization legislation, Congress will have to extend the program again by the end of September.

The prospects for change are slim. The stage is already set for the next fiscal cliffhanger: the budget "supercommittee's" November deadline for reaching a new spending deal. In addition, the federal fiscal year ends this month, so once again we'll be debating a continuing resolution since an agreement on 2012 spending is nowhere in sight.

While there can be no denying the critical importance of today's economic and budget issues, real economic policy is rarely part of the discussion. Instead of policy making we mostly get the political equivalent of reality television. And our needs are so great! Three years into an historic economic crisis the potential for a "double-dip" recession appears to be increasing. Unemployment remains high. The housing market hasn't recovered and may well be in the midst of a restructuring. Local sales and property tax revenues are flat.

The budget squeeze facing local governments is, if anything, getting worse. State and local governments combined have eliminated 200,000 jobs so far this year. Groups ranging from the Center on Budget and Policy Priorities to the National League of Cities have documented widespread and continuing budget gaps. Planners working in the public sector are all too aware of the challenges facing local governments. Planners in the private sector are experiencing the effects of reduced contracts.

The international financial scene is cause for more concern. Anxiety over European sovereign debt and the return of higher energy prices have led to the kind of market volatility and tightening credit that remind us of the autumn of 2008.

I have made the point before that today's challenges call for bold, new solutions, not just doubling down on policies introduced half a century ago. I firmly believe that good planning is absolutely essential to restoring economic prosperity. Communities and regions across the country need to be planning for a new economic future. We're not talking about new development projects measured by the number of cranes on the skyline. If we want communities of lasting value, we must invest in planning innovation. If we want to be competitive in the global economy, we must renew our vital infrastructure, based on innovation. China is doing it. India is beginning to do it.

In spite of these needs, Congress has been moving in the opposite direction. Recent budget and deficit reduction deals have squeezed resources for critical planning programs that can foster community innovation. I don't believe that more federal spending by itself is a cure-all for our problems, and I fully acknowledge that the debt is a serious issue in the long term. However, we only make our problems worse by slamming the breaks on the very investments needed to move the economy and our communities forward.

A case in point is the Community Development Block Grant program. The final agreement on FY 2011 spending cut CDBG by $300 million, or 16 percent. The 2011 funding level of $3.3 billion is the lowest for CDBG since the end of the George H. W. Bush administration in FY 1992. To make matters worse, although funds were cut, the total number of recipients increased — from 889 cities and counties in 1992 to 1,169 today. And the program's real purchasing power has eroded. Over its history, CDBG never kept pace with inflation. The program originally was enacted in 1974 with funding of nearly $2.5 billion. Adjusted for inflation, that would be about $10 billion today — three times the current funding level.

And, yet in today's climate the 2011 funding level can be seen as something of a victory. At the onset of the budget debate, the Republican Study Group, a coalition of House conservatives, called for complete elimination of CDBG. The budget bill that initially passed the House, H.R. 1, provided $1.5 billion for CDBG and completely eliminated two components: sustainable regional planning grants and community challenge grants. The funding outlined in H.R. 1 would have been $1 billion lower than any budget in the program's history.

The new Partnership for Sustainable Communities program also came under attack. At HUD, the new regional planning and community challenge programs are part of CDBG even though they are competitive. The program was originally funded at $150 million. H.R. 1 sought to prohibit HUD from using any funding for the new initiative and even attempted to rescind earlier grants. Through successful advocacy efforts, which APA helped lead, the final agreement for 2011 provided $100 million for a second round of grants. In fact, HUD is now accepting applications. Without question it was an important victory to keep this innovative planning program alive. Nevertheless it sustained a one-third cut and will likely be targeted again in the 2012 appropriations process.

When CDBG was signed into law, President Ford said that the program was essential because "sustained action by all levels of government is necessary to maintain strong, viable urban communities." When judged by a multitude of indicators, CDBG has more than met the challenge. A study of 2010 funding by HIS Global Insights of ten major metropolitan areas found that one year of funding generated 120,000 jobs and contributed $10.7 billion in GDP. With communities facing the profound consequences of the economic downturn and housing market collapse, the flexibility and utility of CDBG continue to be needed.

Threats to CDBG also come despite years of evidence of the program's leveraging impact. According to HUD, every $1 in CDBG funds leverages $3 in non-CDBG funds. CDBG and the new planning grants have provided important support not only for cash-strapped municipalities but also for the many planning, design, construction, and development firms working on projects. These resources also help many non-profit partners at the local level that provide essential services for citizens hit hard by the economic downturn. It is easy to realize the support that CDBG provides to localities, but not so apparent is the essential role it plays for some of the nation's most experienced and relied upon service groups such as Boys and Girls Clubs, Catholic Charities, YMCA, YWCA, Meals on Wheels, Red Cross, and numerous low-income housing organizations. CDBG dollars leverage enormous volunteer contributions.

In spite of this record and the obvious need, CDBG and the related sustainability programs are very likely to face even greater challenges in the year ahead. The budget drafted by Rep. Paul Ryan (R-Wis.) and adopted by the House targets HUD programs for the second-largest percentage cut of any domestic program over the next ten years. CDBG is particularly vulnerable within HUD because of the political and social obstacles of cutting Section 8 and other direct-assistance programs. CDBG is one of the few substantive targets left in the department.

If left intact, the original House budget allocation for HUD would virtually assure another round of significant cuts. The debt ceiling deal provides at least a glimmer of hope since most of domestic cuts are "back loaded" in FY 2014 and beyond. Still, it appears likely that the House will move ahead with an initial spending bill that cuts CDBG and targets the new sustainability programs. This would set the stage for new budget drama leaving, communities at risk and further impeding economic recovery.

None of this is to suggest that CDBG and other federal programs are infallible or that the fiscal realities aren't serious. Much can be done to strengthen and improve federal programs that support community development. In fact, I am heartened by the fact the HUD is seeking to implement new initiatives like Choice Neighborhoods and the Partnership for Sustainable Communities that help meet new local needs.

And, it is true that we need to make hard decisions about the federal budget, both revenues and expenses. However, cuts shouldn't undermine sources of future economic growth. We can make responsible decisions about our debt and our need to plan in ways that rebuild the economy. The United States had a robust economy in the 1990s and early 2000s. Then came massive tax cuts and massive, "off the books" military spending. We quickly moved from federal surpluses to federal deficits. Either private spending or public spending creates jobs. They are financed by either current resources or borrowing. We need to find again the reasonable balance that can lead to prosperity.

APA is taking this challenge very seriously. I hope that many of you took advantage of our new toolkits for local district advocacy and site visits to promote and explain the importance of planning and key federal initiatives to your congressional representatives during the recent August recess. If not, there is still plenty of opportunity to do so. October is National Community Planning Month — a wonderful opportunity to show elected officials and the public the tangible benefits and outcomes of good planning.

We are working on a new advocacy campaign in Washington to support the programs, like CDBG, that make a difference for your community. This includes helping lead new coalitions in Washington and supporting a variety of local advocacy efforts in target districts across the country. We are also expanding our support for communities receiving or seeking new sustainability grants. Because we know this fight won't end with one bill or one budget, we will continue and expand this campaign during the coming months.

A significant opportunity for you to get the latest insights on what's happening in Washington and make your voice heard about the value of investments in planning and communities happens later this month at APA's Federal Policy & Program Briefing and Planners' Day on Capitol Hill. These events will feature special sessions with policy makers and issue experts, and give you the opportunity to take the planning message directly to Capitol Hill. We will also be honoring a bipartisan pair of planning champions, Sen. Robert Menendez (D-N.J.) and Rep. Steve LaTourette (R-Ohio), as our Legislators of the Year.

We are at a genuine crossroads in the nation's economic and political life. As planners we can bring valuable assets to the debate. We can help the public and policy makers see more comprehensively and lay a broadly supported vision for restoring our economy and building communities of lasting value. To live up to this role, APA and its members must be engaged and active as never before. APA is committed to this cause and to providing the training, research, education, communications, and advocacy resources required.

Now is the time for you to be part of the effort. I hope you can join us later this month in Washington and commit to being part of our non-partisan campaign based on who we are as planners. We stand for something. Check out our Articles of Incorporation and the AICP Code of Ethics and Professional Conduct. Some planners are Democrats, some are Republicans, and some are independent. We range from conservative to liberal and our progressive values historically have been the values of our movement. The stakes are high in our 104th year for programs we support and the communities and people we serve.