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Spring 1994
City Journal Spring 1994.
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HUD Follies
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Henry Cisneros, the secretary of housing and urban development, has declared homelessness his department’s top priority—even though most experts now agree that homelessness is less an issue of housing than of substance abuse, mental illness, and other personal problems. That means that HUD, which was originally set up to coordinate public housing and home mortgage programs, is likely to devote more of its attention to providing social services.

In his $29.5 billion proposed budget for fiscal 1995, Cisneros proposes to increase the amount spent on homeless programs from $823 million to $1.63 billion. Many of these programs are laden with “transitional” services such as counseling and medical and psychiatric care.

A Clinton administration report on homelessness would, if its recommendations are implemented, swell HUD’s social-service component even further. The plan, titled “Priority: Home!” and prepared by an interagency group chaired by Cisneros, does not specify the amount of new spending that would be necessary to provide housing and other assistance to those who live on the streets. But it does say that, had HUD’s budget kept pace with inflation since 1980, the department would be spending $40 billion a year in addition to the $25 billion it currently spends. That $65 billion total would make HUD the third-largest Cabinet-level agency, topped only by the Department of Health and Human Services and the Department of Defense.

The plan hints darkly at a possible way to fund new homeless services: scale back the deduction for interest on home mortgages, which saved taxpayers $41 billion in 1993. The interagency report does not explicitly advise eliminating the popular tax break but does call it a subsidy for the upper and middle classes that is much larger than current federal housing subventions for the poor.

 

 


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