A product of Great Society urban aid efforts, the Community Development Block Grant was supposed to fight poverty and revive blighted neighborhoods. The program soon proved a wasteful mess, however (see Americas Worst Urban Program, Spring 2005). The money it has lavished on poor neighborhoods has had little impact, because nothing in the funding formula requires grantees to show that theyre actually improving things. Few ever graduate from the program, having achieved their mission. Instead, the funding spigot stays open, year after year.
Buffalo officials, for instance, have squandered over $550 million in block-grant money over the last three decades on programs run by local politicians relatives, friends, and supporters, or on unrealistic schemes, like a downtown cultural center unlikely to flourish in Americas poorest city. The effect on poverty: nil.
Worse, after politicians representing wealthy communities grumbled in the late 1970s that they werent getting any of the CDBG pie, Congress cynically expanded eligibility so that almost every community now qualifies for the dough. CDBG dollarsoften allocated through earmarks, the pork that Congress inserts into spending bills outside of the traditional funding processhave poured into some of Americas plushest communities, bankrolling everything from tennis courts to historical renovations. Such projects, needless to say, have zilch to do with eliminating urban poverty. The program has become fraud-plagued: since 2004, HUD has indicted 159 people on charges of false claims, bribery, fraudulent contracts, theft or embezzlement, and corruption in association with CDBG.
Now, however, the Bush administration wants to put an end to all this with the 2006 CDBG Reform Act, sent to Congress in May by HUD secretary Alphonso Jackson. By setting a minimum grant of $518,000, the bill would end thousands of smaller grants to tiny, mostly suburban communities with no need for the money, thus ensuring that program funds go to poor neighborhoods. Further, the act would require recipients to submit plans with practical antipoverty objectives that they must meet to keep getting funded.
As sensible as these reforms sound, the bills passage is a long shot, precisely because Congress has so corrupted the CDBG program. Republicans and Democrats alikefrom rich, poor, and middle-income districtsprotect it because it lets them bring home the bacon. The pols take the bow when hometown newspapers herald the latest CDBG-funded senior-citizen center or Main Street restoration project. And, of course, initiatives to overhaul the CDBG program often prompt hostile stories (fed by congressional delegations) about how much money a community stands to lose. A Baltimore Sun headline on the Bush administrations new reform is typical: community block grant change means less for city.
But with public anger growing about Washington spending, the CDBG reform bill is timely. Republicans could lose Congress in November, partly because GOP leaders have liberally lavished federal pork, undercutting the notion that theyre the party of small, effective government. A good first step to restoring the faith of GOP voters would be for Republican lawmakers to support the presidents reform.