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 “America’s 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 they’re 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 America’s poorest city. The effect on poverty: nil.
Worse, after politicians representing wealthy communities grumbled in the late 1970s that they weren’t getting any of the CDBG pie, Congress cynically expanded eligibility so that almost every community now qualifies for the dough. CDBG dollars—often allocated through “earmarks,” the pork that Congress inserts into spending bills outside of the traditional funding process—have poured into some of America’s 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 bill’s passage is a long shot, precisely because Congress has so corrupted the CDBG program. Republicans and Democrats alike—from rich, poor, and middle-income districts—protect 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 administration’s 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 they’re 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 president’s reform.