City Leaders Will Fight the Cuts Because Cities Are Worth Fighting For

The president’s budget proposal represents a vision of unprecedented withdrawal of federal investment in America’s neighborhoods and communities.

Small and rural cities in particular generally lack the tax base to absorb cuts at the level the White House has proposed. (Getty Images)

President Donald Trump’s “skinny budget” proposes more than $50 billion in domestic spending reductions across the board, and would outright eliminate dozens of programs important to cities and towns. For city leaders, cuts of this magnitude are not merely a question of how to do a little more with a little less. That’s a question that has already dogged local officials for years as a result of the relatively smaller annual funding cuts to city priorities resulting from sequestration. It’s also a question city leaders have had to contend with because of the growing number of state-mandated caps on local tax and revenue authority.

The president’s budget proposal not only asks cities and towns to do a lot more with a lot less, it represents a vision of unprecedented withdrawal of federal investment in America’s neighborhoods and communities and an abandonment of the role the federal government traditionally plays as a stakeholder in cities, the nation’s economic engines and centers of opportunity.

A quick scan of programs proposed for elimination revels what is at stake for all American cities, large and small:

  • Community Development Block Grants (CDBG)
  • HOME Investment Partnerships Program for Affordable Housing
  • Economic Development Administration Grants (EDA)
  • Transit New Starts for Public Transportation
  • TIGER Grants for Public Transportation Projects
  • Minority Business Development Agency
  • Community Development Financial Institutions (CDFI) Grants
  • Low Income Home Energy Assistance (LIHEAP)
  • National Endowment for the Arts (NEA)
  • Pre-Disaster Mitigation Grants
  • State Criminal Alien Assistance Grants
  • Community Services Block Grant (CSBG)
  • Weatherization Assistance Program
  • The Clean Power Plan

NLC President Matt Zone has pointed out that the president’s budget proposal runs directly counter to his campaign promise to lift up America’s cities – and in fact, the worst impacts of the cuts will be felt in the small towns and rural communities the president promised to prioritize. That’s because small and rural cities generally lack the tax base to absorb cuts at this level, and will be forced to make tough decisions that could have drastic human consequences.

The Community Development Block Grants program is a good example. For many reasons, NLC has had to lead efforts to “Save CDBG” from significant cuts or elimination every few years. Among those reasons is the fact that, from the viewpoint of federal lawmakers, CDBG can look like a “big city” program with a level of flexibility that makes outcomes difficult to measure. In reality, when the threat to CDBG is real, small-town leaders are always at the forefront of NLC advocacy to save the program. That’s because CDBG is one of the few programs that funds infrastructure improvements, such as water towers or main street redevelopment, in small and rural communities.

NLC is calling on Congress to throw out the White House’s budget proposal and develop a new plan focused on building prosperity, expanding opportunity, and investing in our future. Whatever the outcome, we know that real-life stories from local officials on the impact of federal programs will carry the day. That’s why we’re asking city leaders from communities large and small to help us fight the cuts by showing Congress why their city is worth fighting for.

mike_wallace_125x150About the author: Michael Wallace is the Program Director of Federal Advocacy at the National League of Cities. Follow him on Twitter @MikeWallaceII.

Fighting for Local Government Priorities on Capitol Hill

NLC is laying the groundwork for Capitol Hill Advocacy Day, which takes place on March 15 during NLC’s Congressional City Conference. More than 250 meetings have been arranged for local officials to speak with their Congressional representatives about city priorities.

With a new president and Congress, now is the time to raise the voice of cities and make their priorities heard. (Getty Images)

With a new president and Congress, now is the time to raise the voice of cities and make their priorities heard. (Getty Images)

This post was co-authored by Michael Wallace and Ashley Smith.

Thousands of local officials will soon arrive in Washington, D.C. for NLC’s 2017 Congressional City Conference. Among the members of Congress scheduled to meet with conference attendees are seven new senators, 55 new representatives, and 91 former local elected officials. To lay the groundwork for successful meetings, NLC lobbyists have met in advance with these offices, alongside top leadership, over the last two months.

From January 3, when the new Congress was gaveled into being, to now, NLC lobbyists have taken 135 Congressional meetings with 120 members of Congress and their staff; and 11 meetings with Congressional committee staff from nine House and Senate committees. Among outcomes related to specific policy issues, these meetings served to educate Congressional offices on cities’ bipartisan priorities and reinforce NLC as the voice of America’s cities on Capitol Hill.

The Congressional City Conference takes place March 11-15. While in Washington for the conference, you’ll learn from political and issue experts on how federal action may impact your city in the months and years ahead, and have the opportunity to speak up for cities during meetings with your Congressional delegation.

Start your conference experience by attending NLC’s Federal Advocacy Committee meetings on Sunday, March 12 to learn more about our policy development process and how the committees are leading NLC’s advocacy efforts. Federal Advocacy Committee meetings are not just for committee members – they are open to every local official registered to attend the conference. And during workshops on March 13 and 14, you’ll hear about the most pressing topics facing cities and learn about federal plans and proposals. Topics include:

  • Infrastructure plans and funding
  • Possible changes to the Affordable Care Act and impacts to cities
  • New technologies and strategies for your police force
  • Considerations when pursuing public private partnerships
  • How to effectively advocate for your city in Washington

During the general sessions, you’ll hear from political analyst and former White House Director of Communications Nicolle Wallace and bestselling author J.D. Vance. Finally, on March 15, join city leaders from across the country as we advocate for city priorities during NLC’s Capitol Hill Advocacy Day. Register today to join us and learn more about the conference here.

We look forward to seeing you and city leaders from around the country in our nation’s capital!

You can get to know more about NLC’s advocacy team of lobbyists and grassroots professionals through the “Meet Your City Advocate” blog series and by attending one of NLC’s seven Federal Advocacy Committee meetings at the conference.

About the authors:

mike_wallace_125x150Michael Wallace is the Interim Director of Federal Advocacy at the National League of Cities. Follow him on Twitter @MikeWallaceII.


Ashley Smith is the Senior Associate for Grassroots Advocacy at the National League of Cities. Follow Ashley @AshleyN_Smith.

Federal Advocacy in 2017: In a Year of Transition, Cities Seek Certainty and Opportunity

NLC is advocating for what may be cities’ most important federal priority in 2017: promoting a positive narrative around cities to the incoming administration and new lawmakers in Congress.

(Getty Images)

The majority of decision-makers inside the Obama Administration understood that the overall success of federal policies requires good local input and leadership. NLC will continue to build a strong relationship between local leaders and the White House during the Trump Administration as well. (Getty Images)

In the nation’s capital, the remarkable success of the Republican Party in the 2016 election surprised many and started a fresh debate over the message voters wanted to deliver to Washington. Outside the Capital Beltway, Americans remain deeply divided in ways that could impact the division of power and authority within the intergovernmental partnership.

For a non-partisan organization like the National League of Cities (NLC), representing 19,000 cities of every size, such divisions are a concern for sure. Fortunately, NLC was not caught off guard by the election outcome because our 2017 Advocacy Agenda began taking shape two years ago, when our bipartisan leadership first started thinking about what a presidential transition would mean for cities.

In 2015, NLC convened a number of highly respected city leaders to form a Presidential Election Task Force with the goal of forging a truly bipartisan campaign platform for cities. The campaign, Cities Lead, was built on a platform of three issues important to every city: public safety, infrastructure, and the economy. City leaders around the nation used the Cities Lead Playbook to engage with the presidential candidates of both parties and to obtain assurances and commitments that areas of broad bipartisan consensus would remain on solid ground — regardless of the party in power.

Thanks to the work of that task force, NLC was able to create engagement opportunities during President-elect Donald Trump’s campaign and spotlight city leaders at the Republican National Convention (and Democratic National Convention). On election night, when the Trump campaign declared victory, NLC was there to congratulate him as the president-elect of the United States.

There is a fair amount of uncertainty about the priorities of the next administration and the 115th Session of Congress, but we are certain of at least three areas of common ground between the incoming administration and cities: the need to create greater resources for infrastructure, a desire to help cities and neighborhoods reduce crime and grow opportunity, and a focus on creating and retaining jobs.

It is unfortunate that the president-elect too often relies on mischaracterizations of cities, and there appears to be an urgent need for city leaders to build relationships with stakeholders inside and outside of the new administration. That’s why NLC is taking the lead and focusing on what may be cities’ most important federal priority for 2017: promoting a positive narrative around cities to the Administration and new lawmakers in Congress.

In 2008, then-Candidate Barack Obama said along the campaign trail that “we need to stop seeing our cities as the problem and start seeing them as the solution.” There is little question that, within the recent intergovernmental partnership, local governments were empowered by the greater value placed on cities by the outgoing administration.

Place-based programs prospered across federal agencies and allocated federal funding directly to local governments, including those programs strongly associated with NLC like the My Brother’s Keeper Community Challenge and the Mayors Challenge to End Veterans Homelessness. The appointment of multiple former mayors and city officials to lead federal agencies, including the Department of Housing and Urban Development and the Department of Transportation, sent a message about the value of local leaders and ensured a city point of view inside the Obama Administration and at every cabinet meeting.

Of course, there were many actions taken by the Administration which drew criticism from NLC, including President Obama’s repeated proposals to cap tax exempt municipal bonds to achieve a balanced budget, and the $1 billion cut to the Community Development Block Grant (CDBG) program early in his first term that has yet to be reversed.

The fact remains that, as the result of a strong relationship between local leaders and the White House, the majority of decision-makers inside the Obama Administration understood that the overall success of federal policies depends on good local input and leadership.

This, then, is our main advice to the incoming administration: gain local insight.

Alongside our Cities Lead Advocacy Agenda, NLC also remains focused on specific legislative priorities. Our top asks for Congress this year are to protect tax-exempt municipal bonds, to authorize the collection of sales tax on internet purchases, and to allocate funding for infrastructure directly to local governments.

NLC has built a history of progress and success with both Democratic and Republican leadership in Congress, and we are poised to continue that success. Over the previous session of Congress, NLC helped deliver legislative victories for cities: a five-year transportation bill that puts more money in the hands of local governments; a water bill that includes resources for cities with contaminated water, like Flint, Michigan; a public health bill that significantly increases resources to battle the opioid epidemic tearing through communities; and spending bills that have largely maintained level funding for local priorities — just to name a few.

What’s most impressive is that Congress sent all of these measures to the president without tampering with municipal bonds.

New challenges and opportunities await cities, and NLC, in the coming year. Yet, as a non-partisan organization, NLC is the best-placed organization to build a new partnership for cities with the incoming administration, to advance policies where we are aligned, and to express opposition without fear of reprisal.

In turn, we are asking city leaders to help us in our mission by reintroducing their city to members of Congress (and Congressional staff) in their district as well as to the new administration officials in federal agencies overseeing the programs that matter most to their city.

mike_wallace_125x150About the author: Michael Wallace is the Interim Director of Federal Advocacy at the National League of Cities. Follow him on Twitter @MikeWallaceII.

NLC Visits Capitol Hill to Promote Role of Local Government in Infrastructure Projects

More than 100 congressional staff, local officials, and media members gathered in the U.S. Capitol to hear NLC leaders explain the role of local government in infrastructure projects including clean water, transit, and broadband internet.

Gilmartin presented data showing ongoing disinvestment from localities from state and federal sources, meaning cities are having to “go it alone” in areas where there was once robust intergovernmental cooperation.

Dan Gilmartin, Executive Director & CEO of the Michigan Municipal League, presents data showing that state sources are disinvesting from localities in Michigan – proof that cities are having to “go it alone” in areas where there was once robust intergovernmental cooperation. (photo: Jason Dixson)

On the final day of NLC’s 2016 Congressional City Conference in Washington, D.C., more than 100 congressional staff, local officials, and media members gathered in the U.S. Capitol to hear NLC leaders explain the role of local government – and benefits of local control – in infrastructure projects including clean water, transit, and broadband internet.

Following opening remarks from D.C. Congresswoman Eleanor Holmes-Norton, a long-time champion of local control in Congress, NLC Executive Director Clarence Anthony started the briefing by announcing NLC’s support for federal assistance to the City of Flint, Michigan, to address the ongoing lead contaminated water crisis. Panelist Dan Gilmartin, Executive Director & CEO of the Michigan Municipal League, also focused his remarks on water crisis in Flint, Michigan, and what it meant for federal-state-local relations nation-wide. Among other things, Gilmartin presented data showing ongoing disinvestment from localities from state and federal sources, meaning cities are having to “go it alone” in areas where there was once robust intergovernmental cooperation.

Councilmembers Greg Evans of Eugene, Oregon, and Andy Huckaba of Lenexa, Kansas, were also featured in the briefing. Councilmember Evans, who also serves as Vice Chair of NLC’s Transportation and Infrastructure Advocacy Committee, contrasted state and local perspectives on accountability in the transit funding process. Councilmember Huckaba, a longtime leader on NLC’s Information Technology and Communications Advocacy Committee, spoke about competing public and private interests in the broadband market.

NLC 2nd Vice President, Mayor Mark Stodola of Little Rock, Arkansas, provided the concluding presentation by highlighting the local point of view on infrastructure finance, telling the assembled crowd, “Our message is clear: we must protect the tax exemption on municipal bonds.”

In addition to being well-attended, the briefing was live-streamed over the internet and is still available for viewing on Facebook.

About the Author: Michael Wallace is the Program Director for Community and Economic Development at the National League of Cities. Follow him on Twitter @MikeWallaceII.

40 Years Later, Why Advocating for CDBG Still Matters

This is the fifth post in NLC’s 90th Anniversary series.

"Gerald Ford speaking into microphones, 9 Aug 1974" by O'Halloran, Thomas J., photographer.Leffler, Warren K., photographer.

“Gerald Ford speaking into microphones, Aug 1974” by O’Halloran, Thomas J., photographer.

The Community Development Block Grant Program (CDBG) turns 40 this August, marking an important milestone for the National League of Cities (NLC) and other stakeholders. To observe the occasion, NLC has teamed up with the co-chairs of the Congressional Urban Caucus, Representatives Chaka Fattah (D-PA) and Michael Turner (R-OH), to support H.Res. 668, Supporting the goals and ideals of the Community Development Block Grant program. Additional cosponsors are welcome, and you can help.

The 40th Anniversary of CDBG is also an opportunity to reflect on how NLC’s views of the program have evolved over successive legislative campaigns. NLC has been a champion of CDBG from the very beginning, when President Gerald Ford enacted the program by signing the Housing and Community Development Act on August 22, 1974.

In the intervening years, NLC has led numerous campaigns to turn back efforts to weaken or eliminate the program. Although campaigns to “Save CDBG” have been successful thanks to the advocacy of thousands of local elected officials, NLC has taken a more nuanced view of legislative proposals regarding program flexibility over CDBG’s 40 year history.

CDBG was conceived and enacted in the 1970’s, following significant social upheaval and ongoing disparities within cities and towns. The program replaced 7 previous federal programs – Urban Renewal, Model Cities, Water and Sewer Facilities, Open Spaces, Neighborhood Facilities, Rehabilitation Loans and Public Facility Loans[1]. NLC advocated in support of the consolidation and rallied support for the new CDBG program[2].  There were many reasons for this, but two stand out.

First, many of the programs CDBG replaced, like Urban Renewal, had become racially divisive within communities and highly politicized within Congress. Second, CDBG replaced several highly targeted programs with one flexible program that provided local officials with a greater degree of local control over federal funds. Upon signing the bill, President Ford expressed this second reason by saying “this bill will help return power from the banks of the Potomac to people in their own communities. Decisions will be made at the local level.”

At some point in the 1980s however, NLC’s leadership was concerned that the pendulum was swinging too far in the direction of flexibility and actually came out against a proposal to eliminate the requirement that CDBG primarily benefit those in low and middle income brackets. NLC’s President at that time, Cleveland Mayor George Voinovich, who would go on to be a U.S. Senator from Ohio, testified to Congress that, “without meaningful guidelines and review by HUD of a city’s compliance with the primary objectives of the Act . . . pressures to fund a wide range of unfocused activities will be very severe.” [3]

He put it more bluntly in an UPI interview, “we insist the program be used for low and moderate income people.  Otherwise it becomes revenue sharing and then it disappears.  It is money meant to rebuild our cities.  It is not meant to meet a lot of other needs.”  Mayor Voinovich proved correct when general revenue sharing was eliminated in the late 1980s.

NLC was almost too successful, however, in turning back the proposal to drop CDBG targeting requirements. By the 1990s NLC had refocused on increasing flexibility and local control under the CDBG program. A survey of NLC members in 1994 showed that local official’s views on CDBG were evolving again.

On a question about local community development, a majority of respondents said the primary goal of community development was to improve the tax base. Poverty alleviation was secondary.[4]

More recently, questions of program flexibility have receded as successive budget crises have resulted in significant funding cuts for the CDBG program. Still, in the 2000s, NLC lead two successful campaigns to turn back Administrative proposals to eliminate CDBG by means of consolidation. And despite recent program cuts, CDBG continues to stand out as one of the few federal programs to maintain a significant bipartisan base of support.

Moreover, it has remained sufficiently flexible to be repurposed to meet contemporary challenges. The CDBG program proved effective for local efforts to overcome the recent home foreclosure crisis and subsequent national economic downturn, serving in many instances as a crucial source of gap funding for projects and services that otherwise would have been cut from local budgets.

In addition to housing and infrastructure, CDBG is being used in ways entirely unforeseen in the 1970s, supporting economic development efforts that have led to much-needed job creation.

The next challenge to CDBG is not likely to be too far off. For 40 years, CDBG has funded thousands of projects and programs and not every project is a success. After 40 years, it’s almost inevitable that some funding would find its way to unscrupulous use.

With such an expansive history, it’s possible for CDBG champions and opponents alike to create further lists of projects that demonstrate the best and worst uses of the program. Program funding grows more challenging each year as well, as the percentage of the HUD budget required to fund housing vouchers steadily climbs. History suggests simply preserving the status quo is a formula for diminished returns.

My book signing will be at 10:00 and 14:00About the author: Michael Wallace is Program Director for Community and Economic Development at the National League of Cities. As a member of the Federal Advocacy team, Michael works closely with mayors, council members and municipal staff to represent local priorities in the areas of housing, community development and economic growth.



[1] Richard P. Nathan and Paul R. Dommel, Political Science Quarterly, Vol. 93, No. 3 (Autumn, 1978), pp. 421-442
[2] Timothy Conlan “From New Federalism to Devolution”, pp. 47-50
[3] Ferguson, Ronald F., Urban Problems and Community Development, p. 146
[4] National League of Cities. 1994. “Attitudes toward Economic Development and Poverty.”

Local Officials behind Growing Support for CDBG, but Process and Partisanship Remain Significant Challenge

For the 7000 cities and towns that receive Community Development Block Grant (CDBG) funds each year, directly or indirectly, concerns are growing that that the foundation for transformative community projects is beginning to crumble.  Over the last two years, Congress has cut funding for the CDBG program over 25 percent, from about $4 billion to $2.9 billion, which is divided among 1,200 cities and 50 states.  For a program with enormous, bipartisan support from leaders elected to local office, the recent drop in support from Congress, as measured by House and Senate letters on spending priorities, appears well out of step with hometown priorities.

Every year, Members of Congress are given a deadline to tell the House and Senate Appropriations Committee’s what programs, if any, they consider funding priorities.  Appropriators take these recommendations into consideration as they write spending bills.  Unfortunately, growing pressure to reduce the federal deficit has complicated the traditional processes by which Members of Congress signal support for programs.  In the case of CDBG, the number of Senators and Representatives willing to sign annual CDBG support letters to the Appropriations Committee has been shrinking.  Worse yet, the growing partisan divide threatens to pin the fate of programs like CDBG to just one party at the federal level, despite support across parties, demographics, and sectors at the local level.  The divide is reflected in how increasingly lopsided Congressional CDBG support letters have become.

Last week, however, marked a small turnaround in those trends thanks in large part to calls from local elected officials and state municipal leagues.  In the House, the Pennsylvania delegation led the way.  Congressman Robert Brady (D-PA) wrote and circulated a letter arguing for greater federal investment in CDBG grants at $3.4 billion for FY 2013.  Congressman Lou Barletta (R-PA) joined Brady as the top Republican to cosign the letter and, unlike last year, gave the request an important bipartisan boost in the House.  In total, 137 Members of Congress signed the Brady-Barletta CDBG support letter to the House Appropriations Committee, an increase of more than 50 compared to last year.

In the Senate, as in past years, Senator Patrick Leahy (D-VT) authored and circulated a letter urging Senate Appropriators to raise CDBG funding to $3.3 billion for FY 2013.  Senator Scott Brown (R-MA), responding to significant outreach from local officials and others in his state, joined Senator Leahy in signing the letter.  In total, 33 Senators signed the Leahy-Brown CDBG support letter to the Senate Appropriations Committee, a gain of 5 over last year.

The potential impact of the House and Senate CDBG support letters on FY 2013 funding depends on many factors, including how budget sequestration is dealt with.  And bipartisan support for CDBG remains much too lopsided.  However, lifting the trend in Congressional support for CDBG is a significant accomplishment and, more importantly, a necessary first step to reversing the downward trend in funding.

Another step, almost as important as supporting CDBG directly, is to ask if the overall funding level allocated to each Appropriations Subcommittee is adequate to fund federal programs at sufficient levels.  This overall funding level, called a 302(b) allocation, can largely determine the fate of federal funding for programs before appropriations bills are even written.  For instance, programs administered by HUD and the Department of Transportation are funded annually under one single 302(b) allocation.  In recent years, community planning and development programs like CDBG have not fared well in this division.  Rather than cut funding across the board for all programs when 302(b) allocations waver, Congress has, reasonably, chosen to maintain investments in job-creating transportation programs and sufficient funding for existing housing rental vouchers.  Generally, then, any overall reduction in funds necessarily fall on programs comprising the “UD” side of HUD, such as CDBG, HOME, and Sustainable Communities Grants.

Earlier this year, in an effort to provide Appropriators with the necessary additional resources to fulfill House and Senate CDBG funding request letters, NLC spearheaded a large coalition of HUD and DOT stakeholders to urge Congress to increase the overall Transportation-HUD 302(b) allocation.  A total of 178 organizations joined NLC on our 302(b) letter to Congressional Leaders.

That coalition of organizations, however, will only hold for a handful of weeks.  After the 302(b) allocation is announced, each of the 178 groups that found common ground on the overall DOT-HUD allocation will split apart to urge Congress to direct any resulting new funds to their organizations own unique top federal priorities.  Under this system, organizations that manage to beat the drum consistently for their priorities are more likely to succeed than those that advocate in fits and spurts.  In other words, anytime is a good time to remind your Congressional delegation what CDBG is behind in your hometown because at least 177 public interest groups are doing the same thing for other priorities.

NLC expects Congress to set 302(b) allocations sometime in the next three weeks.  Soon after, Appropriators will release their first drafts of FY 2013 spending bills, revealing funding levels for individual federal programs like CDBG.  After that, local leaders and stakeholders will have a small number of additional opportunities through amendments and House/Senate negotiations to impact funding for their priorities.

The letters and lists of those who signed can be found on NLC’s website at

Congress Shouldn’t Act as a National Zoning Board

Seven years after the Supreme Court affirmed the right of cities to use eminent domain to secure land for proposed private commercial development, and after more than 40 States that have reassessed and limited their own state eminent domain laws in response, a bipartisan group of federal lawmakers is still seeking to legislatively overturn the decision in Kelo v. City of New London. 

On Tuesday, Feb. 28, the House of Representatives approved by voice-vote H.R. 1433, the Private Property Rights Protection Act of 2011.  The bill would prohibit federal, state, and local governments that receive federal economic development funds from using eminent domain to acquire land for economic development purposes. “Economic development” is defined in the bill as private, for-profit projects, or projects designed to increase tax revenue, the tax base, or employment.  The bill imposes punitive measures on governments for violating the ban and creates a cause of action for landowners who have property wrongfully taken by a state or local government.

The bill creates safe harbor for specific “public purpose” activities that necessitate eminent domain, such as the construction of roads, hospital facilities, airports or military bases.  Such authority would also be permitted in cases of developing public transportation systems or infrastructure, such as the proposed Keystone pipeline, or to remove threats to public health and safety.

During House debate the bill was championed by cosponsors Congressman James Sensenbrenner (R-WI) and Congresswoman Maxine Waters (D-CA).  Congressman John Conyers (D-MI), Ranking Member of the House Judiciary Committee, was the sole speaker in opposition.  Although Conyers called protections against eminent domain abuse a laudable goal, he referred to the bill as a “one-size-fits-all, Washington-knows-best solution”, and said that, “Congress should not now come charging in after 7 years of work and presume to sit as a national zoning board, arrogating to our national government the right to decide which States have gotten the balance right and deciding which projects are or are not appropriate”.

In 2006, an overwhelming bipartisan majority in the House approved a stronger eminent domain bill.  However, it was never considered by the Senate.  Instead, the Senate compromised with NLC and other state and local groups advocating for local authority by inserting a new permanent section in the“Transportation-Housing and Urban Development Appropriations” (THUD) bill that prohibits the use of federal funds on any project connected to the exercise of eminent domain unless it was exercised for a “public use”.  The complete section reads:

No funds in this Act may be used to support any Federal, State, or local projects that seek to use the power of eminent domain, unless eminent domain is employed only for a public use: Provided, That for purposes of this section, public use shall not be construed to include economic development that primarily benefits private entities: Provided further, That any use of funds for mass transit, railroad, airport, seaport or highway projects as well as utility projects which benefit or serve the general public (including energy-related, communication-related, water-related and wastewater-related infrastructure), other structures designated for use by the general public or which have other common-carrier or public-utility functions that serve the general public and are subject to regulation and oversight by the government, and projects for the removal of an immediate threat to public health and safety or brownsfield as defined in the Small Business Liability Relief and Brownsfield Revitalization Act (Public Law 107-118) shall be considered a public use for purposes of eminent domain.

Under the normal process, the House-passed eminient domain bill would be referred to the Senate Judiciary Committee which has jurisdiction over the issue, and which is unlikely to consider eminent domain.  However, in an effort to gain support and advance a difficult Transportation Reauthorization bill, Senate leaders have decided to permit a number of non-germane amendments on the transportation bill.  The first of those amendments is a controversial contraception measure.  Waiting in the wings is an amendment submitted by Senator John Boozman (R-AR) that mirrors the Eminent Domain legislation passed by the House.  If Senate leadership allows consideration of the Boozman amendment and it passes, the new eminent domain legislation could ride the higher-stakes Transportation Reauthorization bill to the President’s desk and enactment.  NLC is urging Congress to pass a clean transportation reauthorization bill free of non-germane amendments and to oppose legislation that would usurp local control and further limit eminent domain authority.

President’s Housing Proposal Would Help Cities, But Congress Unlikely to Cooperate

In the State of the Union President Obama announced the Administration’s latest proposal to help struggling homeowners lower mortgage payments; and help neighborhoods hard hit by vacant and abandoned housing.  Unlike existing programs that target assistance to homeowners at high risk of foreclosure, the new proposal is aimed directly at middle class homeowners who may or may not be at risk of foreclosure, but who are in many instances tied to mortgages worth much more than their homes.  If successful, the proposal could jumpstart the housing market by opening an avenue to hundreds of thousands of homeowners to refinance their mortgages.  But first, the proposal will need approval from an extremely combative Congress, in an election year, where common ground on any issue has been hard to find.

The new proposal would help homeowners who have been mostly current on mortgage payments over the course of a year.  More than one missed mortgage payment over six month prior to the immediate past six months would disqualify an applicant.  Under the proposal, any qualifying homeowner that has been unable to refinance their mortgage in the private market could refinance through a federal entity to take advantage of historically low interest rates.  Homeowners with mortgages insured by Fannie Mae and Freddie Mac would have access to streamlined refinancing through those entities.  Homeowners with privately held or insured mortgages would have access to refinancing through the Federal Housing Administration.  Homeowners with FHA mortgages and rural homeowners with mortgages insured by USDA would be given similar access through those agencies.  Federal mortgage refinancing would only be available for single-family, owner-occupied homes to prevent housing speculators from benefitting.  According to the White House, the program would cost the federal government a total of $5 to $10 billion, which would be paid for by a proposed “Financial Crisis Responsibility Fee” on financial institutions.

Cities and towns with high rates of foreclosure and vacant housing would also benefit.  First, the proposal includes a request to Congress for $15 billion in FY 2013 for Project Rebuild, modeled off the Neighborhood Stabilization Program, to provide direct grants to local governments to put people to work on rehabilitating homes made vacant by foreclosure and commercial property vacated or damaged as a result of the economic downturn.  Secondly, the President is calling on Congress to fund the Housing Trust Fund for the first time at $1 billion.  Housing Trust Funds would be distributed to states based on vacancy and foreclosure criteria for use in neighborhoods impacted by the housing crisis.  Lastly, a pilot program to transition foreclosed homes held by Fannie Mae and Freddie Mac into rental properties could help cities and towns increase necessary affordable housing stock and quickly put vacant homes to use rather than remaining vacant and depressing surrounding home values for an indefinite period of time.

However, without a significant groundswell of support, the President’s proposal faces high hurdles in the House where Republicans have made decreasing the role of the government in the housing market a priority in response to near collapse of Fannie Mae and Freddie Mac and in opposition to the Wall Street Reform bill.  Other opponents include financial industry organizations, including the American Bankers Association, who are lining up against the proposed fee on financial institutions that would pay for federal mortgage refinancing.

After the President’s proposal was announced, House Financial Services Chair Spencer Bachus (R-AL) took to the pages of USA TODAY to criticize the proposal for “doing nothing to help those on the verge of losing their homes”.  He also made the point that Republicans are unlikely to support a proposal that shifts the risk of refinancing underwater borrowers from private lenders to taxpayers.  Earlier this year, the House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises dealt a setback to the proposal months before it was even introduced by approving, along party lines, a bill that would repeal authorization of the Housing Trust Fund.  Opponents of the Trust Fund call it a waste of taxpayer money and little more than a slush fund.  Sound familiar?  Opponents of CDBG use the same argument.

Congressional supporters, however, are saying they will nevertheless push the proposal forward.  Senate Majority Leader Harry Reid, whose home state of Nevada has been hotbed of foreclosure activity said the President’s housing proposal is a high-priority.  He also chastised opponents of the proposal for advocating a “do-nothing policy”.  Still, without some Republican assistance, the chances of the proposal advancing will remain small.  NLC is supporting the Administration’s efforts to help homeowners and improve the housing market, and is urging the President and Congress to find common ground.