Order Code RL31304
Report for Congress
Received through the CRS Web
Appropriations for FY2003:
VA, HUD, and Independent Agencies
June 10, 2002
Dennis W. Snook and E. Richard Bourdon, Coordinators
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress

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Appropriations are one part of a complex federal budget process that includes budget
resolutions, appropriations (regular, supplemental, and continuing) bills, rescissions, and
budget reconciliation bills. The process begins with the President’s budget request and is
bounded by the rules of the House and Senate, the Congressional Budget and Impoundment
Control Act of 1974 (as amended), the Budget Enforcement Act of 1990 (scheduled to
expire at the end of FY2002), and current program authorizations.
This Report is a guide to one of the 13 regular appropriations bills that Congress passes each
year. It is designed to supplement the information provided by the House and Senate
Appropriations Subcommittee on VA, HUD, and Independent Agencies. It summarizes the
current legislative status of the bill, its scope, major issues, funding levels, and related
legislative activity, and will be updated to reflect new developments. The Report lists the
key CRS staff relevant to the issues covered and related CRS products.
NOTE: A Web version of this document with active links is
available to congressional staff at:
[http://www.crs.gov/products/appropriations/apppage.shtml].

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Appropriations for FY2003:
VA, HUD, and Independent Agencies
Summary
FY2003 Administration Requests. The House and Senate Subcommittees on
Appropriations for the Departments of Veterans Affairs (VA), Housing and Urban
Development (HUD), and Independent Agencies have begun work on FY2003
appropriations. The Administration requested $122.8 billion ($93.5 billion in
discretionary funds) to carry out the various programs, according to estimates by the
Congressional Budget Office (CBO) for use during the appropriations process.
Among the independent agencies are the Environmental Protection Agency (EPA),
the Federal Emergency Management Agency (FEMA), the National Aeronautics and
Space Administration (NASA), and the National Science Foundation (NSF).
The Administration’s budget proposes a $1.6 billion increase in VA medical
care, to provide health care for the burgeoning veteran population. In FY2003, VA
expects to provide medical services to nearly 5 million veterans, double the number
VA served 5 years ago.
For HUD, the Administration would renew all expiring rental assistance
(Section 8) contracts, and provide for 33,400 additional vouchers. Under the budget
proposals, no substantial changes to most individual programs are envisioned,
although the Public Housing Capital Fund would be cut by $417 million, along with
a controversial new initiative to leverage private capital for modernization.
EPA projects receiving approximately $500 million in “earmarked” funds for
FY2002 would not receive funding for FY2003. Other environmental projects would
be scaled back, and the Superfund, which funds the clean-up of toxic wastes would
continue the decline which began when its taxing authority ceased at the end of 1995.
NASA funding would remain close to FY2002 levels under the President’s
proposed budget. While space exploration would continue under the proposed
budget, funds for the International Space Station would be $254 million less,
reflecting an Administration intent to curtail construction of the station at a stage it
calls “core complete.” NSF would expand by 5%, and FEMA funding would
continue to depend largely on unknown emergency needs.
In its budget, the Administration proposed that the future costs of retirement
benefits and retiree health insurance for current federal employees should be shown
as an accruing cost for each fiscal year. Because this change requires legislation to
accomplish, the effects upon annual appropriations of the change are not shown in
this report, which is based on CBO estimates of program costs under current law.
FY2002 Appropriations. P.L. 107-73, appropriations for FY2002 for VA,
HUD, and Independent Agencies, provided $112.7 billion for FY2002. After taking
into consideration supplementals, rescissions, recaptures, and mandatory spending
projections, CBO estimates that Congress provided $119.6 billion for FY2002 for
programs funded through the VA, HUD, and Independent Agencies appropriations
process, including $92.3 billion in discretionary funds.

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Key Policy Staff
CRS
Name
Area of Expertise
Division
Tel.
Keith Bea
Disaster Assistance; Emergency Mgmt.
G&F
7-8672
Richard Bourdon
Housing
DSP
7-7806
Eugene Boyd
Community Development
G&F
7-8689
Bruce Foote
Housing
DSP
7-7805
Martin Lee
Environmental Policy
RSI
7-7260
Ann Lordeman
National and Community Service
DSP
7-2323
Christine Matthews
National Science Foundation
RSI
7-7055
Bruce Mulock
Consumer Affairs
G&F
7-7775
Pauline Smale
Banking
G&F
7-7832
Marcia Smith
National Aeronautics and Space Admin.
RSI
7-7076
Dennis Snook
Veterans Affairs
DSP
7-7314
Susan Vanhorenbeck
Housing
DSP
7-7808
M. Ann Wolfe
Housing for Homeless, AIDS Victims
DSP
7-6262
Division abbreviations: DSP=Domestic Social Policy; G&F=Government and Finance;
RSI=Resources, Science and Industry.

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Contents
Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Total Appropriations Enacted for FY2002 and Requested for FY2003 for VA,
HUD, and Independent Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Title I: Department of Veterans Affairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Spending for VA Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
FY2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
FY2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
VA Cash Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Medical Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Medical Care Cost Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Medical research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Housing benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
VA construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Burial and cemetery benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Department administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Title II: Department of Housing and Urban Development . . . . . . . . . . . . . . . . . . 9
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Highlights of Proposed HUD budget for FY2003 . . . . . . . . . . . . . . . . . . . . . 9
Summary of budget proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Policy Issue: The Shortage of Affordable Rental Housing . . . . . . . . . . . . . 12
A brief history of federal housing assistance . . . . . . . . . . . . . . . . . . . . 14
Is there available housing at an affordable price? . . . . . . . . . . . . . . . . 15
Lower income and minority homeownership initiatives . . . . . . . . . . . 20
Housing Certificate Fund: A Closer Look . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Funding sources and disbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Public housing programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Public Housing Operating Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Public Housing Capital Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
HOPE VI Revitalization of Distressed Public Housing . . . . . . . . . . . . 26
Native American Block Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Housing for Persons with AIDS (HOPWA) . . . . . . . . . . . . . . . . . . . . 27
Rural Housing and Economic Development . . . . . . . . . . . . . . . . . . . . 28
Empowerment Zones and Enterprise Communities . . . . . . . . . . . . . . 28
Community Development Fund
(Community Development Block Grants) . . . . . . . . . . . . . . . . . . 28
Brownfields Redevelopment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
The HOME Investment Partnership Program . . . . . . . . . . . . . . . . . . . 32
Homeless Assistance Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Housing for the Elderly and Disabled . . . . . . . . . . . . . . . . . . . . . . . . . 34
Federal Housing Administration (FHA) . . . . . . . . . . . . . . . . . . . . . . . 35
Government National Mortgage Association (Ginnie Mae) . . . . . . . . 36
Office of Federal Housing Enterprise Oversight (OFHEO) . . . . . . . . . 37
Fair Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

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Lead-Based Paint Hazard Reduction . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Title III: Independent Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Environmental Protection Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
State and Tribal Assistance Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Superfund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Federal Emergency Management Agency . . . . . . . . . . . . . . . . . . . . . . . . . . 41
National Aeronautics and Space Administration . . . . . . . . . . . . . . . . . . . . . 43
International Space Station (ISS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Space Shuttle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Space Science . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Biological and Physical Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Earth Science . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Aero-Space Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
National Science Foundation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Research and Related Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Major Research Equipment; Facilities Construction . . . . . . . . . . . . . . 50
Education and Human Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Other Independent Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Agency for Toxic Substances and Disease Registry . . . . . . . . . . . . . . 51
American Battle Monuments Commission . . . . . . . . . . . . . . . . . . . . . 52
Cemeterial Expenses, Army . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Chemical Safety and Hazard Investigation Board . . . . . . . . . . . . . . . . 52
Community Development Financial Institution Fund . . . . . . . . . . . . . 53
Consumer Product Safety Commission (CPSC) . . . . . . . . . . . . . . . . . 53
Corporation for National and Community Service (CNS) . . . . . . . . . . 53
Council on Environmental Quality; Office of Environmental
Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
U.S. Court of Appeals for Veterans Claims . . . . . . . . . . . . . . . . . . . . . 55
Federal Consumer Information Center (FCIC) . . . . . . . . . . . . . . . . . . 55
Federal Deposit Insurance Corporation . . . . . . . . . . . . . . . . . . . . . . . . 55
National Credit Union Administration . . . . . . . . . . . . . . . . . . . . . . . . 55
National Institute of Environmental Health Sciences . . . . . . . . . . . . . 56
Neighborhood Reinvestment Corporation (NRC) . . . . . . . . . . . . . . . . 56
Office of Science and Technology Policy . . . . . . . . . . . . . . . . . . . . . . 56
Selective Service System (SSS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Selected World Wide Web Sites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Additional Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
List of Tables
Table 1.
Status of VA, HUD and Independent Agencies Appropriations,
FY2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Table 2.
Summary of VA, HUD, and Independent Agencies
Appropriations, FY2002-FY2003 . . . . . . . . . . . . . . . . . . . . . . . . . 2
Table 3.
Department of Veterans Affairs Appropriations,
FY1998-FY2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Table 4.
Appropriations: Department of Veterans Affairs,
FY2002-FY2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Table 5.
Department of Housing and Urban Development
Appropriations, FY1998 to FY2002 . . . . . . . . . . . . . . . . . . . . . . 12

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Table 6.
Appropriations: Housing and Urban Development,
FY2002-FY2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Table 7.
Requested Spending for the Housing Certificate Fund
(HCF), Administration and Congressional Estimates,
FY2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Table 8.
Community Development Block Grants (CDBG): Entitlement
Communities with Per Capita Income At Least Twice the
National Average . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Table 9.
Community Development Block Grants, FY2002-FY2003 . . . . 30
Table 10.
Environmental Protection Agency Appropriations,
FY1998-FY2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Table 11.
Appropriations: Environmental Protection Agency,
FY2002-FY2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Table 12.
Appropriations: Federal Emergency Management
Agency, FY2002-FY2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Table 13.
National Aeronautics and Space Administration Appropriations,
FY1998-FY2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Table 14.
Appropriations: National Aeronautics and Space Administration,
FY2002-FY2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Table 15.
National Science Foundation Appropriations,
FY1998 to FY2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Table 16.
Appropriations: National Science Foundation,
FY2002-FY2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Table 17.
Appropriations: Other Independent Agencies,
FY2002-FY2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

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Appropriations for FY2003:
VA, HUD, and Independent Agencies
Most Recent Developments
President submits FY2003 budget. On February 4, 2002, the President
submitted a proposed budget for FY2003. According to congressional estimates, the
President’s budget proposes $122.8 billion in appropriations for programs provided
through the bill covering the Departments of Veterans Affairs (VA), Housing and
Urban Development (HUD), and various other independent agencies.
President signs H.R. 2620 as P.L. 107-73, appropriations for
FY2002. On November 26, 2001, President Bush signed the VA, HUD, Independent
Agencies appropriations bill for FY2002. Conferees finished their work on
November 6, and both Chambers approved the Conference Report (H.Rept. 107-272)
on November 8.
Congress approves, President signs P.L. 107-38, an emergency
supplemental in response to terrorist acts. On September 18, the President
signed H.R. 2888, a bill Congress unanimously approved (September 14) that
provides $40 billion “. . . for additional disaster assistance, for anti-terrorism
initiatives, and for assistance in the recovery from the tragedy that occurred on
September 11, 2001, and for other purposes.”
Status
Table 1. Status of VA, HUD and Independent Agencies
Appropriations, FY2003
Subcommittee
Conference
markup
Report approval
House
Passed
Senate
Passed Conference
House Senate Report
House
Report
Senate
Report
House
Senate Signed
--
--
--
--
--
--
--
--
--
--

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CRS-2
Total Appropriations Enacted for FY2002 and
Requested for FY2003 for VA, HUD, and
Independent Agencies
Table 2. Summary of VA, HUD, and
Independent Agencies Appropriations, FY2002-FY2003
(budget authority in billions)
FY2002 FY2003 FY2003
FY2003
FY2003
Department or Agency
enactedb
request
House
Senate
Confer.
Department of Veterans Affairs
51.137
54.613
--
--
--
Department of Housing and
Urban Development
32.149
31.450
--
--
--
Environmental Protection
Agency 8.079
7.621
--
--
--
Federal Emergency
Management Agency
7.660
6.704
--
--
--
National Aeronautics and Space
Administration
14.902
15.000
--
--
--
National Science Foundation
4.789
5.029
--
--
--
Other Independent Agencies
0.926
1.143
--
--
--
Grand Total: Appropriations
119.642
121.561
--
--
--
Score keeping adjustmentsa
-0.004
1.195
--
--
--
Receipts; misc. adjustments
-0.004
-0.004
--
--
--
Proposed retirement accruals
---
1.199
--
--
--
Total: Fiscal Year mandatory
and discretionary authority
119.638
122.756
--
--
--
Mandatory
27.305
29.250
--
--
--
Discretionary
92.334
93.506
--
--
--
Source: House Committee on Appropriations
Note: Totals will not add due to rounding at agency level. Italics indicates lines are subsumed within
entry above.
aAdjustments may include various legislative changes, rescissions, cancellations, receipts,
supplementals, advance appropriations, accounting changes, and reestimates of program experience.
bTotals for FY2002 include emergency supplementals.

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CRS-3
Title I: Department of Veterans Affairs
Spending for VA Programs
FY2003. The President requested $56.6 billion for the Department of Veterans
Affairs (VA) for FY2003. Congressional reestimates of the Administration’s budget
for the VA for FY2003 show the request to be $54.6 billion, an increase of $3.5
billion over the amount projected to be the final appropriations recorded for
FY2002.1 (Congressional estimates do not include amounts that the Administration’s
budget documents project would be required to carry out an Administration proposal
to “book” to the current year, the future costs of federal employee retirement income
and health benefits presumed to be earned in that year.) About $1.8 billion of
projected programmatic increases result from projected higher mandatory spending
for VA cash entitlement programs. The VA medical care program would receive
about $1.7 billion in additional appropriations under the Administration’s request.
FY2002. After including updated spending for increased mandatory spending
for VA entitlements, projected FY2002 final appropriations for VA will total $51.1
billion. According to the conference report accompanying P.L. 107-73, the VA-HUD
appropriation bill (as the bill containing annual appropriations for VA is popularly
known) (H.Rept. 107-272), the Administration requested $50.7 billion for VA
programs for FY2002.
VA Cash Benefits. Spending for the VA cash benefit programs is mandatory,
and the amounts requested in the budget are based on projected caseloads.
Definitions of eligibility and benefit levels are in law. While the number of veterans
is declining, VA entitlement spending, mostly service-connected compensation,
pensions, and readjustment (primarily education) payments, reached $23.4 billion in
FY2000, $25.7 billion in FY2001, is expected to be $27.3 billion in FY2002, and is
projected to reach $29.3 billion in FY2003. Much of the projected increases for
FY2001 and FY2002 result from liberalizations to the Montgomery GI Bill, the
primary education program.
Compensation and pensions. The compensation program pays benefits
to living veterans who have suffered a loss or reduction in earning capacity as a result
of a condition traceable to a period of military service, and to the dependent survivors
of certain veterans. The VA pension program is a means-tested benefit for
permanently disabled (from a condition unrelated to their military service) veterans
of war-time service, whose incomes and assets fall below certain levels. After taking
into consideration the financial circumstances and dependents of eligible veterans,
the pension payments, along with countable income, are intended to bring their total
incomes to the basic targeted amounts.2 Given the broad availability of other sources
1 Final spending levels remain uncertain until all program experience has been recorded, and
any supplemental appropriations or rescissions have been included.
2 For 2002, the annual basic level for an eligible single veteran is $9,556; with 1 dependent,
$12,516; and each additional dependent, $1,630. Additional amounts are available for
(continued...)

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CRS-4
of income, including social security, program caseload is diminishing, as fewer
veterans have incomes below the categorical levels.
During FY2002, about 2.3 million veterans are drawing an average of $633 in
monthly compensation for service-connected disabilities; about 310,000 of their
dependent survivors are averaging about $1,021 in monthly payments. Pensions for
346,000 veterans average about $569 monthly; 233,000 survivors of veterans
pensioners average about $245 monthly.
Readjustment. Following a tradition going back to the beginnings of the
Republic, near the end of World War II Congress enacted a series of programs to
assist veterans in their readjustment to civilian life, and to help the national economy
adapt to the influx of demobilizing armed forces. The GI Bill has entered the
national lexicon as an example of federal responsibility for this readjustment
responsibility, and many citizens continue to refer to the current array of programs
by that historical name. Indeed, the largest current program providing readjustment
education benefits is named the Montgomery GI Bill program, after its congressional
sponsor and the heritage it brought into the age of an all-volunteer military service.
Without conscription to fill the ranks of active duty armed services, the
inducements to potential recruits must be sufficient to attract them to enlist. The
Montgomery GI Bill provides recruits with the promise of educational assistance
when they separate, and the amounts that eligible participants receive has climbed
significantly over the last few years, currently $800 per month for 36 months for a
3-year enlistment, and scheduled to rise to $900 per month on October 1, 2002, and
$985 per month on October 1, 2003. During FY2003, about $2.3 billion in total
payments for education payments will go to 326,000 active duty veterans, 79,000
reservists, and 50,000 dependents.
Medical Care. VA operates the nation’s largest health care system, with 172
hospitals, 137 nursing homes, 43 domiciliaries, 206 readjustment counseling centers
(Vet Centers), 73 home health-care programs, and about 900 outpatient clinics.
About 88% of VA’s 207,000 employees will be involved in the provision of medical
services to an estimated 4.7 million veterans during FY2002, a caseload expected to
reach 4.9 million by the end of FY2003. The FY2001 caseload was about 4.2 million
unique patients.
Outpatient visits are climbing rapidly. The total number of such visits had
reached 43.8 million during FY2001, and is projected to increase by 2.3 million over
FY2002-FY2003, from slightly less than 47 million to 49.2 million. Patients will
average around 12 visits per veteran patient served. Almost 2,000 medical care
employment slots will shift from inpatient programs to outpatient care.
According to VA data accompanying the FY2003 Budget, the daily inpatient
caseload for FY2002 is projected to be 57,522 rising to 58,361 patients by the end of
FY2003. There is a decline in all service units except for two categories, acute care
2 (...continued)
eligible veterans who are housebound, or in need of aid and attendance.

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CRS-5
and nursing homes. Acute care patients have increased because of the larger number
of total numbers of veterans who are seeking VA medical services, and while the
total number of acute care cases has increased by 2,700 over the last year, the average
daily census for acute care has actually declined by 20 patients, the result of a decline
in the average length of stay. In a reflection of the aging of the veteran population,
and the commitment by Congress to increase the capacity of VA to serve an aging
veteran population, the number of patients given convalescent care is projected to
increase by over 7,000 during the next year, with the average daily nursing home
census rising by 1,205 patients.
The Administration has asked Congress to provide $22.7 billion for VA medical
care for FY2003, continuing the annual increases in funds as the program continues
to serve a larger number of veterans each year. FY2002 congressional appropriations
for VA medical care were $21.3 billion, $1 billion above the $20.3 provided for
FY2001. Congress approved $19 billion for FY2000.
Medical Care Cost Collections. In addition to the funds provided by
Congress, VA medical care is also authorized to “recycle” budget authority from
amounts VA facilities collect from various sources with an obligation to help defray
the cost of VA care for certain patients. The Balanced Budget Act of 1997 (P.L. 105-
33) gave VA authority to retain net receipts of the Medical Care Collections Fund
(MCCF), allowing the funds to be spent for medical services to veterans rather than
be transferred to the Treasury as under previous law. Congress also created a new
fund for FY2002 (the Health Services Improvement Fund), which collects increases
in pharmacy copayments that went in to affect on February 4, 2002. This new fund
also receives income from “enhanced use leases,” which are arrangements for sharing
VA medical assets with paying customers from outside of VA. These leases can
include the revenue from liquidation or leasing of VA capital assets, as well as
income from VA services for which users have contracted. Current Congressional
Budget Office (CBO) estimates are that collection receipts added an estimated $639
million in recycled spending authority in FY2001, and will generate an estimated
$691 million in FY2002, and $752 million in FY2003.
Medical research. The VA engages in research as an ancillary function of
the treatment of veterans, and conducts independent research projects intended to
advance medical science. Almost one-half of VA’s research funding comes from
conventional medical research funding sources, the bulk of which is provided
through grants from the National Institutes of Health (NIH). The remaining funds
supporting VA research are split almost evenly between appropriations from
Congress specifically for such research, and salaries and expenses from the VA
medical care budget for the VA medical staff who are producing the studies that
exhibit VA’s research findings. About two-thirds of the research projects are
initiated by the medical staff reporting their findings. These projects are giving
greater attention to the diseases associated with an aging population, especially in
conjunction with the management of those chronic conditions that are a growing part
of the outpatient workload.
The Administration has requested $394 million in direct appropriations for VA
research in FY2003, Congress provided $371 million for VA research in FY2002,
$350 million for FY2001, and $321 million for FY2000.

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CRS-6
Response to Hepatitis C virus (HCV). The Centers for Disease Control
and Prevention (CDC) estimates that over 4 million Americans are infected with
Hepatitis C, and some data exist that the disease is even more prevalent among
veterans than in the general population. A VA study in 1999 found that the veterans
it surveyed had a prevalence rate of 6.6%, compared to an estimated 1.8% in the
general population. Upon release of the study, leading veterans groups and some
health care professionals advocated an aggressive response by VA to combat the
contagious threat. The Administration’s budget estimated that funding for the
diagnosis and treatment of infected veterans would rise to $340 million in FY2001,
up from $195 million in FY2000, and $46 million in FY1999.
However, VA analysts were concerned that “. . . no comprehensive system was
in place to collect information about actual workloads and costs” for the Hepatitis C
program because the projections for them “were based on formulas that relied on
untested assumptions” and “actual performance (particularly for FY2000) did not
bear out projections.” While Hepatitis C continues to be a serious health issue in
need of dedicated attention to its causes, prevalence, diagnosis, treatment,
management and possible cure, it does not appear that the dire predictions about its
effect on the veteran population have been borne out. However, the costs of
diagnosis and treatment have risen considerably from their FY1999 levels. Actual
costs for HCV related medical services during FY2001 are estimated to have been
$98 million, and for FY2002 are projected to reach $105 million, with $111 million
expected to support diagnosis and treatment during FY2003.
Housing benefits. The VA program to guarantee home loans for veterans
has made a significant contribution to the national goal of increasing the number of
families who own their own homes. Because of the guarantees, lenders are protected
against losses up to the amount of the guarantee, thereby permitting veterans to
obtain mortgages with little or no down payment, and with competitive interest rates.
These guarantees, and certain direct loans to specific categories of veterans were
obligations of the federal government that constituted mandatory spending;
administrative expenses are discretionary appropriations transferred from the home
loan programs to the General Operating Expenses account.
VA construction. The Administration has requested $194 million for major
construction projects for FY2003, and requested the same amount for minor
construction as was appropriated for FY2002. Congress provided $183 million in
major construction for FY2002, and $211 million in minor construction. “Major
construction” projects have an estimated cost over $4 million. Many of the minor
construction projects will continue VA’s overall strategy of expanding outpatient
access for medical care. Congress provided $66 million for major construction, and
a total of $171 million for minor construction for FY2001. P.L. 106-74 included $65
million for major construction, and $160 million for minor construction (projects
with an estimated cost under $4 million), for FY2000.
Capital asset realignment. VA has developed a comprehensive planning
approach to constructing, altering, extending, or otherwise improving facilities. In
part, this new planning approach, called Capital Asset Realignment for Enhanced
Services (CARES), is the Department’s reaction to the criticism it has received from
areas of the country in which hospital resources have been cut back, in order to

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CRS-7
redirect those resources to outpatient care, usually in other geographical areas. While
VA has been successful in expanding the number of patients it serves, conflict
continues between advocates of a more efficient use of resources (who advocate
reducing hospital space and closing or selling superfluous inpatient facilities), and
veterans groups (who see any reduction in inpatient care as a threat to the medical
care needs of the veteran population).
Table 3. Department of Veterans Affairs Appropriations,
FY1998-FY2002
(budget authority in billions)
FY1998
FY1999
FY2000
FY2001
FY2002
$42.41
$44.25
$46.04
$47.95
$51.14
Source: Figures for FY1998-FY2001 are from administration budget submissions of subsequent
years; figures for FY2002 are from the House Committee on Appropriations, and are the latest
available estimates for that fiscal year. Final spending levels remain uncertain until all program
experience has been recorded, and any supplemental appropriations or rescissions have been included.
The CARES effort is an attempt to make the planning process by which the
capital assets are developed, used, modified, or relinquished, open to veterans groups.
Often, the fears about reductions in health care to veterans are based on an inadequate
understanding of the improvements in care for more veterans that such realignment
of resources makes possible, and the CARES approach may lessen those
misunderstandings.
Some veterans have expressed the belief that, over time, moving resources from
an inpatient facility in one area to outpatient access in another yields an unacceptable
rate of deterioration in the former facility, as the commitment to maintain the
building is diminished as the Department moves toward its eventual abandonment.
Burial and cemetery benefits. Payments to honor and help defray the cost
of veterans’ burials will total about $155 million in FY2003, and cover about 84
thousand burials, 69 thousand burial plots, 9 thousand service-connected deaths, 528
thousand flags, and 354 thousand headstones and markers.
Department administration. The Administration has requested $1.256
billion for General Operating Expenses (GOE) for FY2003, and $70 million for
medical administration. Congress approved the Administration’s request for funds
for administration for FY2002, providing $1.2 billion for GOE and $67 million for
medical administration. P.L. 106-377 included $1.050 billion of the requested
$1.062 billion requested for GOE, and $62 million for medical administration for
FY2001. P.L. 106-74 provided $913 million for GOE, and $60 million for
administration of the medical care programs for FY2000.
VA employment estimates. The Bush Administration projects overall VA
employment will decline to an average of 204,670 in FY2002, down from an average
205,896 during FY2001, which was up from an average of 202,621 during FY2000,

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CRS-8
and 205,547 in FY1999. Much of the decline will be in medical staff, which VA
projects will average 179,300 during FY2002. Currently, VA projects that VA
medical care slots will average 181,500 in FY2001. VA originally estimated that
179,206 medical care slots were needed for FY2001, compared to an 179,520 in
FY2000, and 182,661 in FY1999.
The following table shows appropriations to VA for FY2001, the
Administration’s request for FY2002, amounts recommended by each House’s
version of H.R. 2620, and the amounts ultimately enacted by Congress and signed by
the President.
Table 4. Appropriations: Department of Veterans Affairs,
FY2002-FY2003
(budget authority in billions)
FY2002
FY2003
FY2003
FY2003
FY2003
Program
enacted
request
House
Senate
enacted
Comp., pension, burial
24.944
26.524
--
--
--
Insurance/indemnities
.026
.028
--
--
--
Housing programs
.204
.438
--
--
--
Readjustment benefits
2.135
2.265
--
--
--
Subtotal: Mandatory
27.309
29.254
--
--
--
Medical carea
21.331
22.744
--
--
--
Med., prosthetic research
.371
.394
--
--
--
Medical Administration
.067
.070
--
--
--
General operating exp.
1.198
1.256
--
--
--
Admin. expense (hsng.)
.166
.169
--
--
--
Nat’l Cemetery Admin.
.121
.133
--
--
--
Inspector General
.052
.055
--
--
--
Construction, major
.183
.194
--
--
--
Construction, minor
.211
.211
--
--
--
Grants; state facilities
.100
.100
--
--
--
Parking, revolving fund
.004
.000
--
--
--
State veteran cemeteries
.025
.032
--
--
--
Subtotal: Discretionary
23.829
25.359
--
--
--
Subtotal: (VA)
51.137
54.613
--
--
--
Source: House Committee on Appropriations
Note: Rounding may cause discrepancies in subtotals.
aMedical Care Collections Fund (MCCF) receipts are restored to the Medical Care account as an offset
equal to the revenue collected, estimated to be $691 million in FY2002 and $752 million in FY2003.

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CRS-9
Accrual Accounting. Part of the Administration’s budget estimate of a $4.4
billion increase in total VA spending for FY2003 does not reflect expanded program
costs for additional benefits or medical services to veterans, but a change in methods
by which future compensation for VA employees who will eventually retire is
attributed to current service those employees perform. This new accounting method
would result in the transfer of $892 million to central accounts in the Treasury to
fund the accruing future cost of retirement and retiree health benefits for VA
employees. Because the accrued funds would be retained in a government fund, this
new accounting practice does not affect employees’ benefits in any way, nor does it
have a direct impact on taxpayers.
However, to cover the accrual payments, the changing practice makes the
apparent current cost of VA employment somewhat higher, especially in the labor
intensive medical programs, as appropriations to fund requested program levels must
be higher than would otherwise be required to maintain the same level of services.
Although there is no necessary reason for accrual accounting to make any difference
in total government expenditures over time, the apparent higher current personnel
costs for individual agencies may act as a psychological impetus to reduce personnel
expenditures if Congress requires the agency to absorb the accrual transfer within an
appropriation that does not increase to meet the new requirement. These changes in
accounting appear to require legislation, and are not included in appropriations
estimates in this report.
For additional information on VA programs, see CRS Report RL30803,
Veterans Issues in the 107th Congress, by Dennis Snook.
Title II: Department of Housing and Urban
Development
Introduction
Most of the appropriations for the Department of Housing and Urban
Development (HUD) address the housing problems faced by households with very-
low incomes or other special housing needs. Programs of rental assistance for the
poor, elderly or handicapped, housing assistance for persons with AIDS, varying
types of shelter for those who are homeless – all deal with the issue of the availability
of affordable housing. The two large HUD block grant programs also help
communities finance various efforts to address these housing issues. In the last half
dozen years, HUD has focused more attention than previously on efforts to increase
homeownership opportunities for lower-income households.
Highlights of Proposed HUD budget for FY2003
! Proposed FY2003 budget of $31.5 billion;
! All expiring Section 8 rental contracts are renewed;
! Additional housing choice vouchers of 33,400;
! Public Housing Capital Fund cut by $417 million;
! Initiative to convert public housing units to Section 8 assistance;

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CRS-10
! Community Development Block Grants cut by $284.5 million;
! HOME up by $238 million, with $200 million for down payment
assistance;
! Help for persons with AIDS increased to $292 million; and
! HUD to end acquisition of foreclosed FHA single-family homes.
Summary of budget proposals. The Administration presented its FY2003
budget for the Department of Housing and Urban Development (HUD) on February
4, 2002, the first budget that fully reflects its own vision for the agency, and for
federal policy on housing and urban development. The proposal calls for $31.5
billion of discretionary budget authority, about $1.3 billion more than the $30.15
billion enacted for FY2002.3 This budget could generally be viewed as one which
roughly maintains the “status quo,” since an increase of $1.4 billion is necessary to
renew all 2.9 million expiring Section 8 contracts and to protect other tenants from
losing their existing rental assistance.
A proposal to add 33,400 vouchers, at a cost of $204 million, would not
significantly reduce the 4.9 million very low-income renter households who pay more
than 50% of their income for shelter or who live in substandard housing, but who
receive no federal assistance. Under the proposed budget, there would also be $260
million for 43,000 “tenant protection” vouchers for individuals who are currently
receiving rental assistance, but who are threatened with the loss of that assistance.
Examples include tenants in dilapidated public housing units being torn down or
renters in Section 8 projects whose owners are opting out of the program or being
terminated for cause.
The Public Housing Capital Fund, used to rehabilitate and modernize units,
would be cut by $417 million, from $2.843 billion in FY2002 to $2.426 billion. The
Public Housing Operating Fund would be increased by $35 million to $3.530 billion.
The Administration’s new Public Housing Reinvestment Initiative, could use up to
$120 million of public housing capital funds and $130 million of operating funds to
convert some of the 1.25 million public housing units to Section 8 project-based
assistance. HUD claims that this would allow some Public Housing Authorities
(PHAs) to secure private financing to rehabilitate or replace aging properties by
pledging project-based revenue as collateral for loans for capital improvements.
The HOPE VI program, the purpose of which is to rehabilitate or tear down the
worst public housing units, would receive $574 million, the same as provided for
FY2002. HUD budget documents report that to date, 47,268 units have been
demolished under HOPE VI. The program is scheduled to expire at the end of 2002,
and over the next few months, and according to the budget, the Administration will
propose legislation to reauthorize HOPE VI. H.R. 3995, the Housing Affordability
for America Act of 2002, an omnibus housing bill introduced March 19, 2002, would
reauthorize HOPE VI and amend the program.
3 The $30.15 billion excludes a $2 billion emergency supplemental appropriation made in
late 2001 for aid to New York City.

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The Community Development Block Grant (CDBG) program would be cut by
$284.5 million, from $5.0 billion to $4.716 billion. Most of these funds, $4.43
billion in FY2003, would go to over 1,000 cities, urban counties, and states through
formula grants. HUD is proposing to change the formula to reduce grants to the
wealthiest 1% of communities, defined as those with per capita incomes two times
the national average. The estimated $16 million savings from this proposal would
be used to fund a regional initiative to increase the availability of affordable housing,
economic opportunity, and infrastructure in the “Colonia.” Colonias are
communities within 150 miles of the U.S. Mexican border that are often described
as having “third world” living conditions. HUD’s budget statement says that these
communities have greater needs and fewer resources, and are the appropriate targets
for such funds.
Also as part of the CDBG program, the Administration proposes to end funding
for what are called variously economic development initiatives, special purpose
grants, or “earmarks.” These grants received $294 million in FY2002, despite
opposition from the Administration. The Self-Help Homeownership Opportunity
Program (SHOP), a set-aside within CDBG used to support Habitat for Humanity and
similar community building efforts, would be increased from $22 million in FY2002
to $65 million.
The HOME block grant program would be increased by $238 million to $2.08
billion, with the set-aside for the homeowner Downpayment Assistance Initiative
increased from $50 million to $200 million. (Later in this report, Increasing
Homeownership, discusses this and other Administration homeownership initiatives.)
HUD has a number of programs to protect vulnerable populations - the elderly,
persons with physical and mental disabilities, individuals with HIV/AIDS, and the
homeless. Funding for supportive services for elderly and disabled persons is
recommended at $1.02 billion, the same as in FY2002. These funds are awarded
through a competitive process to non-profit organizations to build new facilities for
low-income residents. HUD is proposing that $30 million of the funds for the elderly
be used to convert existing units for the elderly into assisted living facilities.
Housing for persons with AIDS would receive $292 million, up by $15 million.
Most of the grants are allocated by formula, based on the number of cases and highest
incidence of AIDS. HUD reports that since 1999, the number of formula grantees
has risen from 97 to an expected 111 in FY2003.
HUD proposes to spend $1.13 billion on programs for the homeless, about level
with funding during the previous 2 years. Secretary Martinez says that ending
chronic homelessness in the next 10 years is a top priority. The budget proposes to
consolidate HUD’s three largest homeless programs into one. Some organizations
are concerned that HUD plans to change the current competitive grants process used
to award funds under these three programs into a “formula grant” process. But HUD
has not yet made this proposal. The Interagency Council on the Homeless would
receive $1 million to better coordinate the many programs in HUD, the Departments
of Health and Human Services, Veterans Affairs, and Labor, and other agencies.
HUD also is proposing to transfer the $153 million Emergency Food and Shelter
Program that is currently administered by FEMA to HUD in order to consolidate all
emergency shelter assistance. The Senate Subcommittee on Housing and

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CRS-12
Transportation has held hearings on the Bush Administration’s proposed budget on
the homeless and on the reauthorization of the McKinney-Vento Homeless
Assistance Act housing program.
A Brief Look Back: FY2002 Appropriations. The President signed P.L.
107-73 on November 26, 2001 providing HUD with $30.15 billion for FY2002
(H.Rept. 107-272). This is $1.67 billion more than FY2001 appropriation of $28.48
billion, an increase of about 6%. Of the $30.15 billion approved, $16.28 billion,
more than half of the HUD budget, is going to renew all Section 8 expiring contracts,
add an additional 25,900 vouchers, and pay for contract administration and various
tenant protection assistance.
Table 5. Department of Housing and Urban Development
Appropriations, FY1998 to FY2002
(Net budget authority in billions)
FY1998
FY1999
FY2000
FY2001
FY2002
$21.44
$24.08
$25.92
$28.48a
$32.15a
Source: Figures for FY1998-FY2001 are from administration budget submissions of subsequent
years; figures for FY2002 are from House Committee on Appropriations, and are the latest available
estimates for the current fiscal year. Final spending levels remain uncertain until all program
experience has been recorded, and any supplemental appropriations or rescissions have been included.
aIncludes net effect of treating “excess” FHA mortgage insurance premiums as an offset against
discretionary spending within the Federal Housing Administration. The offsets are an estimated -
$2.246 billion for FY2001, and -$2.323 billion for FY2002. Because of the scoring change, the
figures for FY2001 and FY2002 are not comparable to figures shown for previous fiscal years. The
FY2002 figure includes $2 billion in emergency supplemental funds for the Community Development
Fund for assistance to New York City following the terrorist attacks of September 11, 2001.
Policy Issue: The Shortage of Affordable Rental Housing
A budget is a statement of spending priorities. Despite the fact that HUD now
spends almost all of its budget – an average of about $28 billion in recent years – to
help low-income families with their housing costs, the shortage of affordable rental
housing continues to be the most important housing issue before the Congress.
(Housing that costs more than 30% of one’s income is considered by the government
to be excessively burdensome or “unaffordable”.) In a February 5, 2002 conference
held by the Urban Institute, Preventing Homelessness: Meeting the Challenge,
researchers found that the number of homeless people in a number of large cities was
increasing, and all attributed this to a growing shortage of affordable housing. Others
believe this shortage is reducing the chances that welfare recipients will be able to
achieve economic self-sufficiency. As it becomes increasingly clear from the new
fiscal realities that there will be no large increases in spending for housing in the
immediate years ahead, there is likely to be an increasing intense scrutiny of all
existing federal resources devoted to housing to assure that these funds are efficiently
addressing the most pressing issues.

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CRS-13
Including the effect upon federal revenues of residential real estate-related tax
provisions, and housing programs through HUD and the Department of Agriculture,
the federal government now spends more than $140 billion on housing assistance.
CBO estimates that nearly $55 billion of the mortgage interest and property tax
deductions or “tax expenditures” (spending through the tax code) in FY2002 will be
made for housing assistance to homeowners with annual incomes above $100,000.
In comparison, the requested budget for HUD for FY2003, at $31.5 billion, is
substantially less in real terms than was spent 2 decades ago.4
Since most of the HUD budget addresses the shortage of rental housing, and
because many mayors and governors and other elected officials believe the problem
has become serious, this report reviews this issue in some detail. The shortage of
affordable housing is a complex matter with many dimensions, including the often
overlooked but important role that local governments play, too often some say, as
part of the problem. There are many statistics available for advocates who argue that
more federal assistance is needed. HUD reported in 2001 that 1999 American
Housing Survey data from the U.S. Census Bureau showed 4.9 million “worst case”
households, those with incomes below 50% of the local area median (“very-low
incomes”) who pay more than 50% of their income for housing or live in substandard
housing, but who receive no assistance because of limited funding.5 These same data
showed that in 1999, 44% of extremely low-income renters, about 3.75 million
households, were in the worst case situation. To put these median incomes into more
meaningful perspective, on a national basis, those with very-low incomes would be
households with recent incomes below about $21,000. Those with extremely low-
incomes had incomes below $13,000.
Those who support more federal efforts to help low-income households with
their housing costs generally want either more funds for housing vouchers or more
funds to encourage the construction of affordable rental housing, or both. HUD
Secretary Martinez says he favors housing vouchers over subsidized housing
production to address the affordability issue and does not support another rental
housing production program. He points out that there are already government
programs that can and are being used to produce affordable rental housing.
The agency does not have a long-term goal of increasing the number of worst-
case families who can be helped with housing assistance. In fact, some critics of
HUD programs say that because there is generally no shortage of units available in
most communities, the affordability issue is not a housing issue at all, but an income
issue. They argue that a better way to respond to worse-case renters is through
government efforts to help low-income households become more productive, which
could translate to higher incomes. Presumably this would mean they would not need
federal housing assistance, or not as much of it.
4 The HUD budget peaked at $33.5 billion in FY1981 (about $67.6 billion in 2002 dollars)
and declined to $14 billion in 1987.
5 Report On Worst Case Housing Needs In 1999: New Opportunity Amid Continuing
Challenges. Executive Summary. January 2001. U.S. Department of Housing and Urban
Development. Office of Policy Development and Research.

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CRS-14
The Administration seems to favor this approach. The FY2003 budget says
“....HUD would fail in its mission if families were not moving towards eventual self-
sufficiency. An important measure of HUD’s success should be the number of
families that no longer need to reside in assisted housing because they have moved
to safe, decent, and affordable private housing.” The Administration (and the Clinton
Administration before it) has placed increasing emphasis on promoting
homeownership for lower-income families in the belief that this is an effective way
to move families towards self-sufficiency and wealth accumulation.
A brief history of federal housing assistance. In the Housing Act of
1949, Congress established a national goal of providing: “a decent home and suitable
living environment for every American family.” Much progress was made in the
next 2 decades in eliminating substandard housing as many of the nation’s worst
slums were torn down. But against the backdrop of the inner city riots of the 1960s
and the recommendations of the 1967 Douglas Commission, the 1968 Kaiser
Committee, and the 1968 Kerner Commission on Civil Disorders, Congress adopted
the Housing Act of 1968 which set a specific 10-year goal of building 6 million
housing units for low- and moderate-income families.
Federally-subsidized housing production increased from 91,000 in 1967 to
166,000 in 1968; 200,000 in 1969, 430,000 in each of 1970 and 1971, and 339,000
in 1972. During the 4 years from 1968-1972, there was also a total of about 200,000
units rehabilitated with federal subsidies and 2,200,000 mobile homes built, the latter
considered an important source of affordable housing for lower-income households.6
During the 1970s, attention on housing issues changed from its previous focus
on the problem of too many substandard housing units, to the problem of housing
being too expensive for lower-income families to afford. In effect, the 1949 Housing
Act paved the way for the more elusive goal of making it possible for all families to
have a decent affordable home and suitable living environment.
The problem of substandard housing has not been entirely eliminated. Data
from 1999 show more than 2.5 million housing units lacked some or all plumbing
facilities, with nearly a million without a bathtub or shower, and over 900,000
without a flush toilet. Yet, the quality of the housing built in the past 25 years and
the level of amenities provided or required, such as off-street parking, wide sidewalks
and roads, air conditioning, landscaping, health, safety, and environmental
protections, had so upgraded housing and neighborhoods that many lower income
families could not afford it. The policy objective of improving the minimum
standard for housing began to conflict with the objective of increasing the availability
of affordable housing.
Reducing the size and level of amenities is only one of the many dimensions of
the affordability issue. Some point out that many of the recent immigrants to the
United States come from a culture of extended families, thus needing larger units, not
smaller. Some lower income households cope with high housing costs by sharing a
6 U.S. Department of Housing and Urban Development. Housing in the Seventies. A Report
of the National Housing Policy Review, 1974.

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CRS-15
single-family home or apartment, sometimes two or three households in a unit meant
for one.
During the latter half of the 1970s, HUD began phasing out its involvement in
subsidizing new housing construction. By the early 1980s, this withdrawal was
nearly complete and the shift towards subsidizing existing units with housing
vouchers was well underway.
Since the 1980s, there has been no obvious consensus as to what should be done
to improve housing opportunities for those with difficulties finding adequate housing.
Beginning in 1982, the number of additional rental units receiving assistance under
HUD dropped sharply. In 1986, Congress replaced a number of existing rental
housing tax provisions that were thought to be poorly targeted, with the Low Income
Housing Tax Credit program, a tax incentive to encourage developers to build
apartments affordable to households with incomes no greater than 60% of the local
area median. After a slow start, the number of subsidized units built or rehabilitated
averaged about 50,000 to 60,000 a year during most of the 1990s.
During the 1990s (and continuing), there was also a small number of apartments
built or rehabilitated under HUD’s Section 202 program for the elderly and under the
HOME and Community Development Block Grant programs. Perhaps as many as
30,000 additional units were added each year during the 1990s by these other HUD
programs. But it is also important to remember that during each of the last 3 decades,
hundreds of thousands of older or obsolete rentals (many shabby but affordable),
including “trailer parks” in urban areas, and most of the remaining inner-city “single-
room-occupancy” “hotel” units (including many YMCA/YWCA facilities that
provided shelter to the near-homeless), were torn down.
After a number of years in which no new housing vouchers were added,
Congress appropriated money for 50,000 additional vouchers in FY1999 and 60,000
in FY2000. The Clinton Administration recommended 120,000 additional vouchers
for FY2001, with 79,000 approved. The Bush Administration requested 34,000
additional vouchers for FY2002; 25,900 were funded. As noted, HUD is
recommending 33,400 additional vouchers for FY2003.
Is there available housing at an affordable price? With the exception
of some cities in the Northeast, West Coast, and a few other places, most areas have
an adequate supply of modern apartments - those with large kitchens and baths, high
ceilings, fireplaces, exercise facilities, enclosed balconies, covered parking, and other
amenities. But restrictive zoning, building codes, health and safety and
environmental regulations, and local opposition have made it difficult to construct
basic no-frills rental housing affordable to lower-income households. The smaller
apartment units built in the 1940s and 1950s with 500 square feet or less, with no
walk-in closets or in-unit washer-dryers, with small kitchens and baths, and with no
on-site parking, are much sought after in older cites because of their low rents, but
they cannot be built today under current laws.
The strong rental markets in middle-income and rehabilitated areas of cities
have not escaped the attention of Section 8 landlords whose buildings have been set
aside for lower-income families under long-term federal contracts. As more

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CRS-16
profitable alternatives presented themselves during the prosperous 1990s, some
owners decided not to renew their expiring contracts. Older apartment buildings,
with their lower rents, continue to be torn down or renovated for a more upscale and
profitable market. Mobile home parks that provide relatively affordable housing
have largely disappeared from most large metropolitan areas. Since it is so difficult
to build new affordable rental housing, a first line of defense by housing advocates
is to try to preserve the affordable rental stock that currently exists. Nevertheless, a
significant number of these units are lost each year.
There is no shortage of statistics, reports, studies, and commissions
documenting the difficulties that lower-income people have in finding affordable
housing. The National Low Income Housing Coalition has done extensive research
showing the hourly wage a household would have to earn (with one wage earner or
more), to afford the rent on a “standard” apartment in major cities across the
country.7 Their research finds that in most major cities and counties, it is highly
unlikely that households earning near the minimum wage of $5.15 an hour or even
$6, $8, or $10 an hour, can find an affordable apartment. Waiting lists for rental
assistance in most major cities are so long that no others are allowed to be added.
The National Housing Conference (NHC) examined recent American Housing
Survey data, looking at households with low to moderate incomes, those with
incomes from 80% to 120% of the local area median income (nationally, about
$33,000 to $50,000). The NHC reported that the number of these households with
critical housing needs (paying more than 50% of their income for shelter) had sharply
increased between 1997 and 1999. These households are much less likely to receive
government rental assistance than those with incomes below 50% of the local
median.
The NHC concluded that affordable housing problems had moved up the
income ladder. Police, teachers, fire fighters, and other public municipal employees,
who have been cited in the media as having problems affording housing, generally
fall into this 80% to 120% median income category. (Although two-earner families,
for example, a police officer and teacher, can often reach securely into the middle-
class.) The NHC concluded that simply having a full-time job does not guarantee a
family a decent place to live at an affordable cost. Among its findings: “More than
220,000 teachers, police, and public safety officers across the country spend more
than half their income for housing, and the problem is growing worse.”8
Local governments are often reluctant to adopt policy approaches that may
attract low-income households, the mentally and physically handicapped, ex-felons,
many of the estimated 8 to 10 million illegal aliens, and others – partly, some say,
because of their negative fiscal impact. Many of these households would pay much
7 Out of Reach 2001: America’s Growing Wage-Rent Disparity, can be found at
[www.nlihc.org].
8 The Center for Housing Policy (a research affiliate of the National Housing Conference),
Housing America’s Working Families, New Century Housing, Washington, D.C., June 2000.
p. 2.

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CRS-17
less in local taxes than the cost of providing schools, police, fire and rescue, trash
collection, and other social services.
Many homeowners may believe that affordable rental units built near their
homes would lower their property values, and resist local government efforts to
increase the supply of low-income housing in their neighborhoods. The result is that
very-low-income households or even those not quite so poor, are heavily
concentrated in particular neighborhoods, and local officials in these areas often find
it necessary to look the other way as many apartments are shared by two or three
families in violation of local laws.
Increasing the supply of affordable housing. Aside from the issue of
how much additional money could or should be spent to address the housing
affordability problem, the question remains of how funds could best be spent towards
achieving the 1949 national housing goal. Housing analysts inside and outside of
HUD, elected officials, and others have been debating for decades the relative
advantages and disadvantages of “tenant-based” rental assistance and “project-based”
assistance. In simple terms, this usually means whether to use housing vouchers to
assist individual households, or to subsidize the construction (or rehabilitation) of
more housing. Knowing when each type of assistance is most appropriate requires
a knowledge of local housing market conditions. The discussion that follows reviews
this on-going debate.
Voucher utilization rates. In the past few years, there has been growing
concern that not all of the housing vouchers awarded to local public housing
authorities have been put to use. Some households with vouchers have found it
difficult or impossible to find an apartment within the time period for which the
voucher is approved. An increasing number of vouchers have been returned unused
(although these vouchers are often given to someone else who does succeed in
finding appropriate housing).
In recent years, arguments have surfaced in Congress that because not all
vouchers are used, there is less reason to increase the number of vouchers. Both
HUD and the VA-HUD appropriation committees expressed concern ( H.Rept. 107-
159) that the average utilization of vouchers has fallen from 96.7% in FY1999, to an
estimated 92.4% in FY2001. (However, HUD documents claim that the utilization
rate for 2000-2001 was 96%.)
The 33,400 additional vouchers that HUD is proposing for FY2003 would only
be awarded to PHAs with a voucher utilization rate of 97% or greater. Some PHAs
with lower voucher utilization rates have tried, with limited success, to better inform
landlords about the voucher program, and to encourage more to participate in it by
offering various incentives. Some voucher holders have been provided transportation
to assist them with their search, and help with security deposits. Nevertheless, where
vacancy rates are very low, it may have become prohibitively expensive on a per-unit
basis for PHAs to try to locate additional units for voucher holders.
Rental vacancy rates. In one of the many paradoxes of housing policy, the
national vacancy rate for rental housing reached a record high of 9.1% in the 1st
quarter of 2002, jumping from 8.2% in the 1st quarter of 2001, while statistics show

---

CRS-18
a serious shortage of affordable rental housing in many metropolitan areas. A
vacancy rate above 5% is often considered adequate for a marketplace to function
without difficulty. Vacancy rates for 2001 varied widely across the country: Atlanta,
11.9%; Louisville, 10.8%; Houston, 11.1%; West Palm Beach, 18.0%, New York,
3.6%; Boston, 2.9%; Los Angeles, 3.4%, San Francisco, 3.4%; and Jacksonville,
4.6%. As noted, low vacancy rates make it more difficult to use a voucher. Many
landlords who have a choice of tenants will not pick very low-income families, with
(or without) vouchers.
Some landlords are unwilling to accept vouchers because they want to avoid the
bureaucratic “red tape” of the program, or because they believe, rightly or not, that
low-income families will cause problems. A few local governments have recently
adopted laws requiring landlords to accept renters with vouchers, although landlords
can often reject a voucher holder because of bad credit, lack of references, and for
other reasons. Reports also continue to show that discrimination in rental housing
on the basis of race and against households with children is still common, which
makes the use of vouchers more difficult.
But as this review has suggested, vacancy rates tell only part of the story about
the shortage of affordable housing. A higher vacancy rate may not help a very low-
income household if the available units are too expensive. Furthermore, statistics on
vacancies can be misleading. Many large cities have tens of thousands of boarded-up
rental units. For example, Philadelphia lists more than 14,000 housing units as
abandoned.
Many vacant units are or were owned by landlords who could not charge their
very low-income renters enough to pay the cost of operating the units. Other
landlords struggle to survive, letting their buildings deteriorate over time. Among
the policy questions this raises – Would more housing vouchers, if made available
to very low-income renters in marginally profitable buildings, help landlords to
continue operating often shabby but affordable units? With increased rent revenue,
some of these units that may have housing code violations, could be brought up to
code. A related policy issue is the advisability of new federally-subsidized apartment
buildings being built near these struggling landlords. Some think this could make it
even more difficult for marginally profitable landlords to compete and stay in
business.
Increasing the number receiving assistance by adding vouchers.
The HUD Secretary is now on record as not being in support of a new HUD program
to subsidize the construction of affordable rental housing. He instead favors housing
vouchers because of the freedom of mobility they offer to low-income renters. In
theory at least, a family with a voucher can move out of a poorly maintained building
or a dangerous neighborhood and go to a safer one with better schools and more job
opportunities. However, as the above discussion has indicated, the freedom of a
voucher holder can be quite limited. Those who do not have automobiles are also
very limited in where they can live. Most of the $31.5 billion proposed for HUD in
FY2003 would continue housing assistance for the approximately 5.5 million
housing renters now receiving federal rental assistance – through the Section 8,
public housing, HOME, and CDBG programs, and several others.

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CRS-19
At a recent congressional hearing on the FY2003 budget, some concern was
expressed at the increasing cost of the Section 8 program. It will cost almost $1.4
billion more in FY2003 just to renew all 2.9 million Section 8 contracts and protect
some vulnerable groups from losing their current rental assistance. The proposed
$17.5 billion for the Housing Certificate Fund (largely Section 8 ) will account for
well over half of the total HUD budget. There are a number of reasons why Section
8 costs continue to increase rapidly, the main one being that rents have increased
significantly.
Last year, in 39 tight rental markets, HUD began permitting the allowable rent
level (Fair Market Rents) for units eligible for vouchers to be based on the 50th
percentile for the local rental housing market rather than the previous 40th percentile.
Since voucher holders generally pay 30% of their income towards the rent, with the
government paying the rest, allowing units with higher rents to be eligible means a
higher cost to the government. Also, major housing legislation passed several years
ago (P.L. 105-276, The Quality Housing and Responsibility Act of 1998), requires
that 75% of all new households getting vouchers have to have incomes below 30%
of the local area median. More voucher holders with even lower incomes than
previously means that these new households will require a larger rental subsidy. The
cost of an average voucher is now about $6,000 a year. Just for illustrative purposes,
one million additional vouchers would cost $6 billion a year.
Increasing rental housing production. The difficulty of using vouchers
in some areas has led to legislative proposals for a new HUD program devoted solely
to the development of rental housing for extremely low-income households.
Referring to the limited value of vouchers in many tight rental markets, the Senate
Appropriations Committee expressed its concerns in 2001 that “families with
vouchers often have little choice in their rental decisions, leaving them often in low-
income and very low-income neighborhoods and living in substandard housing.”
Using mortgage insurance reserves to fund additional rental
construction. Several bills (H.R. 2349; S. 1248; S. 652) introduced in the 107th
Congress seek to influence the production of rental housing, by stimulating
construction through a “trust fund” financed by what some believe to be “excess”
reserves of a mortgage insurance premium pool. Others point out that the so-called
excess reserves are not idle pools of unutilized capital, but federal funds booked for
insurance purposes, and treated like other federal revenue. Thus, these excess
reserves cannot be used as if the reserves were unspent resources.
A simplified explanation of this funding dispute is as follows. HUD operates
a successful mortgage insurance business under the Federal Housing Administration
(FHA) program. During the strong economy of the 1990s, this insurance business
was very profitable for HUD – the premiums were much larger than the expenses
from defaults on loans. A serious economic downturn, with increased
unemployment, would increase the number of mortgage defaults. Then, more of the
reserves would have to be used to pay off the loans held by lenders, and also be used
by HUD to fix up properties and to pay real estate agents to sell these homes. Each
default could cost the FHA tens of thousands of dollars. Thus, because of the
uncertainties of the economy in the years ahead, the insurance program must keep a
certain amount of the profits as rainy day “reserves”.

---

CRS-20
Supporters of using the measurable growth in the trust fund believe the reserves
are more than required by law and more then enough to cover future needs and, as
noted, they want to tap some of the “excess reserves” for a housing trust fund.
However, these reserves are already being used to support both the HUD and the
federal budget. HUD budget figures show that $2.3 billion of “negative subsidy”
from FHA insurance program income has been used to offset appropriation levels
that would otherwise have been required to maintain the same level of program
expenditures in FY2002, and $2.8 billion is proposed to be used in FY2003. The
FHA program is, in effect, providing spending authority represented by these reserves
to the rest of HUD.
The debate over the reserves is largely academic. Both sides agree that if
Congress were to redirect part of the FHA reserves into a housing trust fund, there
would have to be additional appropriations to make up for the reserves already built
into the budget.
There is another view that instead of using the growing FHA reserves for rental
housing production, the insurance premiums should be lowered to more closely
approximate the estimate of future needs. S.607 would do this. Even some who
support efforts to increase the production of affordable rental housing are uneasy
about using the FHA reserves since these reserves come from charging higher than
necessary insurance premiums that are paid largely by low- and moderate-income
households, including many minority families. To some, this would constitute a
regressive method of funding a rental production program.
Are there other options for obtaining more affordable rental housing? Some
point to the Congressional Budget Office report of February 2001, Budget Options:
Restrict Itemized Deductions, Credits. And Exclusions Under the Income Tax. One
of the options identified by CBO to increase federal revenues is: limit the mortgage
principal on which interest can be deducted to $300,000. Taxpayers may now deduct
interest on up to $1 million of mortgage debt used to buy and improve a first and
second home. CBO says that reducing the eligible amount of debt for the mortgage
interest deduction from $1 million to $300,000 would trim deductions for 1.2 million
taxpayers with large mortgages and increase revenues by $55.8 billion over the 2002-
2011 period. Some argue that this would be a less regressive option to fund a rental
housing production program for extremely low-income families. Limiting
deductions to the interest on not more than $300,000 of mortgage debt would affect
high-cost areas such as San Francisco, Los Angeles, New York, and Boston. It is
probably no coincidence that these are the areas that have some of the lowest rental
vacancy rates in the country, and the most severe shortages of affordable rental
housing.
Another option for addressing the shortage of affordable rental housing is to
encourage more local governments to use “inclusionary zoning,” which requires
home builders to construct and set-aside a minimum percentage of new units in a
specific residential development that are affordable to a particular income level. (See
Inclusionary Zoning: A Viable Solution to the Affordable Housing Crisis? The
Center for Housing Policy. October 2000, for the pros and cons of this approach and
how it has worked in Montgomery County, Maryland.)

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CRS-21
Lower income and minority homeownership initiatives. Since the
early to mid-1990s, many in Congress have expressed interest in expanding
homeownership opportunities for lower income and minority families. The real
estate industry – the homebuilders and real estate agents – was interested because
most of the baby boomers, those born between 1946 and 1964, were past the time
when most purchased a first home. The national homeownership rate stood at 68.0%
at the end of 2001. The rate for minorities, and for many central cities, has increased
considerably in recent years but still remains slightly below 50%, while the rate for
non-Hispanic whites reached 74.4% in the fourth quarter of 2001. For households
with heads age 55 years or older, the homeownership rate is above 80%. HUD’s
1999 American Housing Survey shows that 92% of households with annual incomes
above $120,000 are homeowners.
Table 6. Appropriations: Housing and Urban Development,
FY2002-FY2003
(budget authority in billions)
FY2002
FY2003
FY2003
FY2003
FY2003
Program
Enacted
Request
House
Senate
Confer.
Housing certificate fund
15.641
17.527
--
--
--
Appropriation
11.441
13.327
--
--
--
Advance appropriation
4.200
4.200
--
--
--
Section 8 recaptures
-1.200
-1.100
--
--
--
(rescissions)
Public housing capital fund
2.843
2.426
--
--
--
Pub. housing operat. fund
3.495
3.530
--
--
--
Revitalization of distressed
.574
.574
--
--
--
public housing (HOPE VI)
Native American housing
.649
.647
--
--
--
block grants
Indian housing loan guar.
.006
.005
--
--
--
Native Hawaiian loan guar.
.001
.001
--
--
--
Hsng., persons with AIDS
.277
.292
--
--
--
Rural Housing; Economic
.025
.000
--
--
--
Development
Empowerment zones;
enterprise communities
.045
.000
--
--
--
Community Devel. Blk.
5.000
4.716
--
--
--
Grant
Comm. Devel. Fund
(emergency supplemental)a
2.000
.000
--
--
--
Sec.108 loan guar.; subsidy
.015
.007
--
--
--
Brownfields redevelopment
.025
.025
--
--
--
HOME Invest. Partnerships
1.846
2.084
--
--
--
Homeless Assist. Grants
1.123
1.130
--
--
--

---

CRS-22
FY2002
FY2003
FY2003
FY2003
FY2003
Program
Enacted
Request
House
Senate
Confer.
Housing for special
1.024
1.024
--
--
--
populations
Housing for the elderly
.783
.774
--
--
--
Housing for the disabled
.241
.251
--
--
--
Hsg. counseling assistance
.000
.035
--
--
--
Federal Housing Admin.
(net)b
-1.671
-2.207
--
--
--
GNMA (net)c
-.373
-.347
--
--
--
Research and technology
.050
.047
--
--
--
Fair housing activities
.046
.046
--
--
--
Office of lead hazard
.110
.126
--
--
--
control
Salaries and expenses
.556
.510
--
--
--
Inspector General
.067
.075
--
--
--
Working capital fund
.000
.277
--
--
--
Rescissions; legislative
-.025
.000
--
--
--
savings; supplemental
Subtotal (HUD) net
32.149
31.450
--
--
--
Source: House Committee on Appropriations
Note: Rounding may cause discrepancies in subtotals.
a Emergency supplemental for assistance to the City of New York, following terrorist attacks on
September 11, 2001.
b Net, interagency transfers and offsetting receipts against appropriations of the current year; included
in the totals are projected experience gains greater than premiums to the mortgage insurance fund,
which are now treated as offsetting receipts against discretionary funds. The effect is estimated to be
$-2.323 billion for FY2002, and -$2.753 for FY2003.
c Net, interagency transfers and offsetting receipts against appropriations of the current year.
The Bush Administration is proposing several homeownership initiatives in its
proposed budget for FY2003. One would set aside $200 million within the HOME
block grant program for a Downpayment Assistance Fund, which would provide a
$3-for-$1 match of third-party contributions, up to a maximum of $1,500. This same
proposal was introduced for FY2002. While the Administration is again proposing
a $200 million set-aside for downpayment assistance, this year HUD is proposing to
increase the HOME program by $238 million, enough so that regular formula grants
would not have to be reduced to fund the downpayment program. (See the section
on the HOME program below for more on last year’s debate over this proposal.)
HUD is also proposing to triple the set-aside in the Community Development
Block Grant program to fund the Self-Help Homeownership Opportunity Program
(SHOP) – from $22 million in FY2002 to $65 million in FY2003. Under SHOP,
grants are made to national and regional non-profit organizations such as Habitat for

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CRS-23
Humanity. Homebuyers must contribute significant amounts of volunteer labor to
the construction or rehabilitation of the property. The proposed $65 million is
expected to help produce approximately 3,800 new homes for very low-income
families. HUD is proposing to increase funding for housing counseling from $20
million in FY2002 to $35 million in FY2003. Counseling is used to help potential
buyers understand the process of purchasing a home and the responsibilities that
come with homeownership. Counseling has also proven effective in helping
homeowners keep their home in times of financial stress and to avoid some of the
worst aspects of predatory lending.
Another Administration homeownership initiative that was introduced last year
and re-introduced this year would create a $1.7 billion tax credit over 5 years to
support the rehabilitation or new construction of an estimated 100,000 homes for
purchase by low-income households. This would be a provision in the federal tax
code, not a HUD program. According to a draft proposal, the new homes would be
targeted to census tracts with incomes no greater than 80% of the local area median
and to families making 80% or less of the local area median income.
Housing Certificate Fund: A Closer Look
Funding sources and disbursements. The Housing Certificate Fund
(HCF) is the major disbursing mechanism through which HUD provides funding to
local entities responsible for administering project-based housing programs and direct
low-income rental housing subsidies (vouchers). The Administration is requesting
$17.5 billion for the Housing Certificate Fund in FY2003. According to
Administration estimates, this amount includes a direct appropriation of $16.9 billion
plus a carry-over of $640 million in Section 8 reserve funds from previous years, for
a total increase of nearly $2.0 billion over the FY2002 funding level of $15.6 billion.
Of this amount, the Administration is requesting $16.9 billion for Section 8 contract
renewals, $204 million for 34,000 incremental vouchers to add new families to the
assisted housing rolls, $196 million for tenant protection, $260 million for contract
administration, and $3 million for the working capital fund. These vouchers would
be distributed to public housing agencies that have demonstrated their ability to
effectively use the vouchers they have been given in the past.
Section 8 Expiring Contract Renewals. The HCF finances provisions of
Section 8 of the Housing Act of 1937 (as amended). Broadly referred to as Section
8 programs, these HUD programs subsidize rental housing for low-income families,
using several avenues for administering such assistance. Approximately 3 million
families will be assisted under Section 8 in FY2003. The largest portion of the
Administration’s request is $16.9 billion in new budget authority for funds to renew
expiring Section 8 rental contracts in FY2003. This amount will be used for the
renewal of approximately 817,000 project-based units and 2.1 million tenant-based
units in FY2003.
In addition to these contract renewals, $52 million of the $16.9 billion
appropriated under this heading will be used to fund Family Self-Sufficiency
Coordinators for a renewal term of 1 year.

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CRS-24
Section 8 Incremental Vouchers. The President’s budget request includes
$204 million to fund approximately 34,000 incremental vouchers in FY2003. These
vouchers will be provided to PHAs that have demonstrated their ability to use their
existing vouchers (having a utilization rate of at least 97%). Of the requested amount
for incremental vouchers, $164 million is targeted for specific use vouchers such as
assistance for homeless veterans, assistance for families on the road to self-
sufficiency and as downpayment assistance for homeownership. The Bush
Administration strongly supports the use of Section 8 vouchers as downpayment
assistance for homeownership by low-income families, and encourages PHAs to
strengthen their ability to assist such families in becoming homeowners.
The President’s budget request also earmarks $6 million of the $164 million for
incremental vouchers to fund 1,000 vouchers to be used for persons with mental
disabilities to assist states in meeting a federal court requirement that mentally
disabled individuals be housed in community settings with services whenever
possible.
The remaining $40 million is to be used to provide rental vouchers for non-
elderly disabled individuals who are now residing in public housing projects that
have been designated for occupancy by the elderly. The amount is expected to fund
approximately 6,000 vouchers which will help integrate them into mainstream
privately-owned housing.
The Administration’s budget request also provides $196 million for Section 8
contract administration. These contract administration funds would be provided to
the many state and local housing agencies that act as HUD’s agent in administering
the Section 8 project-based program. These agencies are responsible for the
oversight of the physical and financial condition of projects funded under nearly
20,000 contracts between HUD and individual project owners.
The following table shows the Administration’s request for FY2003 funding for
the Housing Certificate Fund, using the Administration’s estimates, and estimates
from the House Committee on Appropriations.
Tenant Protection Vouchers. The President’s budget requests $260 million
for tenant protection vouchers in FY2003. HUD estimates that this amount would
finance approximately 43,000 vouchers for individuals who are currently receiving
rental assistance, but who are in danger of losing the subsidy because their units are
being demolished, the owner of their development is “opting out” of the program, or
for some other reason.
Public housing programs. There are about 3,050 public housing authorities
(PHAs) that manage 1.25 million housing units. The common perception of public
housing, formed during the 1980s and much of the 1990s, is often one of the
mismanagement of dilapidated projects housing very poor single-parent households
with few marketable skills, youth gangs, high crime rates, and drug use. This picture
has too often been accurate for a small number of the largest inner city projects where
the worst problems have been concentrated.

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CRS-25
However, many smaller projects outside of the inner city are well run and in
relatively good condition. Legislation passed during the past half dozen years has
begun to target problems in the worst projects. The HOPE VI program has received
high marks towards achieving its goal of tearing down the worst 100,000 units,
largely high-rise complexes in inner city areas, and replacing them with lower density
garden apartments and townhouses (see HOPE VI below).
Recent legislation has also made it easier to evict those involved in criminal
activity under the “one-strike-and-you’re-out” rule (Anti-Drug Abuse Act of 1988).
On March 26, 2002, the Supreme Court (HUD v. Rucker), unanimously upheld the
one-strike rule, affirming that a PHA can evict a tenant who may have no knowledge
of drug-related activities committed by another occupant or guest of the housing unit
on or off the public housing premises.
Table 7. Requested Spending for the Housing Certificate Fund
(HCF), Administration and Congressional Estimates, FY2003
($ in billions)
President’s
President’s
request
request
(HUD
(Congress.
FY2003
FY2003
HCF Programs
estimates)
estimates)
House
Senate Confer.
Housing Certificate Fund
17.527
17.527
--
--
--
FY2003 Appropriations
(Table 6)
16.887
13.327
--
--
--
Advance appropriations
from previous years
--
4.200
--
--
--
Carry-over of reserve funds
from previous fiscal years
.640
--
--
--
--
Housing Certificate Fund:
--
--
--
--
--
Expiring Sec. 8 Contracts
16.864
--
--
--
--
FFS Co-ordinators
(.052)
--
--
--
--
Incremental Vouchers
.204
--
--
--
--
Fair-share (.158)
--
--
--
--
Olmstead Decision
(.006)
--
--
--
--
Non-Elderly Disabled
(.040)
--
--
--
--
Tenant Protection
.260
--
--
--
--
Contract Administration
.196
--
--
--
--
Working capital fund
.003
--
--
--
--
Source: Fiscal Year 2003 Budget Summary, Department of Housing and Urban Development; House
Committee on Appropriations.
Note: Italics indicate lines subsumed under major heading for HCF in Table 6 and Table 7.

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CRS-26
Public Housing Operating Fund. HUD is requesting $3.530 billion for the
Operating Fund for FY2003, $35 million more than the $3.495 billion enacted for
FY2002. The Quality Housing and Work Responsibility Act of 1998 directed HUD
to develop a new formula for allocating operating funds to the Public Housing
Authorities. Since public housing is not part of the private marketplace that
determines rent levels and requires landlords to compete for tenants, it has been
difficult to set national cost standards and to hold PHAs accountable. HUD, through
a Negotiated Rulemaking Committee, contracted with the Harvard Graduate School
of Design (GSD) to conduct the Public Housing Operating Cost Study (PHOCS).
However, continuing work on this new formula is proving difficult and controversial.
The Council of Large Public Housing Agencies has faulted the progress of the GSD
thus far and on April 10, 2002, recommended a new team of researchers to complete
the final phase of work. An interim formula-based approach for allocating operating
funds was implemented in FY2001 following regulatory negotiations as required by
the 1998 Act, and HUD hopes to complete action on a final rule in FY2003.
Public Housing Capital Fund. This fund provides formula grants to PHAs
to meet an estimated $20 billion backlog of rehabilitation and modernization needs.
The rehabilitation of this housing is important to help ensure that these developments
do not become so obsolete that they must be demolished. The proposal in the HUD
budget for FY2003 to cut the capital fund by $417 million, from $2.843 billion in
FY2002 to $2.426 billion, is certain to be controversial. It includes what the agency
calls a “bold” experiment to bring about even more fundamental change to public
housing than has already occurred in the past few years. HUD proposes a new
financial initiative to allow up to $120 million of public housing capital funds and
$130 million of operating funds to be used to convert some public housing units to
Section 8 projected-based assistance. This would begin to make public housing more
market-driven and to integrate it into the private capital markets – to make public
housing less “public.”
On a property-by-property basis, HUD would consider requests from Public
Housing Authorities (PHAs) to participate in this initiative to change some units to
project-based vouchers. HUD thinks that this would allow PHAs to secure private
financing to rehabilitate or replace aging properties by pledging project-based
revenue as collateral for loans for capital improvements. The agency believes that
lenders will view the stream of Section 8 renewals as more predictable than capital
fund appropriations, and thus, that at least some of the proposed cut of $417 million
in capital funding can be replaced by private sector loans.
Some housing organizations have already expressed concern about this proposed
experiment, asking that HUD at least wait for evidence on how well this new idea
might work before cutting capital funds. In response to this concern, HUD Secretary
Martinez told the Senate Banking Committee on February 13, 2002 that to the extent
this pilot program does not generate at least $400 million of capital improvements,
HUD will seek to restore the reduction of funds to the previous year’s level in
FY2004.
HOPE VI Revitalization of Distressed Public Housing. As noted above,
HUD is transforming public housing through the use of HOPE VI grants by
rehabilitating or demolishing severely distressed public housing units and replacing

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CRS-27
them with low-density, garden-style apartments or townhouses. Rather than filling
them with only the poorest of the poor, as had usually been the case, the new housing
has more mixed-income families – the poor, the not quite so poor, and some
moderate-income households – in an effort to change the culture to one of more hope
and opportunity for those residents who are willing to take advantage of new
opportunities.
The Administration is requesting $574 million for HOPE VI grants in FY2003,
the same as enacted for FY2002. Of this total, $5 million is designated for the
Neighborhood Networks Initiative. Under this initiative, competitive grants are
awarded to Public Housing Authorities for the establishment and initial operations
of computer centers to increase resident self-sufficiency, employability, and
economic self-reliance. Authority for the HOPE VI program is scheduled to end on
September 30, 2002. Over the next few months the Administration will be proposing
legislation to continue the program. An omnibus housing bill, H.R. 3995, introduced
on March 19, 2002, would also reauthorize and amend the HOPE VI program.
For more information on HOPE VI, see CRS Report RL30589, HOPE VI: The
Revitalization of Severely Distressed Public Housing, by Susan M. Vanhorenbeck.
Native American Block Grants. This block grant provides tribes or tribally
designated housing entities with a flexible source of funding for affordable housing
and related activities. As provided in the Native American Housing Assistance and
Self-Determination Act, block grant funds may be used for a wide range of
homeownership and rental activities. The Administration’s FY2003 budget requests
$647 million, slightly below the $649 million enacted in FY2002.
Housing for Persons with AIDS (HOPWA). President Bush requested
$292 million for HOPWA for FY2003, up $15 million from the $277 million enacted
in FY2002. HOPWA provides housing assistance and related supportive services for
low-income persons with HIV/AIDS and their families. Funding is distributed both
by formula allocation and competitive grants to states, localities and nonprofit
organizations. HOPWA funds may be used for housing information services,
resource identification to establish and coordinate housing assistance resources, to
acquire, rehabilitate or lease housing and services, to construct single room
occupancy dwelling and community residences, for rental assistance and for short
term rent. Funds may also be used for mortgage or utility payments to prevent
homelessness of a tenant or mortgagor and for supportive services including health,
mental health, drug and alcohol abuse treatment and counseling, day care, nutritional
services and assistance in gaining access to local, state and federal government
benefits.
In an evaluation released by HUD in December 2000, it was reported that the
HOPWA program predominately serves extremely low-income (54%) and very low-
income (27%) persons living with HIV/AIDS, and that in 1999 the HOPWA program
was providing housing assistance to approximately 49,000 low-income persons living
with HIV or AIDS. This is approximately one-sixth of the estimated 311,701 persons
living with AIDS in the United States as of June, 2000 as reported by the Centers for
Disease Control and Prevention (CDC). The CDC reported that through June 2001,
the number of HIV infections reported in states with confidential HIV reporting (34

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CRS-28
states and two territories) was 134,505 for a cumulative total of 466,023 persons
identified as being HIV positive or of having AIDS. Since many states are not yet
reporting on HIV, the CDC estimates that 800,000 to 900,000 Americans are actually
living with HIV or AIDS.
For more information on HOPWA, see CRS Report RS20704, Housing
Opportunities for Persons with AIDS (HOPWA) by M. Ann Wolfe.
Rural Housing and Economic Development. The FY1999 HUD
Appropriations Act (P.L. 105-276) established within HUD an Office of Rural
Housing and Economic Development to support housing and economic development
in rural areas. It received $25 million in both FY2001 and FY2002. The
Administration is not requesting funds for this program for FY2003 (it did not ask
for funds for FY2002 either), arguing that many of the agency’s core programs, such
as CDBG, already serve rural communities, and because other Departments like the
U.S. Department of Agriculture have very large and effective programs already in
place to address rural housing and economic development issues. Last year, the
House agreed with the Administration and did not include any funds for this office.
The Senate recommended $25 million and the conferees approved $25 million with
language requiring that the funds be awarded competitively by June 1, 2002.
Empowerment Zones and Enterprise Communities. This initiative is
an interagency effort to promote economic development and community
revitalization in distressed areas, by directing tax relief and federal funds to
designated Empowerment Zones (EZs) and Enterprise Communities (ECs). EZs and
ECs are eligible for a variety of tax credits and other incentives intended to stimulate
investment, economic growth, and revitalization activities. Grants are used for
activities that assist residents and businesses, including workforce preparation and
job creation efforts linked to welfare reform; neighborhood development; support for
financing capital projects; financing of projects in conjunction with Section 108 loans
or other economic development projects. Funds are also used for rental assistance
and other housing assistance.
To date, there have been three rounds of EZ/EC designations. In the first round,
nine communities (six urban and three rural) were designated as Empowerment
Zones and 95 communities were named as Enterprise Communities. Twenty new
Empowerment Zones – 15 urban and 5 rural – were designated in the Round II
competition, along with 20 new Enterprise Communities, all rural. The 2000
Community Renewal Tax Relief Act authorized the designation of 40 renewal
communities (28 urban and 12 rural) and nine new Round III Empowerment Zones
(seven urban, two rural) designated on December 21, 2001, which utilize only tax
incentive provisions.
In FY2002, $45 million was approved for urban EZs - $3 million each for the
15 Round II zones designated by HUD. The Administration’s FY2003 budget
proposes no funding for Round II Empowerment Zones because after 4 years of
funding, major balances of unused funds have been built up. To help develop the
economies of distressed urban and rural areas, HUD has recently designated 40
Renewal Communities (RZs) and seven additional Round II urban Empowerment

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CRS-29
Zones. Private investors in both RZ and EZ areas are eligible for tax benefits over
the next 10 years tied to the expansion of job opportunities in these locations.
Community Development Fund (Community Development Block
Grants). The Bush Administration’s FY2003 budget proposes $4.716 billion for
CDBG, including $279.5 million for program set-asides, and $4.436 billion in
formula-based grants to entitlement communities, states, and insular areas. The
Administration’s budget request would increase the formula-based portion of the
program by $95 million for FY2003 and it would convert Section 107 funding for
insular areas into a formula-based allocation.
The Administration is also requesting approval for its new Colonias Gateway
Initiative. This regional initiative would be targeted to communities in Texas, New
Mexico, Arizona, and California within 150 miles of the border with Mexico. Funds
would be used for housing, infrastructure, and economic development projects in
these distressed areas. The Administration is also proposing to fund this $16 million
initiative with the savings achieved from a proposed legislative change that would
reduce funding for CDBG entitlement communities with per capita incomes that are
twice the national average or higher. Currently, HUD estimates that there are 13
communities with per capita incomes that meet or exceed the proposed threshold,
although this could change as figures from the 2000 Census become available (see
Table 8).
Table 8. Community Development Block Grants (CDBG):
Entitlement Communities with Per Capita Income At Least
Twice the National Average
Per capita income as a multiple of
Community
the national average
Newport Beach, California
3.2
Palo Alto, California
2.3
Santa Monica, California
2.0
Colorado Springs, Colorado
3.1
Greenwich, Connecticut
3.2
Naples, Florida
2.9
Brookline, Massachusetts
2.0
Malden, Massachusetts
2.2
Newton, Massachusetts
2.0
Westchester County, New York
2.1
Lower Merion, Pennsylvania
2.9
Penn Hills, Pennsylvania
2.8
Virginia Beach, Virginia
2.6
Source: HUD Budget Submission, FY2003

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CRS-30
The CDBG is the largest source of federal financial assistance in support of
housing, neighborhood revitalization, and community and economic development
efforts of state and local governments. After funds are allocated for the various set
asides under CDBG, 70% of the remaining appropriated funds are allocated by
formula to entitlement communities. These include metropolitan cities with
populations of 50,000 or more, central cities, and urban counties. Currently, 1,023
communities (865 cities and 158 urban counties) meet the definition of entitlement
community. The remaining 30% of appropriated funds are allocated by formula to
states for distribution to nonentitlement communities.
Table 9. Community Development Block Grants, FY2002-
FY2003
(funding in millions)
FY2002
FY2003
FY2003
FY2003
FY2003
Programs and set-asides
enacted
request
House
Senate
Confer.
Subtotals:
set-asides (see below for details)
659.0
279.5
--
--
--
formula-based (entitlement
3,038.7
3,100.3a
--
--
--
communities
insular areas
–
7.0
--
--
--
formula-based state allocation
1,302.3
1,328.7
--
--
--
Set-asides:
Indian Tribes
70.0
72.5
--
--
--
Econ. Develop. Access Center
(1.0)
(1.5)
--
--
--
Housing Assistance Council
3.3
3.0
--
--
--
National American Indian
Housing Council
2.6
2.2
--
--
--
Nat’l Council of La Raza HOPE
5.0
0.0
--
--
--
technical assistance
(0.5)
0.0
--
--
--
HOPE Fund; other activities
(4.5)
0.0
--
--
--
Section 107
45.3
38.9
--
--
--
technical assistance
--
(3.0)
--
--
--
insular areas
(7.0)
0..0b
--
--
--
university programs
(34.3)
(31.9)
--
--
--

Historically Black
(10.0)
(10.0)
--
--
--

Colleges and Universities

Hispanic Serving Institutions
(6.5)
(5.5)
--
--
--

Community Dev. Work Study
(3.0)
(3.0)
--
--
--

Alaskan Native and Native
(4.0)
(2.4)
--
--
--
Hawaiian Serving Institutions

Tribal Colleges and
(3.0)
(3.0)
--
--
--
Universities

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CRS-31
FY2002
FY2003
FY2003
FY2003
FY2003
Programs and set-asides
enacted
request
House
Senate
Confer.

Comm. Outreach
(7.9)
(8.0)
--
--
--
Partnership Centers
management info. systems
(4.0)
(4.0)
--
--
--
Hawaiian Homelands
9.6
0.0
--
--
--
Community Technology Center
0.0
0.0
--
--
--
Improving Access Initiative
0.0
0.0
--
--
--
Self-Help Housing Opportunity
22.0
65.0
--
--
--
National Housing Dev. Corp.
5.0
0.0
--
--
--
operating expenses
(2.0)
0.0
--
--
--
Capacity Building for
29.0c
29.5x
Community Development and
Affordable Housing
--
--
--
National Com. Dev. Initiative
(25.0)d
(25.0)d
--
--
--
Habitat for Humanity
(4.0)
(4.5)
--
--
--
Resident Opportunities and Self
55.0
0.0e
--
--
--
Sufficiency (supportive services)
Neighborhood Initiative
42.0
0.0
--
--
--
Demonstration
Working Capital Fund for the
13.8
3.4
--
--
--
development of info. tech. systems
Youthbuild
65.0
65.0
--
--
--
Youthbuild in rural and
(10.0)
(10.0)
--
--
--
underserved areas
Youthbuild USA capacity bldg.
(2.0)
(2.0)
--
--
--
Economic Develop. Initiative:
294.2
0.0
--
--
--
Total: CDF, CDBG
5,000.0
4,715.5
--
--
--
CDBG to New York for September
11, 2001 emergency response
2,000.0
0.0
--
--
--
small businesses, nonprofit
organizations, and individuals
(500.0)
0.0
--
--
--
tourism promotion
(10.0)
0.0
--
--
--
Transfer of unobligated balances
under P.L. 107-38 in response to
terrorist attack
700.0
0.0
--
--
--
Total
7,700.0
4,715.5
--
--
--
Source: Dept. of Housing and Urban Development.
Note: Totals may not add due to rounding. Italics indicates entries subsumed under CDBG line in
Table 6; parenthesis indicates entry subsumed in this table under line immediately above.
aThe Administration’s $16 million Colonias Gateway Initiative is included in this amount since it
would be funded by a formula change for CDBG entitlement communities.
bInsular areas would be included in formula portion of the CDBG program and would not be included
as a set aside under Section 107 (Special Purpose Grants).

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CRS-32
cFY2002 appropriations included $5 million for rural and tribal areas. The Administration’s FY2003
budget also recommends $5 million for rural and tribal areas.
dIncludes funding for the Enterprise Foundation and the Local Initiative Support Corporation in
support of local community development corporations.
eAppropriations for this program would be transferred to Public Housing Capital Fund. The
Administration is requesting $55 million.
These and other Community Development initiatives are to be offset by
eliminating funding for two community development fund-related set asides, notably,
the Neighborhood Initiative, which received $42 million for FY2002, and the
Economic Development Initiative, which received $294 million in FY2002. In past
years the Economic Development Initiative (EDI) has routinely been used by
Members of Congress to earmark funding specific projects. Entitlement
communities, states, and previous Administrations have objected to these earmarks
on the grounds that they are noncompetitive, and reduce the amount of funds
available under the core CDBG program for distribution to entitlement communities
and states.
For FY2002, $294 million in EDI assistance was earmarked for more than 300
specific projects identified in the conference report (H.Rept. 107-272) accompanying
the VA-HUD-Independent Agencies Appropriations Act for FY2002, P.L. 107-73.
The Neighborhood Initiative supports projects intended to stimulate economic
diversification and investment in areas experiencing population out-migration,
improve conditions in blighted and distressed neighborhoods, or facilitate the
integration of housing assistance with welfare reform initiatives. For FY2002,
Congress appropriated $42 million for the program with all of the funds earmarked
for specific projects identified in the conference report. Congress also provided $2.7
billion in CDBG assistance to New York City to assist in post-September 11, 2001
recovery efforts.
Brownfields Redevelopment. The Administration requests $25 million for
brownfields redevelopment projects for FY2003, the same amount appropriated in
both FY2001 and FY2002. Brownfields redevelopment funds are used to reclaim
abandoned and contaminated commercial and industrial sites. Administration
estimates place the number of eligible brownfield sites at 450,000 nationwide. Funds
are used to finance job creation activities that benefit low and moderate income
persons, and the Administration estimates that the $25 million requested could
support the cleanup of 25 brownfield sites and create approximately 5,400 jobs.
Funds have been used in conjunction with Section 108 loan guarantees and with EPA
brownfields cleanup efforts, but HUD will propose decoupling the brownfields
program from the Section 108 loan guarantee program, believing this will attract
more participants.
The HOME Investment Partnership Program. The Administration is
requesting $2.084 billion for FY2003, $238 million more than the $1.846 billion
enacted in FY2002. The HOME block grant program makes funds available to
participating jurisdictions to increase the supply of affordable rental housing and
homeownership opportunities for low-income families. Jurisdictions have
considerable flexibility in the use of these funds but all households assisted must
have incomes below 80% of the area median and 90% of renters receiving assistance
must have incomes below 60% of median. Funds can be used to help new

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CRS-33
homebuyers. Both homebuyers and renters can be helped through the rehabilitation
of substandard housing and new construction. Funds may also be used for tenant-
based rental vouchers. Some HOME funds are used with the HOPE VI program and
with the Low-Income Housing Tax Credit. According to HUD budget documents,
since its beginning in 1992, HOME funds have been used to construct or rehabilitate
more than 250,000 rental units, and have provided direct rental assistance (vouchers)
to more than 73,000 households.
There would be $200 million set-aside for a “Downpayment Assistance
Initiative” to assist first-time low-income homebuyers, up from the $50 million
enacted for FY2002. Funds would be provided on a competitive basis and would be
administered by state housing finance agencies, and be expected to assist over
130,000 first-time buyers each year. Funds would be matched on a 3 to 1 basis up
to $1,500 per family. HUD made the same $200 million request last year, and some
organizations, including those representing the National Association of Counties and
the U.S. Conference of Mayors, testified before the House Subcommittee on Housing
and Community Opportunity last year (May 22, 2001), in opposition to the $200
million set-aside, arguing that HOME funds may already be used for downpayment
and/or closing cost assistance. Further, they oppose it because “it chooses one
delivery system – state housing finance agencies – for no proven programmatic
purpose.” They argued that some communities already have a high homeownership
rate and that affordable rental housing is the critical need.
Last year’s Senate bill did not include any funding for this downpayment
assistance fund (the House recommended the full $200 million). H.Rept. 107-43
notes that “downpayment assistance is already permissible under the HOME program
and therefore does not require new or additional authorization.” The conferees
provided $50 million, subject to authorization legislation by June 30, 2002.
Otherwise, the $50 million will be available for any authorized purpose. Since the
Administration is seeking a $238 million increase in the HOME program, there could
be less objection to the full $200 million set-aside request.
Homeless Assistance Grants. President Bush’s FY2003 budget requests
$1.130 billion for homeless assistance, an increase of $7 million from the FY2002
appropriation of $1.123 billion. From the FY2003 request of $1.130 billion, $1.109
billion would fund Homeless Assistance Grants, $1.5 million would be for the
Working Capital Fund for homeless assistance projects, $11 million for homeless
management systems, $6.6 million for technical assistance and $1 million for the
Interagency Council on the Homeless. For FY2003, the Administration has proposed
that the Emergency Food and Shelter program (EFSP), which is currently
administered by the Federal Emergency Management Agency (FEMA), be transferred
to HUD. In addition, HUD’s FY2003 budget request is based on a legislative
proposal to consolidate the three competitive homeless assistance programs under the
Homeless Assistance Grants programs, i.e., Supportive Housing, Shelter Plus Care
and Single Room Occupancy. The fourth HUD program, Emergency Shelter Care,
is a formula program. The proposed consolidation is intended to provide more
consistent funding and eliminate the burden of administering the current competitive
programs. The Senate Subcommittee on Housing and Transportation held a hearing
on the “Reauthorization of the HUD McKinney-Vento Homeless Assistance Act
Programs,” on March 6, 2002.

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CRS-34
The homeless assistance programs are intended to help homeless persons and
families break the cycle of homelessness and to move to permanent housing and self-
sufficiency. The Continuum of Care (CoC) process encourages the creation of
linkages to other housing and community development programs including public
housing, Section 8, Community Development Block Grants, HOME, Housing
Opportunities for Persons with AIDS and state and local programs. In addition, the
strategy promotes direct links to mainstream social service programs critical to the
success of homeless assistance efforts, such as Medicaid, State Children’s Health
Insurance Program, Food Stamps, Temporary Assistance for Needy Families (TANF)
and services funded through the Mental Health and Substance Abuse Block Grant,
Workforce Investment Act, and the Welfare-to-Work grant program.
The FY2003 HUD justification included preliminary measurable performance
indicators which concentrate on the number of homeless persons who have attained
permanent housing. One of HUD’s strategic objectives is to end chronic
homelessness (20% of the homeless) in 10 years; one of the indicators of progress to
this goal is that at least 25,000 formerly homeless persons move into HUD
McKinney-Vento funded permanent housing through FY2003. Another strategic
objective is to help homeless individuals and families move to permanent housing.
Some of the indicators of successfully moving toward that goal is that through
FY2003, at least 29,000 homeless persons move from HUD transitional housing to
permanent housing; that at least 115,000 homeless people move into HUD-funded
transitional housing and that at least 19,000 homeless persons become employed
while in HUD’s homeless assistance project. Another indicator of moving toward
that goal is that the number of communities with Homeless Management Information
Systems increase from 12 in FY2001, to 25 in FY2002, to 75 in FY2003; HUD has
been charged by Congress to assist communities in developing unduplicated counts
of homeless persons and generating client-level data nationally by 2004.
For more information on federal programs for the homeless, see CRS Report
RL30442, Homelessness: Recent Statistics, Targeted Federal Programs and Recent
Legislation, by M. Ann Wolfe.
Housing for the Elderly and Disabled. These programs provide capital
grants to eligible entities for the acquisition, rehabilitation, or construction of
housing. The President is proposing $783 million for housing assistance for the
elderly in FY2003, the same as for the previous year. HUD points out that an
increasing number of the elderly living in these apartments have become frailer and
less able to live in rental facilities without some additional services. Of the $783
million, $30 million would be made available for grants for construction to convert
existing units to assisted living facilities. This will allow individual elderly residents
to remain in their units and maintain their independence. Another $53 million would
be targeted to service coordinators who help the elderly obtain needed and eligible
services from the community.
The Administration has also requested $251 million for housing for the disabled
(Section 811), a $10 million increase over the $241 million provided in FY2002.
Like last year, up to 25% of the funds for the disabled could be used for vouchers to
give disabled individuals more flexibility and choice so they could live in mainstream
rental housing. However, these vouchers must then be renewed each year, and in

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CRS-35
FY2003, $32 million of the $251 million total would be to renew vouchers. In
addition, of the $204 million proposed for 33,400 additional vouchers, mentioned
earlier under the Housing Certificate Fund, $40 million would be allocated for
approximately 6,000 vouchers for non-elderly disabled individuals who are currently
living in public housing units that are now being converted to “elderly only” projects.
Federal Housing Administration (FHA). For FY2003, the Administration
is requesting an insurance commitment limitation of $160 billion for the FHA Mutual
Mortgage Insurance and Cooperative Housing Mortgage Insurance (MMI/CHMI)
fund, the same level as appropriated for FY2002. A $21 billion insurance
commitment limitation is requested for the General Insurance and Special Risk
Insurance (GI/SRI) fund, the same level as approved for FY2002.
Since FY2002, the Office of Management and Budget (OMB) and the
Congressional Budget Office (CBO) have determined that FHA receipts under the
MMI account should be classified within the discretionary rather than the mandatory
part of HUD's budget. According to CBO, the reclassification has no effect on the
amount of budgetary resources available to HUD, and the MMI program will
continue operating as it did prior to the reclassification. Mandatory spending must
comply with the pay-as-you-go rules of the Budget Enforcement Act (BEA) while
discretionary spending must comply with the BEA’s discretionary spending caps.
Spending for the MMI program will be determined by the annual appropriations acts.
The Budget requests a loan limitation of $50 million for direct loans under the
MMI/CHHI fund, a $200 million reduction from the FY2002 level. A direct loan
limitation of $50 million is proposed for the GI/SRI fund, the same limit as in
FY2002. The direct loans are used to facilitate the sale to municipalities and
nonprofit corporations of single family and multifamily properties that have been
acquired by the FHA insurance funds through defaults and foreclosures by borrowers.
The Budget states that the $250 million limitation in FY2002 was in anticipation of
increased demand for disposition of single family properties and the demand did not
materialize because of the availability of alternative financing.
The Budget requests $776 million for administrative expenses of the FHA
program accounts, of which $363 million would be funded in the MMI/CHMI
accounts and $233 million in the GI/SRI accounts.
As in FY2002, the FY2003 Budget requests an appropriation of $15 million for
credit subsidies to support loan guarantees under the GI/SRI programs. The credit
subsidy is based on the net cost to the government, exclusive of administrative
expenses, of a direct loan or loan guarantee over its full term, discounted to the
present value at the Treasury's borrowing cost. FHA proposes to reduce the annual
mortgage insurance premium from 80 basis points to 57 basis points on new
construction loans insured under the Section 221(d)(4) program. That program is the
largest multifamily program insured in the GI/SRI fund. Interestingly, the insurance
premiums were raised from 50 to 80 basis points in FY2002, and that was used as
partial justification for the need of only $15 million in credit subsidies instead of
$101 million that had been appropriated in the prior year.

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CRS-36
The Budget notes, however, prior estimates were based on historic performance
over the past 40 years, including tax law changes in the 1980s that adversely effected
the performance of loans in the portfolio at the time. The Budget argues that the new
credit subsidy estimates are based on econometric models that incorporate the
improvements in recent years in underwriting, program monitoring, and asset
management.
Section 601 of P.L. 105-276, the FY1999 HUD Appropriations Act, amended
Section 204 of the National Housing Act to give HUD more flexibility in choosing
the most cost-effective way of paying insurance claims and disposing of acquired
notes or homes under the FHA single family programs. The amendment provides a
new claims payment procedure that permits HUD to pay a claim upon assignment of
the mortgage rather than upon conveyance of the property; authorizes HUD to take
assignment of the notes and transfer them to private parties for servicing, foreclosure
avoidance, foreclosure, property management, and asset disposition; allows FHA to
be an equity participant in private entities; and allows a structured financing for asset
disposition in which FHA retains an equity interest, thereby increasing the value of
the asset over simple asset sales.
In FY2003, HUD is proposing to use its Section 601 authority to transfer
defaulted notes to joint venture partners in the private sector. The partners would
make upfront payments to FHA at the time of transfer, FHA would retain an equity
interest in the notes until their disposition, and FHA would receive additional
payments for that interest. The proposal is expected to reduce foreclosures, eliminate
much of the acquisition of property by FHA, and increase net recoveries to FHA.
This is regarded as a big step towards getting FHA out of the property management
business altogether.
The Budget reiterates HUD’s commitment to eliminating predatory lending and
comprehensively reforming and simplifying the home-buying process. While
providing few details, HUD states that new regulations under the Real Estate
Settlement Procedures Act will require full disclosure of all fees that borrowers will
pay at settlement, and make it clear to borrowers that other finance options are
available. A proposed rule was published in 2001which would prevent the issuance
of FHA insurance on properties that have been transferred by a previous sale within
6 months. The Budget notes that the rule will be implemented in 2003. FHA also
proposes to publish a rule in 2003 which would restrict excessive points and fees on
FHA-insured loans. A rule will be proposed in 2002 and, if implemented, would
hold lenders accountable for the selection and performance of appraisers for FHA-
insured mortgages.
HUD has oversight responsibilities for establishing affordable housing goals for
the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan
Mortgage Corporation (Freddie Mac) and for monitoring their progress toward
achieving those goals. The Budget commits HUD to expanding and aggressively
pursuing its mission-related regulatory obligations regarding Fannie Mae and Freddie
Mac.
Government National Mortgage Association (Ginnie Mae). For
FY2003 the Budget proposes a limit of $200 billion on new commitments for

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CRS-37
mortgage-backed securities by Ginnie Mae, which is the same limit as in FY2002.
An appropriation of $10.8 million is proposed to fund salaries and expenses.
Office of Federal Housing Enterprise Oversight (OFHEO). OFHEO
is the safety and soundness regulator for Fannie Mae and Freddie Mac. The FY2003
Budget proposes $30.8 million in budget authority compared to $27 million in
FY2002. That cost is assessed from Fannie Mae and Freddie Mac. Legislation would
be proposed to remove OFHEO from the annual appropriations process, and fund the
organization directly. That would place OFHEO on a par with other safety and
soundness regulators such as the Federal Reserve Board, the Office of Thrift
Supervision, and the Federal Housing Finance Board.
Fair Housing. The Fair Housing Act makes it illegal to discriminate in the
sale, rental, or financing of housing based on race, color, religion, sex, national
origin, disability, or family status. HUD’s FY2002 budget promises vigorous
enforcement of fair housing laws and increased educational activities to combat
discrimination in housing. For FY2003, HUD requests $46 million, level with
FY2002 appropriations.
Two programs comprise HUD’s fair housing efforts: the Fair Housing
Assistance Program (FHAP) and the Fair Housing Initiatives Program (FHIP).
FHAP strengthens nationwide enforcement efforts by providing grants to state and
local agencies to enforce laws that are substantially equivalent to the federal Fair
Housing Act. For FY2003, HUD is requesting $25.7 million for FHAP. FHIP
provides funds for public and private fair housing groups, as well as state and local
agencies, for activities that educate the public and housing industry about the fair
housing laws, including accessibility requirements; investigate allegations of
discrimination; help to combat predatory lending practices, and reduce barriers to
minority homeownership. FHIP would be funded at $20.3 million in FY2003.
In its FY2002 budget for Fair Housing, HUD pledged to continue its efforts to
combat predatory lending by working closely with interested parties, including
consumer groups, federal, state and local regulators, and the industry to put an end
to predatory lending. As part of this effort, it supports programs to increase financial
literacy. Its proposed budget for FY2003 promised to continue these efforts.
Lead-Based Paint Hazard Reduction. Title X of the Housing and
Community Development Act of 1992 (P.L. 102-550), authorized HUD to establish
the Lead-Based Paint Hazard Control Grant program. Before 1997, funding for the
lead hazard control grant program was provided under the Annual Contributions for
Assisted Housing Account. In 1997 and 1998, the program was funded as a set-aside
under the Community Development Block Grant account. Starting in 1999, the
program was funded as a separate, stand-alone program.
Over the past decade, HUD has worked with local governments and agencies
to increase the number of lead hazard control programs, and measurable lead levels
in children have declined. However, millions of housing units occupied by lower
income households remain contaminated with lead-based paint. To further reduce
lead paint health hazards, the FY2003 HUD budget requests a $16 million increase
over FY2002, bringing the total to $126 million. Funds are distributed through

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competitive grants to entities that agree to match those federal grants. The $126
million supports a 10-year strategy to eliminate lead paint hazards, with funds
targeted to the 1.8 million homes that are at risk of not being modified through
normal renovation or demolition activities.
Title III: Independent Agencies
Environmental Protection Agency
The President’s FY2003 request for the Environmental Protection Agency
(EPA) is $7.621 billion in budget authority or 6% less than the $8.079 billion
appropriated for FY2002.
Accounting for the proposed decrease is the Administration’s decision not to
seek continued funding for about $500 million earmarked for numerous activities in
the FY2002 conference report. This includes some $300 million for specific
wastewater grants, numerous research grants, and other special grants. Other prime
issues include the adequacy of funds to capitalize wastewater needs; funding of state
programs including the shifting of enforcement responsibility to the states; and future
funding of the Superfund program.
State and Tribal Assistance Grants. How to meet the Nation’s water
infrastructure capital needs remains a primary appropriations issue for EPA. The
Administration’s proposed FY2003 level of $3.464 billion for the State and Tribal
Assistance Grants account (STAG) is $269 million, or 7% less than the $3.733
billion allocated in FY2002. The major reason for the proposed decrease is the
Administration’s decision not to seek continued funding for over $300 million
designated for specific water grants in FY2002.
Within the STAG account, the budget proposes $1.2 billion for wastewater
funding, $150 million less than the $1.35 billion for FY2002. Another major account
activity, drinking water state revolving funds, is projected to receive $850 million,
the same as funding for FY2002.
Table 10. Environmental Protection Agency Appropriations,
FY1998-FY2002
(budget authority in billions)
FY1998
FY1999
FY2000
FY2001
FY2002
$7.4
$7.6
$7.4
$7.8
$8.08
Source: Figures for FY1998-FY2001 are from administration budget submissions of subsequent
years; figures for FY2002 are from the House Committee on Appropriations, and are the latest
available estimates for that fiscal year. Final spending levels remain uncertain until all program
experience has been recorded, and any supplemental appropriations or rescissions have been included.
For state and tribal administrative grants, the budget seeks $1.2 billion, $84
million more than current funding; most state administrative grants would remain the
same as in the current year. One new grant program would provide $15 million in

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grants to assist states in enforcing environmental laws and regulations. This
represents a shift in policy, moving more enforcement to the states, and is
accompanied by a related $15 million decrease in EPA’s own enforcement efforts.
A similar proposal in the FY2002 proposal was not agreed to by the appropriators.
Also part of the proposal is $170 million in Brownfields Grants for contaminated
sites with development potential. And, the proposal seeks $20 million for Targeted
Watersheds Project grants to implement restoration in priority watersheds.
Superfund. The future of the Superfund, and its purpose of cleaning up toxic
waste sites remains an issue. The FY2003 budget request of $1.149 billion is a
proposed $72 million decrease compared to FY2002. There is concern over the
ability of the declining trust fund, which is financed by chemical fees and other taxes,
to finance the program beyond FY2003. The available balance of the fund has been
declining since its taxing authority expired on December 31, 1995. The President’s
FY2003 budget does not propose renewing the taxes that support Superfund, and its
balance at the beginning of FY2003 was projected to be $427 million, a level
sufficient to accommodate the fund’s share of the projected spending authority of
$1.2 billion needed for FY2002, 46% of which would come from the fund and 54%
from general appropriations.
Table 11. Appropriations: Environmental Protection Agency,
FY2002-FY2003
(budget authority in billions)
FY2002
FY2003
FY2003
FY2003
FY2003
Program
enacted
request
House
Senate
Conf.
Science and Technology (incl.
transfers from Superfund)
.735
.781
--
--
--
Emergency supplemental
.090
---
--
--
--
Environmental programs,
compliance (management)
2.055
2.048
--
--
--
Emergency supplemental
.039
---
--
--
--
Office of Inspector General
.046
.048
--
--
--
Buildings and facilities
.025
.043
--
--
--
Superfund (net, after transfers)
1.221
1.149
--
--
--
Emergency supplemental
.041
--
--
--
--
Leaking Underground Storage
Tank Trust Fund
.073
.072
--
--
--
Oil spill response
.015
.016
--
--
--
State and tribal assistance
3.733
3.464
--
--
--
Emergency supplemental
.005
---
--
--
--
Subtotal (EPA)
8.079
7.621
--
--
--

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Source: House Committee on Appropriations
Note: Rounding may cause discrepancies in subtotals.
Historically, the share paid by the trust fund has been declining. In the past, the
trust fund paid for the majority of Superfund activities; in the current year, the fund
supports 50% of the program costs, in future years, general appropriations may have
to pay the majority of costs. Some have criticized this fundamental change in policy,
which lessens the responsibility of polluters, under the principle that the “polluter
pays,” and instead socializes pollution costs across the economy, by funding them as
costs to the general Treasury.
For more detailed information on the Superfund, see: CRS Issue Brief
IB10078, Superfund and the Brownfields Issue in the 107th Congress. For
information on wastewater treatment issues, see CRS Report 98-323, Wastewater
Treatment: Overview and Background. For an in-depth discussion of the EPA
budget proposal, see CRS Issue Brief IB10101, The Environmental Protection
Agency’s FY2003 Budget.
Federal Emergency Management Agency
The Federal Emergency Management Agency (FEMA) helps states and
localities prepare for and cope with catastrophic disasters. FEMA administers
policies related to emergency management, including: disaster relief, fire prevention,
earthquake hazard reduction, emergency broadcasting services, flood insurance,
mitigation programs, and dam safety. The Bush Administration and Congress have
emphasized FEMA’s role in preparing for and responding to terrorist attacks since
September 11.
At least 28 statutes and executive directives set forth the responsibilities of
FEMA. (These authorities are summarized in CRS Report RL31285, FEMA’s
Mission: Policy Directives for the Federal Emergency Management Agency.) The
Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121
et seq.) authorizes the President to declare major disasters or emergencies (the latter
provide considerably less federal assistance than the former), sets out eligibility
criteria for federal aid, and specifies the types of assistance that may be provided by
FEMA and other federal agencies. Disaster assistance funding varies from year-to-
year by the severity and frequency of declared catastrophes. In recent years, billions
have been appropriated to help communities recover from tornados, hurricanes,
floods, earthquakes, and other incidents. For detailed information see CRS Report
RL31359, Federal Emergency Management Agency Funding for Homeland Security
and Other Activities.
The FEMA budget requests for each year include funds for normal agency
operations and grant-in-aid assistance to nonfederal entities, in addition to emergency
disaster relief. Should funds appropriated in annual legislation for disaster relief
prove insufficient, supplemental funds are requested. For FY2002, the
Administration requested $1.4 billion for the Disaster Relief Fund account for
FY2002. For the entire agency, the House approved $3.557 billion, the Senate
approved $3.278 billion. The primary difference between the two versions is in

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disaster relief. The House provided $1.369 billion in direct appropriations to the
disaster relief fund, while the Senate approved $359 million. In contrast, the House
provided $1.3 billion in emergency funding for disaster programs, and the Senate
approved $2 billion. The Senate also approved $430 million in emergency
management planning assistance, $25 million more than provided under the House
bill.
Table 12. Appropriations: Federal Emergency Management
Agency, FY2002-FY2003
(budget authority in billions)
FY2002
FY2003 FY2003
FY2003
FY2003
Program
enacted
request
House
Senate
Conf.
Disaster Relief Fund
.664
1.843
--
--
--
Contingent emergency funds
1.500
.000
--
--
--
Emergency supplemental
4.357
.000
--
--
--
Nat’l pre-disaster mitigation
.000
.300
--
--
--
Disaster assist. loan; admin.
.001
.001
--
--
--
Radiological emergency prep.
-.001
-.001
--
--
--
Salaries and expenses
.234
.240
--
--
--
Emergency supplemental
.025
.000
--
--
--
Inspector General
.010
.011
--
--
--
Emergency management,
planning assistance
.405
3.747
--
--
--
Emergency supplemental
.220
.000
--
--
--
Emergency food, shelter
.140
.153
--
--
--
Flood map modernization
.000
.300
--
--
--
Nat’l Flood Insurance Funda
.105
.110
--
--
--
Subtotal (FEMA)
7.660
6.704
--
--
--
Source: House Committee on Appropriations
Note: Rounding may cause discrepancies in subtotals.
a National Flood Insurance Fund data includes salaries and expenses and flood mitigation funding.
To reduce future losses from disasters, in recent years FEMA has sought
increased funding for mitigation activities. Legislation to establish a new hazard
mitigation program was approved by the 106th Congress (P.L. 106-390). For
information on the legislation, see: CRS Report RS20736, Disaster Mitigation Act

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of 2000 (P.L. 106-390): Summary of New and Amended Provisions of the Stafford
Disaster Relief Act.
National Aeronautics and Space Administration
The National Aeronautics and Space Administration (NASA) receives
appropriations within two accounts: Human Space Flight (HSF); and Science,
Aeronautics and Technology (SAT). Funding for the Office of Inspector General is
identified separately. In the FY2003 budget, the HSF account includes funding for
the International Space Station; Space Shuttle; Payload and Expendable Launch
Vehicle Support; Investments and Support; Space Communications and Data
Systems; and Safety, Mission Assurance, and Engineering. The SAT account
contains the bulk of NASA’s research and development activities, including Space
Science; Biological and Physical Research; Earth Sciences; Aero-Space
Technologies; and Academic Programs.
NASA is requesting $15.000 billion for FY2003, compared to $14.902 billion
appropriated in FY2002 ($14.793 billion in the FY2002 VA-HUD-IA Appropriations
Act, and $108.5 million in the FY2002 DOD and Supplemental Appropriations Act),
an increase of 0.66%. According to OMB, the NASA request for FY2003 is $15.117
billion, because OMB includes $117 million in federal retiree costs in the request
(see explanation below).
NASA’s budget structure is changing, complicating efforts to track funding for
specific programs or enterprises. First, NASA is moving to full cost accounting
where costs for personnel and construction of facilities eventually will be included
in individual program costs, instead of grouped together at a broader level. The
accounting changes began in the FY2002 budget and are continued in FY2003.
Second, NASA shifted some of the funding for “Space Operations” from HSF
to SAT. (Space Operations involve activities related to tracking and communicating
with spacecraft in Earth orbit and beyond, and with aeronautics and aerospace
vehicles within Earth’s atmosphere. It also includes the telecommunications
networks used by the agency for its internal operations.) Thus, some of the apparent
decline in the HSF budget, and the increase in the SAT budget, is attributable to these
transfers rather than a reduction or increase in programs. Also, beginning in FY2002,
NASA shifted funds for space station research out of HSF and into SAT, specifically
the Office of Biological and Physical Research (OBPR). Total space station program
funding now is the sum of the funds in the International Space Station (ISS) line plus
the “ISS research” portion of OBPR.
Third, the President has proposed legislation under which federal departments
and agencies, beginning with the FY2003 budget, would pay the government share
of federal retiree (pensions and health insurance) costs for their employees on an
accrual basis, thereby increasing current year costs. Although the legislation has not
yet passed, NASA’s FY2003 budget is presented with $117 million in federal retiree
costs included. Thus, when discussing NASA’s FY2003 request, some refer to
$15.000 billion, while others use $15.117 billion. The difference is whether the

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retiree costs are included. This report uses the $15.000 billion figure, following the
practice of the Appropriations Committees.
More details on NASA’s FY2003 request are available in CRS Report
RL31347. Information on NASA’s FY2002 budget is contained in CRS Report
RL31037.
Table 13. National Aeronautics and Space Administration
Appropriations, FY1998-FY2002
(budget authority in billions)
FY1998
FY1999
FY2000
FY2001
FY2002
$13.65
$13.67
$13.60
$14.29
$14.90
Source: Figures for FY1998-FY2001 are from administration budget submissions of subsequent
years; figures for FY2002 are from the House Committee on Appropriations, and are the latest
available estimates for that fiscal year. Final spending levels remain uncertain until all program
experience has been recorded, and any supplemental appropriations or rescissions have been included.
International Space Station (ISS). For FY2003, NASA is requesting
$1.839 billion for the ISS program: $1.492 billion in the HSF account; and $347
million in the Office of Biological and Physical Research (OBPR) budget, part of the
SAT account. The HSF funding is for building the space station. The OBPR funding
is for the scientific facilities to enable research to be conducted aboard it (often called
the “space station research” or “space station science” budget). For FY2002, NASA
received $2.093 billion in total for the ISS program. The FY2003 request is $254
million less than the comparable figure for FY2002, reflecting the fact much of the
hardware has been built and the Bush Administration has decided to truncate
construction at a stage it calls “core complete.” The FY2003 request is slightly
higher than the $1.818 billion NASA projected that it would need for FY2003.
The space station is under construction in orbit and the facility has been
permanently occupied by successive crews on 4-6 month shifts since November
2000. Much remains to be built, however, and in early 2001, NASA revealed
significant cost growth for completing the station. The new estimate would exceed
a congressionally imposed cap of $25 billion. In response, the Bush Administration
directed NASA to stop construction at core complete in FY2004. At that point, the
U.S. hardware now awaiting launch will be in orbit, plus laboratory modules being
built by Japan and Europe at their own expense.
NASA cancelled its plans to build a Propulsion Module, and indefinitely
deferred two other ISS segments: the Habitation Module, and the Crew Return
Vehicle (CRV). Without the CRV, ISS crew size may be limited to three astronauts,
which could severely restrict the amount of scientific research conducted there.
NASA hopes to have a new, independently verified cost estimate for completing the
“core complete” configuration by August 2002. Subsequently, the Bush
Administration will make recommendations on what, if any, “enhancements” to
make, such as adding back capabilities for a larger crew. The partners point out that

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the term “core complete” does not appear in the international agreements that govern
the station.
Europe, Japan, Canada, and Russia are all partners with the United States in
building the space station, and all have expressed deep concern with the revised U.S.
plan. The Intergovernmental Agreement (IGA) is a treaty involving all the countries
who are partners in the ISS program except the United States (where it is an
Executive Agreement). The international partners want the Bush Administration to
commit to building the space station as agreed in the IGA and associated Memoranda
of Understanding (MOUs), but the Administration is not willing to make that
commitment. See CRS Issue Brief IB93017 for more on the space station program.
Table 14. Appropriations: National Aeronautics and Space
Administration, FY2002-FY2003
(budget authority in billions)
FY2002
FY2003
FY2003
FY2003
FY2003
Program
enacted
request
House
Senate
Conf.
Human space flight
6.912
6.131
--
--
--
Emergency supplemental
.076
.000
--
--
--
Science, aeronaut., tech.
7.857
8.845
--
--
--
Emergency supplemental
.033
.000
--
--
--
Inspector General
.024
.025
--
--
--
Subtotal (NASA)
14.902
15.000
--
--
--
Source: House Committee on Appropriations.
Note: Rounding may cause discrepancies in subtotals.
Space Shuttle. For FY2003, NASA is requesting $3.208 billion for the
shuttle program, slightly less than the $3.273 billion it received in FY2002. NASA
insists that shuttle safety is a top NASA priority, but the aging of the shuttle systems,
and concern about the skill mix of the shuttle workforce as the shuttle program
transitions to a “single prime contractor,” makes safety an ongoing issue. In
testimony to the House Science Committee on April 18, 2002, Richard Blomberg,
who recently completed his term as chairman of an independent panel that oversees
human space flight safety at NASA, said that in all his years of involvement, “I have
never been as concerned for Space Shuttle safety as I am right now.”
Decisions on how much to spend on safety and supportability upgrades for the
shuttle are partially dependent on the length of time the shuttle is required to be in
service. NASA is developing technologies for a vehicle to replace the shuttle (see
Aero-Space Technology below). NASA’s current plans are to operate the shuttle
until 2012, but the agency is assessing what further upgrades would be required if the
shuttle is needed through 2020 should the new program not proceed as planned.

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In its FY2003 budget, NASA is proposing a 43% reduction for the period
FY2002-2006 in funding for shuttle upgrades. In response to questions at a House
Science Committee hearing on February 27, 2002, NASA Administrator O’Keefe
assured the committee that the funding level proposed in the FY2003 budget will not
compromise shuttle safety. For more on the shuttle program, see CRS Issue Brief
IB93062.
Space Science. For FY2003, NASA is requesting $3.414 billion for Space
Science, compared with $2.867 billion in FY2002. Of the $547.2 million increase,
$165.5 million is a transfer from the Human Exploration and Development of Space
(HEDS) account for the Deep Space Network (DSN), and another $73.9 million is
to cover a shortfall in the DSN line item. Thus, $239.4 million of OSS’s FY2003
budget request is due to the transfer of DSN, not new program initiatives. Funding
for OSS programs would increase overall by $308 million, reflecting funding
increases in some areas, but decreases in others. The budget proposes $124 million
for a new Nuclear Systems Initiative to develop nuclear power units for spacecraft
and perform research on nuclear propulsion, $704 million for advanced technology
development (an increase of $264 million over FY2002), and $15 million to create
a “New Frontiers” program.
However, the budget request also proposes eliminating two planned planetary
exploration missions: one to Europa, a moon of Jupiter; and the other to Pluto and
the Kuiper Belt beyond (thought to be the source of comets). During NASA
briefings on its budget in February 2002, NASA officials explained that the missions
were canceled because they are too costly. Congress capped funding for the Europa
mission at $1 billion in the FY2002 VA-HUD-IA Appropriations Act. The
Pluto/Kuiper Belt (PKB) mission is estimated to cost $488 million (not including
inflation). NASA proposed eliminating the Pluto mission in FY2002, but Congress
added $30 million for FY2002 to continue preparatory work. No funding was
included for future years, however, and none is requested by the Administration.
Advocates of the Pluto mission are anxious to launch the spacecraft by 2006 to
ensure that it reaches Pluto before that planet’s atmosphere collapses as Pluto moves
further from the Sun. The 2006 launch date is required because the probe, using
today’s propulsion technology, needs a “gravity assist” from Jupiter in order to reach
Pluto in 2016. NASA Administrator O’Keefe argues that funding should be spent
instead on research into nuclear propulsion to enable planetary spacecraft to reach
their destinations more quickly, without gravity assists from other planets (permitting
greater flexibility in when such mission can be launched), and to remain at their
destination for longer periods of time.
The FY2003 budget would replace the Europa and PKB missions with the “New
Frontiers” program in which planetary mission proposals would compete for funding.
NASA estimates that a new planetary exploration mission would be initiated every
3 years, with each mission’s funding capped at $650 million. The National Academy
of Sciences is expected to release a study of planetary exploration priorities in 2002
that NASA could use to help choose among candidate missions.
Biological and Physical Research. For FY2003, NASA is requesting
$842.4 million for the Office of Biological and Physical Research (OBPR), compared

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with $820 million in FY2002. As noted, funding responsibility for scientific research
aboard the International Space Station (ISS) shifted from HEDS to this office in
FY2002. OBPR’s FY2003 request includes $347 million for ISS research. It also
funds two new initiatives: the Space Radiation Initiative ($10.1 million) to better
understand radiation effects on astronauts in space; and the Generations Initiative
($11.2 million), to learn how organisms evolve in space.
In FY2002, NASA cut space station research funding by $1 billion over the
FY2002-2006 time period to compensate partially for the cost growth in the ISS
program (discussed earlier). Also the expected reduction in crew size from seven to
three will affect how much research can be conducted. Consequently, OBPR has
named a special task force to reprioritize the space station research strategy. A report
is anticipated in mid-2002. Because of the relatively limited resources, NASA may
have to make difficult choices about which research areas to emphasize.
Earth Science. For FY2003 NASA is requesting $1.629 billion for the Office
of Earth Science (OES), virtually identical to its FY2002 funding level of $1.626
billion. For FY2003, $42.4 million was transferred from the HSF account to OES
for the Ground Network, and another $37.6 million is needed to cover a shortfall
because of that transfer, a total of $80.6 million of OES’s FY2003 budget request is
proposed for the transfer of the Ground Network.
Some may view the FY2003 funding level as a decrease compared to FY2002
in terms of program content. OES is continuing to launch its first series of Earth
Observing System (EOS) satellites and Earth Probes. OES developed a plan for the
“EOS Follow-On” program through 2010 that was endorsed by the Space Studies
Board of the National Academy of Sciences. However, in 2001, the Bush
Administration announced a new Climate Change Research Initiative (CCRI). The
Department of Commerce is responsible for scoping the CCRI and determining how
it will interact with the existing U.S. Global Change Research Program. Those
decisions ultimately will lead to choices about what satellites NASA should launch
to support CCRI’s goals.
Thus, plans for the EOS program are uncertain. NASA is moving forward,
however, with development of the Ocean Topography Mission, the NPOESS
Preparatory Project (NPP), and the Landsat Data Continuity Mission (LDCM).
LDCM is intended to continue producing data similar to that from the Landsat series
of satellites that have been launched since 1972 (two are still operating). The Bush
Administration directed NASA to purchase Landsat-type data from the private sector
rather than build its own satellite. Two companies were selected by NASA in March
2002 to develop proposals to accomplish that goal.
Aero-Space Technology. For FY2003, NASA is requesting $2.816 billion
for Aero-Space Technology, compared with $2.508 billion in FY2002. The Office
of Aero-Space Technology (OAST) supports NASA’s aeronautical research and
development (R&D) program, the advanced space transportation technology
program, information technology, and technology transfer.
The total requested funding for aeronautics R&D is $541.4 million, a decrease
of 10% from the FY2002 appropriation. In February 2002, NASA presented its

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technology vision for aviation in the report The NASA Aeronautics Blueprint
[www.aerospace.nasa.gov/aero_blueprint/]. The report identifies a variety of
challenges that could be addressed by advances in aeronautics technology, but it does
not address funding for R&D. Although FY2002 saw a 5% increase compared with
FY2001, funding for aeronautics R&D is still down considerably from its FY1998
peak of $920 million, and the proposed further reduction may be contentious.
Among the more controversial issues are funding for the rotorcraft program and
the Small Aircraft Transportation System (SATS). The FY2003 budget request
provides no funding for the rotorcraft program, which was funded at congressional
direction in FY2002 ($12.5 million). SATS would increase by 29% to $20 million.
A review of SATS by the National Academy of Sciences was completed in March
2002, after release of the President’s budget. The report endorsed NASA R&D on
small aircraft and small airports, but it was skeptical about NASA’s long-range
vision for the SATS concept in particular.
A primary focus of NASA’s advanced space transportation effort is the Space
Launch Initiative (SLI) to develop technologies for a new Reusable Launch Vehicle
(RLV) to replace the space shuttle. SLI replaces the unsuccessful X-33 program.
The FY2003 request for SLI is $759 million, compared with $467 million in
FY2002. Total funding for the program (FY2001-2006) is expected to be $4.8
billion.
SLI is intended to reduce the technical risk involved in building a 2nd generation
RLV (the shuttle is the 1st generation RLV), and provide the necessary technical and
cost information to enable a decision in 2006 as to what RLV to build. The SLI
program itself does not involve development of the launch vehicle, only of the
technologies that will permit a design choice to be made. NASA is focusing on
technologies that would meet NASA requirements, but also is trying to “converge”
its requirements with those of the commercial space launch services market and the
Department of Defense to determine if a single vehicle could meet all requirements.
Although the original intent was for the private sector to fund development of,
own, and operate the new RLV, NASA concedes that current market conditions make
it unlikely that the private sector will fund development. NASA still hopes the new
vehicle will be owned and operated by the private sector. Informal cost estimates for
development are in the $10 billion range (in addition to the $5 billion being spent on
SLI), though actual cost estimates will not be available until the SLI program is
completed. NASA intends that the new vehicle will be operational by 2012, meaning
that a substantial commitment of government funding would be required for the
FY2007-FY2012 time period. Some observers are skeptical that a new vehicle can
be developed in such a short time period, an important consideration in terms of
deciding how long the shuttle will be needed and therefore how much to spend on
shuttle upgrades (discussed earlier).
For more on the SLI program, see CRS Issue Brief IB93062, Space Launch
Vehicles: Government Activities, Commercial Competition, and Satellite Exports, by
Marcia Smith.

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National Science Foundation
The FY2003 request for the National Science Foundation (NSF) is $5.029
billion, a 5% increase ($240 million) over the FY2002 estimate of $4.789 billion.
The FY2003 request provides support for several interdependent priority areas:
biocomplexity in the environment ($79 million, 36% above FY2002), information
technology research ($286 million, 3% above FY2002), learning for the 21st century
($185 million, 27.5% above FY2002), nanoscale science and engineering ($221
million, 11% above FY2002), mathematical sciences ($60 million, 100% increase
above FY2002), and social, behavioral and economic sciences ($10 million, new in
the FY2003 request).
The request provides a second installment of $200 million for the President’s
Math and Science Partnerships program (MSP). Additional FY2003 highlights
include increased funding for graduate students ($26 million), continued support of
plant genome research ($75 million), increased investment in NSF’s administration
and management portfolio ($268 million), and funding for the Partnerships for
Innovation program ($5 million). As part of the Administration’s new multi-agency
Climate Change Research Initiative, the NSF will provide $15 million for research
to advance understanding in the highly focused areas of climate science and to
facilitate policy-decision making in climate research.
In FY2003, the Administration proposes the transfer of three programs from
other agencies to the NSF. The proposed transfers include the National Sea Grant
program, currently at the National Oceanic and Atmospheric Administration ($57
million), Environmental Education, currently at the Environmental Protection
Agency ($9 million), and Hydrology of Toxic Substances, currently at the United
States Geological Survey ($10 million).
Research and Related Activities. Included in the FY2003 request is
$3.783 billion for Research and Related Activities (R&RA), a 5% increase ($185
million) over the FY2002 estimate of $3.599 billion. R&RA funds research projects,
research facilities, and education and training activities. In the FY2003 request, the
NSF has placed an emphasis on funding rates for new investigators and on increasing
grant size and duration. The R&RA includes Integrative Activities (IA), created in
FY1999. IA funds major research instrumentation, Science and Technology Centers,
Science of Learning Centers, Partnerships for Innovation, disaster response research
teams, and the Science and Technology Policy Institute. The FY2003 request for IA
is $111 million, an increase of $4 million over FY2002.
Research project support in the FY2003 request totals $2.560 billion, an
increase of 5% over FY2002. Support is provided to individuals and small groups
conducting disciplinary and cross-disciplinary research. Included in the total for
research projects is support for centers, proposed at $380 million. NSF supports a
variety of individual centers and center programs. The request provides $45 million
for Science and Technology Centers, $53 million for Materials Centers, $62 million
for Engineering Research Centers, and $13 million for Physics Frontiers Centers.
Research facility support in FY2003 is $1.122 billion, a 2% decrease from the
FY2002 estimate.

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Table 15. National Science Foundation Appropriations,
FY1998 to FY2002
(budget authority in billions)
FY1998
FY1999
FY2000
FY2001
FY2002
$3.67
$3.90
$4.43
$4.79
$4.79
Source: Figures for FY1998-FY2001 are from administration budget submissions of subsequent
years; figures for FY2002 are from the House Committee on Appropriations, and are the latest
available estimates for that fiscal year. Final spending levels remain uncertain until all program
experience has been recorded, and any supplemental appropriations or rescissions have been included.
Major Research Equipment; Facilities Construction. The Major
Research Equipment and Facilities Construction (MREFC) account is funded at
$126.3 million in FY2003, a 9% decrease ($12.5 million) from the FY2002 level.
The MREFC, established in FY1995, supports the acquisition and construction of
major research facilities and equipment that extend the boundaries of science,
engineering, and technology. Seven projects are supported in this account for
FY2003, five ongoing projects and two new projects – construction of the Atacama
Large Millimeter Array ($30 million), the Large Hadron Collider ($9.7 million), the
Network for Earthquake Engineering Simulation ($13.6 million), the South Pole
Modernization Project ($6 million), Terascale Computing Systems ($20 million),
Earthscope ($35 million), and the National Ecological Observatory Network, Phase
I ($12 million). No funds are requested in FY2003 for the High-Performance
Instrumented Airborne Platform for Environmental Research (HIAPER) or the
IceCube R&D project because they have been determined to be of lower priority.
Education and Human Resources. The FY2003 request for the Education
and Human Resources Directorate (EHR) is $908.1 million, a 3.8% increase ($33.1
million) over FY2002. Support at the various educational levels in the FY2003
request is as follows: precollege, $359.6 million; undergraduate, $157.4 million; and
graduate, $136.9 million. Support at the precollege level includes $200 million for
the Math and Science Partnership (MSP), a cornerstone of the President’s education
reform agenda. The MSP will provide funding for states and local school districts
to join with colleges and universities to strengthen K-12 science and mathematics
education.
Funding increases to $27 million for Centers for Learning and Teaching (CLT).
The focus of the CLTs will be on developing the next generation of professionals to
manage and direct the development of instructional materials, large scale
assessments, and education research and evaluation.
Support will continue for Systemic Reform Initiatives and Instructional
Materials Development. Selected programs at the undergraduate level are Advanced
Technological Education, Louis Stokes Alliances for Minority Participation,
Scholarship for Service, Historically Black Colleges and Universities-Undergraduate
Program, and Tribal Colleges and Universities Program.

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CRS-50
Table 16. Appropriations: National Science Foundation,
FY2002-FY2003
(budget authority in billions)
FY2002 FY2003
FY2003
FY2003
FY2003
Program
enacted request
House
Senate
Conf.
Research, related activities
3.598
3.783
--
--
--
Major research equipment
.139
.126
--
--
--
Education, human resources
.875
.908
--
--
--
Salaries and expenses
.170
.203
--
--
--
Office of Inspector General
.007
.008
--
--
--
Subtotal (NSF)
4.789
5.029
--
--
--
Source: House Committee on Appropriations.
Note: Rounding may cause discrepancies in subtotals.
An increase of 21.7% in FY2003 for graduate level programs will allow NSF
to raise the stipend of graduate fellows and to increase the number of offers to new
fellowships. Support at this level is directed at the Graduate Research Fellowship,
Graduate Teaching Fellows in K-12 Education, Integrative Graduate Education and
Research Traineeships, and Alliances for Graduate Education and the Professoriate.
Funding for the Experimental Program to Stimulate Competitive Research (EPSCoR)
is $75 million. (An additional $30 million from R&RA will support EPSCoR
activities.)
It is anticipated that the H-1B nonimmigrant petitioner fees collected in FY2003
will approximate $92.5 million, $2.5 million above the FY2002 estimate. (P.L. 106-
313, The American Competitiveness in the 21st Century Act, stipulates that H-1B
receipts be used for computer science, engineering, and mathematics scholarships for
disadvantaged students and precollege private and public sector partnerships).
For additional information on NSF, see: CRS Report 95-307, U.S. National
Science Foundation: An Overview.
Other Independent Agencies
In addition to funding for VA, HUD, EPA, FEMA, NASA and NSF, several
other smaller “sundry independent agencies, boards, commissions, corporations, and
offices” will receive their funding through the bill providing appropriations for VA,
HUD, and Independent Agencies for the fiscal year beginning October 1, 2002.
Agency for Toxic Substances and Disease Registry. This agency,
which is placed in the Department of Health and Human Services (HHS), manages
the Toxic Substances and Environmental Public Health program, which issues
toxicological profiles of possible toxic substances. The Agency conducts health

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CRS-51
studies, evaluations, or other activities, using biomedical testing, clinical evaluations,
and medical monitoring. The agency was funded (via earmark) through EPA’s
Hazardous Substance Superfund through FY2000. P.L. 106-377 provided a separate
line of $75 million for the agency for FY2001, although the Agency continued to be
financed through the structure of the Superfund. The Administration proposed, and
P.L. 107-73 provided $78 million for FY2002, continuing the separate funding line
for its appropriations. The conference report requested that adequate funds be used
for minority health professions, and for studies of the health effects of consuming
Great Lakes fish.
For FY2003, the Administration’s request rounds to a similar level, although it
is actually $636,000 less than provided for FY2002.
American Battle Monuments Commission. The Commission is
responsible for the construction and maintenance of memorials honoring Armed
Forces battle achievements since 1917. Included among the Commission’s functions
are the maintenance of 24 American military cemeteries and 31 memorializations in
15 foreign countries, as well as three large memorials in the United States.
The Administration requested $30 million for the Commission for FY2003.
P.L. 107-73 added $7 million to the Administration’s FY2002 request of $28 million,
in part, to complete scheduled, but delayed maintenance. Also, $5 million of the
added amount was to provide for development of a visitor’s center at the site of the
D-Day invasion in Normandy.
In recent years, the Commission has received considerable attention as the
agency that collects funds for the construction of a memorial in Washington, D.C. to
honor those who served during World War II. The Commission projects that the
World War II Memorial Fund will reach $175 million during FY2002. Congress has
given the Commission authority to borrow up to $65 million from the U.S. Treasury
to facilitate a more rapid completion of the memorial. P.L. 106-377 appropriated $28
million for the Commission for FY2001.
Cemeterial Expenses, Army. Arlington National Cemetery and the
Soldiers’ and Airmen’s Home National Cemetery are administered by the U.S. Army.
By FY2001, 283,553 persons were interred/inurned in these cemeteries. In addition
to almost 6,300 interments and inurnments each year, Arlington is the site of
approximately 3,000 other ceremonies, and 4 million visitors, annually.
The Administration requested $24 million for these expenses for FY2003. P.L.
107-73 provided $23 million for FY2002, continuing with the expansion of Arlington
National Cemetery into contiguous land sites previously used for military commands,
and to fund another increment of the Columbarium Complex.
Chemical Safety and Hazard Investigation Board. The Board, which
was authorized by the Clean Air Act Amendments of 1990, investigates hazardous
substance spills or releases. Congress appropriated $8 million for FY2002. The
Administration requests $8 million for FY2003.

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CRS-52
Community Development Financial Institutions fund. The Community
Development Financial Institutions (CDFI) fund was created by P.L. 103-325. The
CDFI fund program was a Clinton Administration initiative to provide credit and
investment capital to distressed urban and rural areas. The program also provides
training and technical assistance to qualifying financial institutions. P.L. 104-19
modified the original Act by giving the Department of the Treasury the authority to
manage the CDFI program, although the program continues to be funded through the
VA/HUD bill. The program has survived despite attempts to eliminate it.
The Community Renewal Tax Relief Act of 2000 (P.L. 106-554) created the
New Markets Tax Credit Program, administered by the Fund. Through this program
the Fund allocates tax credits as part of an effort to expand incentives for business
investment in low-income communities.
The Administration requested $68 million for the Fund for FY2003, $12 million
less than the $80 million appropriated for FY2002, which was a decrease of 32%
from the $118 million appropriated in FY2001. Included in the FY2002
appropriation was language providing a set-aside of $5 million for Native American,
Alaskan Natives, and Native Hawaiian communities.
Consumer Product Safety Commission (CPSC). This Commission is
an independent regulatory agency charged with protecting the public from
unreasonable product risk and to research and develop uniform safety standards for
consumer products. The Administration has requested $57 million for FY2003 for
this Commission. P.L. 107-73 provided $55 to the Commission for FY2002.
Corporation for National and Community Service (CNS). The
Corporation administers programs authorized under the National and Community
Service Act of 1990 (NCSA) and the Domestic Volunteer Service Act of 1973
(DVSA). The DVSA programs — e.g., Foster Grandparents Program and Senior
Companion Program — are funded under the Labor/HHS Appropriation bill.
Authorization for CNS, and programs and activities authorized by NCSA, expired
at the end of FY1996. Since then, continued program authority has occurred through
the appropriations process.
In past Congresses, the key issue concerning the Corporation and the NCSA
programs has been budgetary survival. Concerns expressed by some Members have
included the issues of partisan activities, program costs, and federally funding a “paid
volunteer” program. In recent years, concerns were specifically expressed about
whether CNS could be audited and whether the audits were “clean.” On April 4,
2001, CNS announced that it had received an unqualified or “clean” opinion on its
fiscal 2000 financial statements.
In early 2001, President Bush announced his “faith-based initiative,” and
indicated his support of CNS by noting that it “has done some good work in
mobilizing volunteers of all ages.” More recently, in his November 8, 2001 address
to the nation on homeland security, the president pledged to create new opportunities
within AmeriCorps (and the DVSA Senior Corps) for public safety and public health
efforts.

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CRS-53
Table 17. Appropriations: Other Independent Agencies,
FY2002-FY2003
(budget authority in billions)
FY2002 FY2003 FY2003
FY2003
FY2003
Program
enacted request
House
Senate
Conf.
Agency for Toxic Substances and
Disease Registry
.078
.078
--
--
--
American Battle Monuments
Commission
.035
.030
--
--
--
Chem. Safety and Hazard
Investigations Board
.008
.008
--
--
--
Cemetery Expenses, Army
.023
.024
--
--
--
Community Development
Financial Institutions
.080
.068
--
--
--
Consumer Product Safety
Commission
.055
.057
--
--
--
Corporation for National and
Community Servicea
.407
.636
--
--
--
Council, Environ. Quality;
Office, Environ. Quality
.003
.003
--
--
--
Court of Appeals for Veterans
Claims
.013
.015
--
--
--
Fed. Consumer Inform. Center
.007
.013
--
--
--
Federal Deposit Insurance
Corporation (transfer)
(.034)
(.031)
--
--
--
National Credit Union Admin.
.001
.001
--
--
--
National Institute, Environmental
Health Sciences
.070
.074
--
--
--
Emergency Supplemental
.011
.000
--
--
--
Neighborhood Reinvestment
Corporation
.105
.105
--
--
--
Office, Science &Tech.
.005
.005
--
--
--
Selective Service System
.025
.026
--
--
--
Subtotal: 0.926
1.143
--
--
--
Source: House Committee on Appropriations
Note: Rounding may cause discrepancies in subtotals.
a Totals for NCS include $5 million, specified for the Corporation’s Office of Inspector General, for
each fiscal year.

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CRS-54
The Administration requested a total of $637 million for FY2003, including $5
million for the Office of Inspector General (OIG). P.L. 107-73 provided total
funding of $407.5 million for FY2002, including $5 million for the OIG.
For further information on the Corporation and its programs see: CRS Report
RL30186, Community Service: A Description of AmeriCorps, Foster Grandparents,
and Other Federally Funded Programs.
Council on Environmental Quality; Office of Environmental Quality.
These two entities are within the Executive Office of the President. The Council
oversees and coordinates interagency decisions in matters affecting the environment;
the Office provides the professional and administrative staff for the Council.
Congress appropriated $3 million for these activities for FY2002. The
Administration requested $3 million for FY2003.
U.S. Court of Appeals for Veterans Claims. The U.S. Court Appeals for
Veterans Claims has exclusive jurisdiction to review decisions of the Board of
Veterans’ Appeals, and has the authority to decide relevant conflicts in the
interpretation of law by VA and the Board of Veterans’ Appeals. The Court’s
decisions constitute precedent to guide subsequent decisions by that Board. Congress
provided $13 million for FY2002; the Administration requested $15 million for
FY2003.
Federal Consumer Information Center (FCIC). The Center, administered
through the General Services Administration (GSA), helps federal agencies distribute
consumer information and promotes public awareness of existing federal publications
through publication of the quarterly Consumer Information Catalogue, and the
Consumer’s Action Handbook.
Congress provided $7 million for FY2002, and the Administration requested
$13 million for FY2003. The increased funding would facilitate the development of
a new Office of Civilian Services, which would act as a “portal” through which
citizens could access an array of federal information and services, of which the FCIC
would be an important part.
Federal Deposit Insurance Corporation. The FDIC’s Office of the
Inspector General is funded from deposit insurance funds, and has no direct support
from federal taxpayers. Before FY1998, the amount was approved by the FDIC
Board of Directors; the amount is now directly appropriated to ensure the
independence of the IG office. P.L. 107-73 included the Administration’s estimate
of $34 million for FY2002; the Administration estimates $32 million for FY2003.
National Credit Union Administration. The purpose of this administrative
office, created under the National Credit Union Central Liquidity Facility Act (P.L.
95-630), is to improve the general financial stability of credit unions. Subscribing
credit unions may borrow from the agency to meet short-term requirements.
Congress approves a limitation on administrative expenses, which are financed from
the revolving fund ($257,000 for FY2000; $296,000 for FY2001). Congress also
approved a revolving loan program for credit union risk pooling for FY2000, with
a subsidy of $1 million; P.L. 106-377 repeated that amount for FY2001, P.L. 107.73

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CRS-55
approved that amount for FY2002, and the Administration requested the same level
for FY2003.
National Institute of Environmental Health Sciences. This Institute is
within the National Institutes of Health, administered by the Department of Health
and Human Services (HHS). P.L. 107-73 included $70.2 million for FY2002;
subsequent to the events of September 11, Congress added $10.5 million in
supplemental emergency funds, for “worker training, education, and research”
activities. The Administration requested $74 million for FY2003.
Neighborhood Reinvestment Corporation (NRC). The NRC leverages
funds for reinvestment in older neighborhoods through community-based
organizations called Neighbor Works. Among projects supported by the financing
activities of the NRC are lending activities for home ownership of low-income
families. Nationwide, there are 184 of these organizations, serving 825 communities
in 45 states, with 70% of the people served living in very low and low-income
brackets.
P.L. 107-73 provided $105 million for FY2002, including an Administration
proposal that the NRC become more involved in combining Section 8 housing
assistance, counseling, conventional mortgages, and NRC revolving funds to help
low-income families to purchase their own homes, and designating $10 million to
support the Section 8 home ownership program. The conference agreement also
endorsed the Corporation’s efforts to expand the available stock of “mixed-income”
affordable rental housing through the use of “mutual housing,” as well as acquisition
and preservation of existing units. The Corporation was directed to provide a
detailed accounting of how many families are being helped through the activities of
the Corporation’s program to expand affordable housing.
The Administration requested $105 million for FY2003, to continue NRC
efforts to stimulate low-income home ownership.
Office of Science and Technology Policy. The Office of Science and
Technology Policy coordinates science and technology policy for the White House.
The Office provides scientific and technological information, analysis and advice to
the President and the executive branch, and reviews and participates in the
formulation of national policies affecting those areas. Congress provided $5 million
for the Office for FY2002, and directed the Office to make a priority its effort to
clarify the International Traffic in Arms Regulation. The Administration requested
$5 million for FY2003.
Selective Service System (SSS). The Administration requested $26
million for this function for FY2003. Congress appropriated $25 million for
FY2002. The SSS was created to supply manpower to the U.S. Armed Forces during
time of national emergency. Although since 1973, the Armed Forces have been on
voluntary recruitment and incentives, the SSS remains the primary vehicle for
conscription should it become necessary. In 1987, the SSS was given the task of
developing a post-mobilization health care system that would assist with providing
the Armed Forces with health care personnel in time of emergency.

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CRS-56
Selected World Wide Web Sites
Federal Consumer Information Center (FCIC) [http://www.pueblo.gsa.gov] and
[http://www.info.gov/]
Environmental Protection Agency (EPA), Summary and Justification of Budget.
[http://www.epa.gov/ocfopage]
Corporation for National and Community Service
[http://www.cns.gov/]
Department of Housing and Urban Development (HUD).
[http://www.hud.gov]
Federal Emergency Management Agency (FEMA)
[http://www.fema.gov]
National Aeronautics and Space Administration (NASA).
[http://www.hq.nasa.gov]
National Science Foundation (NSF).
[http://www.nsf.gov]
Office of Management and Budget (OMB).
[http://www.whitehouse.gov/omb/]
Department of Veterans Affairs (VA).
[http://www.va.gov]
Additional Reading
CRS Report RL30803, Veterans Issues in the 107th Congress, by Dennis Snook.
CRS Report RL30916, Housing Issues in the 107th Congress, by Richard Bourdon.

CRS Report RL30486, Housing the Poor: Federal Programs for Low-Income
Families, Morton J. Schussheim.
CRS Report RL30589, HOPE VI: The Revitalization of Severely Distressed Public
Housing, by Susan M. Vanhorenbeck.
CRS Report RS20704, Housing Opportunities for Persons with AIDS(HOPWA) by
M. Ann Wolfe.
CRS Report RL30442, Homelessness: Recent Statistics and Targeted Federal
Programs, by M. Ann Wolfe.
CRS Report RS20670, Temporary Suspension of New Mortgages under the FHA
General and Special Risk Insurance Funds, Bruce E Foote.

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CRS-57
CRS Issue Brief IB10078, Superfund and the Brownfields Issue in the 107th
Congress, Mark Reisch.
CRS Report 98-323, Wastewater Treatment: Overview and Background, by Claudia
Copeland.
CRS Issue Brief IB10086, The Environmental Protection Agency’s FY2002 Budget,
by Martin R. Lee.
CRS Report RL30460, The Federal Emergency Management Agency: Overview of
Funding for Disaster Relief and Other Activities, by Keith Alan Bea.
CRS Report RS20736, Disaster Mitigation Act of 2000 (P.L. 106-390): Summary of
New and Amended Provisions of the Stafford Disaster Relief Act, by Keith Alan
Bea.
CRS Report 95-307, U.S. National Science Foundation: An Overview, by Christine
M. Matthews R. Lee.
CRS Report RL30186, Community Service: A Description of AmeriCorps, Foster
Grandparents, and Other Federally Funded Programs, by Ann M. Lordeman.
CRS Report RL31037, The National Aeronautics and Space Administration’s
FY2002 Budget Request: Description and Analysis, by Richard E. Rowberg,
and Marcia S. Smith.

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