Order Code RL32823
CRS Report for Congress
Received through the CRS Web
An Overview of the Administration’s
Strengthening America’s Communities Initiative
Updated May 5, 2005
Eugene Boyd (Coordinator), Bruce Mulock, and Pauline Smale
Government and Finance Division
Tadlock Cowan
Resources, Science, and Industry Division
Garrine Laney, Bruce Foote
Domestic Social Policy Division
Congressional Research Service { The Library of Congress

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An Overview of the Administration’s Strengthening
America’s Communities Initiative
Summary
On February 7, 2005, the Bush Administration released its budget
recommendations for FY2006. Included in the budget was a proposal that would
consolidate the activities of at least 18 existing community and economic
development programs into a two-part grant proposal called the “Strengthening
America’s Communities Initiative.” As outlined by the Administration, the proposal
would realign several, but not all, federal economic and community development
programs. Responsibility for the programs now being carried out by five federal
agencies would be transferred to the Commerce Department, which presently
administers the programs of the Economic Development Administration. The
Department of Commerce would administer the core program and a bonus program,
which would award additional funds to communities that demonstrated efforts to
improve economic conditions. The Administration has offered a general outline of
the new programs, but it has not yet submitted a detailed proposal for congressional
consideration. It has stated that the new program will emphasize flexibility, will be
results oriented, and will be targeted to communities based on need.
Many of the 18 programs recommended for elimination and whose activities
would be consolidated under the Administration’s proposal have been judged by the
Administration to be ineffective, unable to demonstrate results, or duplicative of the
efforts of other federal programs, according to an Office of Management and Budget
(OMB) evaluation that applied OMB’s Program Assessment Rating Tool (PART).
The Administration proposal would reduce aggregate funding from $5.6 billion in
FY2005 for the programs proposed for consolidation to $3.7 billion in FY2006. The
programs cited for consolidation are administered by five agencies — the Department
of Housing and Urban Development, the Economic Development Administration in
the Department of Commerce, the Department of the Treasury, the Department of
Health and Human Services, and the Department of Agriculture. Several
congressional committees may claim some level of jurisdiction over the programs
proposed for consolidation. The agency that would be most affected by the proposal
is the Department of Housing and Urban Development (HUD). Programs
administered by HUD account for nearly 81% of the $5.6 billion in FY2005 funding.
The agency’s Community Development Block Grant (CDBG) formula grants
represent 74% of the total. As a general observation, the majority of program funds
proposed for consolidation are allocated to local governments, particularly
metropolitan-based communities, principally through two block grants — CDBG and
Community Services Block Grant (CSBG). These two formula-based block grants
account for 85% of the total funding proposed for consolidation. Other programs
whose activities would be consolidated provide assistance to nonprofit organizations,
particularly community development corporations.
On April 28, 2005, the House and Senate approved H.Con.Res. 95, the
concurrent budget resolution for FY2006. It assumes that the 18 programs targeted
by the Administration for consolidation will be funded in FY2006 at the FY2005
funding levels. This report will be updated as the Administration offers new details
and as Congress reviews the proposal.

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Contents
The Administration’s Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Program Assessment Rating Tool (PART) . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Congressional Jurisdiction and Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Budget Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Current Distribution of Funds Proposed for Consolidation . . . . . . . . . . . . . . 7
CDBG Formula Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Policy Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Profile of Programs Proposed for Consolidation . . . . . . . . . . . . . . . . . . . . . 11
List of Figures
Figure 1. Percent Distribution of FY2005 Appropriations for
Community and Economic Development Programs Proposed
for Consolidation, by Administering Federal Agency . . . . . . . . . . . . . . . . . . 8
List of Tables
Table 1. PART Score for Selected Programs Included in the Economic
Development Consolidation Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Table 2. Congressional Committees Which Have Exercised Jurisdiction
Over Programs Included in the Consolidation Proposal . . . . . . . . . . . . . . . . 5
Table 3. Distribution of Funds Proposed for Consolidation . . . . . . . . . . . . . . . . 10
Table 4. Profile of Community and Economic Development Programs
Proposed for Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

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An Overview of the Administration’s
Strengthening America’s
Communities Initiative
The Administration’s Proposal
The Bush Administration’s FY2006 budget request includes a proposal that
would consolidate at least 18 existing community and economic development
programs1 into a two-part “Strengthening America’s Communities Grant.” The
proposed base program would award funds in support of job creation and economic
development. According to Administration documents, the core program would use
job loss, unemployment, and poverty as criteria when determining eligibility.2 A
bonus program (Economic Development Challenge Fund) modeled after the
Millennium Challenge Account3 would allocate additional grant funds to low income
communities that have demonstrated efforts to improve economic conditions. As of
this writing, the Administration has not proposed new legislative authority for this
initiative, nor has it released such details as the following:
! eligible recipients;
! method of distributing funds;
! requirements for matching funds or leveraging;
! criteria for awarding bonus funds;
1 The Administration’s budget documents identify 18 programs to be included in the
consolidation proposal. They include several programs under a single program or agency
heading instead of identifying specific programs. Distinguishing these smaller set-asides
from the core programs would yield 23 rather than 18 programs proposed for consolidation.
For instance, the Administration does not identify separately the four programs administered
by the Economic Development Administration that are proposed for consolidation, but
groups all of these programs under the agency. The Administration only includes funding
for the Neighborhood Initiative Grants and Economic Development Initiative Grants, both
congressional earmarks, when calculating the amount of CDBG set- aside funds that would
be consolidated under its proposal. It does not include FY2005 funding for all remaining
CDBG set-asides or earmarks. These include Housing Assistance Council ($3.3 million),
National American Indian Housing Council ($2.4 million), National Housing Development
Council ($4.8 million), National Council of LaRaza ($4.8 million), Technical Assistance
($1.4 million), and Working Capital Fund ($3.5 million).
2 White House Office of Management and Budget, “President Bush Proposes Strengthening
America’s Communities Initiative,” available online at [http://www.commerce.gov/SACI/
Talking%20Points_Strengthening%20Communities%20FINAL%202-03-05.pdf ], visited
Feb. 22, 2005.
3 For information about the Millennium Challenge Account, see [http://www.mca.gov/
compacts/guidance/Compact_Proposal_Guidelines_en.pdf], visited Feb. 22, 2005.

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CRS-2
! performance measures for evaluating program effectiveness; and
! process for transition from existing programs to the new program.
In proposing the consolidation of various community development, community
service, and economic development programs, the Administration contends the
programs whose activities would be consolidated:
! have been judged to be ineffective, to be unable to demonstrate
results, or to duplicate the efforts of other programs;
! have unclear long-term objectives and are not focused on long-term
community outcomes; and
! include “many communities” that no longer need the assistance,
undermining the purpose of some programs — to help distressed
communities.
Using the Community Development Block Grant (CDBG) program to illustrate
the point, the Administration contends that 38% of the program’s funds currently are
allocated to communities and states with poverty rates below the national average.
This contention has drawn criticism from observers of the CDBG program. They
argue that using the national poverty rates as a basis for comparison masks the
community development needs of jurisdictions that have significant pockets of
poverty and urban blight even though their poverty rates may be less than the national
average.4 When challenging the Administration’s assertion concerning the lack of
need among such communities, supporters of the program could note that when
Congress designed the CDBG program and its grant allocation criteria and formula,
the intent was to award funds to states and communities based on such objective
measures as the state or community’s relative share of poverty, housing
overcrowding, aged housing stock, and population growth rates. Thus, states and
communities with relatively greater community development needs, as measured by
the formula factors, arguably receive a greater percentage of funds per capita than
communities with lesser community development needs. Moreover, CDBG
supporters also note that Congress requires each state and entitlement community to
allocate at least 70% of its funds to activities benefitting low- and moderate-income
persons.5
A recently completed study conducted by HUD on the effects of the 2000
Census on the allocation of CDBG funds noted that although funding anomalies
exist, in general, the formula still provides more dollars per capita to needier
communities than to less needy communities.6 The study noted that some
4 U.S. Congress, House Committee on Government Reform, Subcommittee on Federalism
and the Census, “Strengthening America’s Communities — Is It the Right Step Toward
Grater Efficiency and Improved Accountability?”, statement of James C. Hunt on behalf
of the National League of Cities, hearing, 109th Cong., 1st sess., Mar. 1, 2005.
5 42 U.S.C. 5303(b)(3)(A)
6 U.S. Department of Housing and Urban Development, Office of Policy Development and
(continued...)

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CRS-3
communities with similar need received different allocations, but, it also noted that
for the 10% of communities with the greatest need, the per capita CDBG allocation
was four times greater than for the 10% of communities with the least need. In
addition, the HUD study proposed several optional formulas intend to fine tune the
program’s targeting of funds.7
Program Assessment Rating Tool (PART)
In 2004, the Administration began using its Program Assessment Rating Tool
(PART) to evaluate the effectiveness of federal programs.8 According to the
Administration, it subjected 607 programs to the PART review process and found
that 33% of those programs received a score of “ineffective” or “results not
demonstrated.” The Administration’s PART process is not without its critics. While
some observers view the PART as an extension of the Government Performance and
Results Act (GPRA) designed to ensure that activities of federal agencies have
measurable outcomes, critics of the PART view it as political tool that shifts power
from Congress to the President. Some critics of the PART also ask whether
programs are reviewed in a consistent and value-neutral way. OMB Watch, for
instance, contends that the FY2006 PART outcomes are biased “against programs
that operate through grants, whether competitive grants or block grants.”9 “Of the
programs rated “ineffective and zeroed out completely,” adds OMB Watch, “89% are
competitive or block grants.”10
According to the Administration, of the 607 programs subject to its PART
review, the eight programs listed in Table 1, below, were among those proposed for
consolidation in the Administration’s “Strengthening America’s Communities
Initiative.”11 Three of the eight programs were rated “moderately effective” or
“adequate” while the remaining five were judged as “ineffective” or “results not
demonstrated.” Critics note that 10 of the programs included in the Administration’s
proposal have not been subject to PART review. Conversely, the Administration
may claim that the programs that have been reviewed comprise more than 90% of the
total FY2005 funding level for the programs included in the Administration’s
proposal.
6 (...continued)
Research, CDBG Targeting to Community Development Need, Feb. 2005, p. x.
7 Ibid., p. 61.
8 For a review and analysis of the Administration’s PART, see CRS Report RL32663, The
Bush Administration’s Program Assessment Rating Tool (PART), by Clinton Brass.
9 OMB Watch, “Budget Includes Anti-Regulatory Proposal,” available online at
[http://www.ombwatch.org/article/articleview/2657/1/308?TopicID=1], visited Feb. 24,
2005.
10 Ibid.
11 Office of Management and Budget, Major Savings and Reforms in the President’s
FY2006 Budget, Feb. 11, 2005, p. 6, available at [http://www.whitehouse.gov/omb/
budget/fy2006/pdf/savings.pdf], visited Mar. 15, 2005.

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CRS-4
Table 1. PART Score for Selected Programs Included
in the Economic Development Consolidation Proposal
Program
FY2006 PART Score
Community Development Block Grant (formula grants)
ineffective
Rural Housing and Economic Development
ineffective
National Community Development Initiative
moderately effective
Economic Development Administration
moderately effective
Community Development Financial Institutions Fund
adequate
Rural Business Enterprise Grants
results not demonstrated
Bank Enterprise Award
results not demonstrated
Community Services Block Grants (CSBG)
results not demonstrated
Source: Office of Management and Budget, Program Assessment Rating Tool, available at
[http://www.whitehouse.gov/ omb/budget/fy2006/part.html], visited March 15, 2005.
Congressional Jurisdiction and Action
The programs whose activities would be consolidated under the new block grant
proposal are administered by five agencies: the Department of Housing and Urban
Development, the Economic Development Administration in the Department of
Commerce, the Department of the Treasury, the Department of Health and Human
Services, and the Department of Agriculture. Several congressional committees may
claim some level of jurisdiction over the programs proposed for replacement. In the
House, jurisdiction for the programs included in the proposal has been exercised by
four subcommittees of the House Appropriations Committee and by at least six
standing committees with authorizing or oversight responsibilities. In the Senate, in
addition to the Appropriations Committee, at least four committees have exercised
jurisdiction over some aspect of the Administration’s proposal.
Budget Resolution. The House and the Senate passed their respective
versions of the nonbinding concurrent budget resolution on March 17, 2005. The
House version was approved by a vote of 218 to 214 (Roll Call Vote 88). The report
accompanying H.Con.Res. 95, H.Rept. 109-17, includes language that would provide
an additional $1.1 billion in funding for the Community and Regional Development
budget function (450) to “accommodate higher appropriations for programs such as
the Community Development Block Grant. The resolution makes not assumption
regarding the implementation of the President’s Strengthening America’s
Communities Block Grant or transferring the Community Development Block Grant
program from the Department of Housing and Urban Development to the Department
of Commerce.”12
12 United States Congress. House Committee on the Budget. Concurrent Resolution on the
(continued...)

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CRS-5
The Senate version of the concurrent budget resolution, S.Con.Res. 18, includes
an amendment (SA 230), approved by a vote of 68 to 31 (Record Vote No. 66) that
would restore $2 billion in funding the CDBG and related programs that would be
eliminated under the Administration’s economic development proposal.
On April 28, 2005, the House and Senate approved the conference version of
the budget resolution, H.Con.Res. 95 and its accompanying report (H.Rept. 109-62).
The conference version of the budget resolution assumes an increase of $1.5 billion
above the President’s request for the community and regional development budget
function. According to the manager’s statement in the accompanying conference
report, the increase is “to maintain economic and community development programs
such as CDBG at 2005 levels.” The conference report also notes that budget
resolution assumes an increase of $0.6 billion above the President request to fund the
Community Services Block Grant at its 2005 funding level. It should be noted that
the budget resolution is a nonbinding blueprint for the appropriation committees who
will now consider appropriation levels for specific program, including whether to
fund the President’s new economic development proposal or any of the 18 existing
programs that the proposal would replace.
Table 2. Congressional Committees Which Have Exercised
Jurisdiction Over Programs Included in
the Consolidation Proposal
House
Senate
Appropriations Committee
Appropriations Committee
! Subcommittee. on Agri-
! Subcommittee on Agri-
culture, Rural Development,
culture, Rural Develoment,
Food and Drug Administra-
and Related Agencies
tion, and Related Agencies
! Subcommittee on Com-
! Subcommittee on Labor,
merce, Justice, and Science
Health and Human Services,
! Subcommittee on Labor,
Education, and Related
H e a l t h a n d H u m a n
Agencies
Services, Education, and
! Subcommittee on Science,
Related Agencies
State, Justice, Commerce,
! Subcommittee on Trans-
and Related Agencies
portation, Treasury, the
! Subcommittee on Trans-
Judiciary, and Housing and
portation, Treasury, Housing
Urban Development
and Urban Development, the
Judiciary, and the District of
Columbia
12 (...continued)
Budget — FY2006, report to accompany H.Con.Res. 95. 109th Cong., 1st sess. H. Rept.
109-17 (Washington: GPO, 2005. p. 18-19.

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CRS-6
House
Senate
Authorizing Committees
Authorizing Committees
! Committee on Agriculture
! Committee on Banking,
! Committee on Financial
Housing, and Urban Affairs
Services
! Committee on Commerce,
! Committee on Government
Science, and Trans-
Reform
portation
! Committee on Transporta-
! Committee on Environment
tion and Infrastructure
and Public Works
On March 1, 2005, the House Government Reform’s Subcommittee on
Federalism and the Census held a hearing on the Administration’s consolidation
proposal. Witnesses included Administration officials from the Department of
Housing and Urban Development, the Office of Management and Budget, and the
Department of Commerce, and officials from organizations representing local
governments.13 Administration witnesses testified that the fragmented nature of the
18 programs reduces coordination, encourages duplication, and may provide
assistance to communities that have sufficient resources and modest needs at the
expensive of communities with the greatest needs. It was also mentioned that most
of the approximately 1,100 communities currently eligible for CDBG would be
eligible under the proposed base and bonus programs, with the aim of “graduating”
the wealthiest communities from the program. Noting that the proposal was a work
in progress, the witnesses for the Administration outlined broad concepts that could
be important components of its proposal. One witness noted that the March 1, 2005,
Federal Register includes a notice concerning the formation of an advisory panel to
assist in the development of a formal legislative proposal.
Witnesses representing the interests of local governments voiced unanimous
opposition to the Administration’s proposal. Among concerns they raised during the
hearings was the lack of consultation by the Office of Management and Budget in the
development of the proposal. They were briefed on the proposal after it had been
developed. Representatives of local governments also objected to:
! transferring of the community development function to the
Department of Commerce, particularly from the Department of
Housing and Urban Development, whose CDBG component
represents 74% of the funds that would be terminated under the new
program;
! reducing program funding; and
! narrowing the focus of the new program to economic development
and job creation at the expense of the wider mission of the CDBG
program.
13 Organizations representing the views of local officials included U.S. Conference of
Mayors, National Association of Counties, National League of Cities, and National
Community Development Association.

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CRS-7
In addition, witnesses objected to the Administration’s contention that some
percentage of communities currently eligible for CDBG should be removed as grant
recipients because their poverty rates are below the national average. They countered
that using the national poverty rate as a basis for comparison does not recognize that
communities whose poverty rates fall below the national average may have
substantial pockets of poverty. According to the Census Bureau’s poverty estimates
for 2000, the national poverty rate was 12.4%, excluding the population living in
institutions, college dormitories, and other group quarters. If the 2000 national
poverty rate were used as a qualifying threshold for eligibility, 18 states and Puerto
Rico, 35 urban counties, and approximately 541 entitlement cities would be
eligible.14 The 576 entitlement cities and urban counties whose poverty rates meet
or exceed the national poverty rate of 12.4% represent 51% of the approximately
1,130 communities currently receiving CDBG formula grant allocations. Thus, using
the national poverty rate as a threshold for eligibility would result in approximately
half of the current CDBG-eligible communities qualifying for the new program. It
should be noted that the Administration has stated that poverty is but one factor that
will be considered in determining program eligibility, and that other criteria such as
unemployment and income may be used as eligibility criteria allowing additional
communities to qualify for the new program.
Current Distribution of Funds Proposed for Consolidation
The FY2005 aggregate budget authority for programs included in the
Administration’s consolidation proposal is $5.615 billion. Most of these funds, 81%,
are administered by HUD’s Office of Community Planning and Development (See
Figure 1). The proposed cuts, coupled with proposed increases in other programs
within HUD, would reduce the agency’s total budget by 10.9%, from $32 billion to
$28.5 billion. Critics maintain that the change would reduce the agency’s role in
encouraging solutions to the Nation’s housing and community development
problems, one of the key components of the agency’s mission (42 U.S.C. 3531).
Such activities would be transferred to the Commerce Department and would be
funded at $3.7 billion. The $3.7 billion represents 65% of the total funding
appropriated in FY2005 for the programs proposed for consolidation. The
Administration argues that many of these programs are ineffective or duplicate the
efforts of other programs.
14 U.S. Census Bureau, Income and Poverty in 1999, Census 2000 Summary File 3 (SF3)
Sample Data, United States — County by State, and for Puerto Rico, available at
[http://factfinder.census.gov/servlet/GCTTable?_bm=y&-geo_id=&-ds_name=DEC_200
0_SF3U&-lang=en&-mt_name=DEC_2000_SF3_U_GCTP14_US25&-format=US-25&-
CONTEXT=gct], visited Mar. 15, 2005, and Income and Poverty in 1999, Census 2000
Summary File 3 (SF3) Sample Data, United States — Places and County Subdivisions with
50,000 or More Population and for Puerto Rico, available online at
[http://factfinder.census.gov/servlet/GCTTable?_bm=y&-geoid=&-ds_name=DEC_2000
_SF3_U&-_lang=en&-mt_name=DEC_2000_SF3_U_GCTP14_US25&-format=US-25&
-CONTEXT=gct], visited Mar. 15, 2005, and Census 2000 Demographic Profile Highlights
Fact Sheets available online at [http://factfinder.census.gov/servlet/SAFFFacts?] visited
Mar. 15, 2005.

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CRS-8
Figure 1. Percent Distribution of FY2005 Appropriations for
Community and Economic Development Programs Proposed
for Consolidation, by Administering Federal Agency
81.0%
12.1%
4.6%
1.4%
1.0%
HUD
Treasury
USDA
Commerce (EDA)
HHS
CDBG Formula Grants. The proposed consolidation and the concurrent
reduction in funding from $5.615 billion to $3.7 billion would significantly affect the
formula portion of the CDBG program. Of the programs proposed for consolidation,
CDBG formula grants account for 74% of the $5.615 million in aggregated FY2005
appropriations (See Table 3). The proposed $3.7 billion in FY2006 appropriations
for the President’s new program would be $450 million less than the CDBG formula
grant’s current FY2005 appropriation of $4.15 billion. This would be an 11%
reduction in the formula portion of the CDBG program. Opponents of the change
maintain that because CDBG is the largest source of federal assistance for
community and economic development and neighborhood revitalization activities,
changing or eliminating the program would affect not only the 1,168 state and local
governments that receive direct allocations, but it would also affect the thousands of
nonprofit subrecipients of CDBG funds, including community development
corporations, community action agencies, and faith-based organizations. The
Administration has noted that it is committed to ensuring that the new program will
continue to provide local governments with a high degree of flexibility, but it will
also require that communities demonstrate measurable results.

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CRS-9
Policy Questions
Among the questions the Administration’s initiative poses are the following:
! why has the Administration chosen to undertake a new program
rather than strengthen existing programs such as CDBG and CSBG;
! how will eligibility for the new grants be determined and how will
it differ from existing programs that may have divergent recipients,
such as CDBG (which allocates funds to states and local
governments) and the Community Development Financial
Institutions Fund (which competitively awards funds to financial
institutions involved in community development lending in
underserved areas);
! how will the new program differ in its approach from the CDBG
program, which is the largest component of the programs that would
be consolidated;
! what formula factors will be used to distribute funds, and how will
they differ from the targeting requirements of the CDBG formula;
! how will the new bonus program work; and
! what performance measures will be used to evaluate program
effectiveness?

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CRS-10
Table 3. Distribution of Funds Proposed for Consolidation
Program
FY2005
Percent of
Appropriations
FY2005
(in millions of $)
Total
Community Development Block Grant (formula)
$4,150.0
74.0
Community Development Block Grant Set-
302.0
5.4
Asides
Community Development Block Grants Section
6.0
0.1
108 Loan Guarantees
Brownfields Economic Development Initiative
25.0
0.43
Urban Empowerment Zones
10.0
0.18
Rural Housing and Economic Development
25.0
0.43
National Community Development Initiative
30.0
0.5
Economic Development Administration
257.4
4.6
Community Development Financial Institutions
55.0
1.0
Fund
Bank Enterprise Awards Program
(10.0)
Rural Business Enterprise Grants
40.0
0.71
Rural Business Opportunity Grants
3.0
0.05
Economic Impact Initiative Grants
23.0
0.4
Rural Empowerment Zones
12.0
0.2
Community Services Block Grants and Related
676.7
12.1
Programs (CSBG)a
Community Services Block Grants
(636.8)
(11.3)
Community Economic Development
(32.7)
(0.6)
Job Opportunities for Low-Income
(5.4)
Individuals (JOLI)
Rural Community Facilities
(7.2)
(0.1)
Total
$5,615.1
100.0b
Note: A program in italics is a component of the program preceding it in roman type.
a. Although they are considered CSBG-related programs, the Community Food and Nutrition Program
and the National Youth Sports Program are not included in the calculations for the President’s
Initiative. The Administration stated that activities funded by these programs duplicate existing
programs of the Department of Agriculture’s Food and Nutrition Service, and the Social Service Block
Grant, respectively.
b. Funding does not add up to 100% due to rounding.

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CRS-11
Profile of Programs Proposed for Consolidation
The following table includes brief profiles of programs proposed for
consolidation under the Administration’s Strengthening America’s Communities
Initiative proposal. The table lists for each program included in the consolidation
proposal: (1) its FY2005 funding level; (2) the type of recipients eligible for program
funds; (3) the type of assistance provided by the program (formula grants, project
grants, loans, loan guarantees); and (4) the method used to award or allocate
assistance. As a general observation, the majority of program funds proposed for
consolidation are currently allocated to local governments, particularly those within
metropolitan areas, through two block grants — CDBG and Community Services
Block Grants (CSBG). In addition, a number of programs provide direct assistance
to nonprofit organizations, particularly community development corporations, which
may also receive or administer funds as subrecipients.

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$4,150.0
F
opment
Appropriation
($ in millions)
unities
ities.
ects that
m
ng and Urban Devel
rants
ation,
or
m
g
o
usi
ent, and
o
italiz
ible activ
st be used on
H
evelopment Block
rants to support 23
u
e persons.
elopm
ities. C
g
ities and proj
Table 4. Profile of Community
benefit low-
based block
incom
ents in support of
ic dev
activ
set-asides
eighborhood Initiative
ts
N
n
ula-
ories of elig
G
ernm
hborhood rev
use block
ible activ
rogram Name and Description
mmunity D
a
v
B
P
o
o
ay
oderate-
D
Department of
C
Gr
Form
allocated to states and local
g
neig
econom
housing
m
categ
70% of funds m
elig
principally
m
C

---

G
B
e been
D
ed $24.6
ent efforts in
ate sector funds
ents from
ent corporations
arantees.
elopm
h two national
’s CDBG plan and
u
specific list of eligible
estm
Sec. 108 loan
o
rporation and the
ents as the C
o
elopm
ing
unity
throug
m
unities to receiv
illion in priv
m
unity colleges, nonprofit
dev
ing
pany
m
requirem
com
unity
illion in loan g
e Support C
m
eting
oordination with CDBG Sec. 108 loan
with a com
or Distribution Method
itiativ
n
e targ
ents. Funds are used in support of a variety of
hborhoods. Work
corporate and foundation entities hav
since its inception in 1991.
rants and the accom
Formula
e incom
rants and $119 m
ram
st be used in c
u
ese g
I g
h
st be consistent
u
D
2004, HUD selected 17
E
n
ation efforts. More than $250 m
. I
ediaries, the Local I
eet the sam
e technical and financial assistance in support of their
14 participating
funds m
ram
italiz
st m
roject grants.
roject grants.
arantees. T
arantees m
u
u
u
illion in B
Congressionally earmarked grant funds allocated to diverse groups of
recipients including universities, com
entities, local governm
activities including recreation, literacy, historic preservation, job
training, feasibility studies, public services. N
activities.
P
Federal funds are used in coordination with inv
foundations and corporations in support of redev
distressed urban neig
interm
Enterprise Foundation, local com
receiv
rev
from
used in the prog
P
BEDI
g
g
m
prog
m
o
e
unity
13
m
tities
include
n
ediaries
CRS-
ay
e Support
hborhood
unity
ed in the
ob creation
m
ent corporations.
ent corporations
itiativ
ation efforts of
olv b .
ents are direct
ligible E
n
ediaries). The tw
E
ed in j
ram
rantees or
ities.
specific criteria
italiz
elopm
elopm
ernm
olv
o
v
o
N
establishing eligibility for
funding.
Local I
Corporation and the
Enterprise Foundation
(national nonprofit
interm
nonprofit interm
support neig
rev
local com
dev
More than 300 com
dev
in 23 selected cities hav
been inv
prog
State and local
g
recipients of funds.
Subg
beneficiaries m
businesses or nonprofits
inv
activ
$30.0
$25.0
2005
($261.0)
Y
F
Appropriation
($ in millions)
ing
e
iv
(L
ent
ation.
ed in
ev. Initiative
italiz
supports local
elopm
olv
ic D
mmunity
o
ram
dev
ields Econ. Dev. Initiative
inated sites for adaptiv
Econom
unity
nf
I) Funds are use to reclaim
m
hborhood rev
D
rogram Name and Description
tional C
P
a
evelopment Initiative
ities) Prog
row
N
D
C
com
corporations inv
neig
B
(BE
contam
reuse.

---

;
ram
o
unity
m
unities’
factors:
unction with
m
; and
aranteed
HUD t
u
ents to expected
ent period;
ent com
ities are
m
e rating
ational experience
hest scores.
ill continue to
iewed by
aniz
ith the com
es of the CDBG prog
ent of the g
m
the hig
ice requirem
ectiv
ant org
or state w
aluation (15 points).
the factors used to assess loan
ent period;
(25 points);
ions are rev
m
ong
e the proposed activ
icat
the proposed repay
m
ed $666,666 for use in conj
or Distribution Method
ities consistent w
to furnish adequate security
incom
ith national obj
ect. A
results and ev
arded to the state or entitlem
ram
:
aluated and rated based on fiv
ram
one receiv
ent activ
’s ability
Formula
ing
ount aw
resources (10 points); and
prog
arded to applicants securing
elopm
ion process. Appl
pliance w
of the proj
of the applicant and relev
ing
ing
th of the proposed repay
icat
elihood that the public entity
ount of prog
expected to contribute to repay
erag
ic dev
rant am
ic plans.
ine com
chiev
e CDBG assistance during
are the follow
roject grants.
rants are aw
roject grants.
P
Applications are ev
(1) Capacity
(25 points);
(2) Need and extent of the problem
(3) Soundness of approach (25 points);
(4) Lev
(5) A
G
P
For FY2005, each z
econom
strateg
Loan guarantees.
Open appl
determ
and feasibility
risk
(1) the leng
(2) the ratio of expected annual debt serv
annual g
(3) the lik
receiv
(4) the public entity
(5) the am
reasonably
loan.
ic
ent
ent
b
14
ent
o
profit
tities
include
n
c
elopm
ent
CRS-
ay
ed in j
powerm
ities.
dev
ndian tribes.
nated as a result
encies, state
and econom
olv
ed I
petition.
ligible E
entitlem
E
unity
unity
niz
unities and states on
unities are direct
m
m
G
m
m
rantees or
encies, and federally
B
D
Local rural nonprofits,
com
corporations, state housing
finance ag
com
ag
recog
15 urban em
zones desig
of a com
C
com
behalf of nonentitlem
com
recipients of funds.
Subg
beneficiaries m
nonprofits and for-
entities inv
creation activ
$6.0
ents
$25.0
$10.0
$282.0
in loan
arantee
itm
u
2005
in credit
support of
g
m
Y
F
subsidies in
com
Appropriation
($ in millions)
and
ities.
ic
ic
o
nes
o
, and
arded to the
G
; and (2)
e housing
ent activ
ory
w
unities for use
B
ities:
m
D
ativ
A
ities consistent
unities to borrow
ects.
erment Z
ic plan of each
one.
m
arded for tw
elopm
ited to $150,000
es their annual
scale econom
building
ent z
e-
ent activ
ent proj
ic dev
.
nated com
ent com
e tim
unction with econom
Sec. 108 Loan
ts
states and C
n
ories of activ
ory
G
ible larg
rogram Name and Description
a
elopm
powerm
arantees
elopm
P
rants are aw
ith the strateg
u
llow
Rural Housing and Econ. Dev.
Gr
G
categ
(1) capacity
support for innov
econom
Grants are lim
under the first categ
$400,000 under the second
categ
Urban Empow
Round II Grants
15 desig
in conj
dev
w
em
CDB
G
A
entitlem
up to fiv
CDBG allocations to finance
elig
dev

---

rants.
h
ects
hig
ect g
ed as
not to
ent
ects:
e proj
estm
ect. Proj
st be located in
u
;
petitiv
en to proj
erty
ate inv
iv
ects m
s and collaborations; and
ic downturns and
those experiencing
is g
ber of com
cost of the proj
ect. Proj
uding
h rates of pov
ible for additional funding
ed distressed areas and applicants;
or Distribution Method
es. Priority
hig
ional network
nificant econom
be elig
unserv
e partnerships and priv
sig
inisters a num
ay
incom
ativ
state reg
Formula
iously
oing
adm
A
distressed areas incl
ith persistently
prev
innov
not exceed 50% of the
ent or low
, ED
;
ay
m
ing
ing
g
certain specified criteria and for areas characteriz
depressed m
ically
n
olv
olv
ploy
erely
ragi
enerally
eeting
Competitive grants.
G
Grants m
m
sev
exceed 30% of the cost of the proj
econom
unem
(1) in areas w
(2) inv
(3) inv
leve
(4) that support sub-
(5) in areas underg
dislocations.
st
e;
u
her
ic
15
ent
ulti-
ote
ent and
e;
also
ic
tities
ay
n
ent hig
erag
CRS-
elopm
) (m
ations
D
elopm
m
econom
D
aniz
e areas
ic Dev
h
ploy
-term
ligible E
org
ic dev
per capita incom
isions and other
ations.
E
arded to states, cities,
ides assistance to 327
s. T
nated as EDDs m
D
aniz
istricts (E
eet one of three criteria:
Econom
D
county
established to prom
econom
job creation). EDA
prov
ED
desig
m
(1) low
(2) unem
than national av
(3) sudden econom
dislocation or persistent
and long
distress. Funds m
be aw
and other political
subdiv
org
2005
$257.4
Y
F
Appropriation
($ in millions)
ency
ic
rading
g
ible
anent
e the
ed or
) A
, and trade
A
s, including
mmerce
D
prov
ploy
o
ram
C
eral econom
rants for upg
obs; or (3) benefit
ed.
s g
st:(1) im
ent prog
u
e persons including
ent assistance. Elig
sector j
ploy
inisters sev
ects m
ate-
incom
rogram Name and Description
ministration (E
elopm
ustm
P
epartment of
d
D
Economic Development
A
adm
dev
public work
infrastructure, planning
adj
proj
opportunities for business creation
or expansion; (2) assist in the
creation of additional perm
priv
low-
those who are unem
underem

---

e of the
ent rate.
m
h percentag
ploy
ith a hig
h unem
obs;
j
unities w
or Distribution Method
m
obs; and
es;
e existing
Formula
ill sav
ill create j
en to:
iv
ects located in com
ects that w
ects that w
ects located in areas with a hig
Competitive grants.
Preference g
(1) proj
population with low incom
(2) proj
(3) proj
(4) proj
ision
16
b
o
tities
n
s; j
, town, or
acent to a
CRS-
all and
unities for
rural area is
adj
businesses;
ent for adult
m
transportation
network
ligible E
related to potential
m
ations for prov
ing
ed area
E
ing
ices. A
ediately
erg
ploy
aniz
, town, or
prov
m
Grants to sm
em
expansion of rural distance
learning
training
em
students; nonprofit
org
of technical assistance to
rural com
im
serv
defined as a city
unincorporated area that
has a population of 50,000
or less and is not an
urbaniz
im
city
unincorporated area that
has a population in excess
of 50,000 persons.
$40.0
2005
Y
F
Appropriation
($ in millions)
riculture
terprise
g
n
A
ts
n
rogram Name and Description
ral Business E
a
P
epartment of
u
D
R
Gr

---

ent
ancem
v
s.
be
be
d
also be
A
2005,
ram
population or
ay
ay
ay
m
unity
account for
-term
that m
that m
m
m
ram
/EC prog
ic benefits;
o
illion in FY
ect is sustainable;
unity
er;
unity
m
m
ploy
ral C
u
ic Area Partnership areas).
/EC prog
other sources;
to natural disaster, base closure,
the proj
r em
of appropriations to the
dditional funding
($22.2 m
e a com
ajo
ng
ram
a due
or Distribution Method
has experienced long
a m
poor.
also affect the EZ
ill serv
ay
rant selection criteria include the extent to
by
unities. A
enerated by
m
ent Prog
s m
G
g
es funds from
unity
ic traum
ing
m
ect w
Formula
ity
erag
com
for the Rural Econom
of appropriations to other USDA Rural
ram
ill induce additional econom
ancem
h directed spendi
h directed spending of appropriations to the Rural
v
/EC
d
econom
appropriations to the EZ
ic activ
ect lev
ect w
eted com
ect would be located in a com
ed as chronically
Facilities account of the R
A
ent prog
throug
.
funding
unity
unity
m
ram
nated EZ
ided throug
m
elopm
m
m
o
o
Competitive grants.
which:
(1) econom
(2) the proj
(3) the proj
(4) the targ
job loss;
(5) the proposed proj
experiencing
or exodus or downsiz
(6) the proj
characteriz
Competitive grants.
Funding
C
Prog
Loans and grants.
Discretionary
desig
prov
C
including
Directed spending
Dev
erty
h
h
17
nated
ic
ically
h a
, town,
ration.
ones
tities
ations,
ig
n
acent to a
unity
ith hig
CRS-
ith hig
m
aniz
m
ent Z
for rural
adj
ent and/or
ent and pov
es for training
m
m
e process.
for rural areas,
ligible E
ed area
e been desig
unities w
unities throug
E
unities w
powerm
ediately
ploy
ploy
, town, or
m
m
m
petitiv
m
nificant out-
m
m
o
o
Grants to public bodies,
nonprofit org
Indian tribes, and
cooperativ
and assistance to rural
businesses, econom
planning
and training
entrepreneurs. A rural area
is defined as a city
or unincorporated area that
has a population of 50,000
or less and is not an
urbaniz
im
city
unincorporated area that
has a population in excess
of 50,000 persons.
Essential com
facilities in econom
depressed rural
com
unem
sig
C
unem
that hav
as Em
and Enterprise
C
com
$3.0
$21.0
$12.0
2005
Y
F
Appropriation
($ in millions)
mmunities
o
erment
/EC)
pow
m
nterprise C
ts
ts
n
n
rogram Name and Description
ral Business Opportunity
a
a
ral E
nes/E
P
u
u
o
rogram (EZ
R
Gr
Economic Impact Initiative
Gr
R
Z
P

---

e
rants,
ard
of g
petitiv
e aw
funds
alue of their
h a com
atching
pplicants participate in a
throug
ided in the form
aluation criteria. Assistance
als, m
o
ram
its. A
d ev
ents.
Prog
ities. Participants receiv
pletion of the specified qualified
ance g
A
E
or Distribution Method
establishe
requirem
ents, and depos
e application and selection process. Funding
Formula
estm
aluates applications based on the v
after successful com
inv
ents, and reporting
ents can include perform
based qualitativ
ities.
erit-
reem
pplicants participate in the B
Competitive grants.
Financial and technical assistance is prov
loans, equity
m
decisions are based on pre-
ag
requirem
Competitive grants.
A
process which ev
increases in certain qualified activ
proceeds only
activ
18
it
tities
eet
criteria.
2004, 49
n
$3.6
ade to
CRS-
illion in
st m
awards.
u
ards, totaling
ibility
st subm
m
u
ere m
ram
illion, and 80
ligible E
ations that qualify
FI
E
D
s.
-insured institutions
ed $17 m
aniz
IC
FY2004, 68 financial
illion, w
sured depository
Org
as a C
specific elig
Entities m
applications for
certification to the Fund.
In
assistance aw
$46.7 m
technical assistance
awards, totaling
m
CDFI
In
institutions; in FY
FD
receiv
BEA Prog
$55.0
($10.0)
2005
Y
F
Appropriation
($ in millions)
,
ey
h
ram
ide
s
ponents
und
ations in
e. The
ram
financial
reasury
aniz
s also
opment
ing
eral com
ent capital to
itiativ
ities in distressed
the T
n
ram
and technical
included in CDFI
, the BEA prog
s and thrifts to
e I
estm
ased org
ty Devel
ram
-b
ativ
)
e bank
d I)
prog
unity
unities. The prog
Bank Enterprise Award
Program (
Fund
m
m
ide training
rogram Name and Description
e Fund has sev
e Fund’s prog
P
epartment of
inancial Institutions F
h
h
D
Communi
F
(CDF
T
proposed for consolidation. T
are listed below and include the
CDFI
and the N
purpose of the Fund is to prov
credit and inv
com
distressed urban and rural areas.
T
encourag
expand their activ
com
prov
assistance to qualify
institutions.

---

e
,
ing
Act.
80% are
encies.
inistrativ
ately
ided to state or
ed for outly
ents directly
re than 1,000
o
slands, and the
e 1.5% of appropriated
ed in each state, in
ic Opportunity
in I
st be prov
u
is reserv
ere are m
ich approxim
h
h
to reserv
e their allotm
rants are allotted to states and
ount receiv
er Econom
least 90% of their federal block
aside m
, of w
oa, the Virg
g
eceiv
h at
e am
.
or Distribution Method
ram
ible entities.” T
ations and about 20% are public ag
Prog
erican Sam
aniz
slands). Block
Formula
and technical assistance and other adm
, Am
ndian tribes to r
h the state.
ich half of this set-
lso, half of 1% of funding
I
e CDFI
h
h
ents to “elig
allow
ay
e as for t
ities, of w
m
ate nonprofit org
rmula block grants.
S
ible entities around the country
o
H
rant allotm
Sam
F
HHS is required under the CSBG Act
funds for training
activ
local entities. A
territories (Guam
Northern Mariana I
Puerto Rico based on the relativ
FY1981, under a section of the form
H
rather than throug
States are required to pass throug
g
elig
priv
e,
iv
ards
19
e
ing
2004,
$8.5
,
slands.
tities
ian
e aw
n
erg
ativ
a Nat
k
am
CRS-
N
u
oa, the
as
ing
itiativ
e Hawai
n
and em
ligible E
iv
e I
ade, totaling
slands, and the
E
s serv
ican, Al
unities; in FY
FI
er
m
ativ
erican Sam
in I
D
illion.
m
Existing
C
Am
and Nat
com
41N
were m
m
50 states, Puerto Rico,
Indian tribes, and the
territories of G
A
Virg
Northern Mariana I
($4.0)
2005
$636.8
Y
F
Appropriation
($ in millions)
included in
lock
Health and Human Services
tive Initiatives (
a
N
CDFI Fund)
rogram Name and Description
P
rants
Department of
Community Services B
G

---

st:
u
ent
s of
hose
icro-
ed by
unity
ram
el and
els of
m
ers for
idelines.
is one of
ects m
ic
u
lev
g
h lev
ploy
iduals w
ram
erty
erty
onths of the date
ent and m
ANF.
aluate way
of cash and in-
m
ent and business
ects that docum
) assistance rate of at
use, and low-
T
Econom
ate em
e indiv
businesses, or
is prog
ct. The prog
F
ent, hig
rants to com
h
m
ing
m
ing
ploy
A
N
ic distress, such as a
one or Enterprise
unity
G
erag
em
m
B
ploy
e residents. Proj
ploy
e, drug
ides g
ith priv
-incom
S
m
en to proj
ent Z
iv
onstrate and ev
ent corporations’ National Youth
ilies (TA
prov
the lev
, crim
m
the C
-inco
located in areas characteriz
her low
at or below the pov
ity
ram
’s discretion. T
enerate em
Fam
powerm
ing
ects
els of unem
ent opportunities.
ed by
elopm
or Distribution Method
pleted within 12 to 60 m
eedy
activ
m
e prog
and ot
dev
F
h lev
h
ang
ations to de
N
com
ploy
. T
ent opportunities w
A
unity
aside within the Com
aniz
m
T
Formula
m
ram
ing
el does not exceed 100% of the pov
ith this effort include self-
ities authoriz
arded. Preference is g
, and efforts to g
nation as an Em
/EC), hig
ploy
iolence, g
ssistance to N
is a set-
e lev
obs or em
ram
em
j
benefit persons liv
as aw
ate partnership including
A
(EZ
ent opportunities for low
ram
ent Prog
and other indicators of socioeconom
new
new
unity
e noncustodial parents of children receiv
incom
rant w
m
iduals receiv
elopm
erty
porary
elopm
ects to help w
is prog
ily
ind contributions; and to proj
h
Competitive discretionary grants.
Funds awarded at the Secretary
the related activ
supports local com
Sports Prog
dev
(1) directly
(2) be capable of being
the g
public/priv
k
pov
Tem
least 20%, desig
Com
incidences of v
incom
Competitive discretionary grants.
T
Dev
based, nonprofit org
creating
indiv
fam
Proj
enterprises, new businesses, expansion of existing
creating
an
unity
20
pt
m
tities
n
unity
CRS-
m
ations.
exem
ent corporations
aniz
charitable, faith-
ent corporations
ligible E
ndian, and Alask
ations including
ations.
E
e org
based and com
elopm
aniz
elopm
aniz
Nonprofit com
dev
including
based, I
Nativ
Nonprofit, tax-
org
faith-
dev
and charitable
org
$32.7
($5.4)
2005
Y
F
Appropriation
($ in millions)
-
JOLI)
pportunities for Low
Job O
Income Individuals (
rogram Name and Description
P
Community Economic
Development

---

-
ided
ects
unity
units in
m
ater proj
n
,
;
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