Congress Adds Money for Community Development that Administration Cut; CDFI Supporters Hopeful

WASHINGTON – In the fight between the supporters of the U.S. Treasury’s Community Development Financial Institutions Fund and the Bush Administration, the first round appears to have gone to the CDFI Fund supporters. The Administration sought to eliminate the Fund along with other community development programs in its fiscal 2006 budget proposal and roll the eliminated programs into a block grant initiative called Strengthening America’s Communities, which would be administered by the Commerce Department. CDFI Fund supporters, which include many community development credit unions, have opposed the move, arguing that the U.S. Treasury Department is the competent administrator of the Fund and that the changes would pit CDFIs against too many other organizations competing for funds. Those credit unions got a boost in the week of March 18 when both chambers of Congress restored much of the community development money that the Bush Administration had sought to cut. “I think on the whole this is a solid first step but not the whole race,” said Cliff Rosenthal, immediate past chairman of the CDFI Coalition and executive director of the National Federation of Community Development Credit Unions. “We are pleased the funding has been tentatively restored but we remain committed to the continued existence of the Fund.” The CDFI Coalition is an organization of CDFIs and other Fund supporters which is based in Arlington, Virginia. Rosenthal’s caution arises from the fact that the legislative fight that CDFI supporters won is but one small part, albeit the first one, of a long and complicated budget process. After the President proposes a spending package in any given year, the House and Senate must pass budget resolutions which must be reconciled into one overall budget package. This budget package does not have the force of law in that the President does not have to sign it, but it does guide the rest of Congress’ budget work through the year. It is at this first level where CDFI supporters saw their victory as each chamber of Congress included more money in its 2006 Budget Resolution for community development than the Administration had requested. The House added back $1.1 billion to community development funding and the Senate $2.8 billion and, supporters note, the Senate added the money back by a healthy margin. Sixty-six senators voted to support the additional money and only 31 voted against it. Supporters hope that the large margin indicates the additional money has enough support to carry it through the next step in the budget process, the reconciliation between the House and Senate Budget Resolution and then into the Appropriation’s Committees later. Joe Akman, a program assistant with the CDFI Coalition, says that they are encouraged that support for community development appears strong in Congress but pointed out that neither funding move would necessarily address the proposed elimination of the fund. “It’s a very good first step,” he said, “but it is nowhere near done.” Akman pointed out that simply indicating to an Appropriation’s Committee that it could spend a given amount of money on community development generally does not guarantee that money will be allocated to the CDFI Fund. Community development appears to have gotten a bigger piece of the overall pie than the Administration intended, Akman noted, but it is still up to supporters to make sure the CDFI Fund survives and gets a piece of the community development pie. -