HUD Secretary Cuomo Thursday warned a House subpanel that the federal government cannot afford to let some 1.8 million Section 8 housing contracts expire, saying hundreds of thousands of elderly, children and disabled Americans would become homeless if that happens.
Cuomo told the Government Reform Human Resources and Intergovernmental Affairs Subcommittee that if HUD's fiscal 1998 budget is not increased by $5.6 billion, the department would have to impose a 35 percent across-the-board reduction in its programs. This would include cuts of $1.9 billion for public housing, $1.6 billion for the Community Development Block Grant program and $549 million for the HOME program.
"We would be robbing Peter to pay Paul," Cuomo said.
Cuomo also said HUD will do its part by reducing the cost of contracting for assisted housing by $2.4 billion. The biggest savings, $1.25 billion, would come from restructuring its FHA- insured debt on Section 8 units. Because of that debt, incurred over the 20 to 30 years that many units have been subsidized, the federal government in some cases is paying up to 200 percent of the fair market value of those units, Cuomo said.
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