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Choice Neighborhoods

Budget Update

Promise and Choice Neighborhoods funding remains in limbo, with Congress continuing to negotiate over a possible lame-duck spending bill that would cover funding through the end of the current fiscal year, which ends next September 30.

In the short term, Congress has passed another temporary spending measure that will keep the government open at current spending levels for another two weeks until December 18, giving Congress more time to work out funding levels for the rest of the year.

What happens over the next two weeks will be important for Promise and Choice Neighborhoods. The details are a bit complicated, but the result ultimately depends on the ability of Senate Appropriations Chairman Daniel Inouye (D-HI) to round up a few Republican senators to support a full-year omnibus spending bill, despite the opposition of Sen. Mitch McConnell (R-KY), the Senate Republican leader.

Retiring Sen. Christopher (Kit) Bond (R-MO) has said he would vote for such a bill. Inouye is also working on Sens. Thad Cochran (R-MS) and Olympia Snowe (R-ME), while trying to hold his own Democratic caucus in line.

If Inouye succeeds, spending levels for Promise Neighborhoods might be in the $20-60 million range passed earlier this year. Choice Neighborhoods could be in the $200-250 million range.

If Inouye fails, Plan B appears to be a full-year continuing resolution that would fund all programs at current levels. That would presumably leave Promise Neighborhoods funded at $10 million, for another round of planning grants, and Choice Neighborhoods at $65 million.

Either of these two options -- a full-year continuing resolution or a full-year omnibus budget -- is better than the alternative, a temporary continuing resolution that kicks all decisions to the new Congress that convenes in January.

At current or similar levels of funding, Promise Neighborhoods could become more of a permanent planning grant program. Implementation funding could come through preferences built into other, much larger federal grant programs. These could be modeled on the program interactions already described by the administration for Promise Neighborhoods, Choice Neighborhoods, and the Byrne Criminal Justice Innovation program. We think the administration will reveal more about these plans in the president's next budget submission, due in February.

Hopes Dim for Lame Duck Funding of Promise, Choice Neighborhoods

Prospects that the current Democratically-controlled Congress would enact funding for Promise and Choice Neighborhoods took a hit on November 18 when Senate Republican leader Mitch McConnell announced his opposition, though some Senate Democrats are still trying.

According to reports in The Hill and Politico:

Senate Minority Leader Mitch McConnell has effectively killed any hopes of passing an omnibus appropriations bill in the lame duck, announcing today that he is opposed to such a measure. Congress will be forced to keep the government operating through a continuing resolution.

“If this election showed us anything, it’s that Americans don’t want Congress passing massive trillion-dollar bills that have been thrown together behind closed doors,” McConnell said in a floor speech today. “They want us to do business differently. So I won’t be supporting an omnibus spending bill."

While funding could be passed relatively easily in the House, Republicans can block it in the Senate with a filibuster. McConnell's opposition, therefore, would seem to end any prospects for enactment of an end-of-year package.

Some Senate Democrats are still trying. According to National Journal:

Senate Appropriations Committee Chairman Daniel Inouye, D-Hawaii, hopes to convince a handful of Republicans to honor their position on supporting an omnibus spending package that caps discretionary spending at $1.108 trillion.

“We did what they wanted,” Inouye said of the measure, which includes all 12 of the annual spending bills for fiscal 2011.

Unless Senate Democrats are able to convince a few Republicans to cross party lines, Congress is now likely to pass a continuing resolution, which will continue existing funding levels until the new bipartisan Congress takes up the budget early next year.

Impact on Promise, Choice Neighborhoods?

In the short-term, none of this has any impact on either the Promise or Choice Neighborhoods programs. The 21 Promise Neighborhoods grantees should still continue their planning. Applications for the $65 million in Choice Neighborhoods money will still go forward under the existing December 9 application date.

In the medium-term, though, meaning the next calendar year, funding for Promise Neighborhoods implementation may be in jeopardy. If funding is not enacted in the lame duck session, the outcome next year will depend on negotiations between the incoming Republican House, a Democratic Senate, and the administration, with cuts seemingly the order of the day. Choice Neighborhoods would seem to be in better shape, since it is not a wholly new program, just a transformation of an existing program, HOPE VI.

In the long-run, scaling up these programs always depended upon transforming other, existing education, health and social services programs. It is now up to the administration to accelerate that process, starting with the budget it releases in February.

It is also up to us, as a community, to help each other identify and leverage those existing funding streams. Our upcoming conference calls on Neighborhood Initiatives and Home Visitation are our first steps down that road.

Updated: Choice Neighborhoods Deadline Now December 9

HUD has announced that the new deadline for Choice Neighborhood applications is December 9. Applications were originally due on October 26. This was changed to December 7 and (eventually) to December 9, once it was officially posted in the Federal Register.

HUD has released a technical corrections document outlining changes and also updated its mapping tool (go here and scroll down a bit).

Funding for Promise, Choice Neighborhoods On Deck Again

With Tuesday's elections barely passed, congressional leaders are already negotiating behind the scenes on legislation that will determine the future of Promise and Choice Neighborhoods -- not just for the coming year, but quite possibly for years to come.

The future of both programs will depend on whether Congress can pass an end-of-year, catch-all omnibus budget bill when it returns for a lame duck session on November 15, and on what levels of funding both programs receive. The federal government is currently operating under a continuing resolution that is funding all federal programs (other than entitlements) at last year's levels through December 3.

Best Case Scenario: If it quacks like a duck ...

The odds that Congress will successfully pass an omnibus budget bill in a lame duck session are far from clear. Democrats remain nominally in control of both chambers until January. This is enough in the House, where a budget bill could be passed relatively easily. But it could be blocked in the Senate, where Republicans wield the filibuster and other blocking tactics.

Whether Senate Republicans will choose to use that blocking power is another matter. The Republican Senate leader, Sen. Mitch McConnell (R-KY), is reportedly willing to cut a deal to get this year's budget behind them. Under the rumored deal, discretionary spending would come in at $1.108 trillion, or about 1% less than the level assumed in the House and Senate earlier this year.

That isn't great news for the administration's neighborhood programs. Promise Neighborhoods was funded at just $60 million by the House Appropriations Committee this summer and just $20 million in the Senate. Choice Neighborhoods did better, receiving $250 million in the Senate, while the House provided $200 million for its predecessor, HOPE VI. The final number for Choice Neighborhoods is likely to be in the $200-250 million range. The administration's requested $40 million for the Byrne Criminal Justice Innovation program is also awaiting a final decision.

The 1% cut being considered in the Senate could force these funding levels even lower. Protecting and/or obtaining higher funding levels for neighborhood programs in this political environment would require the White House to intervene and congressional leaders to go along.

The Worse and Worst Case Scenarios

Absent action of this kind, the alternatives may be rough going. If Congress is not able to agree on a budget before Christmas, it would most likely pass another temporary continuing resolution instead. That would effectively punt budgetary decisions into next year, when Republicans will control the House and have more influence in the Senate. House Republican leaders have already said they want to roll back spending to 2008 levels. And while Sen. McConnell has indicated a willingness to cut a deal, he may find his own Republican caucus challenging him. Rumblings are already being heard on the House side against a deal of this kind.

A third possibility, outlined by some, is one where Republicans in Congress block any action on the budget and threaten a pre-Christmas government shutdown unless even deeper spending cuts are made. This seems unlikely.

Looking Ahead

The best option is one where Congress passes an omnibus budget bill this month that protects spending for neighborhood programs. Let's hope this happens. With Republicans in control of the House starting in January, whatever funding levels are enacted for the current budget year are likely to be the ceiling for the next several years, at least until after the next election.

Finally, regardless of these short-term budgetary decisions, the Obama administration needs to start thinking now about new ways to fund neighborhood programs, not just with programs like Promise Neighborhoods, Choice Neighborhoods, and Byrne, but through other existing funding streams. The administration is now working out the details of its next budget proposal, due to be released next February. Let's hope this long-term thinking has begun.

Choice Neighborhoods Deadline Extended

HUD today extended the Choice Neighborhoods deadline -- originally October 26 -- by at least 30 days. HUD is extending the deadline to make changes to its mapping tool. For more information, see this notice.

"Everyone who is eligible under the existing mapping tool will remain eligible with the modification," said a HUD spokesperson.

Notice of this change was also sent to our Choice Neighborhoods email list, which is open to anyone who is interested. To subscribe, send an email to plester(at)unca.org with "Choice Neighborhoods Email List" on the subject line.

Postscript: It wouldn't be a real neighborhood program without a kerfuffle, now would it? (smile)

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by Dr. Radut