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Last Updated: Tuesday, 29 April, 2003, 19:15 GMT 20:15 UK
Bush to cut housing subsidies

By Steve Schifferes
BBC News Online, Washington

Agricultural worker housing in California
Low income families need help with housing

President Bush is determined to shift responsibility for the needy from the Federal government to individual states - and now has targeted federal housing subsidies for the poor.

While the high-profile battle over the size of the tax cut package for the rich has dominated the headlines, the Bush administration has been quietly moving to reshape the Federal role in assisting the poor.

The US tax office, the IRS, has recently announced that it will demand tougher certification before families qualify for the Earned Income Tax Credit, which boosts the income of low-income working families.

The health care programme for the poor, Medicaid, which is jointly funded by the Federal government and the states, is under severe pressure due to the budget crisis, and many states are proposing sharp cutbacks in the range of coverage and who might be eligible.

And now the Federal government is proposing to return responsibility for helping low-income people with their housing costs to the states.

Rent subsidies

Under the current system, two million families receive rent subsidies to help pay the cost of renting homes in the private sector.

The programme ensures that poor people pay no more than 30% of their income on rent, and 75% of participants must be "extremely poor".

It is not, however, an entitlement, and demand for the programme has been rising as apartment rents have been increasing. Only one in four of those eligible receives assistance.

Local housing authorities administer the programme.

Under the new housing proposal, the federal government would give a fixed sum - a block grant - to each state to use as they saw fit.

The states could then change who was eligible for the programme, for example linking it to recipients of welfare assistance, which was devolved the states in 1996.

Under that programme, known as Temporary Assistance to Needy Families (TANF), help expires after five years, and recipients must take part in jobs or training programmes.

Working poor

Most of the people currently receiving housing benefits are not on welfare, with 35% in work and the rest either disabled or retired.

"The notion that there is a group of people they have to force off assistance is erroneous," said Sheila Crowley, president of the National Low Income Housing Coalition told the Washington Post.

"These are people who have income, but it is insufficient to be able to afford housing in America."

There are also worries that the new block grants will not keep pace with the rise in housing costs.

But some advocates of welfare reform say the same principles should be applied to housing aid.

Howard Husock of the Manhattan Institute says that the current programme "is the last redoubt of non time-limited public assistance".

Religious groups

Under the new plan, it would also be possible for religious groups and other non-profit agencies to administer the housing vouchers.

President Bush has been frustrated in his plans to introduce a faith-based initiative through Congress, and has sought to include religious organisations in social programmes through executive orders instead.

But the housing plan could face significant opposition in Congress.

Newspaper reports suggest that a group of 42 senators, including eight Republicans, were opposed to the plan and prepared to sign a statement saying that it would undermine the rent voucher programme.

With other key battles ahead, including tax cuts and health care reform, the Bush administration is likely to continue its drive to find savings across a wide range of domestic programmes.

The poor, who vote less than other groups, are likely to be a target for many of those savings.

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