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Group Says USDA Has Forgotten Rural Development

Group Says USDA Has Forgotten Rural Development

Recent Presidential budget proposal leaves Rural Housing Coalition sore

Accusing the USDA of seeking to eliminate Rural Development programs, a letter released this week by the National Rural Housing Coalition says programs that help low-income rural families obtain affordable housing and potable water are falling short of funding needs, thanks to the latest Presidential budget proposal.

"There is ample evidence that Rural Development programs rank low on USDA's list of priorities," the NRHC wrote in a press statement. The group says between 2010 and 2013, Rural Development programs were cut by at least $750 million, representing 19% of all cuts made to USDA over the same period.

RURAL FUNDING AT STAKE? One group says so, expressing concern that Rural Development is at the bottom of USDA's funding priorties.

The group says adding insult to injury is the President's Fiscal Year 2014 Budget, which proposes $200 million in program reductions. They point out that at the same time, the budget offers $300 million in savings from USDA loan programs.

"USDA should acknowledge that Rural Development is a low priority for the Department," said NRHC Executive Secretary Bob Rapoza in a press statement. "And for that reason, it is obvious to me that these programs are the first on the chopping block and always available to offset increases for other programs and activities that are deemed more important."

If the President's Budget is approved, Rural Development programs like Section 502 Direct Loans are particularly hard hit, NRHC says.

The group points out that according to the FY14 Budget, each direct loan costs the government about $3,000 over the entire lifetime of the loan. In addition, they say that the program performs on par or better than other loan portfolios, including Federal Housing Administration loans, in terms of delinquency and foreclosure rates.

"While there are tight caps on discretionary spending, this is no excuse for the size and scope of the proposed reductions…It is simply one more gimmick to skewer Rural Development spending," Rapoza said.

However, in testimony to the agriculture subcommittee of the House Committee on Appropriations Tuesday, USDA Secretary Vilsack said the ripple effect of the sequestration is still gaining traction, and it is to blame for some of the losses to Rural Development funding.

Vilsack said in August, rental housing assistance for about 15,000 low-income rural residents will run out.

"The question then is what happens to them in their apartment complex, and what happens to the owner of the complex if they don't get the kind of support they are banking on to be able to maintain the project," Vilsack said in a USDA interview.

Also likely to take effect are 10-day furloughs for USDA Farm Service Agency and Rural Development employees, Vilsack added.

Despite the admitted losses to some RD funding, Vilsack said in his testimony that the agency has taken steps to reduce operating expenses over the past two years, and the President's 2014 budget request would "put us back on track to continue the revitalization of rural America, while achieving targeted reductions."

President Obama revealed his budget plan April 10, providing about $139 billion for the USDA, of which $121 billion is mandatory funding.

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