WASHINGTON— The Biden administration’s $6 trillion budget includes ambitious plans to increase funding for community financial development institutions, expand affordable housing and establish a program for lower-income homeowners with flood insurance policies backed by the government.
As part of President Biden’s proposed 2022 budget released Friday, the Treasury Department, the Department of Housing and Urban Development and the Small Business Administration would all benefit from double-digit or near double-digit funding increases. Those proposals are a sea change from the budgets proposed under the Trump administration, which
“The budget invests directly in the American people and will strengthen our nation’s economy and improve our long-run fiscal health,” Biden wrote in the proposal’s preamble addressed to Congress. “It will help us build a recovery that is broad-based, inclusive, sustained and strong.”
The budget, which is more of a policy document than a realistic picture of funding levels, most notably aims to make strides in increasing the supply and accessibility of affordable housing. Biden’s budget proposes allocating $2.8 billion over the next four years to incentivize zoning reform as well as $2 billion over the same period to provide additional rural housing grants and loans.
Funding for the Capital Magnet Fund and the National Housing Trust Fund — two programs designed to further affordable housing that are currently propped up by annual contributions from Fannie Mae and Freddie Mac — would also increase. Again, the proposal is a sharp contrast with the philosophy of Trump, who repeatedly proposed eliminating the funds.
Biden is also seeking to create an affordability program under the National Flood Insurance Program, which offers flood insurance to homeowners in certain areas designated by the Federal Emergency Management Agency. Lawmakers have long-suggested establishing such a program to cater to underserved borrowers in flood-prone areas.
Under the proposed budget, the Treasury Department would see its base funding grow by just over 11%, from the 2021 enacted budget of $13.5 billion to the proposed budget of $15 billion for 2022. For HUD, the agency’s program-level funding would increase even more, jumping 15% from $59.6 to $68.7 billion.
And the Small Business Administration would see a more modest but still significant increase in administrative funding of 9.5% to $852.4 million. The allocation would support 2,100 full-time-equivalent employees, level with fiscal 2021 staffing.
Yet the request for SBA is perhaps more notable for what’s absent from the document, namely budgeted funds for COVID-19 relief programs that dominated agency operations over the past 14 months. Funding for the Paycheck Protection Program, Economic Injury Disaster Loans as well as the Restaurant Revitalization and Shuttered Venue Operators grant programs was terminated. Collectively, those programs received appropriations totaling $1.3 trillion in fiscal 2020 and 2021.
SBA is asking for a total of $49.1 billion of funding authority for its permanent programs: 7(a), 504, Microloan and Small Business Investment Companies. That request is in line with their fiscal 2021 funding authority.
“Today’s budget, which includes the American Jobs and Families Plans, makes the necessary investments in both our infrastructure and our people to ensure the post-pandemic chapter of our history is a strong and prosperous one,” Treasury Secretary Janet Yellen said in a statement. “Importantly, too, this budget puts our country on a long-term fiscally sustainable path through fair and efficient tax reform.”
The Democratic administration continues to signal support for community financing organizations. The proposed budget includes a more than 22% funding increase for community development financial institutions, calling for the Treasury's CDFI Fund’s appropriations to be bumped up to $330 million from $270 million in fiscal year 2021. The Trump administration had made repeated calls to eliminate funding for CDFIs.
The White House’s budget also calls for a $3.8 billion infusion to the community development block grant program, a program run by HUD. The funding increase would include $295 million set aside for “for the modernization and rehabilitation of public infrastructure and facilities ... in historically underfunded and marginalized communities facing persistent poverty,” according to the budget.
In a statement, HUD Secretary Marcia Fudge applauded Biden for putting housing at the center of his first budget.
“The budget sends a clear signal that HUD is no longer going to be left on the sidelines while millions of Americans struggle with housing and remain shut out from the opportunities a good home provides,” she said.
Staff writer John Reosti contributed to this article.
