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sound development of children and the provision of services to new mothers, estimated outlays of $530 million in 1979 are included in the budget. This represents an increase of $168 million in outlays over 1978. The legislation will also more closely align this program with the similar but smaller commodity supplemental food program.
Legislation also will be proposed to end the operation of the special milk program in schools participating in the school feeding programs in order to eliminate the overlap between these programs. Milk is already a required component of both the school lunch and breakfast programs.
Crude oil equalization refund.—As a part of the administration's energy legislation, most people will receive their refund from the crude oil equalization tax in the form of a reduction in their income tax. Individuals who do not pay income tax will receive the refund in the form of a direct payment. These payments will total an estimated $167 million of outlays in 1978 and $1.3 billion in 1979.
Housing assistance.—The Department of Housing and Urban Development (HUD) provides housing assistance to low-income families to improve their opportunity to secure decent housing. The 1979 budget request would provide rental housing assistance to an additional 400,000 low-income families, and homeownership assistance to an additional 50,000 moderate-income households. Total budget authority required to support these long-term additional assisted housing commitments is over $31 billion, of which $24.7 billion will be new and $6.4 billion carryover authority. The total number of families receiving housing assistance is estimated to increase from 2.6 million in 1977 to 3.1 million 1979. Total outlays for housing assistance are estimated to rise from $3.8 billion in 1978 to $4.4 billion in 1979—an increase of over 16%.
Housing assistance is currently provided through three major activities within HUD's subsidized housing programs: lower income housing assistance, public housing, and homeownership assistance. The most important of these programs—lower income housing assistance (section 8)—provides rental subsidies to participating families equal to the difference between market rents and 15–25% of family income. These rental subsidies are paid over a 15- to 40-year period for tenants in newly constructed, rehabilitated, and existing units. The budget proposes additional section 8 assistance for 344,000 lowincome families in 1979, requiring budget authority of $23.3 billion. This is an increase of 10% above the 313,870 additional families to be assisted in 1978. The mix of existing, rehabilitated, and new units to be subsidized in 1979 is consistent with local community needs as reflected in their housing assistance plans. The budget also initiates a new moderate rehabilitation activity, involving less extensive repair work than substantial rehabilitation. Outlays from the section 8 program are estimated to increase from $876 million in 1978 to $1.3 billion in 1979. Average cost per unit of section 8 housing is estimated as follows:
• $180,000 over 40 years for State agency-financed new construc
tion; • $126,000 over 30 years for private new construction; and • $33,000 over 15 years for existing housing.
Public housing, including housing for reservation Indians, is the other major active rental assistance program within the subsidized housing programs. In 1979, the budget proposes providing another 56,000 units of public housing, requiring budget authority of $6.8 billion. In addition, the budget provides $400 million in budget authority to amend previous contracts, and another $750 million in budget authority for modernization to improve existing public housing projects. Most existing public housing projects also receive an operating subsidy to fill the projected gap between the operating costs estimated for “well-run” projects under the performance funding system and anticipated revenues from rent collections. The budget requests $729 million in budget authority in 1979 for public housing operating subsidies. Outlays under this program are estimated to increase from $612 million in 1978, to $686 million in 1979. The administration has undertaken a study of the performance funding system to update and improve the method used to determine operating subsidies. Total outlays for public housing are estimated to increase from $1.7 billion in 1978 to $1.9 billion in 1979.
Another subsidized housing program is the homeownership program that helps families become homeowners by subsidizing mortgage payments down to an effective rate of a 5% mortgage. In 1979, an additional 50,000 households are expected to receive homeownership assistance under the current program using authority provided by the Congress in past years. Outlays for homeownership assistance are estimated to increase from $125 million in 1978 to $137 million in 1979 and $163 million in 1980.
The budget also proposes initiating a new troubled projects operating subsidy for subsidized, FHA-insured, multifamily projects in financial difficulty. This proposed program would provide the difference between the HUD-approved operating costs and projected rents, and would help defray additional rent burdens for low-income tenants, while mandating management improvements for participants. Budget authority of $74 million is requested for 1979, and outlays are estimated to be $52 million in 1979.
Net credit outlays.
*$500 thousand or less.
Refugee assistance.- Assistance is provided to two groups of refugees who fled their countries in large numbers—those from Cuba and Southeast Asia. This program reimburses States for cash payments and for medical and social services provided to needy refugees, and makes special grants to enhance the refugees' English language and employment skills to aid their integration into American society. Outlays for this program are estimated to be $189 million in 1978 and $166 million in 1979. As this integration proceeds and the refugees become increasingly self-sufficient, special Federal assistance for the refugees will be phased out and the refugees' welfare needs will be met by the regular national assistance programs.
A related activity is the resettlement of emigrating Soviet Jews, funds for this purpose are included in the international affairs function under the auspices of the Department of State.
Other public assistance.-In 1977 the Community Services Administration (CSA) received $200 million budget authority to relieve the high cost of home fuel for the low income during the severe 1976–77 winter weather. A 1978 supplemental for CSA to administer an emergency energy program on a contingency basis is pending before the Congress. This temporary program will be replaced by an ex
panded emergency assistance component of the AFDC program under legislation pending in the Congress.
Earned income credit.—Low-income families with dependents are eligible for a tax credit equal to 10% of earned income with a maximum credit of $400. When the credit exceeds any taxes owed, the Government pays the difference to the family in cash, and this payment is treated as a reduction in budget receipts. In prior-year budgets these payments were treated as outlays. The entire reduction in receipts resulting from the earned income credit is a tax expenditure of $1.2 billion in 1978 and $1.2 billion in 1979. The President's tax proposals include extension of the earned income credit beyond its expiration date under current law at the end of calendar year 1978. The credit would be expanded in January 1982 as a part of welfare reform.
Other tax expenditures.—The acquisition of life insurance is encouraged by the exclusion of interest of life insurance savings from tax, resulting in a $2.0 billion tax expenditure in 1979. The exclusion of premiums paid on group term life insurance by employers from employee income results in a tax expenditure of $0.8 billion in 1979.
Related programs.-There are a number of other programs that are related to income security, but their primary purpose is to meet other national needs and serve other major missions. The following table lists these income security-related programs that support other missions.