ADDITIONAL VIEWS OF SENATOR ARMSTRONG

When the Senate considers this bill, I intend to offer an amendment to limit Section 8 rent subsidies to poor families. Subsidizing the rent of middle and upper income families would be neither wise nor affordable, in my opinion. Yet this is exactly what may happen unless the current authorization is amended.

Under current eligibility standards, more than 30 million Americans families-half the nation's total could qualify for rent subsidies, according to the Congressional Budget Office. Obviously, Congress cannot and should not fund a program even approaching this size. Indeed, the pending authorization is already far too expensive in the opinion of many; it substantially exceeds the Administration recommendation. But even so, it will authorize only 300,000 subsidized rental units, about one percent of the potential total.

In order to restrict the program to a more realistic total and, at the same time, to assure that limited available funds are used for those most in need, my amendment will limit subsidies to families whose income is no more than 50 percent of median or $12,000 per year, whichever is less, in any geographic area (50 percent of median income is now used by HUD to define "a very low-income family"; $12,000 is nearly twice the Federal Government's maximum poverty standard for a nonfarm family of four).

The Section 8 rental subsidy program, funded in this legislation, is the Federal Government's primary housing assistance program. Participants pay no more than 25 percent of their adjusted incomes for rent, and the Federal Government pays the difference. To be eligible, adjusted incomes cannot exceed more than 80 percent of the median income for the area. (Nationally, median income for a family of four is $17,600.)

According to CBO and the General Accounting Office, 30 million American families and up to two-thirds of all renters in large American cities qualify for federal housing subsidies under the 80% of median income "ceiling."

The truth is, however, that families with incomes far above the 80% ceiling could qualify. Regulations issued by the Department of Housing and Urban Development grant no less than 11 income deductions and exclusions which simply are not considered in determining eligibility. A partial list of these deductions follows:

-foster child care payments.

-food stamps.

-sporadic or casual gifts.

-all income of any family member under 18, or who is a full-time student.

-GI Bill benefits.

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The Section 8 program merits particularly close Congressional review this year. Created just four years ago, outlays for Section 8 now amount to $2.2 billion annually—more than half of all funds allotted to assisted housing-and CBO estimates that by 1984 outlays will exceed $8 billion annually. What's even more staggering is that in the past four years Congress has authorized some $102 billion in spending authority for Section 8 subsidies, and that CBO projects at current spending rates this figure will increase by $160 billion by 1984.

Although Section 8 is extraordinary for its sheer size, it is typical of the Federal Government's response to emerging problems of recent years. As each new problem is perceived, a new program is created. . . to the point now that we have so many new programs that it is impossible to keep track of them, impossible to determine whether they are functioning effectively, whether they have outlived their usefulness, whether they were needed in the first place or even, as many thoughtful observers believe, whether they are actually doing more harm than good. What Congress has been loath to realize is that by trying to solve every problem with a new program, we have created programs which are themselves one of the main problems facing America.

It is all so complicated and frustrating that it is hard to know which wasteful and counterproductive programs should be pruned first. Congressional adoption of a 50% $12.000 income ceiling would be a good place to start.

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WILLIAM L. ARMSTRONG.

ADDITIONAL VIEWS CONCERNING SPENDING LEVELS Literally thousands of budget decisions made by Congress' 34 committees and 212 subcommittees comprise the recommended spending levels for each year's Federal Budget. The sum total of these decisions in large measure shapes the size and scope of Federal fiscal policy.

We now live in an era which requires restraint in government spending. Popular opinion clamors for such restraint. A growing majority of economists, educators, businessmen and, yes, even Members of Congress believe that excessive spending must be controlled, if for no other reason, because it is a principal cause of inflation. With inflation rates soaring into double-digit figures, it is even more imperative that Congress exercise sound judgment in spending each tax dollar.

The first line of defense against excessive increases in spending lies with each Congressional committee with any jurisdiction over the Federal Budget.

It is in this light that we are dismayed with the provision of the Housing and Community Development Amendments of 1979 proposed by the Committee affecting the basic Federal housing assistance program which does not reflect a firm commitment on the part of the Senate Banking Committee to restrain increase in Federal spending.

First, the provision increases budget authority for Section 8 rental subsidies the primary Federal housing assistance program-to nearly $30 billion, more than was included in the First Concurrent Resolution on the Budget which just passed the Senate.

The Administration recommended that Congress approve $27 billion in budget authority for this program. Depending on the rate of inflation and per unit construction cost, this would be enough to provide between 266,000 to 300,000 additional units of Federally assisted housing. In defending this recommendation, Housing and Urban Development Secretary Patricia Harris told the Banking Committee:

... it is exemplary for the government to show restraint in its spending... I believe it is acceptable, conscionable, justifiable and defensible for the President to present a budget that proposes 300,000 units of housing . . . in Section 8. It protects the future pipeline, and it demonstrates a willingness to have a restrained budget even in the area of assisted housing.

The Administration has sound reasons for concluding that $27 billion in budget authority for this program is adequate. First, Congress, since 1940, has approved $209,766,592,000.00 in so far unspent budget authority for assisted housing programs. In other words, Congress is already obligated to spend nearly $210 billion on housing assistance, not including the $30 billion in additional spending authority contained in this legislation.

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Second, Congress has not been lax in providing housing for the needy. In the past four years, Congress has appropriated some $9.7 billion for federally assisted housing projects, and has authorized $102 billion to be spent on this program. The appropriated funds. since 1940 have been used to provide housing for 3.1 million American families.

Third, if Congress in the future continues to approve the level of funding contained within this legislaiton, outlays for Section 8 and other housing subsidy programs will double in four years.

For these and many, many other reasons, Congress should act now to restrain unwarranted funding increases in the Section 8 program. Proponents of the Section 8 program argue that any cutbacks reflect Congress' intent to "balance the budget on the backs of the poor”. Such claims reject two facts. First, efforts to curtail budget deficits are designed to help another very significant group of American people: low- to middle-income taxpayers, who are beset by escalating tax demands and the ravages of inflation. By curtailing the cost escalations in this and other programs, we can do more to assist workers in meeting daily economic needs than all of the government programs put together.

Second, the way these housing programs operate any new authorization represents an increase of housing assistance to the poor. Even if this bill contained no budget authority for these programs, which we are not recommending, the 3.1 million families now assisted would continue to get subsidies and in increasing amounts which allow for inflation. All of the authority for these programs represents long-term subsidy commitments for more of the poor. Thus even if the Committee had adopted the $23.5 billion amount provided in the 1st Resolution on the Budget, this bill would still help hundreds of thousands additional low-income families.