Issue #102, November/December 1998
Washington News & Views
Senate Banking and Financial Services Committee Chairman Alfonse D'Amato (R-NY) was defeated in his race for re-election on November 3 by Charles Schumer (D-NY), changing the leadership of this committee so critical to housing and community development and to communities in general. Senator Phil Gramm (R-TX) will become the committee's Chairman. A November 5 article in The New York Times quotes a banking lobbyist as saying, "D'Amato worked things out and could reach across the aisle. That's not Phil Gramm's style. Gramm will be more partisan, more interested in drawing lines in the sand in keeping the differences between Republicans and Democrats." Gramm is a well-known opponent of the Community Reinvestment Act (CRA), an issue likely to arise again in efforts to pass financial services modernization legislation (which died in the 105th Congress).
Gramm's ascendance isn't necessarily all bad, says John Taylor, president of the National Community Reinvestment Coalition. "Ideologues like him usually find that as committee chairs they won't get anything done unless they learn to build consensus," he explains. "His being chair will either neutralize his Neanderthal ideals, or he'll get nothing done." Overall, the Democratic gain of five seats in the House of Representatives is a good sign, Taylor added, and he hopes will be an indication of "less mean-spiritedness and selfishness."
Senator Lauch Faircloth (R-NC) and Senator Carol Moseley-Braun (D-IL), both members of the Senate Banking Committee, were also defeated in November. Both Faircloth and Moseley-Braun were also members of the Committee's Housing Opportunity and Community Development Subcommittee. Senator-elect Schumer, previously Representative Schumer, served on the House Banking Committee during the 105th Congress and is expected to be assigned to the Senate Banking Committee.
In the House, the Banking and Financial Services Committee is losing some important members: full committee ranking member Representative Gonzalez (D-TX), Housing Subcommittee ranking member Representative Kennedy (D-MA), and Housing Subcommittee member Representative Schumer (D-NY). Representative LaFalce (D-NY) will become ranking member for the full Committee and Representative Frank (D-MA) will most likely become the Housing Subcommittee's ranking member.
Rep. James Walsh (R-NY) will be the new chair of the VA-HUD Appropriations Subcommittee in the 106th Congress. Current chair Jerry Lewis of California is moving to lead the National Security panel.
Linda Couch, National Low Income Housing Coalition, www.nlihc.org
Act Will Assist Low-Income Families
President Clinton signed The Assets for Independence Act on October 27, authorizing the Department of Health and Human Services to conduct a 5-year, $25 million per year Individual Development Account (IDA) demonstration, through which grants will be made to nonprofits on a competitive basis. IDAs are matched savings accounts designed to help low-income families accumulate money for investments in education, job training, home ownership, and microenterprise. Savings are matched by nonprofits, and will then be matched again by federal grants under the act. Presently, 13 community-based organizations operate IDA programs as part of a demonstration project.
Those eligible for Temporary Assistance to Needy Families (TANF) will automatically be eligible. Others must qualify for the Earned Income Tax Credit (EITC) and meet a net worth test. (Household net worth cannot exceed $10,000 excluding the value of the primarily dwelling unit and one motor vehicle owned by the household.) From among those eligible, the nonprofits will choose the "best suited" candidates.
Only savings generated from earned income can be deposited into an IDA. Then, at least once every three months, a matching deposit will come from the non-federal funds, and this deposit will be between 50 cents and $4.00 for every $1 saved by the participant. Then the federal deposit will equal the non-federal one. For example, assuming the nonprofit adopts a 2-1 matching rate, if a participant deposits a total of $100 over three months, then the non-federal match will be $200, and the federal match will be $200, for a total balance in the IDA of $500 (plus accrued interest). Federal funds in any one IDA cannot exceed $2,000 per individual (and $4,000 per household) over the course of the demonstration.
Corporation for Enterprise Development, www.cfed.org; 202-408-9788.
The Treasury Department awarded $75 million to 190 banks, thrifts, and community development financial institutions (CDFIs) in September, as part of the CDFI Fund's Bank Enterprise Award Program and the CDFI Core Program and Technical Assistance Component. For a list of the 1998 CDFI awards recipients, see www.cdfifund.gov
Budget Provides New Funds for Lead Poisoning Prevention
The FY'99 budget passed by Congress increased two pools of money used to fund lead poisoning prevention efforts. HUD's resources for this area were increased from $60 million to $80 million, and The Centers for Disease Control garnered more than $38 million for their lead poisoning prevention grants to state and local health departments. Alliance Alert, September/October 1998.