President Joe Biden speaks from the Treaty Room in the White House. Congress is not expected to adopt the budget proposal as written, but with the current Democratic majority, more of President Biden’s proposals may have a better chance of enactment. (AP Photo/Andrew Harnik, Pool, File)

Biden Administration’s initial budget request for fiscal year 2022, released last month, shows attention to rural needs, but it’s too early to predict which portions will make it to the final bill.

The long-awaited budget does propose increases in some U.S. Department of Housing and Urban Development (HUD) programs. Those funds would help address rural needs, as HUD does provide a substantial level of funding for small towns and rural areas. 

A more detailed budget will be issued later this spring.  Normally presidential budget proposals come out in early February with requests for the fiscal year beginning on the following October 1.  But in a presidential transition year, especially one with a change in party control of the White House, the documents are almost always later, allowing a new president to set her or his own priorities.  

The rural content in the budget outline includes proposals to increase funding above current levels for the Rural e-Connectivity broadband program, rural water and wastewater programs, and USDA’s civil rights office.  The budget request also has the following passage:

Partners with Rural Leaders to Grow Rural Economies and Tackle Rural Poverty. The discretionary request provides $32 million for a renewed and expanded initiative to leverage USDA’s extensive network of offices to help people in high poverty communities tap into Federal resources, referred to as the “Strikeforce” initiative. USDA will coordinate with other Federal agencies on an all-of-Government approach to connect rural stakeholders with Federal programs and resources.

The StrikeForce initiative, which was used in several states, was launched during the Obama administration. 

Rural development is also mentioned in a budget document paragraph about Community Development Financial Institutions (CDFIs).  These nonprofit loan funds receive support from the CDFI Fund, a part of the U.S. Treasury Department:

Invests in American Communities and Small Businesses. To support and empower the Nation’s most vulnerable communities, including many rural communities, the discretionary request provides $330 million, an increase of 22.2 percent above the 2021 enacted level for annual appropriations, to support expanding the role of Community Development Financial Institutions (CDFIs), which offer loans to start-ups and small businesses to promote the production of affordable housing and community revitalization projects. This investment builds on an unprecedented level of support for the CDFI industry in 2021, including more than $3 billion in direct funding, $9 billion for investments in CDFIs and Minority Depository Institutions, and provisions in the American Rescue Plan Act of 2021 encouraging CDFI participation in the $10 billion State Small Business Credit Initiative.

HUD funds requested in the budget document include:

  • 200,000 new rental housing vouchers for low-income households;
  • $1.9 billion for the flexible HOME program, an increase of $500 million over FY21 funding;
  • support for an additional 100,000 homeless family units;
  • $800 million for modernization and rehabilitation of HUD-supported rental housing;
  • $3.2 billion for public housing modernization;
  • $180 million to support 2,000 units of new permanently affordable housing for the elderly and persons with disabilities;
  • $900 million for Native American housing run by tribal housing agencies;
  • $3.8 billion for the city-and-state-run Community Development Block Grant program, including “a targeted increase of $295 million to incentivize communities to direct formula funds toward the modernization and rehabilitation of public infrastructure and facilities in historically underfunded and marginalized communities facing persistent poverty”;
  • $400 million, a $40 million increase, for prevention of lead and other hazards; and
  • $85 million for fair housing.

It should also be noted that President Biden’s very large infrastructure proposal, the American Jobs Plan, has a number of rural parts, including a new $5 billion Rural Partnership Program and $2 billion for rural housing.  It is not yet clear whether there is some overlap between the infrastructure plan and the budget proposal.  

The budget and infrastructure proposals must receive approval from Congress, which is not expected to adopt them exactly as written.  With the current Democratic Congress, however, more of President Biden’s proposals may have a better chance of enactment.  

Leslie Strauss is a Senior Policy Analyst at the Housing Assistance Council.

Joe Belden is based in Washington, D.C.