The House Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies held a hearing on April 24 on the President’s FY14 budget request for Rural Development. The USDA’s Rural Housing Service programs were a topic of some importance for both witnesses and subcommittee members. Chair Robert Aderholt (R-AL) opened the hearing expressing disappointment in the Administration’s FY14 budget request to Congress. The Chair asked whether the request, including a new proposal for the Rural Development office, serves the needs of people with the lowest incomes.Ranking Member Sam Farr (D-CA) said the nation has a “problem that’s about infrastructure” that must be approached as such. “Why is rural America still dirt poor decade after decade?,” asked Mr. Farr. Doug O’Brien of USDA provided an overview of the Administration’s budget request for Rural Development, saying that the request targets resources to citizens with the greatest needs, including the funding for the Rural Housing Service guarantee and direct loan programs. Mr. O’Brien also said that the budget request will “take care of the most vulnerable” citizens by increasing funds in the rental assistance program.Mr. O’Brien connected the budget request to the issue of sequestration saying that, “growth of [Rural Development] programs is exciting but the reduction of staff is daunting.” Administrative cut backs will reduce services from the department and USDA will have to cut back on services, said Mr. O’Brien. Echoing the testimony of Secretary Tom Vilsack before the Subcommittee on April 16 (see Memo, 4/19), Mr. O’Brien said that USDA will not be able to provide rental assistance to 15,000 residents due to sequestration. These residents are “mostly [people] who are disabled, elderly” said Mr. O’Brien. Chair Aderholt questioned Mr. O’Brien about the assertion 5,000 households will lose rental assistance due to sequestration and asked why the Administration did not share this information until after sequestration took effect. Further, he wanted to know how the USDA plans to manage the reduction in funding for the rental assistance program. Mr. O’Brien said that USDA has sent notices to each multi-family property owner, explain the situation of the Rural Development office. USDA is exploring ways to save funds in the program including requiring that owners utilize reserve funding and other administrative strategies. We are “trying to figure out how to minimize the impact of the rental assistance cuts on tenants,” said Mr. O’Brien. Representative David Valado (R-CA) asked why the Administration requested lower funding for the Self-Help Housing program. Mr. O’Brien responded that the President’s budget focuses on rental assistance, and that even though USDA believes that the Self-Help program is worthwhile, the department was forced to make hard budget decisions. In answer to a question from Chair Aderholt on her testimony about the single family loan guarantee program, Tammy Trevino, Administrator for Housing and Community Facilities Programs at USDA Rural Development, said that USDA balanced the multiple priorities of the Rural Housing Service in its budget request and pointed to the increase in requested funding for rental assistance. This is not a choice that USDA would make, given other budget constraints, said Ms. Trevino. Mr. Farr criticized the Administration for knowingly requesting insufficient funding to address the needs of rural households. “The problem is that they want to help rural America. When they go out, they find out you can’t help rural America without water…. housing. And they are not doing anything about it, they are just talking about it,” said Mr. Farr to Chair Aderholt. Representative Alan Nunnelee (R-MS) asked about the status of HUD and USDA on merging similar housing programs. Mr. O’Brien responded that UDSA continues to work closely with the White House on these alignment efforts including participating in the Rental Housing Working Group and participating in bi-weekly calls with the Domestic Policy Council to ensure that agencies are not duplicating efforts. Representative Jeff Fortenberry (R-NE) asked what USDA is doing to address the change in Census definition that would cause a number of communities that have been defined as rural to no longer be in that category, which would prevent them from receiving federal rural development funding. Mr. O’Brien mentioned that the final FY14 budget extended the current definition through the end of the year for rural housing programs and that the Administration would like to work with Congress on a long-term plan to address this concern. (See related article below under new bills.)Read witness testimony at http://1.usa.gov/10jDMp3.