The Obama Administration's Proposals to Address Concentrated Urban Poverty

Abstract

Prior to the arrival of the Obama Administration, a fundamental shift in the federal government’s support for basic urban programs aggravated problems in inner-city neighborhoods. Beginning in 1980, when Ronald Reagan became President, sharp spending cuts on direct aid to cities dramatically reduced budgets for general revenue sharing— unrestricted funds (that can be used for any purpose)—urban mass transit, economic development assistance, urban development action grants, social service block grants, local public works, compensatory education, public service jobs, and job training. Many of these programs are designed to help disadvantaged individuals gain some traction in attaining financial security (Caraley, 1992). It is noteworthy that the federal contribution was 17.5 percent of total city budgets in 1977, but only 5.4 percent by 2000 (Wallin, 2005). These cuts were particularly acute for older cities in the East and Midwest that largely depended on federal and state aid to fund social services for their poor population and to maintain aging infrastructure. For example, in 1980, federal and state aid funded 50– 69 percent of the budgets in six of these cities, and 40–50 percent of budgets in 11 cities. By 1989 only three cities-–Buffalo, Baltimore, and Newark—continued to receive over fifty percent of their budgets in state aid, and only two cities—Milwaukee and Boston— received between 40 and 50 percent of their budgets in state aid. To further illustrate, New York City’s state aid dropped from 52 percent of its budget in 1980 to 32 percent in 1989, which resulted in a loss of $4 billion (Caraley, 1992). Barack Obama entered the presidency with a pledge to take seriously the role of the federal government in supporting urban America. He created a White House Office of Urban Affairs, with the Director reporting directly to the President. And programs designed to strengthened metropolitan areas have been spread across the federal government—including the Department of Education, the Department of Housing and Urban Development, and the Department of Labor. Among these programs are special initiatives to address the problems of concentrated urban poverty, which have become especially acute since the early 1970s. And, as we shall soon see, the Obama Administration seemed to be aware of the need to address this growing problem, especially in poor African American neighborhoods.