News Release

CLINTON/GORE ADMINISTRATION'S BUDGET INCLUDES MORE FUNDS FOR RURAL AMERICA
Rural Housing, Jobs and Utilities Remain Top Priorities for USDA

WASHINGTON, DC, Feb. 17, 1998 -- The Clinton/Gore Administration's proposed 1999 budget will boost efforts of the administration to improve living conditions in rural America by allocating more than $10.4 billion for U.S. Department of Agriculture Rural Development programs, about $457 million more than in 1998 if the budget is approved by Congress.

"This budget will help breathe new life into some of our nation's neediest rural areas and create new opportunity for many people who have yet to be lifted by the rising tide of the burgeoning American economy," Agriculture Secretary Dan Glickman said. "The critical needs of rural America for better housing, jobs, utility services and community facilities remain top priorities for this administration," he stressed.

A number of cost-saving factors will help pay for these priorities. "The strong U.S. economy allows us to buy more program for less money," said Jill Long Thompson, under secretary for USDA Rural Development. "With interest rates down, the subsidy costs of our rural programs have declined by almost 40 percent."

The Rural Development budget comprises nearly 4 percent of the overall USDA budget of $54 billion in 1999, down from $63 billion in 1993. Despite the overall decrease in USDA funding and his historic effort to balance the budget in 1999, Long Thompson said the President is committed to creating new opportunity in rural America, which is home to 20 percent of the nation's people and encompasses about 80 percent of the nation's land area.

The USDA Rural Development budget breaks down into three primary program areas, two of which will see marked increases.

The Rural Housing Service -- which helps finance single family and multiple family housing and helps build vital community facilities such as schools, medical clinics and fire stations in rural areas -- will see its budget increase from $5.6 billion in 1998 to just under $6 billion in 1999.

The Rural Utilities Service -- which provides financing and technical assistance for water, wastewater, electricity and telecommunications services in rural areas -- will see its budget increase from $3.1 billion in 1998 to $3.22 billion in 1999.

The Rural Business-Cooperative Service -- which provides financing and technical assistance for rural businesses and cooperatives -- will see its budget go from $1.19 billion in 1998 to $1.18 billion in 1999.

Long Thompson cited the following as highlights of the 1999 USDA Rural Development budget:

• $1 billion for direct loans and $3.1 billion for guaranteed loans for single family housing. This budget allocation will help the Clinton/Gore Administration in its drive to boost homeownership levels to a historically high levels. Direct loans will continue to be available only to low-income families which earn less than 80 percent of the median income for the area in which they live. Guaranteed loans will remain available to families that earn up to 115 percent of the median area income.
• $500 million in grants and $839 million in loans for water and waste disposal projects, an increase of more than $66 million over 1998. This increase will provide a major boost to the President's Water 2000 initiative, the goal of which is to extend clean running water and waste disposal service to every rural American by the turn of the century.
• $1 billion for Business and Industry loan guarantees, of which $200 million will be earmarked for developing user-owned cooperatives. It is estimated that the $1 billion spent on rural businesses and cooperatives will generate about 38,000 jobs.
• $583 million for rental assistance, which is provided to multi-family and farm labor housing project owners. This assistance makes up the difference between what low-income tenants pay and the rent required for the project owner to meet debt servicing requirements.
• $1.65 billion in direct loans for rural electric and telephone system and $165 million in loans and grants for the Distance Learning and Telemedicine facilities.

Contact:
Clark Ray, (202) 720-5579
Dan Campbell, (202) 720-6483