Mason – Republican U.S. Rep. Mike Bishop on Wednesday defended federal community development block grant funding from a proposed cut by GOP President Donald Trump.

Trump’s executive budget would eliminate the $3 billion program, which awarded $111 million to Michigan agencies and communities this fiscal year, but there is a bipartisan congressional push to retain the funding.

“We’re still working on our budgeting process, but it is an item that has been identified by many of us as an item to save and to do whatever we can to save it,” Bishop, R-Rochester, said after touring two grant-recipient renovated properties in downtown Mason.

“But everything in the budget is under review because of the dire need of making sure that we address the $20 trillion debt.”

The Mason tour was organized by the Michigan Economic Development Corporation, which received about $31 million in community development block grant funding this year to distribute locally through a Small Cities Program. The quasi-governmental agency is launching a statewide tour to show federal officials the fruits of what it considers a critical program.

The adjoining Mason properties at 124 and 140 Ash Street qualified for $796,000 in fiscal year 2015. Two blighted buildings, including the city’s first brick building that was built during Abraham Lincoln’s presidency, were renovated into a mixed use development, with 10 residential units and a new storefront headquarters for Oracle Financial Solutions.

Community development block grants are “the spark” that makes such projects possible, said Bruce Johnston, an MEDC certified grant administrator with Revitalize LLC and a former Ingham County housing director.

“Quite honestly, without the CDBG funds that came in, this project wouldn’t be here,” Johnston said. “This would be a hole in the downtown. It was dangerous.”

The community development block grants have generated controversy in some parts of the country because of audits showing improper spending or administration. Trump’s budget for the Department of Housing and Urban Development argues the program “is not well-targeted to the poorest populations and has not demonstrated results.”

But the grants are popular with local officials, including a bipartisan group of mayors with the U.S. Conference of Mayors, who have called on Congress to reject cutting funding they say has helped support investments in housing, public infrastructure, safety, employment training and more.

The block grant’s popularity with congressional members who represent those communities is another reminder of the difficulty Trump and Republican leaders will face as they seek to make significant cuts in federal spending.

The issue could come to a head next month as Congress returns from a five-week summer recess and confronts a fast-approaching deadline to raise the national debt ceiling or potentially default on loan payments for the first time in the nation’s history.

Many Republicans are expected to oppose raising the debt-ceiling unless it is coupled with cuts in federal spending, setting the stage for a tense showdown in Congress.

Bishop said the country needs to fulfill its debt obligations but thinks there’s “no question” Congress should also address what he called “a spending problem.” He did not propose any specific cuts.

“I really think the president’s budget, although it was woefully lacking details, tried to convey the message that ‘Wake up, this is a reality,” Bishop said. “To tell Congress, ‘You’re not going to like what I’m sending you, but if you don’t like what I’m proposing, then show me how you do it.’ So I appreciate that approach.”

Bishop, who previously served as state Senate majority leader, is in his second term in Congress. He’s up for re-election next year in the 8th District. Democrat Elissa Slotkin, a former senior official at the U.S. Defense Department, is so far the only challenger to announce for the 2018 race.

Congress’ looming debt ceiling deadline comes amid growing talk of federal tax reform. Details are still unknown, but the Trump administration and Republican leaders last month released a joint statement reiterating a shared commitment to fix America’s “broken tax code.”

The broad outline calls for tax relief for American families, lower tax rates for small businesses and lower rates for larger companies “so they can compete with foreign ones.”

Bishop said he remains optimistic Congress can make progress on stalled plans to overhaul the federal health care system, but in the meantime, he sees “ample opportunity” for tax reform.

“There’s two ways you can handle a debt: you can cut to get out of it, but you can also energize the economy to get growth,” he said. “That will reduce the deficit situation as well.”

The Wednesday tour was Bishop’s second stop at the renovated Mason storefronts, which local officials say have helped revitalize the main downtown business strip in the small city of about 8,400 residents.

While the Mason funding came through a small cities program, many larger communities qualify for direct grants. Detroit was awarded more than $31 million this current fiscal year, Oakland County qualified for more than $3.6 million and Flint was awarded more than $3.5 million.

In downtown Mason, four other nearby properties have been renovated since 2015, primarily with private money, according to Johnson, who said a new mixed us building going up in one of downtown’s only undeveloped plot will feature a new “high-end restaurant” and housing.

The 10 renovated units on Ash Street are fully occupied and at least half of them are rented out to low- and moderate-income residents. Oracle Financial Solutions employs 26 people.

“So when we talk about talent retention and attraction, and trying to make sure we have attainable housing for your young people, this really speaks to that,” said Katharine Czarnecki of the MEDC.

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