This article comments on legislation recently approved by the Senate funding the U.S. Department of Housing and Urban Development (HUD) for FY 2002. While this bill restores public housing cuts proposed in President Bush's budget, it contains provisions damaging to the Section 8 housing voucher program and the project-based Section 8 program. It funds the Section 8 voucher program at a level below the President's request, providing fewer incremental vouchers than the Administration's budget. It also contains a $640 million reduction in the Section 8 voucher program reserves that the Administration proposed. Finally, the Senate bill contains an unprecedented, far-reaching rescission of Section 8 funds that was not included in the Administration's budget or the House VA-HUD bill and that is likely to cause problems in the future for the financing of the Section 8 program. Some 80% of the rescinded Section 8 funds would be transferred to nonhousing programs. The voucher program is the leading source of federal housing assistance for extremely low-income families. These households are far more likely than better-off families to have severe housing problems. A growing number of studies also have found that families with vouchers work more hours and experience higher earnings because they are able to live in neighborhoods with better employment opportunities than similar families without housing assistance or with other forms of housing assistance. Despite this evidence, the Senate bill reduces the number of new vouchers more than 70% below last year's level. The bill provides rental assistance to fewer families than either the Administration's budget or the House VA-HUD bill.