President Obama's FY 2010 budget request includes a total of $435 million, up from $390 million in FY 2009, for the Legal Services Corporation (LSC). The President also requested the elimination of the current restrictions on non-LSC funds, including the restrictions on attorney's fees and participation in class action suits. For more on these restrictions, click here.

If adopted, beginning on January 1, 2010, LSC recipients would be permitted to use their non-LSC funds for any purpose permitted by the funder. LSC recipients would also be able to use LSC or any other funds to participate in class action lawsuits.

On May 4th more than 60 organizations, including OMB Watch, sent a letter to Congress calling for the elimination of the most burdensome limits on LSC grantees. The letter states: "The restriction on state, local and private funds also results in the wasteful spending of precious public resources. In many states, justice planners have had to set up entirely separate organizations and law offices, funded by state and local public funders and private charitable sources, to do the work that LSC-funded programs cannot do, resulting in wasteful duplication of overhead, personnel and administrative costs. [. . .] we urge you to amend the rider in the fiscal 2010 appropriation to LSC, a no-cost way to help make LSC-funded programs more efficient and effective, and to improve access to justice for the most vulnerable during these harsh economic times."