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ACORN May Qualify for Up to Nearly $4 Billion in Obama's Proposed Budget

President Obama's 2011 budget proposal does not explicitly state that ACORN cannot receive federal tax dollars, raising concerns among critics of the scandal-plagued group.

"In President Obama's budget, there's another $3.9 billion dollars in funding that would go out mostly under the community development block grants that ACORN could qualify for, and there's nothing that we could find in Obama's budget that he would recommend that we not continue to fund ACORN," said Rep. Steve King, R-Iowa.

"So the omission is something that gives him some room to operate," he said.

But a Housing and Urban Development spokeswoman told FoxNews.com that the $3.9 billion would be divided among states, municipalities and agencies, and that allocations won't be made until the president's budget is finalized.

Back in September, Congress passed a bill prohibiting ACORN and its affiliates from getting federal money after undercover videos appeared to show ACORN employees advising a couple posing as a pimp and prostitute how to set a up a brothel with underage girls.

Obama signed the ban into law in October and Democratic strategists say the president isn't going to try to sneak funding into his budget now.

"They don't want to be seen as facilitating funds going to ACORN," Democratic strategist Maria Cardona said. "Until they can fully clear their name, you are certainly not going to see this administration pushing for those kinds of funds going to ACORN."

The ban on ACORN funding is tied up in federal court. A federal judge in New York sided with ACORN in a December ruling which lifted the ban. That ruling is being appealed.

On its Web site, ACORN says it "does not apply for nor does it receive any federal grants. ACORN has had contracts with other nonprofit organizations to perform work on projects which received federal grant support."

Those other nonprofit organizations, critics charge, in some cases are ACORN affiliates, possibly hundreds of them although they can be hard to track.

"We can't know how far they go," King said. "I can't find a thread of ACORN that I would want to trust with American taxpayer dollars."

So are ACORN and its affiliates receiving federal dollars now or not? King said Congress renewed the ban in December. After that judge's decision so he says the law should stand. It's a battle between the branches of government and it's not clear where the money is going.

Molly Henneberg joined FOX News Channel (FNC) in 2002 and currently serves as a correspondent based in the Washington bureau. Click here for more information on Molly Henneberg