Federal Budget Update and Action Alert
June 15, 2012
House of Representatives Subcommittee Underfunds Housing Programs
On June 7, the House Appropriations Subcommittee on Transportation, Housing, and Urban Development (THUD) approved its fiscal year (FY) 2013 appropriations bill. The day before, the budget for rural rental housing programs administered by the Department of Agriculture (USDA) was also approved by a different subcommittee. Both bills, which still must be finalized by the full Appropriations Committee and the House as a whole, provide less funding than the Senate versions and underfund important housing programs. The votes by the full Appropriations Committee could be as soon as next week.
No Illinois House members are on either House Subcommittee, but Representative Jesse Jackson, Jr. is on the full Appropriations Committee and all House members will have to decide how to vote on the final budget. Both Illinois Senators, Richard Durbin and Mark Kirk, are on the THUD Subcommittee in the Senate and Senator Durbin will be a key player in any House-Senate negotiations.
The majority of the underfunding of HUD programs impacts the Project-Based Rental Assistance Program (PBRA) for Section 8 contracts. Like President Obama's budget proposal, the House funding level would require that existing project-based contracts be short-funded for less than 12 months, pushing the cost into the next fiscal year and promoting doubts about the stability of the program among private building owners. There are more than 1 million project-based Section 8 housing units nationwide, including more than 61,000 units in Illinois.
The House bill funds Housing Choice Voucher renewals at the President’s requested funding level of $17.238 billion, lower than the Senate bill level of $17.495 billion. The President requested less funding for contract renewals than would be needed, relying on policy changes, such as increasing minimum rents that would harm the poorest tenants.
Even if Congress were to pass legislation with the policy provisions, the House funding level would still likely not fund all vouchers next year. The Center on Budget and Policy Priorities estimates that up to 55,000 vouchers could be lost if contract renewals were funded at the President’s requested level of $17.238 billion. At least $19.75 billion is needed to fully fund all voucher renewals in FY13 and restore vouchers that will be lost in FY12. More than 76,000 households in Illinois, 79% of whom are extremely low-income, use Housing Choice Vouchers to make their rent affordable.
Another underfunded program in the the House bill is HUD's McKinney-Vento Homeless Assistance Grants, which would receive $2 billion in funding. While this is nearly $100 million above the FY12 level, the National Alliance to End Homelessness estimates that it would not be sufficient to fund all Continuum of Care (CoC) renewals for transitional and permanent supportive housing programs and maintain the existing level of Emergency Solutions Grant (ESG) activities for homelessness prevention and rapid rehousing. The Alliance estimates that more than 25,000 people would be homeless instead of housed under this legislation and asks people to advocate that the program be funded at $2.231 billion.
Two HUD programs were funded at a slightly higher level in the House budget compared to the Senate. The HOME Investment Partnerships and Community Development Block Grant programs would receive $200 million and $244 million more, respectively.
The House budget for USDA would provide lower funding than the Senate's appropriations bill for most rural housing programs, including Farm Labor Housing, Section 521 Rental Assistance and the Multifamily Preservation Revitalization Program. The loan guarantee programs—Section 502 for owner-occupied housing and Section 538 for rental units—are at the same levels in the House and Senate bills. These programs charge fees that make them self-supporting. The Housing Assistance Council has a detailed analysis on their website.
If the House and Senate both pass the HUD and/or USDA budget bills, Congress may begin to negotiate differences in program funding levels. However, it seems to be universally accepted that Congress will pass a continuing resolution to keep the government funded through the beginning of FY13, which starts October 1, allowing lawmakers to delay final appropriations decisions until after the November elections. The outcome of the elections will undoubtedly determine what final decisions are made regarding the FY13 budget.
TAKE ACTION: Urge your Representative to Adequately Fund Housing Programs
Also ask them to oppose adding any harmful policy provisions to the budget legislation, including the proposal to increase minimum rents for the poorest HUD-assisted households.
Please let us know if you make a call and what response you get by replying to this email. Thanks so much!
TAKE ACTION: Oppose Sequestration Cuts to Non-Defense Discretionary (NDD) Programs
Next January, all non-defense discretionary (NDD) programs face automatic across-the-board cuts of 8.4% through “sequestration” as a result of Congress’ inability to reach an agreement on deficit reduction as required by the Budget Control Act of 2011.
In addition, on May 10 the House approved H.R. 5652, the Sequester Replacement Act of 2012, which places the burden of deficit reduction primarily on people with low-incomes by eliminating the cuts to military spending for 2013 that were also part of the sequester agreement in the Budget Control Act.
Cuts of 8.4%, or larger if H.R. 5652 becomes law, will have a huge negative impact on affordable housing and community development programs; medical and scientific research; education and job training; infrastructure; public safety and law enforcement; public health; weather monitoring and environmental protection; international relations; and a myriad of other social services.
We are participating in an effort to appeal to local, state, and national organization across the country with an interest in these core government functions to sign on to a letter urging Congress to avoid the sequester and pass a balanced approach to deficit reduction that does not include further cuts to NDD programs.
To read the full letter and sign on visit the NDD sign-on letter initiative website. The deadline to sign on is June 22.
For more information contact Bob Palmer, Housing Action Illinois, 312-939-6074 x. 206 or firstname.lastname@example.org.
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