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President’s Forum: Congress Begins Consideration of FY 24 Spending Bills

Despite Debt Ceiling Agreement, House Legislation Would Impose Larger Cuts

PHADA President Mark Gillett.

As reported in the previous edition of the Advocate, Congress and the Biden Administration agreed on a debt ceiling measure that sets strict spending limits for fiscal years 2024 and 2025 while ensuring the ceiling will not have to be raised again before the 2024 elections. The agreement set spending caps that will make it particularly challenging for congressional appropriators to adequately fund domestic programs including housing. In a subsequent and surprising new development, an influential bloc of House lawmakers argued the caps set a ceiling, not a floor. Consequently, the House majority set even lower top line levels that could result in deeper cuts, setting off a new debate on overall spending.


FY 24 & 25 Spending Caps

The compromise between the House, Senate and the Administration raised the $31.5 trillion debt limit in exchange for tighter limits on federal discretionary spending. Under the agreement, FY 24 domestic appropriations would be set at current levels. There is some latitude in the law, allowing appropriators to move funds from other sources and to classify some spending as “emergency” to help address inflation and other mitigating circumstances. Still, outlays are held steady and can only increase by 1 percent in FY 25 under the terms of the agreement.

PHADA and other housing advocacy organizations have raised concerns about how the deal could impact HUD programs, which have experienced significant inflationary pressures. For example, because of large cost increases in many U.S. rental markets, it is estimated that almost $2.5 billion more is needed in to ensure that the Housing Choice Voucher and Section 8 project-based accounts keep pace with ongoing needs.

In addition, the T-HUD subcommittee typically relies on FHA receipts to help offset the need for appropriations. Due to slow market conditions, however, those receipts are down by billions of dollars. This will make the task for T-HUD appropriators even more challenging.


House Plan Would Impose Larger Cuts Than Debt Ceiling Caps

Rep. Kay Granger (R-TX) chairs the full House Appropriations Committee, which allocates the overall amounts that are made available to the subcommittees. Announcing her plan, she said that “because of years of out-of-control spending, it has been and will continue to be my priority to pass conservative bills that focus our limited resources on the core responsibilities of the federal government, including national defense, our veterans, and our border.” She added that the debt ceiling compromise “set a topline spending cap – a ceiling, not a floor – for Fiscal Year 2024 bills. That is why I will use this opportunity to markup appropriations bills that limit new spending to the Fiscal Year 2022 topline level.”

If enacted, the House allocations could result in devasting cuts for HUD programs somewhere in the range of about 25 percent. Rep. Rosa DeLauro (D-CT), the ranking member of the House Appropriations Committee, strongly criticized Granger’s approach, noting it disregards the bipartisan agreement and could result in a government shutdown later this year. The Biden Administration objected to the deeper cuts too.

During recent congressional testimony, HUD Secretary Marcia Fudge outlined how the FY 22 limits would hit HUD programs and many low-income Americans assisted by those programs. She said it would be impossible to stave off “mass evictions,” adding the cuts could result in the loss of voucher assistance for as many as 600,000 families. Congress “should not balance the budget on the packs of poor people,” the Secretary told appropriators. In addition, Secretary Fudge added that public housing cuts would create “unsafe living conditions” for hundreds of thousands of families. Similarly, she said the cuts could eliminate Section 8 project-based funding for almost 90,000 families, according to HUD’s estimates.

PHADA is collaborating with other national housing organizations to try and ensure that HUD programs receive an adequate overall allocation. The association’s top priorities are public housing operating, capital, voucher, and Section 8 project-based assistance. Our budget recommendations, developed with CLPHA, NAHRO and the MTW Collaborative can be found here.

Members should use this information in their advocacy with Congress. Like Secretary Fudge’s testimony, HAs should illustrate how such large cuts would negatively affect their operations and residents.

At this stage, House lawmakers have begun to markup FY 24 spending bills with hopes of finalizing them for enactment by Sept 30, the end of the fiscal year. It is not yet clear when the House T-HUD subcommittee will mark up its legislation, which again, could cut HUD funding by 25 percent or more. In any case, it is questionable whether the House will be able to pass legislation with cuts of such magnitude, considering the small margin of votes between the two parties. There is no question the Senate and the White House will reject the House’s proposed numbers because they disregard the agreement on FY 24 spending caps.


PHADA’s September Meeting

House and Senate appropriators will need to agree on 2024 budget or a Continuing Resolution before the start of the new fiscal year, October 1. It is highly likely that appropriations will still be in play during PHADA’s Legislative Forum in mid-September. Thus, members are encouraged to attend the meeting in Washington, DC, and make our case directly to Representatives and Senators then. More information, including the Forum agenda, is available here.

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