Major Hurdles Anticipated for FY 25 Legislation
On December 20, just hours before the funding deadline, the House leadership released a scaled-back Continuing Resolution (CR) to extend funding for federal programs, including HUD, through March 14, 2025. The new CR passed both chambers, and President Biden signed the legislation into law early on December 21.
With the March 2025 extension and the increasingly difficult legislative environment, assisted housing programs are vulnerable if the FY 25 appropriations process stalls. The upcoming negotiations are further complicated by the Fiscal Responsibility Act (FRA) of 2023, which caps discretionary spending for the FY 25 budget at just 1 percent above FY 23 levels. This constraint could also trigger automatic spending cuts if all twelve appropriation bills are not passed by April 30, 2025.
Article Summary
- A government shutdown was narrowly avoided ahead
of the December 20 deadline when President Biden signed the funding bill early on December 21.
- The stopgap bill extends funding for 3 months,
includes funding for farmers and natural disasters,
as well as a one-year Farm Bill extension.
- Looking ahead, if all FY 25 twelve appropriation bills
are not passed by April 30, 2025, programs under the Fiscal Responsibility Act (FRA) could be vulnerable
to funding cuts.
- The appropriations process is made more complex by
a divided House, with Republicans holding a narrow
220–215 majority, which continues to shrink due to
resignations and Trump Administration appointments.
- PHADA continues to advocate for full HUD program
funding and will keep members informed of the
FY 25 budget process, possible automatic cuts,
and tax reforms through reconciliation.
PHADA will continue to provide members with updates on the appropriations process as new information becomes available in this dynamic environment.
What is Included in the CR?
A potential government shutdown was averted at the last minute on December 20 when Congress passed, and President Biden signed, a 118-page continuing resolution. Speaker Johnson (R-LA) faced significant obstacles in building consensus after initial bipartisan legislation failed to advance, primarily over the issue of including debt ceiling measures. Following days of negotiations to find common ground among House Republicans, Democrats, and President-elect Trump’s priorities, lawmakers ultimately passed a more streamlined bill.
While the final version does not include a provision to raise the debt ceiling, it does allocate $110 billion for disaster relief and farm aid, and a one-year extension of the farm bill—provisions that had been sticking points in the effort to reach a bipartisan agreement.
Looking Ahead: FY 25 Appropriations Further Complicated by the Fiscal Responsibility Act
The process for this funding extension has revealed significant challenges in the federal budget landscape. The FRA, signed into law in 2023, greatly limits FY 25 discretionary spending, capping it at just 1 percent above FY 23 levels. This will pose a major challenge for housing authorities, as rising costs for materials, labor, and insurance make it difficult to bridge the funding gap with such a modest increase.
Under the FRA, programs are at risk of funding cuts if all twelve appropriation bills for FY 25 are not passed by April 30, 2025. If this occurs, automatic reductions will be triggered, affecting both defense and non-defense programs, including public housing. Some Republican senators have raised concerns that certain House conservatives may intentionally delay spending deals to trigger these cuts.
Legislative Landscape: Challenges Ahead for the 119th Congress
The FY 25 appropriations process is further complicated by a divided House, where Republicans hold a slim 220–215 majority. The resignation of Rep. Matt Gaetz (R-FL) and the expected departures of Reps. Mike Waltz (R-FL) and Elise Stefanik (R-NY) to join the Trump administration will further narrow GOP control to 217–215 in the short term, making it even more difficult to pass critical legislation.
Additionally, while Rep. Tom Cole (R-OK) has retained the Appropriations Committee Chair position, Rep. French Hill (R-AR) has been newly elected Chair of the House Financial Services Committee. Rep. Hill has shown some support for housing credit initiatives and affordable housing and has worked with Sen. Tim Scott (R-SC) on the ROAD to Housing Act with companion legislation aimed at expanding the Rental Assistance Demonstration (RAD) program and promoting affordable housing in Opportunity Zones.
The Reconciliation Process and the Potential Effect on HAs
As President-elect Trump and Congressional Republicans prepare to advance their agenda, reconciliation is seen as a key tool for fast-tracking fiscal measures, including tax and spending provisions, while bypassing the usual Senate filibuster. However, Sen. Lisa Murkowski (R-Alaska) warned that “reconciliation is not easy, referring to the special budgetary process that can be used to circumvent a Senate filibuster.
While unlikely to directly impact public housing funding, changes to mandatory programs like the Supplemental Nutrition Assistance Program (SNAP) could have ripple effects on the broader housing and social services landscape. Another component of the reconciliation process receiving attention is the Byrd Rule, which limits reconciliation to bills affecting revenue or expenditures. Even if a package violates the Byrd Rule, a point of order must be raised to remove it. The Committee for a Responsible Federal Budget provides more details on the history and process for reconciliation.
PHADA continues to advocate for full funding for HUD programs amid the challenges posed by the Continuing Resolution, the FRA, and the reconciliation process. We will keep our members informed of any potential impacts on public housing operations and funding as these dynamic legislative issues unfold. n