Senate Appropriations THUD Subcommittee Rejects Trump’s Drastic FY 2018 Request, Provides Level Funding for HUD

Published by Peter Lawrence on Wednesday, July 26, 2017 - 12:00am

The Senate Appropriations Transportation-HUD (THUD) Subcommittee approved its $60 billion fiscal year (FY) 2018 spending bill July 25. According to the committee press release, that funding level represents $2.4 billion (4.2 percent) more than FY 2017, $12.2 billion (25.4 percent) more than the administration’s FY 2018 request, and $3.6 billion (6.3 percent) more than the House FY 2018 THUD bill. For the U.S. Department of Housing and Urban Development (HUD), the bill provides net appropriations of $40.2 billion, an $8.8 billion (28 percent) increase from the administration’s FY 2018 request, $1.9 billion (5 percent) more than the House FY 2018 bill, and $1.42 billion (3.7 percent) more than FY 2017.

While Congress has yet to approve a FY 2018 budget resolution, the House has begun the FY 2018 appropriations process assuming $511 billion in nondefense spending, which is $49 billion (11 percent) more than the administration’s FY 2018 request, but $4.75 billion (0.9 percent) less than the FY 2018 spending cap and $8 billion (1.5 percent) less than the FY 2017 spending cap as authorized by the Budget Control Act, according to Bloomberg. A July 20 press release from Appropriations Committee Chairman Thad Cochran, R-Miss., says the Senate is assuming $518.5 billion in nondefense spending for FY 2018, which is $7.5 billion (1.5 percent) more than the House and $56.5 billion (12 percent) more than the administration’s FY 2018 request.

Highlights of the HUD program funding levels follow.

 

Blog Chart Key Programs of the FY2018 HUD Budget
Click to Enlarge

 

Public and Assisted Rental Housing

Project-Based Rental Assistance (PBRA)

The Senate bill provides $11.5 billion for Project-Based Rental Assistance, which is $691 million (6.4 percent) more than FY 2017, $756 million (3.1 percent) more than the administration’s FY 2018 request and $425 million (3.8 percent) more than the House bill. It would appear that this funding level is sufficient to renew contracts, and does provide funding for contract administrators, unlike the House bill. Like the House, the Senate bill reportedly rejects the administration’s budget request’s proposals to establish $50 minimum rents, require increased tenant contributions toward rent–reportedly from 30 to 35 percent of adjusted family income, and institute other proposals to achieve savings from HUD’s rental assistance programs.

Tenant-Based Rental Assistance (TBRA)

Tenant-Based Rental Assistance is proposed to be funded at $21.4 billion, a $1.07 million (5.3 percent) increase from FY 2017, a $2.05 billion (10.6 percent) increase from the administration’s request, and an $878 million (4.3 percent) increase from the House bill. The subcommittee asserts in its press release that this funding level should be sufficient to renew funding for all vouchers in use.

Like those for project-based rental assistance, the bill does not adopt the rental assistance reforms from the administration’s budget request. For the HUD-Veteran Affairs Supportive Housing (HUD-VASH) program, the bill provides $47 million, which is equal to FY 2017, $40 million (571 percent) more than the administration request and the House bill. Of this amount, $7 million is for Native American veterans, the same amount as in FY 2017, the administration’s request and the House bill.

Public Housing Capital and Operating Funds

The Senate bill rejects the fairly dramatic cuts to public housing proposed in the administration’s request. For both the Public Housing Capital and Operating Funds, the Senate bill provides $6.45 billion which is $109 million (1.7 percent) more than FY 2017, $1.92 billion (30.1 percent) more than the administration’s request and $240 million (3.8 percent) more than the House bill.

Community Planning and Development (CPD) Programs

The bill does not eliminate Community Development Block Grant (CDBG) formula grants and the HOME Investment Partnerships Program (HOME), as proposed by the administration. It provides level funding from FY 2017 for both programs and $100 million each more than the House bill.

Homeless and Supportive Housing Programs

McKinney-Vento Homeless Assistance Grants are proposed to be funded at $2.46 billion, $73 million (3.1 percent) more than FY 2017 and the House bill, and $206 million (9.2 percent) more than the administration’s request. The bill provides $573 million for the Housing for the Elderly (Section 202) program, a $70.6 million (14.1 percent) increase from FY 2017, $63 million (12.4 percent) more than the administration’s request and equal to the House bill. The Housing for Persons with Disabilities (Section 811) program is funded at $147 million, an $800,000 (0.5 percent) increase from FY 2017, $25.7 million more than the administration’s request, and equal to the House bill. The budget would provide $330 million for the Housing Opportunities for Persons with AIDS (HOPWA) program to provide housing and supportive services, $26 million less than FY 2017 and the House bill, but equal to the administration’s request.

Housing Trust and the Capital Magnet Funds

The bill does not include the administration’s budget’s proposal to eliminate the Housing Trust and Capital Magnet Funds, and the Fannie Mae and Freddie Mac assessments that fund them. HUD announced June 14 $219.1 million for the Housing Trust Fund and the U.S. Treasury’s Community Development Financial Institutions (CDFI) Fund announced June 29 $119.5 million for the Capital Magnet Fund. Fannie Mae and Freddie Mac assessments are not discretionary appropriations, and housing finance reform legislation is expected to address whether Congress wants to continue them. Given the strong support of Senate Democrats for both funds, it is unlikely Congress will eliminate them.

Next Steps

The full Senate Appropriations Committee is expected to consider the subcommittee bill on July 27, and the full House Appropriations Committee passed its FY 2018 THUD bill on July 17. While the full House is expected to consider a few of the annual spending bills combined into one “minibus” bill, it is uncertain if and when the full House will consider the THUD FY 2018 bill. The House is anticipated to recess on July 28, but Senate Majority Leader Mitch McConnell, R-Ky., announced that the Senate will remain in session for the first two weeks of August.

Even with the extra two weeks for the Senate to meet, given the limited legislative calendar for the rest of July, August and September and the competing priorities of health care legislation, the debt limit and tax reform, it is highly unlikely Congress will draft and pass all 12 annual spending bills–including those providing funding for HUD and Treasury–before the end of the fiscal year Sept. 30. Furthermore, there is not yet agreement between the House, Senate and the administration on overall budget levels that would be necessary before spending bills could be enacted.

Most policy insiders expect Congress to consider a continuing resolution (CR) to fund the government in October and November. Presumably before the end of the 2017 calendar year, once overall budget levels have been agreed to, Congress would pass a FY 2018 omnibus spending bill. Such a bill could serve as a “vehicle” for tax reform and/or tax extender legislation.

However it is also possible, especially if there is difficulty in getting agreement on overall budget levels, that Congress will consider a CR to fund the government for the full 2018 fiscal year.