Trump FY 2018 Budget Request Proposes $6 Billion Cut to HUD Budget

Published by Peter Lawrence on Thursday, March 16, 2017 - 12:00am

The Trump administration today released its budget request blueprint for fiscal year (FY) 2018. It requests $1.1 trillion in discretionary spending. As had been widely reported in the press, the proposal includes a $54 billion increase in defense spending, coupled with an equal amount of cuts to non-defense spending.

For the U.S. Department of Housing and Urban Development (HUD), the administration proposes to cut funding overall by $6.2 billion (13.2 percent) from the annualized funding levels based on the FY 2017 continuing resolution (which essentially is equivalent to the FY 2016 funding levels and does not include increases to address the additional cost of renewing rental assistance contracts in FY 2017) to $40.7 billion. To meet that funding request, the administration calls for eliminating the Community Development Block Grant (CDBG) and HOME Investment Partnership (HOME), the Choice Neighborhoods Initiative, the Self-Help Homeownership (SHOP), and Section 4 Capacity Building programs. In total, these eliminations represent $4.18 billion of the $6.2 billion in cuts, leaving $2 billion in further unspecified cuts to be released later.

For Treasury, the administration proposes a $519 million (4.1 percent) cut to $12.1 billion, eliminating the Community Development Financial Institutions Fund (CDFI Fund) discretionary grant programs ($210 million, or 40.4 percent of the overall cut to Treasury) and essentially leaving only administrative funding to oversee the new markets tax credit (NMTC) and other non-discretionary grant programs.

The official request is largely similar to the leaked budget documents that were reported last week in several news sources, including the Washington Post and The Hill. Those leaked documents contained other proposed cuts of $1.3 billion (68 percent) from the public housing capital account; $600 million (13 percent) from the public housing operating fund; $300 million from Section 8 tenant-based rental assistance (which the Center on Budget Policies and Priorities projects would result in losing funding for 200,000 vouchers), including Veterans Affairs Supportive Housing; $130 million (20 percent) from the Native American Housing Block Grant; $42 million (10 percent) from Section 202 Housing for the Elderly (which LeadingAge estimates will result in the loss of renewal funding for 23,500 homes and 360 service coordinators); and $29 million (20 percent) from Section 811 Housing for Persons with Disabilities. These cuts are not explicitly noted in today’s release, but some of these proposals may explain the further $2 billion in funding cuts that the administration is proposing.

These program eliminations and funding cuts would be devastating for affordable housing and community development if enacted and should be treated seriously. That said, it is important to note that Congress is likely to make significant changes to the budget request, even though Congress is led by Republicans and this budget request is coming from a Republican president.

Also, as a practical matter, Congress will likely not consider a FY 2018 budget resolution until it finishes considering legislation to repeal and replace the Affordable Care Act (ACA), because passing a FY 2018 budget resolution would nullify the reconciliation instructions regarding ACA in the FY 2017 budget resolution.

The Trump administration is expected to release its full, program-by-program detailed budget request in May. The Treasury Department will likely release an accompanying “Greenbook” of tax proposals with that detailed budget submission.