The U.S. Congress passed and President Joe Biden signed into law last week the “Fiscal Responsibility Act,” an agreement to lift the federal debt ceiling until 2025 in exchange for capping federal spending programs at fiscal year (FY) 2023 levels in FY2024, and allowing an only 1% increase in spending in FY2025, among other harmful provisions (see Memo, 6/5). While a threat to HUD programs, which require increased funding from year to year to maintain the number of people and communities served, the funding cap imposed by the deal is significantly less disastrous than the cuts proposed in the House Republican-passed “Limit, Save, and Grow Act,” which would have capped FY2024 spending at FY2022 levels and resulted in an up to 30% cut to HUD’s budget, leading as many as 1 million people to lose rental assistance. Now, however, members of the House’s far-right Freedom Caucus are calling on their colleagues to enact steep spending cuts in the FY2024 budget, beyond the levels agreed upon in the debt ceiling bill. Freedom Caucus members derailed a vote on June 6 on a rule that would have allowed floor consideration of several Republican-backed bills, bringing legislative work in the chamber to a halt. The chamber adjourned for the week the following day.
House Speaker Kevin McCarthy (R-CA), working to placate the far-right members of his party, noted that the caps imposed in the “Fiscal Responsibility Act” represent “a ceiling,” stating “we can always spend less…If we can write [spending bills] to even lower levels, then we should do it in the House.” Meanwhile, Representative Andy Harris (R-MD), chair of the House Appropriations Subcommittee on Agriculture, Rural Development, and Food and Drug Administration, noted his subcommittee “will write to a [topline] allocation at the [FY2022] level.” The Subcommittee has jurisdiction over the budget for USDA’s affordable housing programs, as well as other vital anti-poverty programs like the Supplemental Nutrition Assistance Program (SNAP).
Implications for HUD’s Affordable Housing and Homelessness Assistance Programs
It is crucial that HUD’s rental assistance programs – including Housing Choice Vouchers, Project-Based Rental Assistance, and other programs that help people with the lowest incomes afford rent – receive increased funding every year. Because the cost of housing rises every year, flat funding acts as a cut, reducing the number of people served by these vital programs. The dramatic increase in the cost of rent over the last year means that voucher renewal costs will be significantly higher: it is estimated that voucher renewals will require an extra $7 billion over FY2023 funding, just to maintain the number of households currently being served by the program.
HUD’s budget is under additional strain in FY2024 due to lower receipts from the Federal Housing Administration (FHA). FHA receipts are reinvested into HUD, helping to “cushion” HUD’s budget by providing extra money outside of what is allocated through the regular appropriations process. This year, FHA receipts are expected to be approximately $6 billion less than they were in FY2023. In total and without taking into account the newly instated budget caps, HUD’s budget is facing an estimated potential shortfall of $13 billion compared to FY2023 funding.
Take Action!
It is thanks to the hard work and tenacity of advocates around the country that debt ceiling negotiators backed away from House Republicans’ demands to cap FY2024 spending at FY2022 levels. In order to ensure HUD’s affordable housing and homelessness assistance programs are not cut during appropriations negotiations, we must continue this urgent work.
Failure to increase appropriations for HUD’s vital affordable housing and homelessness assistance programs would have a devastating impact on the people served by these programs. Even with recent funding increases to federal programs, many are still being impacted by the austere spending caps put in place by the “Budget Control Act of 2011.” Indeed, HUD’s cumulative appropriations since FY2010 are still slightly lower than if annual appropriations had remained at FY2010 levels and been adjusted only for inflation.
We cannot afford to take a step backwards. Advocates can continue to take action by joining NLIHC and our partners in the Campaign for Housing and Community Development Funding (CHCDF) on Friday, June 16, for a National Day of Action. Advocates should call their members of Congress and urge them to reject spending cuts and instead provide the highest possible allocation for HUD’s and USDA’s affordable housing, homelessness, and community development programs in FY2024. Find more information about the Day of Action here.
Other ways you can take action:
- Sign your organization on to CHCDF’s annual budget letter – join over 2,000 organizations from around the country on CHCDF’s annual 302(b) letter, calling on Congress to reject spending cuts and instead provide the highest possible allocation for HUD’s and USDA’s affordable housing, homelessness, and community development programs in FY2024.
- Email your members of Congress today and urge them to increase – not cut – resources for affordable housing and homelessness in FY2024 and to support NLIHC’s top appropriations priorities:
- Implement full funding for the Tenant-Based Rental Assistance (TBRA) program to renew all existing contracts.
- Provide full funding for public housing operations and repairs.
- Fully fund homelessness assistance grants.
- Provide $100 million for legal assistance to prevent evictions.
- Fund a permanent Emergency Rental Assistance program.
- Maintain funding for competitive tribal housing grants for tribes with the greatest needs
- Check out NLIHC’s advocacy toolkit, “Oppose Dramatic Cuts to Federal Investments in Affordable Housing,” for talking points, sample social media messages, and more!