HUD Programs and Congress' Impending FY 2016 Appropriations Fight

On Sept. 8, Congress returned from recess and lawmakers scheduled 12 legislative days before the start of the 2016 fiscal year on Oct. 1. In that time, Congress must come to a broad new agreement that lifts legally imposed spending caps or, more likely, pass a short-term measure, known as a continuing resolution (CR), to keep the government running for the rest of the year. Current spending laws expire on Oct. 1.

According to an Office of Management and Budget (OMB) report dated Aug. 20, funding provided by House FY 2016 appropriations bills would exceed the sequester spending caps imposed by the 2011 Budget Control Act for nondefense discretionary (NDD) programs by $1.8 million, while the Senate appropriations bills would not exceed the sequester-level spending caps. This means that if Congress were to enact appropriations bills at the House bills’ levels, Congress would be compelled to identify another $1.8 billion in cuts within the 12 spending bills.

President Obama has pledged to veto any appropriations bill that is based on the existing sequester caps. A CR will allow more time for Congress to work out a new budget plan that lifts the sequester caps.

HUD programs. The Transportation, Housing, and Urban Development, and Related Agencies (THUD) Subcommittees’ FY 2016 bills, passed by the full House and the Senate Committee on Appropriations, are expected to remain stalled until either the sequester spending caps are lifted or one or more CRs take their place. The negative impact of the sequester cap levels is evident in both the House and Senate THUD FY 2016 bills.

The House bill uses all of National Housing Trust Fund resources in 2016 and directs them to the HOME Investment Partnerships (HOME) program, which the House bill cuts from $900 million in FY 2015 to $767 million. The House bill doesn’t fully fund the renewal of either current vouchers or PBRA contracts. And the House bill would cut public housing capital funds from $1.875 billion in FY 2015 to $1.681 billion in FY 2016 and would reduce funding for HUD’s Office of Healthy Homes and Lead Hazard Control from $110 million to $75 million in FY 2016.

The Senate Committee on Appropriations’ THUD funding bill would effectively eliminate the HOME program, bringing funding from $900 million in FY 2015 to $66 million in FY 2016. By eliminating this housing program, the Senate bill is able to provide sufficient resources to renew existing PBRA contracts. But the bill also makes deep cuts to public housing capital subsidies and fails to renew about 50,000 Housing Choice Vouchers currently in use.

Because HUD’s largest programs, Public Housing and Project-Based Rental Assistance (PBRA), are funded on a calendar-year basis, they can withstand a CR through December. These have sufficient resources to last until the end of the year from FY 2015 appropriations.

However, renewal costs for vouchers and PBRA contracts require increases next year simply to serve the same number of households currently served as receipts from the Federal Housing Administration (FHA) are down compared to FY 2015. The same amount of funding into 2016 would result in a shortfall of about $3 billion for HUD programs in FY 2016.