Trump Administration’s Budget Proposal Seeks Deep Housing Program Cuts

The Trump administration recently released its proposed federal budget for fiscal year 2019, which begins next Oct. 1. Traditionally, presidential budgets are mostly symbolic and merely indicate an administration’s priorities. This is because while the president can make suggestions, Congress ultimately decides how much and in what manner money is spent.

The symbolic nature of the most recent proposal is highlighted when one considers that an omnibus appropriations bill for the current fiscal year has not yet been completed. The president’s budget is for the next fiscal year (FY 2019). And specific-program appropriations for the current fiscal year (FY 2018) are in the process of being shaped by the House and Senate Appropriations Committees, which have until the stopgap spending bill expires on March 23 or the government shuts down again. So in terms of funding levels, adjustments are being made every day.

In addition, there is a very low chance of Congress adopting a budget resolution this year for fiscal year 2019. The way the budget process is supposed to work, according to the months’-long decision-making process established by the Congressional Budget Act of 1974, is that the president proposes a budget in February and Congress adopts its own “budget resolution” by May, and then congressional committees implement the budget resolution through appropriations bills and, when necessary, a “budget reconciliation” bill forcing spending levels into line. Congressional leadership has made it clear that there will not be any more high-stakes reconciliation bills between now and the midterm elections.

Therefore, the main purpose of the budget request is to formally lay out the administration’s stance on fiscal policy. It details specific policy changes the administration wants, how much those changes will affect spending and tax revenue over the next 10 years, and how individual agencies will be affected along the way. A look at the Trump administration’s budget shows massive social program cuts. As with last year’s budget, this year’s includes some of the largest cuts to social programs and the safety net to be proposed by a president in decades.

At the time of the budget request’s release, HUD Secretary Ben Carson took to Twitter to support the proposed cuts, writing, “The proposed budget is focused on moving more people toward self-sufficiency through reforming rental assistance programs and moving aging public housing to more sustainable platforms.” In a statement, Carson added: “I am confident HUD will deliver on its core programs, assist our most vulnerable populations, and make significant enhancements to our programs where needed.”

For HUD, the budget sees an $8.8 billion cut for the second year under President Trump. This would be 18 percent of 2017’s enacted levels. Among HUD programs, the request proposes to eliminate funding for:

• Section 4 Capacity Building for Affordable Housing and Community Development (Section 4)
• HOME Investment Partnerships (HOME)
• Community Development Block Grants (CDBG)
• Community Development Financial Institutions (CDFI) Fund
• Public Housing Capital Fund
• Choice Neighborhoods Initiative

The administration’s request additionally proposes to:

• Reduce funding for Tenant-Based Rental Assistance (TBRA), also known as Housing Choice Vouchers, to $20.09 billion, and provide $17.5 billion for TBRA contract renewals.
• Slightly increase funding for Project-Based Rental Assistance to $10.952 billion.
• Eliminate the Public Housing Capital Fund, combine it with the Public Housing Operating Fund, and reduce funding for public housing to $2.975 billion.
• Reduce funding for Housing Opportunities for Persons with AIDS (HOPWA) to $330 million.
• Provide level funding for the Family Self-Sufficiency (FSS) program at $75 million.
• Provide level funding for Homeless Assistance Grants at $2.383 billion.
• Increase funding for Section 202 Housing for the Elderly to $563 million.
• Reduce funding for Section 811 Housing for Persons with Disabilities to $132 million.

One positive in the request is a proposal for $100 million for the Rental Assistance Demonstration (RAD) program, which indicates the Trump administration’s preference for public-private partnerships. This $100 million would be awarded to public housing agencies (PHAs) to help public housing properties convert to project-based Section 8 contracts that can leverage private capital and financing to address the $26 billion public housing capital backlog nationwide. The request also would eliminate the 225,000-unit cap on RAD conversions and eliminate the Sept. 30, 2020, deadline for RAD applications.

Since the initial release, the Trump administration has issued an addendum to the budget request that provides an additional $2 billion of funding for HUD to reflect the budget deal that became law on Feb. 9. The addendum provides $1 billion for preventing rent increases on the elderly or persons with disabilities who live in HUD-supported housing, due to rent reforms supported in the request. These funds would be available across the TBRA, public housing, PBRA, Section 202, and Section 811 accounts. The addendum additionally includes an additional $700 million to restore TBRA vouchers that would have otherwise been cut in the request, and provides the Public Housing Operating Fund with an additional $300 million to assist public housing authorities that could potentially face insolvency.