HUD Secretary Responds to Request for Information on Potential Budget Cuts

In January, Representative Rosa DeLauro, ranking member of the U.S. House of Representatives’ Committee on Appropriations, sent letters to federal agencies requesting information about how the House G.O.P. leaders’ reported proposal to cut fiscal year 2024 discretionary spending to fiscal year 2022 enacted levels would impact federal programs. HUD Secretary Marcia L. Fudge recently responded to the request.

The context: The reported pledge to cut programs funded by annual appropriations in 2024 back to their 2022 levels was part of the deal to elect Representative McCarthy as Speaker of the House. An analysis recently released by the Congressional Budget Office concluded that balancing the federal budget through reductions in spending would mean significant cuts to programs to achieve that goal. The analysis was requested by Democrats, and it comes as Democrats have sought to pressure Republicans over proposals to balance the budget in the time frame through potentially steep cuts to spending.

President Biden has already released his budget proposal that would reduce deficits by nearly $3 trillion over 10 years, but his plan contains tax increases on the wealthy and new spending that have led GOP lawmakers to declare it dead on arrival. Currently, House Republicans have not produced a plan of their own to cut deficits, which President Biden has said is a prerequisite for negotiations.

One level deeper: According to the HUD Secretary’s letter sent to Ranking Member DeLauro, the House GOP leadership’s reported proposal of reduced funding would “represent the most devastating impacts in HUD’s history.” She added that “under the 22 percent potential funding cut scenario, it would be impossible to stave off mass evictions.” Among other effects, Secretary Fudge listed the following impacts on HUD programs if the plan to cut federal spending back to the FY22 level was enacted:

• 640,000 families would lose access to Housing Choice Vouchers and more than 430,000 families would be evicted from Section 8 housing.
• Families living in public housing would be exposed to unsafe living conditions due to drastic cuts to the Public Housing Operating Fund and a projected $700 million cut from the capital grants.
• Any cuts to the FY23 levels for HUD’s Project-Based Rental Assistance (PBRA) program would eliminate funding for approximately 286,000 families, leading to an unprecedented loss of existing affordable housing and mass evictions.
• The average Community Development Block Grant (CDBG) annual grant would be reduced by approximately $440,000. The average HOME Investment Partnerships grant would be reduced by $330,000, resulting in more than 6,700 fewer units of affordable housing produced.
• Cuts to the Emergency Solutions Grant (ESG) program would result in over 24,000 fewer people receiving assistance, likely resulting in significant increases in the number of people experiencing homelessness.
• With a 22 percent cut, funding for Native American Housing Block Grants would be reduced to its lowest level since the program was implemented in 1996, making it nearly impossible for most Tribal grantees to develop new affordable housing units and meet the basic operations and maintenance needs of their existing housing stock.