House Approves Two-Year Budget Deal, Senate Vote Next Week

Congress last night moved closer to finalizing a budget deal that would raise spending caps for FY 2020 and FY 2021 and suspend the debt ceiling until July 31, 2021. The deal raises domestic spending by $27 billion in FY 2020, which is a sizable increase, though less than the $88 billion sought by the House.

The bill was approved by the House by 284-149 and now goes to the Senate, which will vote next week. The President has expressed support for the deal and is expected to sign it.

This finally draws a close to one of the more short-sighted policies enacted by Congress in recent history: the Budget Control Act (BCA). Passed in the summer of 2011, the BCA was a complex attempt to deal with the nation’s debt by requiring Congress to form a “super committee” to cut spending by $1.2 trillion dollars. The failure of the super committee resulted in across the board spending cuts and the implementation of arbitrary, low spending limits through FY 2021. However, the spending limits were only adhered to for a couple years and Congress has since approved budget deals to increase spending beyond the caps.

What’s Next

The Senate has a lot of work to do to catch up to the House. This spring House appropriators passed 10 of 12 appropriations bills at $88 billion higher than current levels for both domestic and defense programs, despite the lack of agreement with the Senate.

One of the approved bills is a robust Transportation-HUD spending bill, details of which are available here (NAHRO members only).

The Senate chose not to begin appropriations work until a final deal is in place and they are expected to stay in Washington during the August recess to begin consideration of bills.

At this point it isn’t clear what path Congress is likely to take to finalize FY 2020, though there have been discussions of trying to move small packages of negotiated spending bills in September, similar to the strategy employed in the fall of FY 2019. There is a high likelihood that a continuing resolution will needed for at least part of the new fiscal year, as floor time in September is limited.

Long-Term Impact

The two-year deal allows for $27 billion in additional spending in FY 2020, but only increases spending by $2 billion in FY 2021. This will pose a challenge for appropriators as the year to year cost increases of programs are typically higher than $2 billion. In FY 2020, it’s estimated that the cost of rental assistance programs at HUD will increase by $1 billion. This cost increase is compounded by lowered FHA contributions to the THUD budget.

Advocacy

Your advocacy will be critical to ensuring that THUD is a high priority for lawmakers- download the new NAHRO Advocacy App (members-only) and watch for news on how to participate in NAHRO’s August Advocacy campaign.

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