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.

House Approves Big Increases to Housing, Community Development Funding

The House on Tuesday approved a spending package that would provide HUD, particularly community development programs, with the highest funding levels seen in several years. Unfortunately, unless the Senate and the White House agree to the overall spending increases proposed by House Democrats, the funding levels contained in the bill are likely to change.

Along with Transportation-HUD, the minibus spending package included the FY 2020 Commerce-Justice-Science, Military Construction-VA, Agriculture, and Interior-Environment (HR 3052) bills. Consideration of the minibus began last week, and legislators worked through over 200 amendments before final passage of the bill. It was approved by a largely partisan vote of 227-194. A list of approved HUD amendments is below.

NAHRO’s coverage of the legislation, including in-depth analysis, can be found here (member protected).

The House will narrowly miss its target of completing all appropriations work before July, passing 10 of the 12 spending bills before adjourning for the 4th of July recess. The Legislative Branch bill was pulled from a prior spending package because of a controversy over Congressional pay raises and the Homeland Security bill is being held from the floor because of disagreements over border wall funding.

While the House has made significant progress on FY 2020 spending, the Senate has not yet begun its appropriations work. The Budget Control Act of 2011 set arbitrary spending limits on federal spending through FY2021, but Congress has mostly avoided the limits by passing bipartisan budget deals to raise the caps. The current budget deal expires in FY2020 and a new deal will need to be reached to avoid massive spending cuts and sequestration next fiscal year.

Senate Appropriations Chairman Richard Shelby (R-Ala.) did not want to start writing spending bills until a spending deal is reached. However, with negotiations dragging on and the time to deal with appropriations before the beginning of the fiscal year becoming increasingly limited, Chairman Shelby is expected to instruct appropriators to start consideration of bills in July.

It isn’t clear what spending level the Senate will use, but it seems likely that it will stick with the current FY 2019 level, which is $88 billion lower than the topline level used by the House. As a result, the FY 2020 House and Senate THUD bills are likely to be very different. Unless the Senate and White House agree to a budget deal at the House-proposed level, the funding levels contained in the House THUD bill will almost certainly be lowered in the final version of THUD.

Approved HUD Amendments:

  • Homeless Assistance Grants: Proposed by Rep. Maxine Waters (D-Cali.). Increases funding for the Homeless Assistance Grants by $5 million. Another amendment proposed by Rep. Pramila Jayapal (D-Wash) funding by an additional $1 million, bringing the total funding level to $2.806 billion.
  • Continuum of Care: Proposed by Rep. Lisa Blunt-Rochester (D-Del.). Requires HUD to study the continuum of care program and its impact of awarding transitional family housing grants via competitive assessments and the effectiveness of these programs versus alternative programs in achieving long-term housing stability.
  • Fair Market Rent Calculations: Proposed by Rep. Mike Levin (D-Cali.) and Rep. Ayanna Pressley (D-Mass.). Requires HUD PD&R to study alternative methods for calculating Fair Market Rents in rental markets with rapidly rising rents.
  • Community Development Block Grant Disaster Relief: Proposed by Rep. Sheila Jackson-Lee (D-Texas). Requires the HUD Office of Inspector General to investigate the Department’s delay in releasing over $5 billion in Hurricane Harvey Disaster Community Block Grant funds.
  • Veterans Affairs Supportive Housing: Multiple co-sponsors: Increases funding for the HUD-Veterans Affairs Supportive Housing (VASH) program by $2 million, bringing the total funding level to $42 million.
  • Public Housing Oversight: Proposed by Rep. Mike Bost (R-Ill.) and Sean Duffy (R-Wisc.). Orders HUD to continue to work with the HUD Office of Inspector General (OIG) to incorporate findings and recommendations of the OIG investigation, “Final Evaluation Report – HUD’s Oversight of Alexander County Public Housing Authority” and “Alexander County Housing Authority’s improper usage of HUD subsidized Asset Management Project Funds,” for the purposes of protecting public housing residents and improving agency oversight and enforcement of public housing regulations.
  • Family Self-Sufficiency: Proposed by Rep. Rashida Tlaib (D-Mich.) and Rep. Ayanna Pressley (D-Mass.). Increases funding for FSS by $5 million, bringing the total funding level to $105 million.

House Appropriations Approves FY 2020 THUD Spending Bill, Report on Small Agencies Included in S.2155

The House Appropriations Committee on Tuesday approved the FY 2020 Transportation, Housing, and Urban Development (THUD) spending bill by a vote of 29 to 21. The bill now moves to the House floor, though the timing on a full House vote is unclear.

The spending bill was approved with a single amendment, a manager’s package that includes a provision mandating HUD report on which small agencies are included in regulatory relief provided by the Economic Growth, Regulatory Reform, and Consumer Protection Act of 2018 (frequently referred to as S. 2155). Congressman Steven Palazzo (R-Miss.) requested the language be included at the advice of NAHRO.

Full details of the bill can be found on NAHRO’s web site (password restricted).

The House will consider a five-bill omnibus package next week, but unfortunately THUD is not included in the package. Timing of when the THUD bill will move to the floor isn’t known, though House Democratic leadership said they intend to approve all spending bills by the end of June. The Senate has not begun appropriations work yet, insisting that they will wait for a budget deal to be approved.

Prior to the full committee mark-up, report language was also released on the bill. These notable provisions were included:

  • Sexual Harassment in Housing – Committee wants a report no later than 90 days after enactment on the activities of an interagency task force between HUD and DOJ to combat sexual harassment.
  • Tenant-based rental assistance:
    • TPVs – more funding for TPVs is not to reposition public housing, but to address anticipated closures of certain PHA properties.
    • Fair Market Rents – committee directs HUD to work with authorizing committees to “develop statutory flexibilities” so that vouchers will be usable in rapidly rising rental markets.
    • Purchasing power of vouchers – committee directs HUD to report on impacts of rising rental market prices on purchasing power of vouchers. HUD should develop recommendations regarding funding levels necessary to ensure that PHAs can serve the same number of households.
  • PD&R
    • Studies in the works:
      • Collaborating with Centers for Medicare and Medicaid Services – how Medicare and Medicaid funds can be used to support programs that use affordable senior housing as a platform for coordinating health, etc.
      • A study of alternative methods for calculating FMRs in rental markets with rapidly rising rents.
  • Public Housing
    • Secretary must evaluate requiring carbon monoxide detectors in HUD rental housing.
    • HUD must continue improving REAC inspections, as required in the House bill. This includes looking into potentially using civil monetary penalties to ensure PHAs and landlords maintain physical quality of HUD rental units. Congress also asks HUD to solicit comments from stakeholders, including tenants, on how they can improve REAC inspections. HUD needs to submit a 60-day progress report to Congress.
    • Congress asks HUD to create more stringent inspections for lead.
    • HUD must release S. 2155 FSS regulations within 90 days of enactment.

 

Government Shutdown Ends

The historic government shutdown ended Friday night after Congressional leaders and the White House came to a deal to pass a short-term spending bill that expires on Friday, February 15.

The three-week continuing resolution was quickly approved by voice vote in both the Senate and the House. The President signed it shortly after it was cleared by Congress. The measure provides backpay to federal workers and resources for state governments that may have covered expenses otherwise covered by the federal government. It also extends the Violence Against Women Act.

 

NAHRO analysis suggests that the CR may support payments for March, and perhaps April, but we are waiting for confirmation from HUD. If the government had not reopened before the end of February, funding for the Public Housing Operating Fund and the Housing Choice Voucher program would have stopped.

While reopening the government is a positive step, the political situation in Washington is still contentious and it is possible another shutdown will happen at the end of the current CR.

If you’ve contacted HUD during the shutdown, it may take employees time to respond to your email, as workers have a month-long backlog of work to try to get through. NAHRO deeply appreciates the dedication of HUD employees who worked hard without pay during the shutdown to ensure that the impact to PHAs and residents was minimized.

Your voice throughout this shutdown was critical – NAHRO members sent more than 3,300 letters to Congress and the White House in just three weeks. NAHRO and its members were also featured in dozens of national and local news stories about the impact of the shutdown. Please continue to tell us your stories; if the government shuts down again, your stories will be needed to communicate to Congress and the media.

Election Impact on Congressional Committees

The analysis below is simply a prediction of who is likely to serve as leadership on the committees based on the current information available. Frequently after a large number of losses or retirements, members of Congress shift between committees and chair/ranking member positions, changing the seniority structure of committees as a result. One Senator choosing to take an unexpected chair position can have ripple effects across several committees that are difficult to predict. This is particularly true at the subcommittee level. Additionally, Republicans have established a six-year term limit for committee chairs and ranking members, which causes more committee changes than Democrats who don’t have a term limit.

Finally, one of the biggest impacts on committee change is a flip of party control or a dramatic change in majority size. The committee structure is based on majority party and size, and when for example Senate Republicans increase their majority overall in the Senate, their control of committee seats also increases. Depending on how the remaining three Senate races are called, it could force lower-seniority Democrats off committees.

Appropriations

The House Appropriations Committee will see some turnover in the 116th Congress; while all Democrats won his/her races, four Republican members either lost or are retiring, in addition to Rep. Evan Jenkins (R-W.V.) who retired earlier this year.

The Transportation, Housing and Urban Development (THUD) Subcommittee will look very different next year. Included in the Republican losses/retirements are two members of the Transportation, Housing and Urban Development Subcommittee, Rep. John Culberson (R-Texas) and Rep. David Young (R-Iowa). Also retiring is full committee Chair Rodney Frelinghuysen (R-N.J.). There may be some consistency in the THUD leadership, as current Chair Mario Diaz-Balart (R-Fla.) will have the option of remaining chair if he chooses.

Democratic leadership on the committee is expected to remain fairly stable. Current Ranking Member Nita Lowey has stated that she will take over the gavel in January and has already started pushing Republicans to make a budget deal for FY 2020. THUD Ranking Member David Price (D-N.C.) also has the option of taking over as chair of the subcommittee.

The Senate Appropriations Committee will have far less turnover in the 116th Congress and leadership will likely remain the same. Only a single member of the committee is at risk of losing her seat; Sen. Cindy Hyde-Smith was forced into a run-off election that will take place on November 27.

Full Committee Chair Richard Shelby (R-Ala.) will remain in the top position on the committee, which he took over in April after the retirement of former chair Thad Cochran (R-Miss.). Senator Patrick Leahy (D-Vt.) has the option of remaining ranking member, though as a high-ranking Democrat he may have other committee options. Leadership of the THUD Subcommittee is likely to continue with current Chair Susan Collins (R-Maine) and Ranking Member Jack Reed (D-R.I.).

Authorizing Committees

As a result of a high number of losses and retirements, the House Financial Services Committee will be a significantly different committee in the next Congress. Eight Republicans either lost their re-election bid or are retiring and four additional races are too close to call. Four Democrats are retiring.

Current Ranking Member Maxine Waters (D-Cali.) will take over as chair in January. Current Chair Jeb Hensarling (R-Texas) is retiring and Rep. Patrick McHenry (R-N.C.) has declared his intention to take over as ranking member. Leadership of the Housing and Insurance Subcommittee is likely to remain the same, with current Ranking Member Emanuel Cleaver (D-Mo.) expected to take the chair position and current Chair Sean Duffy (R-Wisc.) likely to be ranking member. The composition of the subcommittee will be extremely different, though, as six Republican members and two Democrats will not return to Congress.

Unlike the big changes coming to Financial Services, the membership of the Senate Banking Committee is likely to remain consistent. Only two Republicans and two Democrats lost their re-election or are retiring. Leadership could see some changes, though. Depending on the committees that other members choose to chair, current Chair Mike Crapo (R-Idaho) could move to head another committee. There are several scenarios that could result in either Sen. Chuck Grassley (R-Iowa) or Sen. Patrick Toomey (R-Penn.) taking over the committee. Current Ranking Member Sherrod Brown (D-Ohio) is expected to remain in his position.

Tax Writing Committees

The Senate Finance Committee is set for a change in leadership thanks to the retirement of current Chair Orrin Hatch (R-Utah). It’s unclear at this point who will take over, though Sen. Grassley does have the option of taking the Chairmanship if he is willing to give up his current role as the Chair of the Judiciary Committee. If he elects to remain at Judiciary, current Banking Committee Chair Mike Crapo would be next in line for the position. Current Ranking Member Ron Wyden (D-Oregon) will probably remain in place, though if he does take a position on another committee, Sen. Debbie Stabenow (D-Mich.) and Sen. Maria Cantwell (D-Wash.) would be next in line. I

The House Ways and Means Committee will be lead by current Ranking Member Richard Neal (D-Mass.) and current Chair Kevin Brady will probably take over as Ranking Member, though he will need to request a waiver from leadership.

Election Brings Changes to Housing, Community Development

As widely predicted, the Democrats took control of the House and the Senate will remain in Republican control. Between the shift in control of the House and a large number of retirements and losses, big changes are coming in the 116th Congress for housing and community development.

Right now, Democrats control 225 seats in the House and Republicans have 197 seats. Thirteen races are still too close to call. This is a net gain of 30 seats for the Democrats and gives them a relatively slim majority of 7 seats. In the Senate, Republicans have picked up two seats so far, giving them a 51 seat majority. Democrats managed to hold 46 seats. However, two races are still too close to call and one seat will go to a run-off election later this month.

The big question is how this new dynamic in Congress will play out within Washington, both between the Congressional chambers and with the White House. Will the Senate Republicans and the House Democrats be able to find enough common ground to pass legislation and spending bills? What role will the President choose to play and will his relationship with (presumptive) House Speaker Nancy Pelosi more closely mirror the deals they were able to forge throughout the past two years or will he revert to his recent campaign rhetoric?

These new dynamics will be tested soon during the lame duck session of Congress, which begins next week when all members of the current Congress return to Washington to finalize unfinished business. Newly-empowered Democrats will begin to assert muscle as Congress attempts to deal with a significant amount of legislative work, including a continuing resolution that expires on December 7, the Violence Against Women Act, the Farm bill, flood insurance, disaster relief, tax credits, and other must-pass legislation.

As detailed in a separate blog post, the impact on housing and community development could be significant, particularly in the House Financial Services Committee and the House Appropriations Transportation, Housing and Urban Development (THUD) Subcommittee.

Democrats taking control of the House means they will also take control of the committees, putting Rep. Maxine Waters (D-Cali.) in charge of the Financial Services Committee and Rep. Nita Lowey (D-N.Y.) in charge of Appropriations.

Though neither has publicized an outline of their priorities for their respective committees, it can be expected that Rep. Waters will focus a significant amount of committee time on housing and HUD. Whereas the Republican-controlled Congress approved legislation like the Housing Opportunity Through Modernization Act (HOTMA) that provided program reform and regulatory relief, a Democratic-controlled House is likely to focus more on topics like the impact of budget cuts on programs, oversight, and subsidized housing resident impacts. There are benefits to both approaches and both required a bipartisan effort to pass the Senate.

Congresswoman Lowey this week insisted that Democrats would not cave on the President’s demand that FY 2019 spending include funding for a border wall and that she intends to negotiate aggressively for a FY 2020 budget deal to avoid $126 billion in automatic cuts that will otherwise be required because of the Budget Control Act of 2011. Her leadership will be tested early in the lame duck session as Democrats will look to her to lead the negotiations to finalize FY 2019 spending. As difficult of a feat as that may prove to be, her leadership will further be tested early in the year as FY 2020 negotiations begin and the extension of the debt ceiling expires in March, which will require Congress to act before the summer.

 

President Signs Continuing Resolution

The President signed a spending package this afternoon that includes a continuing resolution providing funding for the government until Friday, December 7. This averts a government shutdown for the departments and agencies funded by the seven appropriations bills that will not be finalized before the beginning of FY 2019 on October 1. The package also includes an extension of the Violence Against Women Act, which was set to expire on September 30.

Congress approved five spending bills for FY 2019, the highest number in over 20 years. Negotiations were in progress on a four-bill package that included the Transportation, Housing and Urban Development (THUD) bill, but unfortunately progress stalled this week and the package was never formally introduced. Negotiations broke down over issues with the Interior-Environment and Legislative Branch spending bills; reports are that THUD was easily negotiated.

The expiration of the CR on December 7 ensures that Congress will have to address spending in the lame duck, the time period when Congress returns to Washington after the election before the 115th Congress adjourns for the final time in December.

Last Week of August Advocacy: Support HUD Funding!

It’s the final week of August advocacy! We’ve sent over 2,000 letters to Congress in August – a good number, but still well below our goal of 3,000 letters. Please take action now to support responsible funding for housing and community development in FY 2019.

House and Senate Appropriations staff are currently working to negotiate a final Transportation, Housing and Urban Development (THUD) spending bill. Using the Senate-approved FY 2019 THUD bill and the House Appropriations Committee-approved bill, staffers are in the process of “conferencing” these two pieces of legislation into a single bill, likely to be passed as a larger spending package. This means important decisions about spending levels for housing and community development programs are being made right now. Make sure your voice is heard in this process by sending a letter to your members of Congress today.

Please help us reinforce the importance of responsible funding for housing and community development programs and help NAHRO send 3,000 letters to Capitol Hill this month – reach out to your members of Congress now!

Senate Approves FY 2019 Transportation-HUD Spending

This afternoon the Senate voted 92-6 to approve a four-bill spending package that includes the FY 2019 Transportation, Housing and Urban Development (THUD) bill.

Details on the Senate’s THUD bill can be found here (NAHRO log-in required). The bill was passed without major changes; no funding levels were altered and only a couple of housing-related amendments were approved, including one on mapping the presence of a pyrrhotite across the country and eviction protections for domestic violence and sexual assault victims.

The FY 2019 THUD bill generally maintains the spending gains achieved in by the FY 2018 omnibus bill that increased HUD spending by 10 percent. This is a major victory considering funding for the overall federal budget is not increasing significantly in FY 2019 and the spending allocation for the Senate’s THUD bill was lower than the House THUD allocation. Despite these obstacles, housing programs fared well compared to most of the transportation programs funded by the bill, demonstrating the effectiveness of NAHRO members’ advocacy efforts.

Though the passage of the FY 2019 THUD bill is a major step toward finalizing spending, the path forward from here is unclear. The House FY 2019 THUD bill contains several controversial policy riders (largely transportation-related) and both members of the Democratic Party and the conservative House Freedom Caucus are unhappy with funding levels contained in the bill. As a result, THUD is seen as one of the more controversial spending bills this year and is unlikely to be brought to the House floor as a stand-alone bill.

Because Congress is unlikely to finalize FY 2019 THUD spending before the beginning of the fiscal year on October 1, 2018, a continuing resolution will be needed to keep THUD programs operating. A continuing resolution is a stop-gap bill that maintains previous year spending levels until a set date, allowing Congress additional time to finalize spending. Conversations about a CR have not yet begun in Congress, but like recent years, it’s probable that a CR would last until late November or early December.

Secretary Carson Discusses FY 2019 HUD Budget at Appropriations Hearing

HUD Secretary Ben Carson testified in front of the House Appropriations Transportation, Housing and Urban Development (T-HUD) subcommittee today, answering questions about HUD’s FY 2019 budget proposal.

A video of the full  hearing and his written testimony are available on the subcommittee’s web site.

Members of the subcommittee asked several pointed questions about the Administration’s plan to eliminate key components of the HUD portfolio, including the the Community Development Block Grant program (CDBG) and the HOME Investment Partnerships program (HOME). Congressman David Valadao (R-Calif.) and full committee Ranking Member Nita Lowey (D-N.Y.) both asked the Secretary to comment on how communities would deal with losing CDBG dollars.

“We do have a way to take care of the good things CDBG does, and that is through the Opportunity Zones, a program that will bring in up to $2.2 trillion in money to substitute for that program and infrastructure,” said Secretary Carson. “I suspect we may be asking ourselves how we can use all that money.”

Several times, Secretary Carson offered the new Opportunity Zone program as a replacement for funding cut by the Administration’s budget. The program was created in December through the tax reform legislation and is run through the Treasury Department. It is unclear how much funding the program will generate or how the dollars will be distributed in communities.

The Administration also proposes eliminating the entire Public Housing Capital Fund, slashing the Operating Fund by $1.6 billion, and shifting the financial burdens of the Capital Fund and all its set-asides to the Operating Fund. This is part of a larger plan at HUD to move away from the public housing model, which the Secretary called “failing and financially unstable,” to the Section 8 platform through the Rental Assistance Demonstration (RAD) program. However, while the Administration does propose $100 million for RAD conversions, it does not request additional funding for more vouchers.

Subcommittee Ranking Member David Price (D-N.C.) asked Secretary Carson to address the budgetary problems this creates. “You’re proposing to totally eliminate public housing and merge the Capital Fund into Operating, while proposing to cut the Operating Fund,” he said. “The Operating Fund is slashed, so that’s not even adequate to address operating, much less absorbing capital expenses. And then if we’re going to go to RAD, we’re going to need some additional section 8 vouchers.”

The Secretary re-emphasized the benefit of RAD conversions. “We’re moving away from the whole concept of public housing, quite frankly,” Carson said. “I think this is going to work much better,”

He again mentioned Opportunity Zones as a replacement for lost capital funding and referenced unused Capital Fund reserves held by housing authorities to address the backlog in deferred maintenance.

The subcommittee has several members from areas hit by natural disasters in the past year, and those members reinforced the importance of HUD assistance to recover from the storms. Congressman John Culberson (R-Texas) pressed the Secretary to agree to lower the mandate that 70 percent of CDBG disaster relief (CDBG-DR) dollars go to families of low to moderate incomes, noting that funding has been slow to get to localities. Subcommittee Chairman Mario Diaz-Balart (R-Fla.) thanked the Administration for its focus on mitigation in disaster relief recovery and asked for coordination on long-term efforts.

The Secretary was also asked several questions about the purchase of a $31,000 dining set for the HUD office and is likely to be pressed further on Thursday when he will testify before the Senate Banking, Housing and Urban Affairs Committee in a hearing on HUD oversight.

One bright spot of the hearing was a comment by full Committee Chairman Rodney Frelinghuysen, who said that the T-HUD bill will be “getting a lot of money in 2018.” The final FY 2018 omnibus spending bill is expected to be released later tonight. The current continuing resolution providing funding for the federal government expires on this upcoming Friday.