By Kim Johnson, NLIHC
Note: Given the fast-changing nature of the legislative process, some information in this article may be outdated by the time of publication.
The Debt Ceiling and the “Fiscal Responsibility Act”
Members of the U.S. House of Representatives and Senate left their offices on Capitol Hill on July 27 for August recess, a period when federal elected officials return to their home states and districts to hear from constituents about their needs and priorities. The break came after months of tense negotiations over the federal debt ceiling and the federal budget.
The debt ceiling, or the “debt limit,” is the legal limit on how much the federal government can borrow to pay for already-approved spending. The debt ceiling is a political and accounting obligation, not a reflection of economic stability or well-being, and most countries do not have a debt ceiling.
When the federal debt begins approaching the debt ceiling, it is necessary for Congress to vote to raise the debt ceiling to ensure the federal government can continue paying its bills. Congress has voted to raise the debt ceiling almost 80 times since 1960, to ensure the U.S. government has the money it needs to pay its bills on time. However, this once routine practice has become politicized. This year, House Speaker Kevin McCarthy (R-CA) refused to agree to raise the debt ceiling without steep cuts to domestic spending programs.
After weeks of negotiations, Congress passed and on June 3 President Joe Biden signed into law the “Fiscal Responsibility Act of 2023,” a compromise proposal that lifts the debt ceiling until 2025 in exchange for capping fiscal year (FY) 2024 spending at FY23 levels and limiting spending increases to just 1% in 2025. The bill also rescinds unspent funds from COVID-19 relief legislation; imposes additional burdensome work reporting requirements on recipients of the Supplemental Nutrition Assistance Program (SNAP) and the Temporary Assistance for Needy Families (TANF) program; and rescinds funding previously allocated to the IRS to help audit higher-income households, among other provisions.
Impact of the “Fiscal Responsibility Act” on HUD Appropriations
Unsatisfied with the terms of the Fiscal Responsibility Act, far-right members of the House Freedom Caucus pushed their Republican colleagues to enact even steeper cuts to FY24 spending, with some pushing for cuts to vital federal anti-poverty programs as high as 30%, which would result in reductions that HUD Secretary Marcia L. Fudge noted would make it “impossible [for HUD] to stave off mass evictions.”
In response to the immediate threat to HUD’s affordable housing and homelessness assistance programs, advocates across the nation mobilized to make clear to Congress the impact of budget cuts and caps on their homes, families, and communities. Thanks to this advocacy, both the House and Senate draft FY24 spending bills for HUD proposed overall increases of 10% and 13%, respectively., for the department While still insufficient to make up for decades of underfunding or meet the level of need, such increases in overall funding for HUD – at a time when most programs were facing the prospect of deep cuts – is a testament to the strength, determination, and effectiveness of affordable housing and homelessness advocates.
Overall, the House bill would provide a 10%, or $6.4 billion, increase to HUD in FY24, totaling $68.2 billion in proposed funding. The bill proposes deep cuts to – and in some cases the elimination of – some HUD programs but does provide increased funding to most rental assistance programs, and to the Homeless Assistance Grants (HAG) program, which is vital to helping communities respond to the needs of people experiencing homelessness. However, due to steep increases in the cost of rent over the last year, it is not clear whether the funding for rental assistance provided in the House bill would be sufficient to renew all existing contracts. Read NLIHC’s full analysis of the House bill here.
The House bill also includes a provision that would ban funds from being used to implement, administer, or enforce HUD’s “Affirmatively Furthering Fair Housing” (AFFH) rule. The AFFH rule mandates that recipients of HUD funding not only not discriminate but actively work to undo historic patterns of discrimination and segregation. The language would make it more difficult for HUD to help grantees comply with the AFFH rule and more difficult to ensure that recipients of HUD funding not discriminate against individuals protected under the “Fair Housing Act of 1968,” which protects people from housing discrimination on the basis of race, color, national origin, religion, sex (including gender identity and sexual orientation), familial status, and disability.
The Senate’s draft FY24 funding bill would provide an $8.26 billion – or roughly 13% – increase to HUD’s budget, for a total of $70.06 billion. Appropriations leaders in the Senate drafted their bills according to parameters agreed to in the Fiscal Responsibility Act, but despite these tight toplines, the Senate bill proposes increased funding for key HUD programs.
The bill proposes funding rental assistance programs at levels expected to be enough to renew all existing rental assistance contracts and provides funding to expand vouchers to an additional 4,000 people, targeted to veterans at risk of or experiencing homelessness and youth aging out of foster care. The bill also proposes increased funding for the HAG program, Public Housing Operating Funds, and the Native American Housing Block Grant program and preserves $20 million for legal assistance to prevent evictions – all NLIHC priorities. Read NLIHC’s fully analysis of the Senate bill here.
House Appropriators Vote to Strip Three LGBTQ Resource Centers of Funding
During the House Committee on Appropriations’ review of its HUD spending bill, Subcommittee on Transportation, Housing and Urban Development (THUD) Chair Tom Cole (R-OK) offered an amendment to strip three previously approved community development projects of funding because they serve members of the lesbian, gay, bisexual, transgender, and queer (LGBTQ) communities.
Committee Democrats banded together in outcry at the amendment, with Ranking Member Rosa DeLauro (D-CT) accusing Republican appropriators of “negotiating with terrorists” for bending to the will of the party’s far-right wing. The Ranking Member also pointed out that, historically, neither Republicans nor Democrats have attempted to strip funding from community development projects because of ideology.
“This is below the dignity of this committee,” said Representative Mark Pocan (D-WI), an openly gay man, during the amendment debate. “There is absolutely no excuse; the fact is that, for too many people, unless they’re personally affected, they don’t give a damn.” Representative Pocan went on to tell his colleagues about the harassment and violence he has faced as a gay man, including receiving death threats when he ran for Congress and being followed and violently beaten after leaving a gay bar.
“This is what you guys do by introducing amendments like this, taking away from peoples’ earmarks, taking away from your colleagues, who want to protect people on housing,” continued the representative. “This is below where we all are. We have to have more respect and dignity for our constituents.” Despite the outcry, the amendment was adopted along a party-line vote of 32-26.
Looking Ahead
The differences between the House and Senate bills will have to be resolved when Congress returns to Capitol Hill in September, in what will likely be a turbulent, difficult negotiations process. While the road to enacting a robust FY24 spending bill for HUD’s vital affordable housing and homelessness resources is steep, together we have achieved historic resources and protections for renters, and together we can continue pushing Congress to ensure HUD’s programs and the people they serve are protected in the FY24 budget.
Bipartisan Affordable Housing Legislation Is Introduced
So far in the 118th Congress, several of NLIHC’s priority affordable housing bills have been introduced with bipartisan support. Given the divided Congress – with Republicans controlling the House and Democrats in control of the Senate – any piece of legislation will require bipartisan support to be enacted.
The “Family Stability and Opportunity Vouchers Act” (S.1257) was introduced in the Senate by Senators Todd Young (R-IN) and Chris Van Hollen (D-MD). The bill would fund 250,000 new housing vouchers and housing mobility services to help low-income families with young children move to communities of their choice, including neighborhoods with high-performing schools, quality childcare, and economic opportunities.
The “Reforming Disaster Recovery Act” (S.1686) was introduced in the Senate by Senators Brian Schatz (D-HI) and Susan Collins (R-ME), along with 12 of their colleagues from both parties. The bill would permanently authorize the Community Development Block Grant-Disaster Recovery (CDBG-DR) program and ensure program resources better reach disaster survivors in communities with the lowest incomes.
The “Affordable Housing Credit Improvement Act” (S.1557) was introduced in the Senate by Senators Maria Cantwell (D-WA), Todd Young (R-IN), Ron Wyden (R-OR), and Marsha Blackburn (R-TN). The bill would expand and reform the Low-Income Housing Tax Credit (LIHTC) program, the largest national affordable housing program in the U.S. While an important resource for affordable housing development, LIHTC alone does not typically build housing affordable enough to people with the lowest incomes, who are also most impacted by the affordable housing crisis. If enacted, the bill would reform the tax credit to provide additional incentives to developers to build homes affordable to extremely low-income households and to construct housing in underserved rural and Native communities.