President Joe Biden and House Speaker Kevin McCarthy (R-CA) released on May 28 the legislative text of an agreement on to lift the debt ceiling in exchange for essentially a two-year freeze on spending for some domestic programs and increased work requirements for certain recipients of food and cash assistance programs, among other things.
The House and Senate will now work quickly to enact the agreement before the nation defaults on its debts on June 5. The House may take up and vote on the legislation on the floor as soon as Wednesday, May 31.
Because some key HUD programs require additional funding to keep up with inflation, higher rents, and interest rate hikes, the debt ceiling agreement acts as a significant cut to affordable housing and homelessness programs. In FY 2024 alone, HUD needs an estimated $13 billion to $16 billion in additional funding just to maintain current levels of assistance. Unless further action is taken by Congress, tens of thousands of households will be at risk of losing rental assistance.
NLIHC President and CEO Diane Yentel said in a statement, “House Republicans held our nation’s lowest-income and most marginalized people hostage in exchange for lifting the debt ceiling. By preventing necessary inflationary cost increases for critical HUD programs, this debt ceiling deal could lead to tens of thousands of families losing rental assistance during an already deepening housing and homelessness crisis. Expanding ineffective work requirements and adding time limits for food assistance adds salt to the wound, further harming some of the lowest income and most marginalized people in our country.”
Under the debt ceiling agreement:
- The debt limit is suspended through January 1, 2025.
- Fiscal Year (FY) 2024 spending for domestic programs would essentially be capped at FY 2023 levels, and spending increases in FY 2025 would be limited to just one percent.
- Unobligated COVID-19 relief resources would be rescinded, including emergency funding for tenant-based rental assistance, project-based rental assistance, Section 202 Housing for the Elderly, Section 811 Housing for Persons with Disabilities, tribal housing, fair housing, and assistance to rural homeowners. Critical Emergency Housing Vouchers and Emergency Rental Assistance funds are spared.
- New time limits would be phased in for food assistance programs, impacting recipients up to age 54 without dependent children, if they do not meet certain work reporting requirements. Veterans, people experiencing homelessness, and others would be exempted from such time limits. The changes would sunset in 2030. Under current law, time limits apply only to certain individuals up to 49 years old.
- Changes to work requirements would be put in place for cash assistance programs. These changes may make it more difficult for states to meet work participation rules.
Your effective advocacy helped prevent some of the most extreme House Republican proposals from being enacted. Our collective efforts increased public pressure to prevent HUD’s budget being cut by 30 percent, which could have put nearly 1 million households at risk of losing their rental assistance and denied services to 120,000 fewer people experiencing homelessness.
But this final debt ceiling agreement will cause significant harm to households with the greatest needs. Once the agreement is enacted, Congress will turn its attention to divvying up the available funds among various departments and programs and begin drafting and voting to approve final spending bills. Your continued advocacy will be needed over the coming weeks and months to ensure the highest level of funding possible within these tight budget caps for affordable housing and homelessness programs, and to protect thousands of our nation’s lowest-income and most marginalized households from losing their rental assistance.
NLIHC will share a more detailed analysis of the debt ceiling deal and next steps for advocacy in the coming days and weeks. Join us, and stay involved. Thank you for your advocacy.
See the text of the debt ceiling agreement at: https://tinyurl.com/7t3hu4mc
See NLIHC’s press statement on the debt ceiling agreement at: https://bit.ly/42aJIHI