THUD Moving to House Floor- Veto Threat, Bigger Spending Fight Looms

The House will begin consideration of its FY 2016 Transportation, Housing and Urban Development (THUD) spending bill today.  Notwithstanding the cuts and obvious problems with the THUD bill, NAHRO is keeping its focus on a larger conversation about the irresponsibly low spending cap that is likely to derail the entire budget and appropriations process. Ultimately, the goal is to get another deal to raise spending caps like the Murray-Ryan deal that was reached in 2013.  We are maintaining our messaging to fit that strategy.

Though THUD was the beneficiary of an increased spending allocation- which is evidence of the impact of the good work NAHRO members and others did on the national letter to increase the THUD 302(b)- the bill’s allocation was essentially level-funded because of Federal Housing Authority (FHA) revenue reductions. As a result, the bill contains unacceptable cuts to housing and community development. Reductions recommended to the Public Housing Operating and Capital Funds and Choice Neighborhoods represent just two of the steep program cuts in THUD. Administrative Fees would also be prorated to approximately 68 percent and the Housing Trust Fund would essentially be eliminated and its funding transferred in a budgetary gimmick to allow lawmakers to claim “full funding” for the HOME program.

Given the constraints of the allocations, this bill reflects the attempts of appropriators to keep families in their homes without making even deeper cuts to other critical programs, like the continuation of the $3 billion investment in the Community Development Block Grant (CDBG) program. Appropriators were given an impossible job given the artificial constraints placed on them by the Budget Control Act spending caps approved in 2011.  The only solution to this problem is to raise the overall spending caps for the year, which would presumably raise THUD’s allocation.

THUD isn’t the only bill with an allocation problem, and as appropriators move through other spending bills, it will be increasingly difficult to pass bills on the floor. For example, the allocation for the frequently controversial Labor, Health and Human Services, and Education (Labor-HHS-Ed) spending bill is nearly $4 billion lower than current levels. Much like the THUD bill, many programs within Labor-HHS-ED bill are essentially mandatory.   Pell Grants that help low-income students access higher education highlight this point. There is no room within the bill to cut. At that allocation, the Labor-HHS-Ed bill will be very difficult to draft, that is if the process even makes it that far. It is  possible that the budget and appropriations process will fail with THUD, much like it did in 2013.

Lawmakers on both sides of the aisle agree that the funding cap for FY 2016 is too low and that a deal similar to the Murray-Ryan agreement should be reached. Unfortunately, it may take a breakdown of the entire appropriations process to begin negotiations. Whether the THUD bill once again stops  the appropriations process or another bill is still unclear; however, even if THUD is passed by both the House and the Senate, President Obama promised today that he would  veto the bill.

What is clear, though, is that the bills being offered now on the House floor and in the Senate Appropriations Subcommittees represent, in our opinion, the beginning of a much longer budget and appropriations process that is likely to stretch to the end of the fiscal year and beyond- likely ruining many winter vacation plans in Washington, DC.


By Tess Hembree

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