Secretary Donovan Testifies Before House Committee
On Thursday, April 10, HUD Secretary Shaun Donovan appeared before the House Appropriations Subcommittee on Transportation, Housing, and Urban Development (T-HUD) to discuss the Department’s FY 2015 budget request.
The Subcommittee’s Chairman, Tom Latham (R-IA), began the hearing by asking Donovan about the estimated $14 billion in receipts for the FHA in FY 2015. This amount is $1.4 billion over the 2014 projection and $2.8 billion higher than what the Congressional Budget Office (CBO) predicts for 2015. The Secretary replied that the CBO is not factoring in the significant changes that HUD has made to loan premiums that increased returns. Latham asked the Secretary to communicate these changes to the CBO and that the outcomes of these discussions should be relayed to the Subcommittee.
Representative Jamie Herrera Beutler (R-WA) asked about the proposal to shift contract renewals to a calendar year schedule in the Project-Based Section 8 program. She started that the request appears to be underfunded, and asked if the change will remove funding uncertainty for owners/managers. The Secretary responded that he believes it will reduce O/A uncertainty and put the PBS8 program back on more stable footing. The PBS8 program was not addressed for the rest of the hearing.
New York Congresswoman Nita Lowey (D) asked about the proposal for the Rental Assistance Demonstration (RAD) program. She highlighted that the budget includes a $10 million dollar request for RAD and it proposes to remove the programs current unit cap of 60,000 and extend it through FY 2017. Representative Lowey also asked if there is sufficient demand to expand the program. Donovan responded that there is a very high demand for the program – about 180,000 units have so far applied. Also, smaller Public Housing Authorities (PHAs) are more likely to be using the program, suggesting that the RAD program is reaching smaller and more rural areas.
The Performance-Based Contract Administration (PBCA) Notice of Funding Availability (NOFA) was raised by Ohio Congressman David Joyce (R). He asked Secretary Donovan to comment on the U.S. Court of Appeals for the Federal Circuit’s recent reversal of a lower court’s decision which permitted HUD to proceed with its PBCA contract awards under a 2012 NOFA. The Court of Appeals decided that PBCA contracts are procurement agreements, not cooperative agreements as HUD had argued. Procurement agreements carry stricter restrictions for contract awards. Secretary Donovan stated that he disagrees with the decision. He claimed that the appeals court did not look closely enough at the specifics of PBS8 or HUD’s contract authority in this matter. The problem that he cited with the full procurement process is that it will not allow HUD to work closely with state HFAs and local housing authorities, which reduces HUD oversight and would not allow the Department to leverage additional project funding from other programs like HOME or the Low-Income Housing Tax Credit (LIHTC). The remainder of the session focused on Community Development Block Grants and recovery from Hurricane Sandy.
On April 8, NAHMA submitted testimony to this Subcommittee requesting that the members scrutinize HUD’s budget request for the PBS8 program with attention paid to their proposal to switch to a calendar year schedule for contract renewals.
To watch an archived webcast of this hearing,
please click here.
House of Representatives Passes a New Budget for FY 2015
On Thursday, the House of Representatives passed a budget for FY 2015. Submitted by Budget Committee Chairman Paul Ryan (R-WI), this budget would make cuts to federal spending and repeal the Affordable Care Act. The budget does not contain specific funding numbers for federal departments and programs. Instead the budget outlines efficiency reforms and a plan to cut $5.1 trillion from U.S. spending over the next ten years.
According to a
Q&A posted on the Budget Committee’s website, Ryan states:
“The overall spending cap for fiscal year 2015 is $1.014 trillion, as agreed to in Murray–Ryan (Bipartisan Budget Act), and the levels for defense and non-defense discretionary spending are where they were set in the Murray–Ryan agreement. We are not changing the plan that was agreed to by bipartisan majorities in the House and Senate and signed by the President.”
“The Bipartisan Budget Act does provide funding levels for fiscal year 2015. But that agreement was the bare minimum. House Republicans have put together their fourth balanced budget in a row because we believe we owe it to the country to offer an alternative to the status quo. We need to get this economy growing, bolster our defense, strengthen Medicare, reform government, and we need to stop spending money we don’t have.”
“The House Republican budget strengthens key investments—like defense and Medicare—by cutting waste and making much-needed reform.s”
“House Republicans want to clear out special-interest loopholes, simplify the tax code, and lower everybody’s rates.”
The final vote for the budget was 219 to 209 – 19 Republicans did not vote in the affirmative and all Democrats voted no as well. Though it has passed the House, Ryan’s budget has little chance of passing the Senate because of its proposed elimination of the Affordable Care Act. Overall, the budget can be seen as a statement of beliefs rather than viable policy, and lawmakers will most likely draft appropriation bills for FY 2015 without this budget.
To read more about this budget,
please click here.
Deputy Secretary Nomination
On Tuesday, April 8, the Senate Committee on Banking, Housing, and Urban Affairs held a hearing examining the nomination of Nani A. Coloretti to be HUD’s Deputy Secretary. Coloretti worked in the U.S. Treasury Department since 2009 and was appointed as this Department’s Assistant Secretary for Management by President Obama in 2012. Prior to joining the Treasury Department, Coloretti spent four years as a policy advisor and budget director in San Francisco Mayor’s office, where she led the development and implementation of San Francisco’s $6.2 billion dollar annual budget.
During the hearing, the Ranking Member Mike Crapo (R-MI) stated that he hopes Coloretti will be able to encourage cooperation in HUD and serve as a role model to the Department’s employees. A vote on her nomination will occur later.
To watch an archived webcast of this hearing,
please click here.
