Congress passes short-term funding measure with two-year spending cap increases
Continuing Resolution Following an overnight shutdown, Congress early this morning reached a deal to temporarily extend fiscal year 2017 funding, buying lawmakers more time to enact full-year appropriations within new overall spending caps. The measure, which passed 71-28 in the Senate and 240-186 in the House, continues federal funding at mostly FY17 levels until March 23rd, and suspends the debt limit until March 1, 2019.
Spending Caps In order to ease appropriations negotiations for FY18 federal funding past March, the deal includes two-year increases to the overall spending caps on both defense and domestic spending: For FY18, discretionary spending caps would be lifted by $80 billion for defense and by $63 billion for domestic programs, such as housing, with similar increases set for FY19. Although this week’s deal reflects the largest such increase in recent years, the new spending caps remain more than 5% below pre-sequestration funding levels of 2010, without adjusting for population growth.
Disaster Funding The measure provides more than $84 billion in emergency supplemental funding for hurricane and wildfire relief efforts. This is the largest standalone total ever appropriated for disaster relief, and the amount is not counted against the increased non-defense discretionary spending caps raised under the deal. The disaster funds include $23.5 billion for FEMA’s Disaster Relief Fund, which state and local recipients can use to respond to disasters, and $28 billion to states and communities through HUD’s Community Development Block Grant (CDBG) program – including $2 billion to repair electrical infrastructure damaged by Hurricane Maria.
Housing Credit Among other provisions, the bill also temporarily extends the National Flood Insurance Program (NFIP); however, provisions from the Affordable Housing Credit Improvement Act to strengthen and expand the Housing Credit program were left out of the final bill after being considered in earlier versions, representing yet another missed opportunity to address the affordable housing crisis.
President’s Budget Request expected on Monday
President Trump is expected to release an outline of its FY2019 budget request early next week. While the request is likely to mirror last year’s proposed cuts to HUD, USDA, and other agencies, the higher spending caps could give some preserve renewal levels. The request is also likely to propose rent reforms and work requirements for some affordable housing residents, as well as more of HUD’s self-sufficiency “EnVision Centers.” In addition to emphasizing agency cutbacks and economic independence measures, the Administration’s budget could also include an infrastructure proposal to enhance Private Activity Bonds (PABs).
NAHMA will keep members up-to-date as developments unfold; stay tuned for a NAHMAnalysis of the shift toward self-sufficiency initiatives, as well as a forthcoming analysis of the budget and appropriations process.
