Secretary Castro Testifies before Senate
On Wednesday, March 11, HUD Secretary Julian Castro appeared before the Senate Appropriations Committee’s Transportation, Housing and Urban Development (T-HUD) Subcommittee to deliver testimony and answer questions on the Obama Administration’s budget request for fiscal year 2016. This is Secretary Castro’s first appearance before this subcommittee, and the first hearing led by its new Chair Susan Collins (R-ME) and Ranking Member Jack Reed (D-RI).
Senator Collins began her opening testimony by citing the fiscal constraints placed on appropriators by the Budget Control Act of 2011, which established firm spending caps for federal discretionary spending through 2023. The Budget Control Act also introduced sequestration (the automatic funding cuts across all discretionary programs) as a method of reducing spending should Congress exceed the spending caps. The Administration’s budget assumes a repeal of sequestration, which Senators Collins criticized. The senator also expressed concern regarding a predicted drop in the Federal Housing Administration’s (FHA) receipts, estimated to be $1.4 billion below the 2014 levels. These receipts are used to offset spending for housing programs, so the reduction will put additional restraints on the FY 2016 appropriations legislation.
Senator Collins continued that the Administration’s budget seems to disregard these challenges since it proposes funding increases for all HUD programs, minus the Community Development Block Grant (CDBG). She did plug support for triennial certifications for tenants with fixed income and increases to the Moving to Work program.
Ranking Member Jack Reed also expressed concern over the fiscal restraints placed on appropriators, stating that much of the funding increases proposed are to either maintain current preservation needs or to repair the damage caused by sequestration. Later in his questions to Secretary Castro, Senator Reed asked him about the Project-Based Section 8 program and the fiscal flexibility the Department has to address the limits of federal funding. Secretary Castro responded that the program no longer has flexibility, citing the transition to the calendar year funding cycle. He stated that if the amount requested in the Administration’s budget is not provided, they would not have the means to provide housing for all tenants currently in the program.
Switching focus to the tenant-based programs managed by HUD, Senator Reed highlighted the impact of decreased federal spending on the providers of housing, mentioning properties that allow vouchers will feel the impact of lower funding levels. Castro agreed with this statement and noted the ripple effect that a disinvestment for housing programs has on the overall local economy.
The Section 202 Housing for the Elderly and Section 811 Housing for Persons with Disabilities programs were also discussed. Senator Christopher Murphy (D) of Connecticut asked how many new units would be created under the 811 program should Congress adopt the Administration’s request. Secretary Castro responded that the request would lead to the addition of 700 units to the program, but that much more could still be done to address the need for these units. Senator Jack Reed highlighted the funding for the Section 202 program noting that the funding for the program has been cut in half since 2010. He expressed concerns for these cuts as the population of senior citizens increases and that the federal government must respond by providing budgets that address their needs.
Much of the other questions from subcommittee members were centered on addressing homelessness amongst veterans and our country’s progress in eliminating all homelessness. There was unanimous consent from the subcommittee’s members that sequestration must be replaced with a responsible deficit reduction tool, but there was no discussion on how to accomplish this goal.
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