House Hearing on HUD Budget Request for FY 2017
On Tuesday, March 1, the House Appropriations Transportation, Housing and Urban Development (T-HUD) Subcommittee held a hearing to examine and discuss the funding request and policy proposals included in the Administration’s FY17 budget request for HUD. The sole witness for this hearing was HUD Secretary Julian Castro.
Like many of the appropriation hearings before, this hearing was contentious as lawmakers from both parties quarreled over the budget request and current operations within HUD. Representative Mario Diaz-Balart (R-FL), chairman of the T-HUD Subcommittee began in his opening remarks by stating “HUD is requesting a total of $49 billion in new budgetary resources in Fiscal Year 2017, about 3.5 percent above 2016. Now this is not a dramatic increase. Unfortunately, however, there are so many accounting gimmicks in the budget as a whole, that it makes it difficult to frankly take any of it very seriously.”
He continued that the Department fails in “basic management” of its resources, lacks proper oversight of its programs and remains dysfunctional as ever. In contrast, the Ranking Member of the T-HUD Subcommittee, David Price (D-NC), was critical of funding limitations that constrain HUD to serving only one in four families that are qualified to receive federal housing support. He cited that more than three-quarters of the budget request is dedicated to just maintain current contracts, and that new initiatives cannot occur without new obligations from appropriators.
The Chairman for the full House Appropriations Committee, Hal Rogers (R-KY), was present for this hearing and highlighted that lawmakers must abide by the spending limits as mandated in the Bipartisan Budget Agreement. He also plugged support for the Community Development Block Grant Program for its ability to address unique community development needs.
Secretary Castro used his opening remarks to promote HUD’s current efforts and defend the budget request. Castro noted that between 2010 and 2015, there has been a 36 percent decline in veteran homelessness because of the Department’s work. He also testified that the Rental Assistance Demonstration (RAD) program has already leveraged nearly $2 billion since its inception and is beginning to address the backlog of crucial repairs needed in the nation’s housing portfolio. “One-fourth of American renters spend more than half their incomes on housing, and for every dollar that goes towards a rent payment, one is taking from a family’s grocery budget, a child’s education or a couple’s retirements savings” he said.
The Secretary then received questions from Subcommittee members, beginning with single-family housing policies, the Lead Hazard Control and Healthy Homes programs, and high income earners living in public housing who are unqualified to do so. Representative David Joyce (R-OH) asked about the Affirmatively Further Hair Housing (AFFH) rule and its effects of local community input in zoning laws. Castro responded that there is a history of tension between HUD’s Fair Housing office and its community planning and development office. He stated that the Department is seeking to clamp down on noncompliance with the Fair Housing Act but in order to get it right, HUD is taking input from local communities. Concluding, he said that the AFFH does not intend to force local jurisdictions to adopt specific zoning or planning laws, or land use restriction. Rather, the rule intends to give local communities the data that they need to make prudent decisions on their own.
Later, Chairman Diaz-Balart questioned the increase in administrative fees for public housing authorities (PHAs) overseeing the Housing Choice Voucher (HCV) program. He was surprised to see an increase of $427 million requested, a 26 percent increase over 2016. Secretary Castro responded that housing authorities have been asked to consistently do more with less and that the requested level is the right amount to ensure that HCV is a well-run program. Diaz-Balart countered that HUD is developing a new administrative fee structure, but it has not been implemented. He suggested that HUD should hold spending increases for PHAs until they finalize the new administrative fee formula. Castro did state that under the Housing Opportunity Through Modernization Act (H.R. 3700) and its flexibility with regard to inspections and income verification will reduce administrative burdens and allow PHAs to reduce overhead costs.
Ranking Member Price followed later on and asked about the Olmstead Decision, in terms of housing for persons who are disabled (the Olmstead decision made it unconstitutional for communities to segregate based on disability). Price said that the nation needs to do more to integrate people with disabilities into their communities, and while it is widespread, the Section 202, Housing for the Elderly program has historically addressed it. However, he said that “There’s a shortage of available units, ten people waiting often for each unit. Yet this budget request seeks no funding for additional units of housing for people with disabilities or the elderly, 202, 811.” He wanted to know how HUD could leverage other programs, like HOME, to create units to further Olmstead compliance.
Secretary Castro pointed to success in the HCV program. From January 2015 to January 2016, 36 percent of HCV admissions were disabled families. He continued that while the Department has not made major increase requests for 811, but they are anticipating good results from a research project on 202 housing on the link between housing and health.
There was not substantive discussion on Project-Based Rental Assistance. Additionally, it is well observed that the Appropriations Committees will likely reject all, or at the least the significant majority of the Administration’s Budget Request.
Ways and Means Committee Chair Issues Tax Reform Mission Statement
On Wednesday, March 2, House Ways and Means Committee Chairman Kevin Brady (R-TX) issued a press release containing mission statement and broad policy goals for tax reform in the United States.
In January of this year, the committee announced that it will address five broad issue areas under task reform through committee-led task forces charged with developing an agenda and holding idea forums to take input and ideas from all members of Congress. The five main issues managed by the task forces include “national security; jobs and the economy; health care; poverty, opportunity, and upward mobility; and restoring constitutional authority.”
The overall mission statement for task reform efforts states “Create jobs, grow the economy, and raise wages by reducing rates, removing special interest carve-outs, and making our broken tax code simpler and fairer.” Tax reform was a major goal of Representative Paul Ryan (R-WI) when he chaired the Ways and Means Committee, which is the primary committee on tax laws in the House of Representatives. The Senate similarly has discussed tax reform through its counterpart Committee on Finance. Like the Ways and Means committee, the Senate broke down the topic of tax reform for separate task forces to manage.
Brady and other Republican leaders have said that while they do not expect Congress to enact comprehensive tax reform until the next President takes office in 2017, but they intend to use this year to lay the groundwork for those reforms.
Read the press release here