Federal Budget News: Looking Ahead to 2013

From the Center on Budget and Policy Priorities

President's Budget Proposal to Increase Minimum Rent to $75

We posted today a new analysis of the proposal in the President’s budget to increase the minimum rent to $75 in all HUD’s rental assistance programs.  Half a million families with incomes below $250 per month, or $3,000 per year, would face rent increases that many would have difficulty affording.  For the vast majority of these households — about 400,000 of them — rents would increase by 50 percent or more. A substantial number of families in every state would face rent increases (see Appendix I), although the severity of the impact would vary due to differences across the states in such factors as joblessness and the strength of other safety-net programs (see Appendix II).  The affected families include 725,000 children, and are disproportionately minority. 

The analysis concludes that the Administration’s rationale of keeping pace with inflation and cost-savings don’t withstand scrutiny.  The incomes of extremely poor families generally do not rise with inflation in rents or prices generally, and recent research shows that the number of U.S. families living on less than $2 per person per day has more than doubled since the mid-1990s — roughly the same period that the $50 minimum rent policy has been in place.  If the minimum rent increase is imposed at families’ regular annual recertification in 2013, and more households receive hardship exemptions, the savings from the proposal would likely be less than half as large as the Administration’s estimate of $150 million.  Policymakers can find much better ways to secure $75 million or so in savings to help comply with the $501 billion statutory cap on non-defense appropriations for fiscal year 2013 than by making some of the poorest American families and children still more destitute.

View the full report:
http://www.cbpp.org/cms/index.cfm?fa=view&id=3706
http://www.cbpp.org/files/3-20-12hous.pdf 11 pp.

Appendix I: Number of Households Facing Rent Increase if Minimum Rent is Set at $75 by State and Program

Appendix II: State Safety Net Programs and Share of HUD-Assisted Households Facing Rent Increase Under $75 Mandatory Minimum Rent

FY 2013 Budget Debate Heats Up

Today, House Budget Committee Chairman Paul Ryan released a draft budget resolution for fiscal year 2013.  While many details of the blueprint are not yet available, it proposes massive cuts in spending — including deep cuts in nondefense discretionary programs below the levels set under the Budget Control Act (BCA) and sharp reductions in Medicaid and SNAP (food stamps) — as well as trillions in new tax cuts over the next decade.  The House Budget Committee is expected to mark up the resolution on March 21, and the full House will likely vote on it next week.  In the Senate, Budget Committee Chairman Kent Conrad has filed a “deeming resolution” to set the FY 2013 discretionary spending targets at the levels set by the BCA.  There will be no House-Senate agreement on a resolution.

Over the next several weeks, the House and Senate appropriations committees will divide the respective spending targets set by the House and Senate resolutions into 12 allocations, one for each of the FY 2013 spending bills.  A critical question for low-income housing and community development programs will be the size of the House and Senate allocations for the Transportation-HUD bill.  A coalition of national organizations is sponsoring a letter to the House and Senate appropriations committees urging them to support a strong allocation for the FY 2013 T-HUD bill.  Please consider signing the letter, which is closing today.  To view or sign the letter, please go to the following webpage set up by the National Low Income Housing Coalition: https://nlihc.wufoo.com/forms/thud-302b-signon-letter/#public.

For those unable to participate in the webinar we held last Thursday on the budget seeking more background on these issues, an archived file is available here http://www.cbpp.org/housingwebinar.

AHSSIA (a/k/a SEVRA) Mark-Up

It now appears likely that the full House Financial Services Committee will consider the Affordable Housing and Self-Sufficiency Improvement Act (AHSSIA) on April 18.  Efforts are underway to modify several of the provisions in the draft bill approved by the subcommittee on February 7th --- notably the expansion of MTW, the increase in minimum rents, and the voucher renewal formula --- to enable the bill to have broad bipartisan support.