Imperfect budget deal opens door for partial sequestration fix

Budget Committee chairs Sen. Patty Murray (D-Wash.) and Rep. Paul Ryan (R-Wisc.) unveiled Tuesday night a bipartisan budget deal, setting spending levels for FY2014 and FY2015 and rolling back a substantial portion of sequestration cuts in year one. Under the deal, overall spending levels will be set at $1.012 trillion in FY2014, which is a net increase of $45 billion relative to the sequester level. The deal also makes modest adjustments to sequestration in FY2015, raising spending only slightly over FY2014 levels. The additional spending will be shared evenly between defense and non-defense discretionary programs. Savings were generated through reduced contributions to federal pensions, increases in airline user fees, and extending small portions of sequestration for two years, primarily affecting Medicare.

The deal’s major accomplishment is preventing another government shutdown by setting a top-line budget number. The deal is very far from a grand bargain, however. It does not increase revenue, significantly change entitlement programs, reform the tax code, or replace the across-the-board sequestration cuts. In the true spirit of compromise the deal does not seem to fully satisfy members on either side of the aisle, with some House Democrats voicing complaints that it does not extend federal unemployment benefits, while some conservatives are concerned over offsets of some of the sequestration cuts. Much of this will be hashed out this afternoon as the bill is set to head to the House floor for debate and a vote.

What this all means for housing and community development funding is still unclear. Setting a top-line number was just the first step. Appropriators now have to settle on allocations for each of the twelve subcommittees and then craft final bill language. If House and Senate appropriators are able to reach consensus on funding levels for Transportation, Housing, and Urban Development (T-HUD) programs then it is likely to be included in an omnibus or minibus appropriations bill. Since the T-HUD bill nearly passed back in the summer, there is some hope of agreement this time around. If appropriators are unable to work out some of the more contentious elements of the T-HUD bill (namely high speed rail funding) then funding through a continuing resolution at FY2013’s level becomes likely. Over the coming weeks (maybe even days), final funding levels for HUD programs will be worked out as appropriations staff hammer out specifics of the final bill.

This budget cycle offers a real opportunity to improve the funding trajectory of HUD programs and to undo at least some of the devastating impacts of year over year cuts on low-income families and recovering neighborhoods. Decisions may well happen quickly now that the contentious top-line spending level has been set. Take this opportunity to tell your senators and representatives how housing and community development programs help the people they represent. Your individual thoughts will be the most persuasive, but you can also use this letter from NDD United as a guide. We will keep you posted on NHC’s Open House Blog and in the Washington Wire as more details emerge