Budget Conference Committee Chairs Senator Patty Murray (D-WA) and Representative Paul Ryan (R-WI) reached agreement on final FY14 and FY15 spending levels on December 10, ending months of budget gridlock. Representative Ryan offered the Bipartisan Budget Act of 2013 in the House as a substitute amendment to H.J. Res. 59, the current continuing resolution (CR). The House passed the budget agreement by a vote of 332 to 94 on December 12, and the Senate is expected to approve the budget agreement the week of December 16.
The Bipartisan Budget Act of 2013 would provide $45 billion in FY14 sequestration relief and $17 billion in FY15 relief, split evenly between defense and non-defense discretionary spending. The bill would increase total FY14 spending from the FY13 level of $986 billion to $1.012 trillion, approximately half way between the House’s budget resolution level of $967 billion and the Senate’s proposed level of $1.058 trillion. The FY14 defense spending cap would be $520 billion and the non-defense spending cap would be $492 billion. For FY15, the bill would slightly increase the overall discretionary spending cap to $1.014 trillion. In addition, the bill provides for $23 billion in deficit reduction over the next ten years. The agreement also includes a provision to create a reserve fund for the National Housing Trust Fund (see article elsewhere in Memo).
Sequestration relief and deficit reduction would be achieved through the budget agreement’s spending reductions and non-tax revenue increases, including: changing federal retirement benefits; increasing aviation security fees; implementing numerous other user fees; and, extending the mandatory sequester for two years. The Congressional Budget Office (CBO) reported that the budget agreement would increase revenue by $6.6 billion and reduce mandatory spending by $78.4 billion.
Increased guarantee fees charged by Fannie Mae and Freddie Mac were not included among the revenue-raising offsets in the bill. The Senate Committee on Banking, Housing and Urban Affairs Chair Tim Johnson (D-SD) and Ranking Member Michael Crapo (R-ID) wrote a letter to the Budget Conference Committee chairs urging them not to include guarantee fees as offsets (see Memo, 12/6).
To provide greater sequestration relief, Chair Murray had advocated raising revenue by closing tax loopholes. However, from the onset of the conference negotiations, Chair Ryan objected to including any tax revenue in a budget agreement (see Memo, 11/8). The bill did not include instructions on tax reform.
At a press conference, Senator Murray said the bill is, “a good step in the right direction that can hopefully rebuild some trust and serve as a foundation for continued bipartisan work.” Representative Ryan offered similar praise saying, “This agreement will stop Washington’s lurch from crisis to crisis. It will bring stability to the budget process and show both parties can work together.”
Immediately after the Senate passes the budget agreement, the House and Senate Committees on Appropriations are expected to establish a single set of 302(b) allocations for their twelve subcommittees, including the Transportation, Housing and Urban Development, and Related Agencies (THUD) subcommittees. Appropriations Subcommittees are expected to move quickly to negotiate final FY14 spending bills and advance them in an omnibus that would include several bills, including the THUD bill.
The Campaign for Housing and Community Development Funding (CHCDF) re-sent a letter signed by 2,422 organizations urging the Chairs and Ranking Members of the Appropriations Committees to increase the FY14 THUD subcommittee allocation. In a cover memo to the letter, John Bohm from the National Association of Housing and Redevelopment Officials and current chair of CHCDF wrote, “This request has become increasingly urgent as the impacts of sequestration have taken hold. Communities are experiencing the negative impacts of reduced spending for THUD programs because of sequestration and prior year funding cuts.” CHCDF is a group of more than 70 national organizations facilitated by NLIHC.
The House recessed for the rest of the year on December 12 and the Senate is scheduled to adjourn on December 20. When Congress resumes its session in January, it will have to quickly pass the FY14 appropriations package before January 15 when the CR currently funding the government expires.
View the Bipartisan Budget Act at: http://1.usa.gov/18lmwKT
View the bill summary at: http://1.usa.gov/1hLzIMl
View the CBO estimates at: http://1.usa.gov/1ctlgBn
View the CHCDF letter at: http://bit.ly/18LDHjM