After passing a continuing resolution to fund the government through March 2013, Congress left for election season recess without addressing the looming issue of sequestration (see Memo, 9/21). The Budget Control Act of 2011 (BCA) requires the administration to sequester discretionary funds, which means making across-the-board cuts, to achieve a $1.2 trillion reduction in the deficit over a 10-year period. Sequestration is scheduled to begin in January 2013 but Congress could elect to replace these scheduled cuts to defense and non-defense discretionary spending with another deficit reduction mechanism prior to January.

The Center on Budget and Policy Priorities (CBPP) issued a September 25 report estimating the impact of cuts to discretionary funding required by the BCA. CBPP estimates that the BCA’s limits to discretionary spending will generate $1.5 trillion in savings. Three-fifths of these savings would be derived from non-defense discretionary programs, which will reduce this spending to its lowest share of GDP since 1962.

In compliance with the Sequestration Transparency Act of 2012 (see Memo, 9/7), the administration submitted a report to Congress on September 14 regarding the impact sequestration would have on federal programs. HUD estimates that if sequestration takes effect, more than 250,000 families, nearly one million people, would lose their tenant based rental assistance vouchers and be at risk of homelessness. Half of these households include a person with a disability or a person who is elderly. HUD also estimates that an additional 100,000 households served by Homeless Assistance Grants will return to homelessness in FY13 (see Memo, 9/14). These 100,000 households would include 1,500 homeless veterans and their families, reversing the administration’s progress on eliminating veteran homelessness.

The Campaign for Housing and Community Development Funding (CHCDF), a coalition of more than 70 national affordable housing and community development groups convened by NLIHC, estimated the impact that sequestration would have on HUD programs nationally and is revising these estimates based on the Administration’s report to Congress. CHCDF, in collaboration with the National Housing Trust, will present a briefing to House and Senate staff on the impacts of sequestration to housing programs in October.

Click here to read the CBPP report.