The federal budget and deficit are expected to be high policy priorities in the 112th Congress as many new Republican members focus on spending cuts. The House of Representatives started the first day of its new session adopting a rules package that allows its leadership to use new methods to control spending. These rules changes will apply to 12 appropriations bills for the fiscal year that began October 1, 2010 that the last Congress did not pass.
The new rules change the current “pay as you go” requirement to “cut as you go.” Under this rule, any new spending must be paid for by spending cuts elsewhere, but cannot be paid for by an increase in taxes. However, taxes can be cut without a need to find an offset, i.e., a way to pay for the tax cut, which will work against deficit reduction. The rules also apply savings from discretionary spending cuts in appropriations to deficit reduction, rather than to other priorities within a bill.
Another rule allows Budget Committee Chairman Ryan to set FY11 budget levels for the House Appropriations Committee to use for spending bills, independent from a budget resolution, where spending levels are traditionally set.
The House has the opportunity to reconstruct its FY11 Transportation, Housing and Urban Development (T-HUD) appropriations bill, which it passed in July 2010. The Senate did not do the same (see Memo, 7/30/10, 12/23/10). The government has been funded under four continuing resolutions (CR) since the start of the fiscal year. The current CR expires on March 4.
Several plans to reduce discretionary spending circulated at the end of 2010, including House Republicans’ “Pledge for America,” which proposed spending reductions to FY08 levels. Speaker Representative John Boehner’s (R-WI) suggestion to cut nondefense discretionary programs by $101 billion could severely impact households that HUD programs now serve. Mr. Boehner has suggested breaking appropriations legislation into individual bills for each federal agency, which could result in deeper and more consistent cuts.
Cutting discretionary spending by more than $100 billion could reduce Tenant-Based Rental Assistance by $4 billion, causing 475,000 households to lose their rental assistance and likely their homes. The Project-Based Rental Assistance program could experience a $2.3 billion reduction, the Public Housing Capital and Operating Funds a $1.5 billion decrease, the Community Development Block Grant a $7 billion cut, and Homeless Assistance Grants a $500 million reduction.
Meanwhile, Representatives Marsha Blackburn (R-TN) and Robert Woodall (R-GA) have introduced legislation to slash discretionary spending. Ms. Blackburn offered three bills that would make 5%, 10% and 15% cuts to non-defense, non-homeland security and non-veterans affairs spending, respectively, for FY11 and FY12. Mr. Woodall’s bill would reduce total discretionary funding to levels established in the CR.
NLIHC is monitoring Congressional developments on HUD appropriations and will issue a “Call to Action” when advocate calls to Capitol Hill will be most effective.