The Obama administration submitted a report to Congress September 14 on the impact sequestration would have on federal programs. The Budget Control Act of 2011 (BCA) requires the administration to sequester funds, which means making across-the-board cuts from discretionary funding to achieve a $1.2 trillion reduction in the deficit over a 10-year period. Sequestration is scheduled to begin in 2013. The Sequestration Transparency Act of 2012 required the administration to prepare this report for Congress within 30 days of its August 7 enactment (see Memo, 9/7). The delay in releasing the report, according to the administration, was due to the complexities of implementing sequestration.

The 400-page report prepared by the Office of Management and Budget (OMB) includes a percentage cut and dollar figure for accounts subject to the sequester. The Campaign for Housing and Community Development Funding (CHCDF) estimated that over two million people would be negatively impacted by sequestration of HUD programs, based on the Center on Budget and Policy Priorities’ (CBPP)  8.4% estimate for sequestration cuts (see Memo, 8/24). OMB estimates that most HUD and USDA Rural Housing Service programs would be cut by 8.2%, but estimates that a higher number of households would potentially be impacted by these cuts than does CBPP.

HUD estimates that more than 250,000 households would lose their vouchers, leaving nearly one million people who are currently stably housed without assistance and at risk of homelessness. More than half of these households include people who are elderly or have disabilities. HUD also estimates that 100,000 households housed through Homeless Assistance Grants would no longer have homes. This would include 1,500 veterans and their families. Additionally, 80,000 homeowners would not receive housing counseling services. HUD estimates that sequestration cuts to the department would cause the loss of 53,000 jobs.

The Administration and advocates alike continue to urge Congress to avoid sequestration. Advocates are urging Members of Congress to craft a deficit reduction plan that includes a balanced approach to spending and revenue in order to protect low income households served by government funded programs. The Coalition on Human Needs (CHN) is circulating a sign-on letter urging the protection of low income and vulnerable people. The letter currently has over 1,200 organizational signers. NLIHC sent a call to action urging local, state and national organizations to sign onto this letter by September 19.

In a press release, National Low Income Housing Coalition President and CEO Sheila Crowley stated, “The OMB report is conclusive proof that sequestration will rob low income people of already scarce housing resources at a time when our economy and communities can least afford to lose them. We urge Members of Congress to work together to instead seek a balanced solution that will raise revenue and protect the most vulnerable Americans.”

Some in Congress support a sequestration alternative that would protect defense spending at the expense of spending on housing and other social supports. On September 10, Representative Allen West (R-FL) introduced a bill to eliminate the sequester and replace it with an unbalanced alternative. H.R, 6365, the National Security and Job Protection Act, would lessen the cuts to defense spending while deepening those to non-defense discretionary spending.

OMB issued a Statement of Administration Policy (SAP) on H.R. 6365 on September 12. “The bill’s unbalanced approach breaks the agreement reached in the bipartisan BCA and fails the test of fairness and shared responsibility,” writes the administration. Mr. West’s bill passed the House on September 13 by a vote of 223 to 196. 

Click here to view the OMB report.

Click here to view the NLIHC press release.

Click here to view H.R. 6365.

Click here to view the SAP.

Click here to view the NLIHC call to action.

Click here to view the CHN letter.