The Senate Committee on Banking, Housing and Urban Affairs held a hearing on May 5 on the President’s HUD budget request for FY12, with Secretary Shaun Donovan as the sole witness. The Administration submitted its FY12 request to Congress in February. The Senate has spent most of the last three months consumed with finalizing the FY11 budget and has now shifted its focus to the President’s latest request (see Memo, 4/29).
Banking Committee Chair Tim Johnson (D-SD) opened the hearing by praising the HUD budget request for proposing to streamline programs to provide greater efficiency in housing and community development initiatives. Chair Johnson discussed the significant need for these programs, particularly as state and local governments slice their budgets and decrease services for low income households. The Senator also spoke about the needs of tribal communities facing significant housing and community development challenges.
Secretary Donovan said that the FY12 HUD budget request will protect current subsidized housing tenants and improve the programs that serve those households. Secretary Donovan said that enacting portions of the Section Eight Voucher Reform Act (SEVRA) legislation that are included in HUD’s FY12 budget request would result in savings of $1 billion annually for five years. HUD’s proposal would also require public housing agencies (PHAs) to collectively use $1 billion in excess reserve funding to supplement HUD’s Public Housing Operating Fund request of $3.96 billion. The request is $1 billion below HUD’s estimated cost of operating public housing for FY12.
The Secretary also reflected on the FY12 request in light of Congress’s FY11 funding decisions. Secretary Donovan said that the increase requested for Homeless Assistance Grants in FY12 would allow the department to fully implement the HEARTH Act, enacted in 2009, but that the funding level provided in the FY11 Continuing Resolution (CR) would only support implementation of one portion of the program. The President requested $2.05 billion in FY11 and Congress funded the program at $1.9 billion, $36 million above the FY10 level. Advocates had requested $2.4 billion for FY11, the full authorization level necessary to ensure complete implementation of the new legislation.
The Secretary also pointed to HUD’s request for $88 million for Housing Counseling in the FY12 budget. The Housing Counseling program was unexpectedly cut in the FY11 CR.
Ranking member Senator Richard Shelby (R-AL) questioned the Secretary about increasing efficiencies in current HUD operations to realize savings for the department. The Secretary elaborated on the administrative burdens that SEVRA would relieve and discussed the savings that could result from both enacting portions of that legislation as well as from the work of HUD’s Transformation Initiative.
The National Housing Trust Fund was also discussed (see article above).
The Senate will continue its focus on budget and appropriations for
FY12 in the coming weeks. The Senate Budget Committee is expected to
proceed with an FY12 budget resolution shortly. The Senate may also take
up the House budget resolution passed on April 15, though it is
expected to reject that resolution. Broader budget proposals being
crafted by smaller groups within the Administration and Congress are
still pending. Meanwhile, the House anticipates crafting its FY12
appropriations subcommittee bills starting in May.