Sequestration, the across-the-board discretionary funding cuts required by the Budget Control Act of 2011 and modified by the American Taxpayer Relief Act of 2012, could reduce federal department funding by 5.1% in 2013, according to the Center on Budget and Policy Priorities (see Memo, 1/25). The Administration and Members of Congress all spoke against the sequestration during the week of February 4, but no agreement on how to stop it from going into effect on March 1 was reached. NLIHC encourages advocates to stay engaged in the process to help ensure the best possible outcomes for housing programs.
President Barack Obama called on Congress to craft an agreement to avoid the sequester, even if that would require creating a short-term deal to postpone it beyond March 1 in lieu of an immediate, comprehensive replacement deal. Instead of proposing a new plan for addressing sequestration, the President said that Congress should work on existing proposals to replace the cuts, and urged House Democrats to present a unified position that would include tax revenue in any sequestration replacement deal.
Even as the President called for sequestration to be averted, the Administration continued making plans for federal agencies to implement the sequester beginning March 1. The Office of Management and Budget (OMB) began communicating instructions on implementing sequestration to federal agencies the week of January 28. During the week of February 4, OMB shared a draft letter with heads of agencies that would prepare federal staff for furloughs should the sequester take effect. Federal employees of discretionary-funded defense programs should prepare for staff furloughs of one day per week. Non-defense agencies funded through discretionary spending would need to prepare for furloughs one day every other week, according to the draft letter.
In a press release, the White House shared examples of how sequestration would impact various government programs. The release said that sequestration would result in the loss of 125,000 Housing Choice Vouchers, and that 100,000 formerly homeless people “would be removed from their current housing and emergency shelter programs” due to cuts to Homeless Assistance Grants.
While many Republicans and Democrats agree that the sequester should not take effect, they are divided on how to replace it. Democrats favor eliminating tax loopholes and increasing taxes, while Republicans urge further spending cuts and entitlement changes. On the Republican side, House Speaker John Boehner (OH) spoke this week in favor of replacing the sequester, calling it a “meat ax” that would “weaken our national defense.” Meanwhile, House and Senate Democrats convened in Annapolis, MD to discuss budget positions and strategies. Senate Majority Leader Harry Reid (D-NV) stated that the Senate would work on legislation to replace the sequester, but that such a replacement could not be identified by March 1 (see Memo, 2/1). Senate Democrats are expected to introduce legislation to replace the sequester during the week of February 11.
Representative Keith Ellison (D-MN) introduced H.R. 505 on February 15, which would cancel the sequester and replace it with another deficit reduction package including both cuts and revenue. The bill has fourteen co-sponsors and has been referred to the Committees on Ways and Means, Budget, Oversight and Government Reform, Armed Services, Education and the Workforce, Transportation and Infrastructure, and Financial Services.
Finally, the Senate Committee on Appropriations will hold a hearing on the impacts of sequestration on February 14, with HUD Secretary Shaun Donovan scheduled to testify about sequestration’s impact on HUD programs. Other witnesses include Education Secretary Arne Duncan, Homeland Security Secretary Janet Napolitano, Defense Deputy Secretary Ashton Carter, and Danny Werfel of the Office of Management and Budget. NLIHC encourages housing advocates to urge the Senators on this committee to raise housing issues to highlight sequestration’s potential damaging impacts on HUD’s programs. Senate Appropriations Committee Chair Barbara Mikulski (D-MD) and Ranking Member Richard Shelby (R-AL) are reportedly working on a sequester replacement plan.
The Non-Defense Discretionary (NDD) Funding Coalition prepared a letter, signed by over 3,200 organizations, to be sent to Members of Congress on February 11. The signers urge that Congress use a “balanced approach to deficit reduction that does not include further cuts to discretionary programs.” The signers explain that “nondefense discretionary… programs are core functions government provides for the benefit of all, including medical and scientific research; education and job training; infrastructure; public safety and law enforcement; public health; weather monitoring and environmental protection; natural and cultural resources; housing and social services; and international relations.”
Click here to view the White House press release.
The House Democrat’s report is attached.
The NDD letter is attached.