Members of Congress returned to their offices on Capitol Hill today (April 17), as Republicans have begun formulating a potentially disastrous proposal for raising the federal debt limit. While details are still being revealed, reports suggest that the proposal would involve raising the statutory debt limit until May 2024 while potentially capping non-defense discretionary spending – including funding for HUD’s and USDA’s vital affordable housing and homelessness programs – at fiscal year (FY) 2022 levels in return. The proposal may also include provisions to limit increases in the federal budget to just 1% annually over the next 10 years.
The debt limit, also known as the “debt ceiling,” is the legal limit on the maximum amount of debt the federal government can take on to finance obligations that have already been approved by Congress. Lawmakers have voted to raise the debt limit more than 100 times since it was created in 1917 so that the federal government can continue meeting its financial obligations.
When the federal government hits the debt limit, it cannot issue any new debt but can continue paying its bills in the short-term by implementing “extraordinary measures” – that is, shifting federal funds to keep paying incurred financial obligations. U.S. Department of the Treasury (Treasury) Secretary Janet Yellen announced on January 19 that the federal government had reached its statutory debt limit and that the department would begin implementing “extraordinary measures” to keep paying its bills and avoid a catastrophic default (see Memo, 1/23). However, without Congressional action to raise the debt ceiling, Treasury is expected to exhaust its “extraordinary measures” sometime between June and September of this year.
While the debt ceiling and appropriations are separate though related issues, Kevin McCarthy (R-CA), the speaker of the U.S. House of Representatives, has vowed that his caucus will not vote in favor of raising the debt ceiling unless it can extract severe funding cuts from the FY24 appropriations bill. In addition to reducing FY24 spending to FY22 levels and capping budget growth at 1% per year over 10 years, House Republicans are expected to issue a proposal that would rescind unspent COVID-19 relief funds and institute work requirements for social programs, among other harmful provisions.
Analysis from the Center on Budget and Policy Priorities (CBPP) notes that cutting spending to FY22 levels would result in a cut to non-defense discretionary programs of around $133 billion. According to an analysis published by the office of HUD Secretary Marcia L. Fudge, such a proposal, if enacted, would “represent the most devastating impacts in HUD’s history” and “make it impossible to stave off mass evictions” (see Memo, 4/3).
Capping future spending at a paltry 1% per year would likewise have a tremendously negative impact for people served by affordable housing and homelessness programs. These programs must receive increased funding from year-to-year simply to maintain the number of households being served. Even with recent funding increases to federal programs, many programs are still being impacted by the austere spending caps put in place by the “Budget Control Act of 2011”: HUD’s cumulative appropriations since FY10 are still slightly lower than they would have been had annual appropriations remained at FY10 levels and been adjusted only for inflation.
It is unacceptable to balance the federal budget by demanding cuts to programs that help the lowest-income households survive. There is a national shortage of approximately 7.3 million affordable, available homes for people with the lowest incomes, and only one in four households who qualify for federal housing assistance receives the help it needs. Without adequate funding for vital federal affordable housing and homeless assistance programs, households with the lowest incomes will continue to live precariously, only one missed paycheck or unexpected emergency away from housing instability, eviction, and, in the worst cases, homelessness.
In addition to scheduling in-district meetings with their members of Congress, advocates can continue to take action in the following ways:
- Sign your organization on to the Campaign for Housing and Community Development Funding’s (CHCDF) annual budget letter, calling on Congress to reject spending cuts and instead provide the highest possible allocation for HUD’s and USDA’s affordable housing, homelessness, and community development programs in FY24.
- Email your members of Congress today and urge them to increase – not cut – resources for affordable housing and homelessness in FY24 and to support NLIHC’s top appropriations priorities:
- $32.7 billion for the TBRA program to renew existing vouchers and to expand the program to an additional 200,000 households.
- $5.4 billion for public housing operations and $5 billion for public housing repairs.
- $3.8 billion for HUD’s Homeless Assistance Grants program.
- $100 million for legal assistance to prevent evictions.
- $3 billion for a permanent Emergency Rental Assistance program.
- $300 million for the competitive tribal housing grants, targeted to tribes with the greatest needs.
- Check out NLIHC’s advocacy toolkit, “Oppose Dramatic Cuts to Federal Investments in Affordable Housing,” for talking points, sample social media messages, and more!