Debt Ceiling and Spending Deal Possible This Week – Take Action!

Negotiations between the White House and proxies for House Speaker Kevin McCarthy (R-CA) stretched into the weekend, as both sides sought to reach an agreement to raise the nation’s debt ceiling. Leaders have until June 1 to reach a deal on raising the debt ceiling, after which Treasury Secretary Janet Yellen warns the department may run out of “extraordinary measures” to continue paying the federal government’s bills, which would likely cause a catastrophic default on the nation’s debt.

Available information about what the debt ceiling deal might include suggests that House Republicans will not see all of the harmful provisions of their “Limit, Save, Grow Act” included (see Memo, 5/01), nor will Democrats get their demand for a “clean” lift of the debt ceiling. Rather, it is increasingly possible the deal could include: additional burdensome work requirements on low-income families receiving assistance through the Supplemental Nutrition Assistance Program (SNAP) and/or Temporary Assistance for Needy Families (TANF) program; provisions to claw back unspent COVID-19 relief funds; and spending caps lasting “a few years.” The length of potential spending caps remains a topic of negotiation, with Democratic negotiators pushing for one or two-year caps, and Republicans pushing for caps lasting between two and ten years, much like the Budget Control Act of 2011.

Democrats in the House, under the leadership of Minority Leader Jeffries, introduced a procedural resolution known as a “discharge petition” on May 17. The discharge petition would force the House to vote on lifting the debt ceiling, despite the objections of Speaker McCarthy, but only if the petition can collect at least 218 signatures from members of Congress. The 218-signature threshold would require every House Democrat and at least five House Republicans to join to see the petition brought forward. Leader Jeffries has stated previously that increased work requirements in the debt ceiling agreement would be a “non-starter,” and noted in a letter to caucus members that, while he hopes a bipartisan agreement to lift the debt ceiling can be reached, “it is important that all legislative options be pursued in the event that no agreement is reached.”

It is crucial that HUD’s and USDA’s affordable housing and homelessness assistance programs receive increased funding every year. Because the cost of housing rises every year, flat funding – like funding allocated under a budget cap, or through a Continuing Resolution (CR) – acts as a cut, reducing the number of people being served by these valuable programs. Cuts to these vital programs have an even more drastic impact.

According to an analysis from HUD, capping FY24 spending at FY22 levels – as proposed in House Republicans’ debt ceiling plan – would cause nearly 1 million households currently served by the department’s rental assistance programs to lose their housing assistance, putting them at risk of housing instability and evictions. It would also lead to nearly 120,000 fewer people experiencing homelessness receiving services. A memo released on May 16 by Office of Management and Budget (OMB) Director Shalanda Young notes that, if funding for Veterans Affairs was spared from cuts to FY22 levels, HUD could then see a cut in funding in FY24 of up to 30%.

Capping future spending at a paltry 1% per year would likewise have a tremendous impact on the people served by affordable housing and homelessness programs. Even with recent funding increases to federal programs, many are still 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 if annual appropriations had remained at FY10 levels and adjusted only for inflation.

Take Action

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 they need. 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 meetings with their members of Congress, advocates can continue to take action:

  • 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.