House Republicans Introduce Key Provisions of Massive Reconciliation Bill, Including Reforms to LIHTC, Medicaid, Food Assistance, and More

House Republicans introduced last week key provisions of a massive reconciliation bill, with the goal of finalizing and passing the bill through the House before members adjourn for Memorial Day recess. The bill proposes reforms to the Low-Income Housing Tax Credit (LIHTC) program, as well as harmful changes to Medicaid, the Supplemental Nutrition Assistance Program (SNAP), and other vital anti-poverty programs.  

Congressional Republicans are using a special legislative process called “budget reconciliation” to pass a bill that would spend over $5 trillion to extend tax cuts, increase funding for immigration enforcement, and fund other Trump Administration priorities, while also cutting at least $1.5 trillion in the federal budget through funding cuts to other federal programs.  

The House Ways and Means Committee introduced tax-related provisions of the reconciliation bill on May 12, which include key pieces of the “Affordable Housing Credit Improvement Act” (AHCIA) (H.R. 2725/S. 1515) that would expand and reform the LIHTC program. NLIHC supports the AHCIA, which includes two key reforms to LIHTC to help the program better serve people and communities with the most urgent affordable housing needs: a basis boost for rural and tribal communities, and an extremely low-income (ELI) basis boost for properties that set aside at least 20% of units for ELI renters. These provisions would make it easier for developers to use LIHTC to build deeply affordable homes, and affordable homes in rural and tribal communities.  

The bill would provide a 12.5% allocation increase for three years, lower the bond-financing threshold from 50% to 25%, and designate rural and tribal areas at “Difficult to Develop Areas,” which makes developments in these areas eligible for a basis boost. However, the bill does not include a basis boost for developing rental homes affordable to ELI households.  

LIHTC is our nation’s largest source of financing for affordable housing. While an important tool, rental homes built with the tax credit are typically too expensive for ELI households. ELI renters make up almost half (49.1%) of LIHTC renters, but only a small share of new LITHC apartments, about 16%, are affordable to them. As a result, the majority (58%) of ELI renters who do not receive additional rental assistance but are living in developments financed with LIHTC are severely housing cost-burdened, paying more than half their limited income on rent. By providing an ELI basis boost, Congress can make it more financially feasible for developers to build apartments at rents that are affordable to households with the greatest needs. NLIHC will continue working to ensure any bill with LIHTC reforms includes these key provisions.  

In addition to LIHTC expansion and reforms, the tax portion of the reconciliation bill proposes changes to the Child Tax Credit (CTC) program, including new immigration restrictions that would potentially cut the number of children eligible for the CTC by 4.5 million. House Republicans on the Energy & Commerce Committee and Agriculture Committee also released draft bill text that would slash funding for Medicaid and SNAP, respectively. According to an analysis from the Center on Budget and Policy Priorities (CBPP), the Medicaid provisions would cut $715 billion in healthcare spending, taking away health care coverage for at least 8.6 million people. In addition, the SNAP provisions would “radically alter the structure” of the program by requiring states to share in the cost of the program, while also increasing bureaucratic hurdles to receiving assistance by dramatically expanding SNAP work requirements.  

While housing assistance has not been named as a potential target for cuts, the anti-poverty programs being considered play a crucial role in economic stability for people and families with low incomes, helping them put food on the table and receive needed medical care. The financial assistance these programs provide also promotes housing stability: by helping families afford the cost of food and other necessities, more money is left over at the end of the month to ensure rent is paid. States can also use Medicaid to cover health-related social needs, including housing.  

The threats to Medicaid, which serves over 72 million low-income people around the country, and SNAP, which serves over 42 million people, have triggered widespread outcry from advocates around the country. Public opposition to the proposed cuts to Medicaid and SNAP is pressuring moderate and swing-district Republicans to express concerns about the bill to leadership; as negotiations continue, it will be crucial for advocates – especially those in Republican districts and states – to keep up the pressure on their members of Congress to vote against any reconciliation bill that would cut vital safety net programs.  

The National Alliance to End Homelessness launched a Take Action page for advocates to quickly and easily contact their elected officials and urge them not to support cuts to Medicaid. Take action here: tinyurl.com/3c2ntnnw. 

Learn more about how you can advocate for continued SNAP funding at the Food, Research, and Action Center’s (FRAC) website: tinyurl.com/2mzr5pb3.