House Republicans Struggle to Reach Consensus on Budget, Delaying Debt Ceiling Negotiations

Republicans in the U.S. House of Representatives who have threatened to use negotiations over raising the debt ceiling to secure major funding concessions in fiscal year (FY) 2024 are struggling to unite their caucus behind a budget plan, stalling discussions to avert a default on the country’s debt obligations. Economists warn that failure to raise the debt ceiling – which would result in the U.S. defaulting on its debt obligations – would be “catastrophic,” not only for the nation’s economy but the global economy.

House Speaker Kevin McCarthy (R-CA) sent a letter to President Biden on March 28 outlining a list of spending cuts demanded by Republicans in exchange for raising the debt ceiling. The demands include freezing non-defense discretionary spending levels at pre-inflationary levels and strengthening work requirements, among others.

Speaker McCarthy’s letter includes several demands made by members of the House Freedom Caucus – a group of ultra-conservative Republicans in the House led by Representative Scott Perry (R-PA). Several weeks ago, the House Freedom Caucus released a broad outline of the concessions its members are demanding of House leadership in order to secure Freedom Caucus members’ votes in favor of raising the debt ceiling. While still scant on details, the outline calls for “[capping] future spending by setting topline discretionary spending at the [fiscal year] 2022 level for 10 years” and “restoring Clinton-era work requirements on welfare programs,” despite the fact that programs like the Supplemental Nutrition Assistance Program (SNAP), which helps low-income families keep food on the table, already have work requirements in place.

Representative Andy Biggs (R-AZ) – former chairman of the House Freedom Caucus – introduced legislation on March 28 that would cap appropriation line items at the FY22 or FY19 levels – whichever is lower – and cut funding entirely from certain programs. According to an analysis by the Senate Democratic Policy and Communications Committee (DPCC), House Republicans’ proposal to cap FY24 spending at FY22 levels would result in a funding decrease of between 12% and 30%, depending on how cuts are made. These cuts could reduce funding for programs like HUD’s rental assistance and homelessness assistance programs by an estimated $6.6 billion, putting the hundreds of thousands of people who rely on this assistance at risk of housing instability, eviction, and homelessness. (For more information, see the article in this edition of Memo on how House Republicans’ proposed cuts would impact HUD programs.)

The House Freedom Caucus’ demands follow the publication of President Biden’s FY24 budget request (see Memo, 3/13), which calls for funding HUD programs at $73.3 billion, a 1.6% increase over FY23-enacted funding, as well as billions of dollars in additional housing investments through mandatory funding. The House Freedom Caucus’ outline, while far from a consensus document among House Republicans, is an important indicator of the appropriations proposals that may come out of the House.

President Biden continues to insist he will not negotiate over conditions for raising the debt ceiling. The president is willing to have separate conversations with Republicans about spending, but he will not meet with Speaker McCarthy until Republicans release a budget. According to House Budget Chairman Jodey Arrington, House Republicans might not unveil a budget for several months. The largest bloc of House conservatives – the Republican Study Committee – plans to issue its own budget plan during the week of April 17.

Cuts to housing benefits – through the imposition of work requirements, time limits for receiving assistance, or other means – increase hardship among individuals and families with low incomes. Meeting basic, life-sustaining needs, like safe, stable housing, should not be contingent upon meeting arbitrary work requirements, and removing assistance from households that are already struggling does little to improve long-term employment and economic stability, according to a recent paper published by the Center on Budget and Policy Priorities.

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 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.

  • 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!