President Joe Biden met on May 9 with the “four corners” congressional leaders – U.S. House of Representatives Speaker Kevin McCarthy (R-CA), House Minority Leader Hakeem Jeffries (D-NY), U.S. Senate Majority Leader Chuck Schumer (D-NY), and Senate Minority Leader Mitch McConnell (R-KY) – for the first of what will likely be many conversations around raising the federal debt ceiling. The leaders are expected to meet again this week to continue discussions. U.S. Department of the Treasury (Treasury) Secretary Janet Yellen has warned that congressional leaders have until June 1 to reach a deal on raising the debt ceiling, after which Treasury may run out of “extraordinary measures” to keep the federal government’s bills paid and avoid a catastrophic default on the nation’s debt.
Under the leadership of Speaker McCarthy, House Republicans are pushing to raise the debt ceiling in exchange for major cuts to domestic spending programs, including HUD’s and USDA’s vital affordable housing and homelessness programs. The House Republicans passed the “Limit, Save, and Grow Act” (“H.R.2811”) along a party line vote on April 26. If enacted, the bill would lift the federal debt ceiling in exchange for cutting federal domestic spending for fiscal year (FY) 2024 to FY22 levels, which would result in at least a 23% reduction in funding for key programs, depending on how cuts are designed. The proposal would also limit future spending increases to just 1% annually for 10 years, rescind unspent COVID-19 relief funds, and impose harsh work requirements for some anti-poverty programs. In exchange, the bill would raise the federal debt ceiling until March 31, 2024, or by $1.5 trillion, whichever comes first, putting Congress in the position of having to restart debt ceiling negotiations all over again next year.
The White House and Congressional Democrats are calling for a “clean” lift of the debt ceiling and separating debt ceiling negotiations from FY24 appropriations talks. Since leaders first met on May 9, broad outlines of what may become a deal have begun taking shape. There is now talk of enacting one-to-two-year caps on federal spending, although Republicans are pushing for longer caps, along with rescinding unspent COVID-19 relief funds and potentially creating burdensome work requirements for anti-poverty programs like Medicaid, the Temporary Assistance for Needy Families (TANF) program, and the Supplemental Nutritional Assistance Program (SNAP). In exchange, the federal debt limit would be lifted for up to two years.
Representative Barbara Lee (D-CA), chair of the House Democratic Poverty Task Force, along with Representatives Judy Chu (D-CA), Steven Horsford (D-NV), Nanette Diaz Barragan (D-CA), Jim McGovern (D-MA), Sara Jacobs (D-CA), and Sylvia Garcia (D-TX), sent a letter to President Biden on May 11 calling on the President to stand by his commitment to enacting a “clean” debt ceiling lift and to continue to reject any “policies that would increase poverty, or take away health care and food assistance from low-income Americans.”
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 annually, 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 the most vital housing programs would have even more drastic impacts. According to an analysis from HUD, capping FY24 spending at FY22 levels – as proposed in the House Republicans’ debt ceiling plan – would cause nearly 1 million households currently being served by the department’s rental assistance programs to lose their housing assistance, putting them at risk of housing instability and evictions, and nearly 120,000 fewer people experiencing homelessness would receive services.
Capping future spending at a paltry 1% per year would likewise have a tremendously harmful impact on the people served by affordable housing and homelessness programs. Even with recent funding increases to federal programs, many are still being impacted by the austere spending caps put in place by the “Budget Control Act of 2011.” Indeed, HUD’s cumulative appropriations since FY10 are still slightly lower than if annual appropriations had remained at FY10 levels and been 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 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:
- 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!
Thank you for your advocacy!