Point of View: From Tax Cuts for the Wealthy to Spending Cuts for the Poor - By Diane Yentel, NLIHC President and CEO

Diane Yentel, NLIHC President & CEODiane Yentel, NLIHC President & CEO

After the tax bill passed, we said (along with many others) that the law will exacerbate our country’s yawning income inequality and harm efforts to end homelessness and housing poverty. We predicted that massive increased deficits created by the tax cuts would threaten vital housing and community development programs with deep spending cuts. Sure enough, just seven weeks after enacting deep tax cuts for wealthy people and corporations, the administration has pivoted to propose immense spending cuts for programs that meet the basic and urgent needs of the lowest income and most vulnerable people throughout the country.

Yes, the extreme cuts will likely be rejected by Congress. But they mustn’t be dismissed by advocates: not only because these proposals seek to lower the bar for acceptable levels of cuts, but also because the president’s budget is the clearest indication of his administration’s priorities. This request makes it crystal clear: the president intends for the nation’s lowest income seniors, people with disabilities and low wage workers to pay for tax cuts for the wealthy and bloated military spending.

The cruelty of the president’s budget proposal is breathtaking. He proposes cutting health care from those who need it most, reducing and restricting food assistance to low income seniors and families with young children, and raising rents on those who can least afford it. The administration callously turns its back on the millions of seniors, people with disabilities and families with children living in deteriorating public housing and on low income people and communities working to recover and rebuild after disasters, by eliminating vital resources for public housing, rental housing construction, and community development.

By proposing to cut HUD funding by an astounding $8.8 billion, or 18%, President Trump is making clear his willingness to increase evictions and homelessness - for the families who could lose their rental assistance due to the cuts and for the low income and vulnerable seniors, people with disabilities and families with children who would be unable to manage having to spend more of their very limited incomes to cover rent hikes.

If enacted, the budget would result in the most severe and sudden cuts to HUD spending since President Reagan dramatically slashed its funding in the early 1980s. Reagan’s deep spending cuts ushered in the modern phenomenon of homelessness with a dramatic increase in the number of people sleeping on the streets, in cars, and in shelters. Years later, a major infusion of resources was needed to manage the newly created homelessness crisis.

While not as sudden or dramatic, affordable housing programs have suffered from a slow bleed of cumulative cuts since tight spending caps were enacted under the Budget Control Act of 2011. Since that time, Community Development Block Grants (CDBG) have been cut by almost 40%, and the HOME program has been cut by nearly 54%. Public housing operating and capital funds have been reduced by 18% and 31%, respectively. Housing for the Elderly (Section 202) has been slashed by 45% and Housing for Persons with Disabilities (Section 811) by 57%. Rental assistance vouchers, a proven solution to ending homelessness, have been merely level funded.

Due to this chronic underfunding, only one out of every 5 eligible families receives the housing assistance it needs. Those receiving affordable housing subsidies literally won a housing lottery. Over 8 million deeply poor households receive no assistance and live in housing poverty. They are one illness, one broken-down car, one missed day of work away from homelessness. They face threats of eviction and poor housing conditions and are severely cost-burdened, paying over half of their limited incomes towards rent each month.

Now, in a time of stagnant wages and rising rents, steadily declining federal funding for housing solutions and, in some communities, increasing homelessness, President Trump proposes deep cuts to the vital programs that make home affordable to the lowest income people. These cuts would have a devastating impact on millions across the country.

His budget would mean over 200,000 households of seniors, families, and people with disabilities losing their rental assistance, putting them at immediate risk of evictions and homelessness. President Trump would gut the public housing program by completely eliminating funding for much-needed repairs. He would eliminate HOME, CDBG, the national Housing Trust Fund, the U.S. Interagency Council on Homelessness, the Legal Services Corporation, and the Low Income Home Energy Assistance Program, that literally keeps the heat on throughout cold winters in the homes of seniors and families with young kids.

Incredibly, the president doesn’t stop there; he also proposes increasing rent burdens for the lowest income residents of HUD-subsidized homes and imposing punitive and harmful work requirements.

The vast majority of residents of HUD-subsidized homes are elderly, disabled, or include someone who works in a low-wage job. Most of those able to work can’t obtain living-wage jobs that enable them to afford skyrocketing rents. Nationally, a full-time person working 40 hours per week for all 50 weeks of the year needs to earn $17.14 an hour to afford to rent a modest one-bedroom apartment. Six out of seven of the country’s fastest growing occupations pay less than this hourly rate. Minimum wage workers have it the hardest: they need to work an average of 94.5 hours per week – nearly two-and-a-half full time jobs - to afford a one bedroom apartment.

Work requirements do not create the jobs and opportunities needed to lift people out of poverty. Instead, they can cut struggling families off from the very housing stability and services that make it possible for them to find and maintain jobs. This administration may try to portray these proposals as increasing “self-sufficiency,” but they are more about punishing low income people than helping them.  

Congress must reject the president’s cruel, unconscionable and unacceptable budget request. Even when they do, we must remain vigilant against attempts to accomplish administratively – through action or apathy - what this administration is unable to do through Congress. Clearly, they won’t be satisfied until tax breaks for the wealthy are paid for through cuts to programs serving the lowest income people. And we won’t stop pushing until those proven solutions to end homelessness and housing poverty are instead expanded to meet the growing need.

Join us on today’s webinar for more on the president’s budget and what you can do to fight back against these proposed cuts. And look out for more important actions to take in the days and months to come.

Thank you for your commitment, partnership and advocacy. It’s never been more important.

Onward,

Diane Yentel Signature

Diane