President Trump Signs Sweeping Reconciliation Bill into Law; House Appropriators Aim to Review HUD Funding Bill on July 14—Take Action!
Jul 07, 2025
By Kim Johnson, NLIHC Senior Policy Director
Reconciliation updates
President Donald Trump signed the “One Big Beautiful Bill Act” (OBBBA) into law on July 4. In addition to a $5 trillion extension of the federal debt limit, the bill carries much of President Trump’s and congressional Republicans’ legislative agenda, including extending tax cuts and an additional $325 billion in spending on immigration enforcement and defense. To pay for these provisions, the bill cuts over $1 trillion in funding for vital safety net programs, including Medicaid and the Supplemental Nutrition Assistance Program (SNAP). Even with these “cost-saving” cuts, the nonpartisan Congressional Budget Office (CBO) estimates the bill will add over $3.9 trillion to the federal deficit over the next decade.
Senate Republicans passed the bill on July 1 by a vote of 51-50, with Vice President JD Vance casting the tie-breaking vote after three Senate Republicans—Senators Susan Collins (R-ME), Thom Tillis (R-NC), and Rand Paul (R-KY)—voted with their Democratic and Independent colleagues against the bill. Senators Collins and Tillis both voiced concerns about the bill’s negative impact on Medicaid recipients in their states, with Senator Tillis stating the bill would put nearly 663,000 of his constituents at risk of losing their health coverage.
The bill then went back to the House and passed on July 3 by a final vote of 218-214. Representatives Brian Fitzpatrick (R-PA) and Thomas Massie (R-KY) were the only Republicans to vote against the bill. Members of the ultra-conservative House Freedom Caucus initially opposed the bill for adding over $3.9 trillion to the federal deficit but agreed to vote in favor after receiving assurances from the Trump Administration and House leadership that they would pursue additional cuts, including through the appropriations process. Republicans also have the opportunity to enact another reconciliation bill this year.
Tax breaks for higher-income households, slashed safety net programs
Because of the complicated rules governing the reconciliation process, HUD housing assistance is not directly impacted by the reconciliation package. However, the bill will impact other vital safety net programs that people and families with low incomes rely on to help make ends meet, including Medicaid and SNAP. In its analysis of the House-passed OBBBA, CBO estimates that the 10% of households with the lowest incomes will lose an average of $1,600 per year because of cuts to assistance programs. For households with low incomes already struggling to make ends meet, the additional strain these cuts will put on their budgets will have a devastating impact on their ability to put food on the table, afford medical care, and keep a roof over their heads. In contrast, the bill’s tax breaks will provide the 10% of households with the highest incomes an additional $12,000 per year on average. CBO will likely release an updated analysis of the final bill in the coming weeks.
Among other tax provisions, the bill makes permanent the tax deductions enacted in the 2017 “Tax Cuts and Jobs Act” and permanently expands two provisions of the Low-Income Housing Tax Credit (LIHTC) program, as well as the Opportunity Zone (OZ) incentive. LIHTC is the primary way in which affordable housing construction is financed in the United States; however, while an important program, LIHTC units are rarely affordable enough for households with the lowest incomes. While the LIHTC provisions are estimated to result in the construction of an additional 1.22 million affordable homes over the next decade, the additional financial strain put on low-income households because of the other provisions of this bill means that housing will continue to be out of reach for those with the most urgent affordable housing needs.
The bill cuts over $1 trillion in federal spending on safety net programs that provide people with low incomes the assistance they need to help make ends meet, including Medicaid and SNAP. The majority of “savings” in Medicaid are expected to come from harmful expanded work reporting requirements and other provisions that will limit Medicaid access and cut funding for the program. As a result of these provisions, an estimated 12 million people are expected to lose their healthcare coverage over the next decade. Requirements around work reporting, address and citizenship verification, and increased eligibility redeterminations will also have a profound impact on healthcare access for people experiencing homelessness. In SNAP, increased state cost-sharing provisions, caps on future increases in assistance, expanded work reporting requirements, and limiting eligibility for certain noncitizens will result in an estimated 22.3 million families losing some or all of their SNAP assistance. The bill also contains a number of anti-immigrant provisions that will limit access to assistance for previously eligible noncitizens and citizen children with an undocumented or noncitizen parent. Advocates can learn about the potential impact of the reconciliation bill with research and analysis from the Center on Budget and Policy Priorities.
Appropriations updates
With the reconciliation bill finalized, Congress will turn its attention to funding the federal government in the coming fiscal year, which begins October 1. Appropriators in the House are expected to begin reviewing their fiscal year (FY) 2026 Transportation, Housing and Urban Development (THUD) bill as soon as July 14, although Appropriations leaders have yet to reach an agreement on topline funding for any of the 12 appropriations bills, and the text of the THUD bill has not been released.
In exchange for voting for the reconciliation bill, the White House promised members of the House Freedom Caucus they would pursue cuts to discretionary programs in the FY26 appropriations process. The White House’s FY26 spending request includes historic cuts to HUD programs, including proposals to redesign HUD rental and homelessness assistance programs altogether; however, only Congress has the power to decide how much funding to provide federal programs, including HUD’s vital affordable housing and homelessness assistance programs. Unlike the reconciliation process, any FY26 appropriations bill needs at least 60 votes to pass the Senate, so enacting a final spending bill will require bipartisan support.
Take action TODAY: Urge Congress to expand, not cut, funding for vital affordable housing and homelessness assistance programs!
Use NLIHC’s toolkits and resources to take action on FY26 funding, including by:
- Using NLIHC’s advocacy toolkit, “Opposing Cuts to Federal Investments in Affordable Housing,” to call on Congress to protect and expand affordable housing and homelessness resources, including NLIHC’s priorities:
- Full funding to renew all existing Housing Choice Voucher (HCV) contracts and funding to renew 60,000 Emergency Housing Vouchers (EHVs).
- Increased funding for public housing operations and public housing capital needs.
- $4.922 billion for HUD’s Homeless Assistance Grants (HAG) program.
- $20 million for the Eviction Protection Grant Program (EPGP).
- At least $1.3 billion for HUD’s Tribal Housing Programs and $150 million for competitive funds targeted to tribes with the greatest needs.
The toolkit includes talking points, advocacy materials, engagement ideas, and more resources for advocates to weigh-in with their members of Congress on the importance of these vital resources!
- Emailing or calling congressional members’ offices to tell them about the importance of affordable housing, homelessness, and community development resources to you, your family, your community, or your work. You can use NLIHC’s Take Action page to look up your member offices or call/send an email directly!
- Sharing stories of those directly impacted by homelessness and housing instability. Storytelling adds emotional weight to your message and can help lawmakers see how their policy decisions impact actual people. Learn about how to tell compelling stories with this resource.
National, state, local, tribal, and territorial organizations can also join over 2,700 organizations on CHCDF’s national letter calling on Congress to support the highest level of funding possible for affordable housing, homelessness, and community development resources in FY26.
Visit NLIHC’s Advocacy Hub for more information and resources that can help you take action and help protect the affordable housing programs people rely on.