White House: Cut HUD by More than 13%

Legislation | March 16, 2017

If enacted, the funding levels the Trump Administration released on March 16 in a budget blueprint for its fiscal year 2018 (FY18) request to Congress for discretionary (non-entitlement) funding levels would be devastating for HUD's housing and community development programs. The blueprint, "America First: A Budget Blueprint to Make America Great Again," is being referred to as a "skinny" budget request because it mostly includes only top-line requests for federal agencies overall. Complete program-by-program requests from the Trump Administration are expected in May. Fiscal year 2018 begins on October 1, 2017.

The request seeks $40.7 billion for HUD in FY18. This is 13% below HUD's FY16 level and 15% below the average of the House Appropriations Committee-passed and Senate-passed FY17 HUD bill (and even lower still than where the FY18 HUD budget is needed to be). The overall HUD number in the request are very similar to those leaked to The Washington Post last week. 

HUD cannot absorb a 15% (or more) reduction below its necessary funding level for FY18 without seriously threatening the housing assistance its programs currently provide to 1.6 million seniors. 

For rental assistance, the request says it is "supporting functions that provide rental assistance to low income and vulnerable households," saying it requests "over" $35 billion for "continuing to assist 4.5M low income households." For FY16, HUD's big three rental assistance programs (public housing, housing choice vouchers, and Section 8 project based rental assistance) were funded at about $36.6 billion (for FY17, the House and Senate are on track to find them at a total of about $37.6 billion); these programs serve about 4.5 million households. These three programs are not identified as those funded by the $35 billion request for FY18. The request does say that it will also be seeking "reforms" to reduce rental assistance program costs; presumably these reforms will be released in May with the more detailed request. 

Nor does the request specifically mention the Section 202 or Section 811 programs. Again, requested levels for these programs are expected in May. Leaked budget documents to the media, from HUD and the White House's Office of Management and Budget, show that devastating cuts to the Section 202 account (specifically, renewals of Project Rental Assistance Contracts and Service Coordinator grants) are being contemplated by the White House.  

The March 16 request seeks elimination of HUD's HOME, Community Development Block Grant, Self-Help Housing Opportunity Program, Choice Neighborhoods Initiative, and Section 4 Capacity Building for Community Development and Affordable Housing programs (whose funds go to Enterprise Community Partners, LISC, and Habitat for Humanity). The request would also eliminate funding for the U.S. Interagency Council on Homelessness and NeighborWorks (Neighborhood Reinvestment Corportation), which are funded in the same appropriations bill as HUD. 

The request includes one program increase for HUD: an additional $20 million for HUD's Office of Healthy Housing and Lead Hazard Control. 

At the U.S. Department of the Treasury, the request eliminates the Community Development Financial Institutions program, which directs and leverages resources to local housing and economic development efforts through on-the-ground partners. 

At U.S. Department of Agriculture (USDA), the request says that USDA service centers will need less staffing because of reduced Rural Development workload, but provides no other specifics. The Rural Housing Service is within USDA's Rural Development, which many fear as a target for spending cuts. 

Many other critical service programs are eliminated by the request, including the Low Income Home Energy Assistance Program, Community Services Block Grants, the Corporation for National and Community Service, and the Legal Services Corportation. 

LeadingAge is communicating with Congress about the negative impact the requested cuts would have on our members' ability to preserve existing affordable housing and make critical, albeit small, inroads to expanding affordable housing with programs like HOME and CDBG. At this time, it is also very important that LeadingAge members educate Congressional offices about the central role HUD's programs play in meeting the needs of communities' low income older adults. 

The President's budget request is an early volley in the appropriations process Congress alone must ultimately write appropriations bills that can garner sufficient support in the respective chambers for passage and then the President's signature for enactment. But, with Republican-controlled House and Senate, the Republican President's budget request will be given great weight.