Federal Budget Battle Appears to be over

According to the The Hill in a post entitled “Pelosi backs down in spending battle” stated that “Democratic leaders would accede to cut spending to levels demanded by President Bush in order to save 11 spending bills from a veto, said sources familiar with a meeting that took place in Pelosi’s office early Wednesday morning.”

The New York Times today in an article entitled “Democrats to Spend Bush’s Limit Their Way” confirmed this budget deal. In addition, they note that the Democrats “intended to shuffle the investment in certain programs within the spending conditions set by the president, putting more money into health care, medical research, veterans benefits, home heating programs, law enforcement and border security.”

This can and will be devastating for domestic spending. For HUD it means very likely that the new HUD budget could be reduced to match the exact amount requested by the President. Click here to view a chart of the HUD budget prepared by NLIHC.

The column FY08 Request is very likely to become the HUD budget. The President’s FY08 HUD budget request was lower than the amounts currently available to HUD; reducing FY08 spending to the levels proposed in the President’s budget would have devastating results for housing programs. For example, The CDBG funds could be reduced by $772 million from last year.

In addition, the Section 811 program for example would be reduced from $237 million to $125 million. The 2007 Section 811 awards totaled $124.9 million. The new funding level proposed by the President would be $125 million. Of this amount $95 million would be used for PRAC and Mainstream voucher renewals. The budget identified $30 million for program expansion which would include both capital and PRAC funding. In addition, off this amount $15 million was listed for “Demo on Leveraged Financing.” A portion of the allocation every year covers PRAC renewals. Thus, this would effectively eliminate the program.

The following is portion of the post form the Hill:

In the face of stiff opposition from powerful fellow Democrats, House Speaker Nancy Pelosi (Calif.) has abandoned a proposal she supported less than 24 hours ago to eliminate lawmakers’ earmarks from the omnibus spending package.

Pelosi told the Democratic chairmen of the House Appropriations subcommittees, the so-called appropriations cardinals, that earmarks would stay in the omnibus and that Democratic leaders would accede to cut spending to levels demanded by President Bush in order to save 11 spending bills from a veto, said sources familiar with a meeting that took place in Pelosi’s office early Wednesday morning.

The House Democrats’ tentative plan is to finalize the package for passage in the next day or so, said sources.

By leaving earmarks largely untouched and agreeing to Bush’s budget ceiling, Democrats have capitulated in their spending battle with Republicans. In the end, Democrats realized they would not be able to muster enough Republican votes to override Bush’s veto. The president vowed to reject any spending package that exceeded the $933 billion limit he set.

To read the full report from The Hill click here.

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