Impact of Debt Ceiling and Budget Deal

What Does it Mean for
Ending Homelessness?

CongressThe National Alliance to End Homelessness has provided this helpful recap of last week’s debt ceiling/federal funding deal and what it means for ending homelessness:

Federal Funding: For the beginning of fiscal year (FY) 2014, the government will be funded at post-sequestration FY 2013 funding levels until January 15, 2014, essentially under a clean Continuing Resolution (CR, or stopgap funding measure). The shutdown, caused by lack of a budget for FY 2014, ended on October 17, 2013 as a result of the agreement, and all federal agencies are open and operating at normal capacity. Furloughed federal employees will receive back pay.

Impact: This does not necessarily impact HUD’s McKinney-Vento Homeless Assistance Grants since communities are still waiting on the FY 2013 funding to be released (the FY 2013 NOFA should be coming out soon). This could present a problem for Section 8 Tenant-Based Rental Assistance.

Debt Ceiling: The legislation essentially suspended the debt ceiling for the nation until February 7, 2014 at which time, the Treasury will honor all its debts and Congress will revisit the debt ceiling issue.

Impact: The debt ceiling issue does not directly impact homeless assistance programs. There could be serious issues that arise should the nation default on its debt obligations. For now, though, this portion of the deal does not impact HUD. In the past few years, the House Republican majority has insisted on spending cuts in return for increasing the debt ceiling, the resulting spending cuts have of course impacted HUD funding programs. It remains unclear what sort of spending reductions, if any, will result from raising the debt ceiling.

Sequestration: The legislation does not repeal or otherwise address sequestration, the automatic, across-the-board cuts to FY 2013 spending and the reduced spending caps on subsequent fiscal years. The deal did, however, set up what is being referred to as a conference committee made up of both senators and representatives who will come up with a Budget Resolution for FY 2014 spending. The Budget Resolution, which will theoretically set a total spending level for FY 2014, could address sequestration for FY 2014 spending or beyond, and will similarly address the variations between defense and non-defense spending.

Impact: Sequestration has a tremendous impact on HUD programs, including Homeless Assistance Grants. The FY 2013 NOFA will contain funding cuts brought about by under-funding combined with sequestration cuts. If it is repealed, HUD should have more money with which to operate. If it is not repealed, or worse – if defense cuts are alleviated in favor of deeper cuts to non-defense programs – HUD programs will be in trouble. The outcome of the conference committee remains to be seen and it seems too early to tell at this stage.

After a tumultuous couple of weeks on Capitol Hill, there is a clear plan of action for the next few months. We have the great opportunity to capitalize on these next steps to ensure Homeless Assistance Grants and other HUD programs receive an increase in the final FY 2014 funding legislation.