White House and House GOP Consider Plan to Rescind Funding from FY18 Omnibus

Rescinding Funding from FY18 Omnibus Not Likely but Advocacy Key to Protecting Gains

President Trump and members of the House GOP are considering a budget maneuver to rescind spending for non-defense discretionary spending from the $1.3 trillion FY18 omnibus package that Congress passed last month with bipartisan support.

The omnibus spending package included a 10% increase for HUD programs. The move to claw back funds comes after the president and House Republicans expressed their opposition to the size of the package. The White House would need to draft a plan indicating the funds to be rescinded and send it to Congress for approval by a simple majority in both the House and Senate.

Senate Republicans have expressed skepticism about the plan. When considering the bill, Senate Democrats could force Republicans to take tough votes on popular federal programs in an election year. Lawmakers are also worried that rescinding funding from the omnibus, which took months to negotiate, would undermine the ability of the parties to reach future bipartisan spending deals.

Overall, the bill increases HUD program funding by $4.7 billion, or nearly 11 percent. Highlights include:

  • Housing Choice Vouchers: $22 billion in total funding, $1.7 billion above the 2017 level. This includes $19.6 billion for renewals — which is likely sufficient to fully renew vouchers in use — and $1.76 billion for administrative fees, a 7% increase over 2017. About $20 million of the administrative fee amount appears to be set aside to assist agencies that are required to implement Small Area FMRs this year. The bill also provides funding for roughly 60,000 new housing vouchers, including 54,000 “mainstream” vouchers for non-elderly people with disabilities, 5,000 vouchers for homeless veterans (VASH), and 2,600 vouchers for at-risk families with children (Family Unification Program).
  • Homeless Assistance: $2.5 billion for homeless assistance grants, $130 million above 2017. This includes $80 million for the homeless youth initiative, and $50 million for rapid rehousing and supportive services for victims of domestic violence. The bill also includes $375 million for HOPWA.
  • $1.36 billion for HOME ($412 million above 2017) and $3.3 billion for CDBG formula grants.

The omnibus includes two key provisions to strengthen and expand the Housing Credit, taken from the Affordable Housing Credit Improvement Act (S. 548/H.R. 1661):

  • A 12.5% increase in Housing Credit allocation, effective for four years (2018-2021), and
  • A provision authorizing income averaging in Housing Credit properties, on a permanent basis upon enactment of this bill. Income averaging would allow Housing Credit units to serve households earning up to 80 percent of area median income (AMI.) This is offset by deeper targeting in other units to maintain average affordability in the development at 60 percent AMI.

The advocacy victory to secure the additional funding is a good example of why the Congressional Reception is crucial. Join us in July 2018 and support a place to call home for everyone in NJ.

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