Without new taxes, affordable housing programs face steep cuts

An agreement Congress made last year to avert a government shut-down has placed affordable housing expenditures on the chopping block. According to the Obama administration, federal housing programs could be cut by more than 8% in 2013 due to last year’s “sequestration” agreement.

Sequestration represents automatic spending cuts that are to become effective at the beginning of the year. Unless Congress agrees to a different set of reforms, in early January as many as 180,000 families could lose their Housing Choice Vouchers (HCV) in the coming years. Cuts to the HCV program could be as deep as $1.5 billion, the Office of Management and Budget (OMB) estimates.

Even worse, if the spending bill passed by the House of Republicans becomes law, the cuts posed by sequestration could more than double, according to the Center on Budget and Policy Priorities.

“The cuts required by the Ryan budget would prove devastating to low-income families and communities,” the Center’s Douglas Rice reports. “ If all non-defense discretionary programs were cut by the same percentage, as many as 1.2 million households containing low-income seniors, people with disabilities, and families with children would lose federal rental assistance by 2021, and communities would lose more than $1.3 billion in funds for affordable housing and economic development.”

Link: http://www.cbpp.org/cms/index.cfm?fa=view&id=3866

Intense negotiations under way on Capital Hill

Government officials are negotiating the make-up of a package of spending cuts couple with tax increases.

“It will be nearly impossible to avoid very deep cuts in low-income programs, including housing assistance and community development programs, if substantial new tax revenues are not part of a budget agreement,” reports The National Housing Institute.

Discretionary government spending will be cut by nearly $1 trillion over the next 6 years, with the cuts beginning on Jan. 1, according to the Centers on Budget and Policy Priorities.

The threat of across-the-board cuts was meant to spur Congress to act. “The sequestration itself was never intended to be implemented,” explains OMB. “The administration strongly believes that sequestration is bad policy, and that Congress can and should take action to avoid it by passing a comprehensive and balanced deficit reduction package.”

Stay tuned. This should get interesting.

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