Synopsis: The White House’s proposed budget for the next Federal Year is out. It looks about as good (i.e., it sucks) as you thought it would.
It feels like we just got through our last Federal Budget crisis (and the full budget is still not approved), but it’s that time of year again. The FY 2027 Federal Budget process/insanity is kicking off.
Earlier this month, the White House submitted their proposed budget to Congress. As I wrote in this column around this time last year, Congress routinely ignores the White House’s request and sets their own budget (as is their Constitutionally-mandated role). But, the White House budget is still an important indicator in that it establishes a starting point for the negotiations/chaos.
Overall, the White House’s proposed budget represents a massive, unprecedented increase in defense spending (a 44% increase in defense spending over last year for a total of $1.5 Trillion) and a 10% decrease in discretionary, non-defense spending.
Relevant to affordable housing production, the White House proposed budget cuts include approximately $4 Billion in cuts to HUD, including zeroing out HOME and CDBG. The proposed budget also zeroes out the CDFI fund. Last year, all of these programs were cut in the White House budget but ultimately funded by Congress.
A Couple Signs of Hope
I’d say it’s not yet time to panic about the federal housing budget because of a couple of promising signs.
One encouraging sign is that, in this year’s budget, the cuts to vouchers and project-based Section 8 are not as extremely bad as the President’s proposal from last year. This is consistent with the administration’s shift in battlefronts from the budget to administrative rule making (for e.g., HUD’s proposed rule on denying housing benefits for mixed-status families). It’s a tactical pivot that indicates that the current administration’s efforts to gut HUD don’t have as much traction as they had thought.
Another sign of hope is that there continues to be strong bipartisan support for housing/affordable housing in the Senate. In March, by a vote of 89-10 (!!), the Senate passed a bundle of housing reforms called the 21st Century ROAD to Housing Act, co-authored by Senators Elizabeth Warren and Tim Scott. Among a long list of items, the act includes raising the cap that financial institutions can invest in LIHTCs and changes to the National Environmental Protection Act (NEPA) to streamline approval of infill housing development. I don’t love everything in this act (for e.g., it raises income limits for HOME-funded housing) and its uptake in the House is unclear (it is unlikely to survive in its current form if it is to become law), but my big positive takeaway is the margin by which it passed in the Senate. This means that there continues to be bi-partisan support in the Senate for affordable housing. Which means that the Senate will likely be a bulwark against the extreme level of cuts to affordable housing that continue to be pushed by the White House. Just like they were last year.
We Still Need to Take Action
BUT, just because Congress (lead by the Senate) did not adopt the White House’s proposed cuts last year does not mean that we can be complacent this year. It’s probably not yet time to chain yourself to the Capitol (at least not for housing funding reasons), but all of us who care about affordable housing should take some form of action (modest) like signing on to a national housing advocacy organization’s letter or emailing their talking points to your representatives: (for e.g., the National Low Income Housing Coalition’s talking points are here).