House Members Introduce White House Rescissions Bill That Includes Cuts to Affordable Housing Pro…

Late Wednesday, House Republican leaders, including House Majority Leader Kevin McCarthy (R-CA), unveiled a package of spending cuts closely mirroring the proposal the Trump Administration released Tuesday.

The Spending Cuts to Expired and Unnecessary Programs Act, H.R. 3, would rescind $15.4 billion in budget authority, including funding for three significant affordable housing and community development programs—$151 million that would support 2018 allocations from the Capital Magnet Fund (CMF), $41 million from HUD’s Public Housing Capital Fund, and $40 million from USDA’s Section 521 Rural Rental Assistance program. Most of the proposed rescissions come from the Children’s Health Insurance Fund and the Department of Energy’s Advanced Technology Vehicle Manufacturing program.

Congressional leaders say they hope to bring up the bill in the House next week, without action by the House Appropriations Committee, which would normally mark up appropriations legislation before reporting it to the House. Senate Republican leaders have said they plan to consider the bill if and when the House passes it.

The CMF rescission would eliminate funds recently provided by Fannie Mae and Freddie Mac for allocations to applicants in 2018. Eligible applicants include state Housing Finance Agencies (HFAs), Community Development Financial Institutions (CDFIs), and other non-profit housing organizations. Five HFAs received CMF allocations from its 2017 funds. The Administration’s explanatory statement justified the CMF rescission by, "recognizing that State and local governments and the private sector have a greater role to play in addressing affordable housing needs."

The bill also includes the Administration’s proposal to rescind $40 million of carryover balances from USDA’s Section 521 Rural Rental Assistance program, which the Administration suggests are not necessary because the FY 2018 appropriations fully funds the program. Rural housing advocates argue that these funds are necessary to ensure USDA has enough funding to provide rental assistance to properties that need it.

H.R. 3 and the Administration proposal would rescind over $41 million of prior years’ budget authority for the Public Housing Capital Fund, including $34 million appropriated in FY 2017, $5 million appropriated in FY 2016, and over $1 million appropriated in FY 2015. These funds are provided for public housing capital repair needs (including Rental Assistance Demonstration (RAD) conversions), emergency repairs, physical inspections, and Jobs-Plus grants. These funds are still available for public housing authorities to use for eligible activities.

By law, Congress has 45 calendar days to act on the rescission proposals. During this time, the funds the Administration proposed to rescind are impounded, meaning federal agencies cannot spend them. If Congress does not act within the 45 days, the funds are not rescinded and federal agencies are obligated to use them for their designated purposes.

The White House also announced this week that it will send Congress another rescissions package that would propose eliminating budget authority provided in the recently passed FY 2018 omnibus tax and spending bill, but did not say when it expects to release its proposal.

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