Congress came back from its spring recess and hit the ground running with a hearing on affordable housing, the President's Fiscal Year (FY) 2024 budget, and the House-passed Republican plan to address the approaching debt limit, by the so-called "X-date." The nation breached the debt limit earlier this year, but the Treasury Department has used "extraordinary measures" to pay the country's bills while waiting for Congress and the Administration to reach a debt limit deal. These negotiations are expected to overshadow most other policy work until an agreement can be met.
Last week, House Republicans passed the Limit, Save, Grow Act of 2023, which would increase the debt ceiling by $1.5 trillion or until March 2024, whichever happens sooner, paired with reducing discretionary FY24 spending to FY22 levels, a cut of roughly $130 billion. These cuts would likely also impact other HUD programs that complement the Housing Credit program's development and operations, such as Section 8 Housing Choice Vouchers. It would also rescind unobligated funds from the Inflation Reduction Act, the American Rescue Plan Act, the CARES Act, and other coronavirus relief measures enacted in various bills over the last few years. If the bill were to pass as is, these rescissions could impact emergency housing programs authorized during the pandemic, including HOME-ARP, ESG-CV, CDBG-CV, Emergency Rental Assistance, State and Local Fiscal Recovery Funds, and the Homeowner Assistance Fund. While the Housing Credit is not directly affected by the House debt limit bill, it would impact energy efficiency resources that could benefit Housing Credit properties.
The House debt limit legislation is expected to be "dead on arrival" in the Senate, where various committees are holding hearings this week to highlight the impact the bill would have on various programs and activities. The Administration, as of this writing, is still calling for a "clean" debt bill that would raise the limit without conditions. The Treasury Department is expected to release a new estimate of the X-date soon.