Housing and Community Development Outlook for FY 2017 Kathy Saile Center on Budget and Policy Priorities ksaile@cbpp.org President’s budget came out Tuesday. It’s good. Has more anti-poverty proposals than ever. It keeps to the budget caps that were agreed to in the BBA Congress won’t act on it, but it sets the table for 2017. March 2016

What does the federal budget look like? Mandatory spending (on auto-pilot unless Congress changes the law) includes health care, retirement, some safety-net programs (e.g., TANF, SNAP) and interest on the debt. “Discretionary” spending is allocated by Congress each year thru appropriations. When it’s gone, it’s gone. Smple Graphic Quick review to remind ourselves where we can have an impact Also, this shows that fighting over the caps is important, Fighting over spending levels at the program level requires stepping back first and looking at the big pictures

Budget Deals: What happened and where are we now? 2010 Budget Control Act (sequestration and caps) Murray-Ryan Deal for FY2014 and FY2015 Bi-partisan Budget Agreement for FY2016 and FY2017 We are dealing with very tight spending caps. So bad that virtually every year they have had to hammer out an agreement to raise the caps. Last year, they started appropriations but ran into a dead end with the caps. So, in the fall a new deal was negotiated. It was the deal that cost John Boehner his job.

NDD Spending Falling to Historic Lows: “Road Map of Disinvestment” As a result of cuts in recent years, spending on non-defense discretionary programs as a percent of the economy is on track to equal its lowest level in at least five decades in 2016—and then to keep on decreasing after that. This reflects a declining investment in areas such as medical research and early education, transportation, and the environment. [The percentage is in a four-way tie for lowest on record in FY 2016, and then drops to the lowest on record in FY 2017.]

So, where did the new money go in FY2016? Much of the spending on low-income programs are in THUD and Labor/HHS. Advocates worked really hard to get the caps raised and we succeeded. We should remind Congress we wanted those caps raised to help those in need.

Highlights from Administration’s Proposed FY17 HUD Budget $11 billion of mandatory funding over 10 years to address family homelessness Level fund HOME at $950 million. Proposes that the traditionally $10 million stand-alone Self-Help Homeownership Opportunity Program be a set-aside within the program. The request would decrease funding for CDBG from FY16’s $3 billion to $2.8 billion in FY17.

What will Congress do this year? The “302(a)” (NDD amount) for FY2017 is $527 billion ($519 billion + $8 billion OCO) NDD is starting out in the hole because increased spending is needed to maintain same level of services (e.g. Veteran’s health, rental assistance) In March, House & Senate will debate if they will keep the cap at the level agreed to in the budget deal Chairmen divvy up the 302(a) to the Subcommittees

Then, what? Appropriations committees will debate and vote on spending bills this spring. Some bills will make it to the House floor. One or two might make it to the Senate floor. Mid-July through August- Gone! September – Continuing Resolution November - Election! December – Lame Duck (Omnibus? CR?)

Threats & Opportunities- 111 Days Reconciliation instructions Big poverty initiative that could undermine safety net Continuing Resolution Omnibus Rental assistance reform (HR 3700) Some are both. Some may not happen, but the debate might begin. Can begin to set the table for 115th congress and new Administration Need to be wary so as not to get bought off from a threat with an opportunity.