Housing with a Heart

Our experience in senior affordable housing for over 40 years.

Is it Time to Change the Federal Budget Process for Affordable Senior Housing?

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By Steve Protulis, EHDOC President and CEO

Steve Protulis, EHDOC President and CEO

For too many years, the federal budget process has been dysfunctional for funding affordable senior housing and most other federal programs. While the annual budget process should be complete by the end of September in time for the next fiscal year that begins on October 1st, unfortunately, this rarely happens.

In recent years, the annual budget rush has resulted in either last-minute intense partisan brinkmanship threatening or actual government shutdowns, or a series of delaying tactics through Continuing Resolutions (CR), or by consolidating many (if not all) appropriations bills into an omnibus appropriations bill that risks possible vetoes. It has also resulted in presidential rescissions seeking to send the money back or shift the use of the funds for other purposes, such as recent shifts from defense and disaster aid to the construction of the southern border wall.

Rather than having routine, dependable annual federal funding that EHDOC and other non-profit organizations can rely upon to develop and operate affordable senior housing for low-income seniors, we too often experience uncertainty of when and if funds will be provided. This uncertainty with funding level and time frame also makes it difficult to align these federal funds as part of a multi-funding development process, including state time frame for tax credits. As stated in my earlier article (Housing with a Heart, Spring, 2019), this is no way to run a government.

Yet, here we go again. Prior to their August recess, the House had passed ten of its twelve FY2020 appropriations bills (including HUD that provides funding for affordable housing). Unfortunately, the Senate had not passed a single bill. The Senate strategy was not to proceed with their appropriations bills until after an agreement was reached with the White House on the overall budget caps, which was passed on August 1st. The next day, President Trump reluctantly signed the comprehensive two-year budget bill (PL 116-37) that would not only raise the budget caps that were imposed by the Budget Control Act of 2011 (BCA), but also suspend the federal debt ceiling caps until July 31, 2021 (after the 2020 election.) The budget bill would increase military and domestic spending levels by approximately $160 billion for FY2020 and again for FY2021, significantly above the Administration’s fiscal 2020 budget request. The 2011 Budget Control Act will expire at the end of FY2021.

The House needed to reduce appropriations bills by $15 billion to reflect the budget caps agreement. Most of their appropriations bills had higher budget cap levels, including the House-passed HUD bill (part of a 5-bill omnibus appropriations) that would have provided $803 million for Section 202 senior housing, including $140 million for new development.

The Senate passed funding for HUD in October that would have provided $696 million for Section 202, but no additional funds for new development. The House and Senate resolved differences between their bills only a few days before the December 20th deadline provided by the 2nd continuing resolution. The consoli-dated FY2020 Appropriations provided $793 for Section 202, including $90 million for new construction.

After threatening another veto that would have shut down the federal government, President Trump signed the bill just before the midnight deadline. Last year, disagreement over funding border wall construction was a key factor to the veto of in the omnibus appropriations bill that led to the historic 35-day government shutdown that began shortly before last Christmas. Congress passed the Consolidated FY2020 Appropriations the same week that the House voted to impeach President Trump, and then recessed for the holidays to return only a few weeks before the Administration was scheduled to release its proposed FY2021 budget the first week of February when the annual process starts all over again.

Given these delays and disruptions, is it time to explore whether there is a better way to provide timing and steady funding for crucial federal programs such as affordable senior housing? There are several legislative efforts being considered to reform the federal budget process. One could be to revise and strengthen the use of the annual Congressional Budget Resolution that sets limits on total spending and revenue (including Social Security, Medicare and Medicaid – about two-thirds of the federal budget.) Under a Budget Resolution, the House and Senate Budget Committees each pass a budget resolution setting spending targets for the upcoming fiscal year. After a compromise budget resolution is reached, changes to existing laws can be made through an expedited reconciliation process to conform tax and spending levels to the levels set in the budget resolution.

Unfortunately, Congress has had difficulties adopting budget resolutions because of partisan differences between the House and Senate. The Budget Resolution was used only three times in the past nine years, and then for the sole purpose of achieving partisan GOP objectives through use of the reconciliation process: 1) attempts to repeal Obamacare in FY2016 and FY2017; and 2) tax cuts in FY2018. With the budget process broken and overdue for changes, there is an opportunity to reform and use the Budget Resolution, including multi-year budgets to address cross-cutting issues, such as affordable senior housing linked with health care and supportive services.

During this time of possible changes to the budget process, it is critical that members of Congress, especially congressional and presidential candidates, understand the need for affordable senior housing, as well as the cost-effectiveness of investing in affordable senior housing as part of a health and long-term care strategy that may be achieved through a reform budget process that includes mandatory (Medicare and Medicaid) and discretionary funding for affordable senior housing.

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