National Housing Law Project Housing Law Bulletin

House-Passed FY 1996 Appropriations
Gut Low-Income Housing Programs—
Floor Efforts to Restore Cuts Rebuffed

HUD Programs

The House savaged HUD's budget by reducing the Department's spending to less than 75 percent of FY 1995 appropriated levels. The proposed cuts came on the heels of enactment of the FY 1995 rescission which had already plundered low-income housing by recapturing already appropriated funds for a number of low-income housing purposes, including public housing modernization and Section 8 incremental units.

Despite the adoption of a Manager's Amendment which restored $300 million to HUD, including $100 million for homeless programs, Democratic efforts on the House floor to restore funding to a broader range of low-income housing met with defeat.

Rep. David Obey (D-WI), ranking minority member of the full House Appropriations Committee, sponsored an amendment which, among other things, would have added $200 million to the annual contributions for assisted housing account and would have increased funding by an equal amount for special-needs housing for the elderly, disabled and persons with AIDS.² The measure was rejected by a vote of 126 to 299.³

Other amendments met with similar defeat. Rep. Louis Stokes (D-OH), ranking minority member of the Subcommittee on VA, HUD and Independent Agencies, was thwarted by a 187 to 237 vote in his effort to obtain reallocation of the $862 million in non-incremental voucher assistance to public housing modernization, drug elimination grants and incremental Section 8 if authorizing legislation for "Section 8 Replacement Assistance" was not adopted by December 31, 1995.⁴ A second Stokes amendment would have eliminated the provision directing local housing authorities to delay issuing new certificates and vouchers for Section 8 incremental assistance until October 1, 1996. Similarly, it would have stricken a provision designed to reduce outlays and actual expenditures during FY 1996 by allowing PHAs and Indian Housing authorities to slow down their development and repair rates. That amendment was defeated on a 185-235 vote.⁵

Rep. Joe Kennedy (D-MA), ranking minority member of the House Housing and Community Opportunities Subcommittee, sought to transfer $320 million from the FEMA disaster account to the annual contributions account and to exempt elderly and disabled Section 8 recipients from the proposed rent increase from 30 to 32 percent of their income. His amendment was rejected by a vote of 177 to 248.⁶

In a companion effort, Rep. Barney Frank (D-MA) sought to restore $331.6 million to the annual contributions account and to eliminate the proposed rent increase for all Section 8 tenants. In an impassioned plea on behalf of the working poor living in Section 8 housing, citing as an example a family earning $20,000 a year, Rep. Frank argued:

What we are saying is, "You have done nothing wrong, you have worked very hard, we know times are tough, and by the way, your rent just went up $400 [a year], without any increase in income." … Why? So we can make sure the tax cut extends to people who make $200,000 a year.⁷

The Frank amendment was also defeated, on a 158-265 vote.⁸

Rep. Bruce Vento's (D-MN) amendment to increase funding for homeless assistance by $184 million and FEMA emergency planning and assistance by $30 million, through reductions of $235 million in FEMA disaster funding, was rejected 160-260.⁹

Both Reps. Stokes and Kennedy offered amendments related to fair housing. Rep. Kennedy's amendment would have stricken language that HUD from issuing or enforcing rules against discriminatory practices in property insurance underwriting that the Department is in the process of developing, while Stokes' amendment would have authorized the use of fair housing monies for the Fair Housing Initiatives Program which would have supported the work of nonprofit organizations seeking to educate and perform outreach, enforcement and counseling. The Kennedy measure was defeated under a storm of opposition criticism that state law already prohibits unfair insurance discrimination.¹⁰ Rep. Stokes withdrew his amendment subject to a point of order by Rep. Lazio (R-NY), Chairman of the House Housing and Community Opportunities Subcommittee.¹¹

Similarly, Rep. Marcy Kaptur (D-OH) was forced on a point of order by HUD Appropriations Subcommittee chair, Jerry Lewis (R-CA), to withdraw her amendment that would have provided $290 million in funding for public housing drug elimination grants, in part by reducing FEMA disaster relief by $34.5 million.

Rep. Scott Klug (R-WI) offered an amendment to eliminate, on a demonstration basis for a project in Madison, Wisconsin, the Section 8 landlord "take-one-take-all" requirement. That amendment met opposition from both sides of the aisle as a matter appropriate for consideration by the authorizing committee, and was voted down 76-348.¹²

The Senate is expected to take up HUD appropriations soon after the August recess, with subcommittee and full committee action anticipated the week of September 5th and floor action the following week. Some observers hope the Senate will moderate the harsh housing cuts meted out by the House. However, working within the constraints of an approximately $19 billion budget, the Senate is unlikely to be in a position to sustain the low-income housing programs through substantial restoration of funds.

RHCDS Programs

Overall, the RHCDS Section 515 program for guaranteed rural rental housing loans will support $150 million in direct loans, down from $220 million appropriated in FY 1995.¹⁴ Mark-up by the Senate Appropriations Subcommittee on Agriculture, Rural Development and Related Agencies has not yet been scheduled.

The September Bulletin will have an update on FY 1996 appropriations developments.

1. H.R. 2099, 104th Cong., 1st Sess. (July 31, 1995).
2. 123 CONG. REC. H7848 (July 27, 1995).
3. Id. at H7869.
4. Id. at H7870; see House Appropriations Subcommittee Approves Deep, Deep Cuts in Funding for HUD Programs as Well as Program-Gutting Reforms, 25 HOUS. L. BULL. 110 (June/July 1995).
5. Id. at H7893-4.
6. Id. at H7871.
7. Id. at H7864.
8. Id. at H7871.
9. Id. at H7894.
10. Id. at H7888.
11. Id. at H7878.
12. Id. at H7867-69; H7872.
13. H.R. 1976, 119 CONG. REC. H7445-6 (July 21, 1995).
14. Id. at H7438.