After Brief Government Shutdown, Congress Approves 2-Year Budget Framework

Filed in Capitol Hill by on February 9, 2018 0 Comments

capitolCongress early this morning approved a two-year budget framework to keep the government running following a brief shutdown that began at midnight and lasted less than six hours. The accord includes massive increases to defense and discretionary spending, as well as key housing provisions.

The deal gives lawmakers until March 23 to pass a long-term spending package that will fund the government through the end of the current fiscal year, which expires Sept. 30. Congress would have to negotiate a separate measure to fund the government through fiscal 2019.

The accord also means that the National Flood Insurance Program (NFIP) will be extended only through March 23. The NFIP will not be extended through the end of the fiscal year unless Congress specifically agrees to include the program when it negotiates an overall spending package to cover fiscal 2018. NAHB is working with lawmakers to include the NFIP in any long-term spending package.

On a related note, last fall the House approved the 21st Century Flood Reform Act, NAHB-supported legislation that would reauthorize the NFIP for five years.

NAHB is calling on the Senate Banking Committee to move forward on a long-term reauthorization of the program to ensure accidental lapses between short-term reauthorizations like we have seen in the past do not occur.

The budget package also includes the following provisions that are positive for housing:

  • Mortgage insurance premiums. Consumers who file their taxes can deduct premiums paid for private mortgage insurance in 2017. The deduction does not apply for mortgage insurance premiums paid in 2018.
  • Mortgage forgiveness tax relief. The budget accord eliminates any taxes home owners might face due to renegotiating the terms of a home loan, which result in forgiving or canceling a portion of the outstanding mortgage, particularly in connection with short sales. The debt forgiveness pertains to debt discharged in 2017 but not in 2018.
  • More funds for worker training. The spending bill proposes an additional $100 million to retrain workers in areas hit last year by hurricanes Harvey, Maria and Irma. It also includes $30 million to rebuild Job Corps centers in Puerto Rico.

Moreover, the budget framework contains Republican and Democratic priorities: It boosts defense spending, something that President Trump and Republicans have been calling for; increases spending for domestic programs, a key Democratic concern; and provides tens of billions of dollars in disaster relief assistance.

Specifically, the agreement will raise the budget caps as follows:

  • $80 billion and $63 billion increases for defense and domestic caps respectively, for fiscal 2018;
  • $85 billion and $68 billion increases for defense and domestic caps respectively, for fiscal 2019;
  • $140 billion and $20 billion for emergency spending for defense and domestic programs, respectively;
  • Extension of the debt ceiling, which sets a limit on the amount of money the federal government can borrow, through 2018;
  • $89 billion disaster aid package, which includes $4.9 billion to increase Medicaid caps; and
  • $20 billion for infrastructure.

For more information, contact Jessica Hall at 800-368-5242 x8253.

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