Trump’s Fiscal 2019 Budget Seeks 14% Cut to HUD

Filed in Capitol Hill, Labor, Safety and Health by on February 12, 2018 2 Comments

President Trump’s proposed fiscal 2019 budget, which runs from Oct. 1, 2018 through Sept. 30 2019, would cut the HUD budget 14% ($6.8 billion) to $41.2 billion.

It’s important to note that no White House budget is ever approved “as is” by the Congress. The annual appropriations process determines the levels of federal spending for each of the federal departments and agencies, and all programs within their respective jurisdictions.

While the president’s budget recommends spending levels for the next fiscal year, it is not legally binding. Congressional appropriators will have the final say in program realignment and spending levels.

Moreover, Congress passed a two-year budget agreement last week that would boost military and domestic spending by nearly $300 billion over the next two years. The administration maintains that those additional funds are spending caps and that Congress does not need to appropriate those extra dollars when it puts together its budgets for fiscal 2018 and 2019.

Of note to the housing community, the White House budget for fiscal 2019 proposes budget cuts and recommendations to the following agencies that would:

HUD

  • Double the 10 basis point guarantee fee tax to 20 basis points for Fannie Mae and Freddie Mac through 2023
  • Eliminate the Housing Trust Fund and the Capital Magnet Fund
  • Terminate funding for the CDBG/HOME programs and place the burden on state/local governments to cover the difference
  • Eliminate the Self-Help Homeownership Opportunity and Choice Neighborhoods programs
  • Increase tenant rent contribution requirements from 30% to 35% of gross income for work-able households in rental assistance programs
  • Impose an FHA lender fee of no more than $25 per loan to offset costs of upgrading FHA’s information technology

USDA

  • Cut the agency’s budget 16%, or $3.7 billion, to $19 billion
  • Eliminate Single Family Housing Direct Loans (Sec. 502)

Homeland Security

  • Cut $78 million from the National Flood Insurance Program (NFIP) mapping program.
  • Request that Congress establish a targeted means-tested affordability program to offer premium assistance under the NFIP based on income or ability to pay, rather than location or date of construction. Although NAHB supports the NFIP being an affordable program for low- and middle-income home and property owners, NAHB would oppose any policy that would remove the focus from initial development date and ongoing efforts to mediate flood risk.
  • Call for mandatory nationwide use of the E-Verify system.
  • Increase the penalties on employers that hire undocumented workers by 35%.

EPA

  • Slash EPA and Army Corps of Engineers funding levels by 23% and 22%, respectively, from the levels enacted for fiscal 2017.

Department of Labor

  • Cut the agency’s budget by 21%, or $9.4 billion, from fiscal 2017 levels.
  • Increase OSHA Federal Compliance Assistance to assist employers who want help protecting their workers through cooperative programs.
  • Support the president’s executive order to expand access to health coverage by allowing more employers to form association health plans.
  • Establish fees on employers seeking labor certification through the Department of Labor to access foreign temporary worker programs (like H-2B).
  • Allocate $200 million for apprenticeships.

Education Department

  • Expand Pell Grant eligibility to include high-quality short-term training programs in high-demand fields
  • Maintain $1.1 billion in funding for career and technical education

NAHB will continue to monitor the appropriations process as funding decisions are made on key housing and labor programs.

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

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Comments (2)

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  1. Robert H Jackson says:

    Thanks for all you’ll do at NAHB.

    I am was encouraged to see the Budget Update article so that we can all be more informed as to what is going on on the HIll. Is there another follow up article planned that helps educate us on each area of concern or opportunity related to how these proposals affect the homebuilding industry?

    Example:
    10 basis point Fannie Freddie guarantee increase. Does this help “sure up” their balance sheet so they remain healthy or is it an unnecessary fee to increase staff salaries?
    Cutting the EPA budget and the USCOE budget sounds like someone has finally said “enough is enough with wasteful regulation”. I think the EPA and the Corps have been agencies running afoul of common sense policy for 50 years. Further insight?
    502 direct? Not sure?
    As you are aware I am sure, in the field we have very little time to engage in the details of learning what is essential to our industry. What most of us desire, I believe, is a level playing field with very little government intrusion into our free markets. Where HUD can encourage responsible housing growth, provide short term assistance for those in need, encourage private investment, and drive out costs and fees that the homebuyer can’t afford I say let them succeed.

    It would be great if the NAHB can drill down further and educate each member on how to engage in this budget process and then of course contact their senator or house delegate.

    • NAHB Now says:

      Thank you for your comments. As the blog stated, this is just the opening round in what will be a very long budget negotiating process. President Trump’s budget blueprint is very unlikely to pass “as is.” It is up to House and Senate budget negotiators to craft a final budget, and their budget is likely to be very different from the White House proposal. NAHB will be closely monitoring the appropriations process and fight to ensure that key housing and labor programs receive sufficient funds.

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