It is hard to imagine Capitol Hill being any more chaotic then it was at the time of our last update yet as of the drafting this update, chaos has reached a new level.
Let us take politics out of the equation for now and just focus on policy. The President released his budget which calls for significant (may I say draconian) cuts to safety net programs, including housing. It would eliminate the HOME, CDBG, VASH and Choice Neighborhoods programs among others. This is in addition to severe cuts to RD at USDA and other safety social net programs. While disappointing to say the least the Administrations budget should be taken for what it is and what it is not. The Administration may be willing to sacrifice safety net programs for the sake of their other priorities but from what we have heard and been told, this is not the vision of the appropriators in Congress. Congress appropriates funds and it is their priorities and the needs of their constituents that will dictate funding levels for the FY 2018 budget.
That being said, we are still skeptical of the course ahead for this budget. The forces in Congress working against each other regarding funding levels, sequestration and reconciliation are significant and may lead to a continuing resolution (CR) to start the fiscal year on October 1. Then again, President Trump has also threatened to shut down the government if his funding requests are not met. And this does not include the pending debate over the debt ceiling. Hold on, it is going to be a ride to remember.
On the tax side, there has been no measurable progress on tax reform and if anything it seems the House leadership (Speaker Ryan and W&M Chairman Brady), Senate (Senator McConnell and Finance Chairman Hatch) and administration (Secretary Mnuchin) are growing further apart when it comes to payfors, deficit neutral reform, and tax reform versus tax cuts. All of this along with the shrinking legislative calendar (only 79 scheduled legislative days left in the House) make tax reform challenging to say the least. Still, it would be unwise to assume reform is unattainable as anything is possible in this environment and much depends on who gets to decide what qualifies as reform.
As for the LIHTC, members of the Tax Reform Working Group of the ACTION campaign have had a couple of meetings with senior Ways and Means committee staff and staff of the Joint Committee on Taxation to review our proposal for the LIHTC within tax reform. Much of the conversation has been centered on the staff understanding the affect lower rates will have on pricing and thus the need to compensate for such changes. We believe these conversations have been productive and will continue in conjunction with the tax reform effort.
Regarding the expansion legislation, our efforts are focused on securing more Republican cosponsors for the Cantwell/Hatch bill (S.548) and the Tiberi/Neal bill (H.R. 1661). Anything you can do to aid in this effort would be greatly appreciated.
Thank You.
