Shutdowns, Debt Ceilings, and CRs, Oh My!

written by Kate Seif
October 21, 2013

If Dorothy’s walk through the woods included a stroll through Capitol Hill, she would have soon realized that lions, tigers, and bears were the least of her worries. As you’ve all no doubt noticed, we’re just getting back to normal after what can only be described as a tumultuous couple of weeks on Capitol Hill.

So, besides giving the 24-hour news networks something to gab about and some hilarious jokes – what did the shutdown and resulting negotiations mean? More specifically, what is there impact, if any, on homelessness? This post should provide the basics on what went down and what’s next. It’s important to emphasize that these are just the basics. You wonks out there probably know there’s a lot more intricacies in everything than we can cover in one blog post. We’re really just trying to focus on the big stuff that’s likely to have an impact on our efforts to end homelessness. Those of you on our McKinney Campaign list already got a similar version of this update, so I apologize for the repetitiveness.

For the first three months or so of fiscal year (FY) 2014, which began on October 1 – until January 15 – the government will be funded at post-sequestered FY 2013 funding levels, essentially under a clean Continuing Resolution (CR, or stopgap funding measure). The shutdown, caused by lack of a budget for FY 2014, ended on October 17 as a result of the agreement, and all federal agencies are open and operating at normal capacity. Flat funding until January 15 does not necessarily impact HUD’s McKinney-Vento Homeless Assistance Grants since communities are still waiting on the FY 2013 funding to be released. (We’re waiting on the FY 2013 NOFA just like you!) This could present a problem for Section 8 Tenant-Based Rental Assistance, but the details of that are still in flux.  

The deal they passed on the 17th essentially suspended the debt ceiling for the nation until February 7, at which time the Treasury will honor all its debts and Congress will revisit the debt ceiling issue. It’s important to note (if you care about that kind of stuff) that they didn’t raise the debt ceiling – they suspended it, meaning our nation doesn’t quite have a debt ceiling until February 7.

Now, the debt ceiling issue gets a lot of media and other attention, but it does not necessarily directly impact homeless assistance programs. There could be serious issues that arise should the nation default on its debt obligations. For now, though, this portion of this specific deal does not impact HUD. The “necessarily” part: In the past few years, the House Republican majority has insisted on spending cuts in return for increasing the debt ceiling, the resulting spending cuts have of course impacted HUD funding programs (i.e. your ESG cuts and upcoming cuts in the CoC NOFA). It remains unclear what sort of spending reductions, if any, will result from these debt ceiling deals.

Finally, the legislation does not repeal or otherwise address sequestration, the automatic, across-the-board cuts to FY 2013 spending and the reduced spending caps on subsequent fiscal years. The deal did, however, set up what’s being referred to as a conference committee made up of both senators and representatives who will come up with a Budget Resolution for FY 2014 spending. The House and Senate both passed their own Budget Resolutions in early 2013, but never came up with a bicameral agreement. That’s what they’re aiming to do this time. This “new and improved” (maybe, probably not) Budget Resolution, which will theoretically set a total spending level for FY 2014, could (hey, anything’s possible) address sequestration for FY 2014 spending or beyond, and will similarly address the variations between defense and non-defense spending.

It’s no secret that sequestration has already had and will continue to have a tremendous impact on HUD programs, including Homeless Assistance Grants. The FY 2013 NOFA will contain funding cuts brought about by under-funding combined with sequestration cuts. If it is repealed, HUD should have more money with which to operate in the future (unlikely that there will be backfilling). If it is not repealed, or worse – if defense cuts are alleviated in favor of deeper cuts to non-defense programs – HUD programs will be in trouble. The outcome of the conference committee remains to be seen, and it seems too early to tell at this stage.

…whew! I bet that clears everything up, right? If not, feel free to shoot me an email with your questions at cseif@naeh.org. We’ll be making sure to keep everyone updated through our Alliance Online News, our Advocacy Updates, and social media outlets.