November 14, 2003
HOUSE-SENATE CONFERENCE COMMITTEE POISED TO DECIDE
FATE OF HOUSING VOUCHER FUNDING
By Will Fischer and Barbara Sard
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The House of Representatives and the Senate Appropriations Committee have approved versions of a fiscal year 2004 appropriations bill (H.R. 2861 and S. 1584) funding the Department of
Housingand Urban Development and certain other agencies that contain significantly different provisions for funding the “Section 8” housing voucher program. It is uncertain at this point whether the full Senate will take separate action on the HUD appropriations bill (most likely approving a version similar to the committee bill) or whether the bill will be included with other appropriations measures in an “omnibus” appropriations bill.
In either case, decisions expected to be made in the next few weeks by the House-Senate conference committee that shapes the final version of the bill will determine whether enough funding will be available in 2004 to cover all of the existing housing vouchers that will be in use. The voucher program currently assists more than two million low-income households, most of them either working families with children or elderly and disabled individuals.
- The direct funding levels provided in the Senate Appropriations Committee and House bills are too low to fund all of the vouchers that are likely to be in use in fiscal year 2004. This is the case because both bills were developed using HUD estimates of program funding needs that were based on data that are now out-of-date. If no other funds are made available, the direct funding level in the House bill could lead to the loss of 63,000 to 108,000 vouchers that could otherwise be used, while the level in the Senate Appropriations Committee bill (referred to in the remainder of this analysis as the Senate bill) could lead to the loss of 92,000 to 135,000 such vouchers.
- The Senate bill, however, requires HUD to supplement the funds it provides directly with unspent appropriations from prior years if needed to fund existing vouchers. Administration budget documents suggest that HUD currently has sufficient unspent funds available to support all existing vouchers likely to be in use in 2004. The Senate bill therefore has the potential to avert any shortfall in housing voucher funding. The House bill does not include this requirement.
- Reappropriating prior-year funds would provide further assurance that sufficient funds will be available. The Senate approach carries some risk that funding will not be adequate. For example, Congress could divert the unspent prior-year funds on which the Senate bill relies to other purposes before they can be used to fund housing vouchers. The conference committee could eliminate this risk by rescinding and reappropriating the amount of prior-year funds anticipated to be needed for the voucher program, while retaining the explicit commitment contained in the Senate bill to fund all authorized vouchers that can be used.
Unfortunately, HUD has not explicitly acknowledged that its estimates of the funding needed to support housing vouchers, and therefore the direct funding levels provided in the House and Senate bills, are too low. A senior HUD official, however, has conceded that at the start of fiscal year 2004 the average cost of a voucher — a key factor in determining the funding needed to support the program — was well above the level HUD had estimated. In addition, three separate estimates — issued by the Congressional Budget Office, the Office of Management and Budget, and the Center on Budget and Policy Priorities — indicate that the funding needs of the voucher program are higher than HUD projected. The estimates, which are based on program data that are more recent than the data HUD used, leave little doubt that the conference committee needs to make available additional resources — either through a requirement like that in the Senate bill that HUD use prior-year funds or through rescission and reappropriation of those funds — if it is to be certain that cuts in voucher assistance will be averted. A fuller explanation of these complex but critically important data issues is provided below.