CBPP Estimates Sequestration’s Effect on Vouchers

According to a report by the Center on Budget and Policy Priorities (CBPP), because of the sequestration cuts instituted on March 1 of this year, state and local housing agencies are facing substantial shortfalls in funding to renew the Housing Choice Vouchers that more than 2.1 million low-income households utilize.

If Congress doesn’t cancel sequestration as part of an agreement to fund the government beyond January 2014, agencies will continue to face shortfalls, and the resulting hardships for low-income families will worsen considerably in the year ahead.

Many of the 2,300 state and local housing agencies that administer housing vouchers are reducing the number of families that receive assistance, by no longer reissuing vouchers when current families leave the program. The CBPP estimates that 40,000 to 65,000 fewer low-income families will be using housing vouchers by December 2013, compared to a year earlier.

Moreover, these cuts will deepen considerably in 2014 if sequestration continues and voucher program funding remains essentially flat. Under that scenario, they estimate that between 125,000 and 185,000 low-income families will lose assistance by the end of 2014 (again, compared to December 2012).

According to the report, to reverse the Housing Choice Voucher cuts that housing agencies have already made and prevent even deeper, more harmful reductions next year, Congress will need to provide $17.7 billion for voucher renewals (and at least $1.69 billion to cover the costs of program administration) in 2014. While Congress could increase voucher funding in the final funding law for fiscal year 2014 even if it doesn’t shrink the overall size of the sequestration budget cuts, canceling sequestration will probably be necessary to meet the goal of fully restoring the availability of housing vouchers to pre-sequestration levels.

Over the next several months, Congress and the administration will seek to negotiate a final budget agreement for fiscal year 2014, including potential changes to sequestration. A primary goal of these negotiations should be to cancel sequestration for non-defense discretionary (NDD) programs such as the Housing Choice Voucher program, or if that goal proves politically unfeasible, to ease the depth of the sequestration cuts in NDD to the greatest degree possible.