The drama surrounding the deficit reduction talks is not a good sign for domestic programs. With Republicans dug against tax increases the underlying question in the current stalemate is: who will blink first?
For supporters of domestic spending it doesn’t matter. In the end, domestic programs, including housing, will take it on the chin. How serious a blow these programs will receive won’t be resolved until the deficit discussion is completed. Until an agreement is reached, all discussions on a FY 2012 budget are in hold.
Therefore, it is not a surprise that the House Transportation-HUD Appropriations Subcommittee cancelled this week’s mark-up of a FY 2012 appropriations bill. After the deficit reduction numbers are agreed to, the real budget will be determined. While the devil is in the details, the parameters of deficit deal are unlikely to favor domestic programs.
By standing firm in their commitment to no new taxes Republicans have put themselves in a no-win situation. They seem to believe they have the leverage and that President Barack Obama is going to blink and accede to their demands before the deadline arrives.
The substance of a potential deal and its political subplot will one day make a writer rich! House Speaker John Boehner (R-OH) is clearly not in charge of the House Republicans. Majority Leader Eric Cantor (R-VA) has positioned himself as the real power in the House. His actions are reminding the Speaker his hold on the speaker’s chair is a tenuous one. Cantor is a fiscal hawk who is championing efforts to reduce federal spending.
The president has looked weak at times appearing to bow to Republican demands. He has made extraordinary concessions by offering to reduce federal domestic spending and making significant cuts and changes to Medicare and Social Security. While these concessions are fiscally necessary, they seem to have strengthened the resolve of Republicans. He has become more assertive with Republicans accept some tax increases; however, it may be too little too late.
For housing providers, regulatory relief provides the only reasonable course of action to weather this fiscal storm. However, if it occurs, it will happen too late to have a reasonable impact on day-to-day operations. Public housing organizations are seeking both regulatory relief from Department of Housing and Urban Development (HUD) regulations and increased flexibility in the structure and use of housing vouchers. While there is some support in Congress for these measures, the pace is not happening quickly enough.
Additionally, the Department of Housing and Urban Development (HUD) is using it administrative authority to reduce the reserve accounts of PHAs. PHAs use these reserve funds for operating expenses and, in some cases, to offset debt on capital expenditure. As much as agencies and their representative may disagree with HUD’s action, as long as they are dependent on the Federal government for funding, they have little recourse available to them.
These tough fiscal times should force all federally dependent groups to reevaluate what they are doing and how they are funded. Innovation will be the key in determining who survives in the future.
Chamber of Commerce Releases Survey Results
The United States Chamber of Commerce released the results of its second quarterly Small Business Survey which found that small business owners rank economic uncertainty as their number one concern.
Over 1,400 business owners were asked to identify their most pressing challenges and economic uncertainty topped the list followed by debt and deficit reduction, the health care law which was passed and over-regulation. A copy of the report can be found
here.
Survey Points to Some Good/Bad Signs in Local Communities
The National League of Cities released a survey which shows progress in some sectors of local communities during the recession although residential property values continue to fall.
NLC recently released the responses to the Local Economic Conditions survey which tracks the impact of the recession on local communities. The survey is the first in a multi-year tracking effort on how the recession has affected local communities and to identify areas which mirror national indicators. The purpose of the survey series is to provide a parallel track to NLC’s 25-year survey on City Fiscal Conditions.
Among the findings:
• 45 percent of the respondents report the retail sector improving.
• 28 percent report that business permits and licenses are improving.
• 35 percent report increased investments in infrastructure and capital projects in the last six months.
• 51 percent report that residential property values have worsened.
• 44 percent report commercial property values have fallen.
• 41 percent report demand for survival services such as food banks and shelters has worsened.
The following areas were identified as most important to generate economic growth:
• small business development (54 percent);
• transportation infrastructure (49 percent);
• education/workforce training (31 percent); and,
• Housing and neighborhood development (25 percent).
A copy of the report can be found
here.
HUD Releases Study of Fair Housing Initiative
The Department of Housing and Urban Development (HUD) released the findings of a study of its Fair Housing Initiative Program (FHIP). The study, the first of its kind in the 15 years of the program, found that the program is successful in reducing the burden of governments at all levels in investigating complaints and that complaints filtered through the program are more likely to result in a binding legal resolution, conciliation or cause finding. The study can be found
here.
Interesting Read
House GOP Not Ready to Blink on Debt
Quite Simply There is No Deficit-Reduction Proposal on the Table That Will Satisfy House Republicans.
By: Jake Sherman and Jonathan Allen
Politico
Obama Exploits Boehner-Cantor Rift
The President Has Managed to Exploit the Fragile Relationship that Exists Between the Two GOPers.
By: Jonathan Allen and Jake Sherman
Politico
In Senate, politics trump substance
By: Manu Raju
Politico
Why Obama's pushing for a mega-deal
By David Gergen
CNN
As Easy as ABC
Moving on from Mitch McConnell.
By William Kristol
The Weekly Standard
Debt-Limit Harakiri
Mitch McConnell isn't selling out Republicans
The Wall Street Journal
The President's Jobs Plan (Not)
By Robert Reich
The Huffington Post
Waiting for the Enemy to Blink on the Debt Limit
By Wesley Pruden
The Washington Times
Small Business Needs Big Boost
By Scott Brown
The Boston Herald
How Kevin McCarthy Wrangles the Tea Party in Washington
By Robert Draper
The New York Times
9:49 AM
Julio Barreto
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