Confronting the LIHTC Cliff
After an abbreviated September legislative session, Congress recessed until after the November elections. Before returning home, Congress passed a continuing resolution to keep the federal government running through late March 2013. This was the only "must-do" bill that Congress had to act on before leaving town.
While there was hope that the Senate might consider the package of tax extenders the Senate Finance Committee passed before the August break, this did not happen. As you will recall, the Finance Committee package includes our amendment to ensure that the benefit of the flat 9% credit can be realized through 2013. The amendment would provide for a fixed 9% LIHTC for allocations made through December 31, 2013.
The House Ways and Means Committee has not acted on an extenders bill, but Chairman Dave Camp (R-MI) is seeking input from his committee members on what extenders should be included in a package. While no decisions will be made before the elections, it is possible an extenders bill could be considered during the lame duck session. We are working hard to line up support for including our LIHTC amendment in the Ways and Means Committee bill, but this will not be easy. So far, the Ways and Means Committee appears to be focused only on provisions that expire in 2011 and 2012 and despite the immediate ramifications of not extending the 9% flat rate, Ways and Means staff still consider this a 2013 issue.
In our ongoing efforts to educate Members about the positive impact of the LIHTC and to urge the inclusion of our amendment in the extenders package, Housing Advisory Group Chairman Bob Moss recently visited Washington, D.C. Bob met with Chairman Camp's Legislative Director who strongly suggested that the industry reach out to current House Republican cosponsors of our LIHTC legislation (H.R. 3661) and key non-committee Members and ask them to contact key Ways and Means Committee staff. Specifically, it is critical to our inclusion in the package that Members contact George Callas, the Staff Director for the Ways and Means Subcommittee on Select Revenue Measures, and express support for including in the Ways and Means extenders bill the 9% flat rate language ("allocations made in 2013") approved by the Senate Finance Committee.
While the industry has been active in recruiting new cosponsors for H.R. 3661, and will continue to do so, this new effort is critical to our success during the lame duck session. We are reaching out nationally, and we need to mobilize every LIHTC supporter who has the ability to send this message. As mentioned above, the Ways and Means Committee is focused on 2012 program expirations, and we all will have to educate lawmakers that our 2013 expiration is really a 2012 LIHTC financing issue. Members of Congress are now home and will be through the election. Now is the time to reach out to them in their districts. Your success in doing so between now and the post-election lame duck session will determine whether we have a 9% flat rate in 2013.
Sequestration
While the LIHTC provision is a top priority, we also wanted to make you aware of the potential impact of sequestration on federal housing programs. The failure of the Joint Select Committee on Deficit Reduction to propose, and Congress to enact, a plan to reduce the deficit by $1.2 trillion sets in motion across-the-board cuts to defense and non-defense programs, beginning in January 2013.
On September 14, the Office of Management and Budget released a Congressionally mandated report specifying the cuts mandated under the Budget Control Act. According to the report, and assuming Congress does not act to halt sequestration, tenant based rental assistance will be cut by $1.5 billion and project-based rental assistance will be cut by $772 million. This is substantial and will devastate the voucher programs. As a whole, HUD and associated programs are looking at cuts of over $3.6 billion. This will set housing programs back at a time when more and more Americans are relying on them for the most basic necessity, a safe place to live. Congress can act to head off these automatic cuts, but so far, there seems to be no path forward for doing so.
Call to Action
We have been very direct in letting our HAG membership as well as housing professionals around the country know that with the extenders package and pending tax reform, the future existence of the LIHTC hangs in the balance. We have been told by the Chairman of the Ways and Means Committee that his colleagues need to see LIHTC communities in their home districts so that they share his commitment to the program. Reiterating our call to action above, it is critical to our inclusion in the extenders package that Members of the Ways and Means Committee (see below) contact George Callas, the Staff Director for the Ways and Means Subcommittee on Select Revenue Measures, and express support for including in the Ways and Means extenders bill the 9% flat rate language ("allocations made in 2013") approved by the Senate Finance Committee. This effort also enhances our standing as we head into the tax reform debate.
Here is the list of Ways and Means Republicans we need to contact George Callas:
Wally Herger, CA
Sam Johnson, TX
Kevin Brady, TX
Devin Nunes, CA
Pat Tiberi, OH
Dave G. Reichert, WA
Charles W. Boustany Jr., LA
Peter J. Roskam, IL
Jim Gerlach, PA
Tom Price, GA
Vern Buchanan, FL
Adrian Smith, NE
Aaron Schock, IL
Lynn Jenkins, KS
Erik Paulsen, MN
Kenny Marchant, TX
Rick Berg, ND
Diane Black, TN
Tom Reed, NY
