Legislative State-of-Play
Reconciliation Process Begins in Earnest
The House and Senate both passed their respective Fiscal Year 2025 (FY25) budget resolutions last month, an important but preliminary step towards advancing President Trump’s policy agenda without needing to rely on any Democratic votes. Next, Congress must reconcile their differences so that both chambers can pass identical budget resolution text. The Senate-passed FY25 budget resolution includes “reconciliation instructions” protecting anticipated legislation on border security, energy, and defense from the filibuster. The Senate’s strategy is to get through the first reconciliation bill and then pass an FY26 budget resolution that would facilitate a tax-only reconciliation bill. The House-passed FY25 budget resolution is much larger in scope, including border security, energy, and defense, as well as making room for a major tax component in the same reconciliation bill, thus making a second reconciliation bill stemming from an FY26 budget resolution unnecessary.
Just before the Senate voted on their budget resolution, President Trump endorsed the House’s one-bill approach. Senate leaders have since recharacterized their budget resolution as a “Plan B” in case both chambers are unable to pass something more akin to the House’s approach.
So Where Does That Leave Us?
The House resolution, which passed on February 25 by a vote of 217-215, authorizes the Ways and Means Committee to increase the deficit – that is, cut taxes – by up to $4.5 trillion and instructs other House committees to propose at least $2 trillion in spending cuts. However, if those committees are unable to identify at least $2 trillion in spending cuts, the amount of taxes Ways and Means can cut is reduced dollar-for-dollar by the difference between the proposed cuts and $2 trillion.
This leaves very little room for the President’s other tax priorities, such as eliminating taxes on tips, overtime, and Social Security payments, which are expected to have a significant price tag. In addition, Congress is still working to find a way to include their own key tax priorities, with the Housing Credit toward the top of that list. One positive point in the Housing Credit’s favor is the wide bipartisan support and inclusion in the narrow tax package last Congress negotiated by Ways and Means Chair Jason Smith (R-MO-08) and then-Chair of the Senate Finance Committee Ron Wyden (D-OR). The cost for the AHCIA’s Housing Credit financing provisions is relatively miniscule, especially when viewed in the context of the nearly two million affordable rental homes it is estimated to create.
Republican leaders and top tax-writers will be meeting weekly at the White House with Treasury Sec. Scott Bessent to strategize on tax policy. ACTION will keep members apprised of the latest developments. It is essential that Housing Credit advocates continue to reach out to Congress and underscore the importance of including the AHCIA’s production provisions in the tax package to address the affordable housing supply shortage. There are also many new Members of Congress we must educate on the Housing Credit’s proven track record and impact in their districts and states.
Check out the ACTION Advocacy Toolkit for national, state, and district fact sheets, as well as many other education and advocacy resources for your congressional outreach.
AHCIA Reintroduction Coming Soon
ACTION leadership continues to meet with the AHCIA bill leads on the bill’s reintroduction. Given the timing and urgency with the tax and reconciliation plans in Congress, we do not anticipate changes to the bill this Congress, which should make it easier to quickly add supporters from the bill last Congress, which secured a record-breaking 309 cosponsors across the two chambers.
Please contact your Member of Congress now and encourage them to reach out to Reps. Darin LaHood (R-IL-16) and Suzan DelBene (D-WA-01), or Sens. Todd Young (R-IN) and Maria Cantwell (D-WA), to get on the bill when it is reintroduced. ACTION will continue providing updates and share new fact sheets upon reintroduction.
Congress Barrells Toward a Government Shutdown
Congressional leaders have not yet reached an agreement on federal spending amounts for the federal government for FY25, which started last October 1. Presently, the government is operating under a Continuing Resolution (CR), or temporary funding measure, which expires on March 14. In a reversal of position, Speaker Mike Johnson (R-LA-04) reportedly now supports a “clean” CR being enacted through September 30—the end of the fiscal year. If Congress cannot reach an agreement by then — either for final FY25 funding or another CR — the government will be forced to shut down on March 15.
If Congress passes another temporary funding measure, and that CR is in effect as of April 30, a mandatory one percent cut to all discretionary spending programs would occur in accordance with the Fiscal Responsibility Act of 2023, unless they reach a deal averting such cuts by that date. Housing Credit developments and the tenants in them often rely on appropriated programs that provide gap financing or rental assistance.
ACTION to Host Congressional Briefing on the Housing Credit
On March 25, ACTION will host a congressional briefing and reception for Members of Congress and their staff. This event aims to educate legislators and key staff about the Housing Credit and the AHCIA. We will discuss how the Housing Credit works and the importance of including the AHCIA in the tax package this year.
Administration Updates
Turner Confirmed, Sworn In as HUD Secretary
Scott Turner was sworn in as HUD Secretary on February 5, after being confirmed by the Senate with bipartisan support the same day. As covered in the ACTION December newsletter, Turner served in the Texas legislature and in the first Trump White House. During his January 16 confirmation hearing in the Senate Banking, Housing, and Urban Affairs Committee, Turner spoke at length about the housing crisis and pledged to work with Congress and the Administration to address the issue. While HUD does not oversee the Housing Credit, ACTION looks forward to working with Secretary Turner on our priorities.
Executive Branch Staff Reductions
In recent weeks, the new Administration has begun implementing a significant reduction in workforce across multiple federal departments and agencies, including at HUD, IRS, and the U.S. Department of Agriculture’s Rural Housing Service (RHS).
While the Housing Credit is largely administered by state agencies, ACTION is concerned that major staffing reductions could impact certain program operations. The IRS establishes the regulatory framework for the Housing Credit and enforces compliance at the federal level. HUD’s Office of Policy Development and Research sets income limits (which determine eligibility and rent limits) and collects data on Housing Credit tenant characteristics and project location. Housing Credit developments also often rely on HUD and RHS programs to fill financing gaps or for rental assistance for residents.
ACTION Membership
In February, the ACTION Campaign welcomed one new member to the coalition. Please join us in welcoming the following new member:
- American Wood Council, National
Help ACTION continue to grow our membership and advocacy strength by encouraging your networks to support affordable housing and the Housing Credit by joining the coalition. Membership is free. Together, we can demonstrate to Members of Congress the widespread support for the Housing Credit across the country. You can also help strengthen our reach by following the ACTION Campaign’s LinkedIn page and inviting your connections to follow and join us.
Housing Credit Research
- A February 11 analysis by Moody’s indicates that, in late 2024, the vacancy rate at Housing Credit properties across the country was just 2.7 percent, compared to a 7.6 percent vacancy rate for luxury multifamily properties and around five percent for market-rate properties; this is despite an increase in Housing Credit inventory of over 17 percent in the past five years. The analysis also points out that the wait time for Housing Credit units across 37 states surveyed ranges from six months to 59 months, indicating a dire shortage of affordable housing. The analysis also reveals that the southwest is the region with the largest increase in Housing Credit units in recent years. The analysis notes that the Housing Credit is an “essential” tool for providing affordable housing and rent relief for lower-income households, and that the data reveals “notable demand from renters for affordable housing units” nationwide.
Housing Credit in the News
- In a February 12 blog post, the Urban Institute says Congress can pass the AHCIA as one of the ways to address the housing crisis.
- In a February 17 op-ed in Slate, former Congressman Rick Lazio (R-NY) and former HUD Secretary Shaun Donovan urge Congress to expand the Housing Credit to address the housing crisis, since it is a proven and effective tool for financing affordable housing. (Lazio is Board Chair of ACTION co-chair Enterprise; Donovan is its CEO and President.)
- On February 22, the National Governors’ Association urged Congress to strengthen the Housing Credit in order to increase the supply of affordable housing.
- On February 25, the National Association of Counties released its 2025 policy priorities, which includes expanding the Housing Credit.
2 Comments