Filed under Economics

Sequestrable Funds for Housing

My inbox is filling up with opinions about the sequester. March 1st is two days away, so everybody weigh in.

Over this morning’s reading session I have found lots of numbers: more than 100,000 individuals who were recently homeless may be removed from their current housing, 125,000 low-income families may not be able to depend on their Housing Choice Voucher and thereby may be put as risk of loosing their current housing, 21,000 less homes would receive funds for rehabilitation, 400,000 fewer households would receive aid from the Low Income Home Energy Assistance Program,  at least 1,000 fewer homes would be weatherized. Given the rhetoric, it would seem that these numbers only represent the  “tip of the ice-berg.” But NRP, one of my most trusted news sources, says “But what if the sequester, which would cut $85 billion from federal spending between March 1 and the end of September, turns out to be less of a calamity than Obama has warned?

I’m depending on my paycheck Friday, and I’m expecting another check on March 15th. With others feeling much less secure, I owe it to them to develop some perspective. My primary interest is housing, so that’s where I’ll weigh in and try to give some perspective. The rhetoric is killing my interest, so I turned to the technical documents posted on the OMB website. I’m trying to answer the question, what kinds of cuts are we experiencing right now, and how does that compare to what we would experience under 1 year of unaltered sequestration.

Looking at the FY 2012 Budget and the FY 2013 Budget, I see that spending for the Dept of Housing and Urban Development decreased by $3,139,000,000 between the end of FY 2010 and the end of FY 2011. OMB estimates another decrease ($214,000,000) between the end of FY 2011 and the end of FY 2012 (wish these numbers were available). FY 2013 Sequestrable funding for HUD totals $3,622,000,000, if nothing changes. So, in the short term, we can expect more of the same (for programs not individuals). We can expect to experience basically the same kind of cuts we experienced over the past two years (it will definitely feel like getting hit where you already have a bruise).  That’s the example, but look to USDA and the Dept of Housing and Human Services for more cuts that will directly effect housing initiatives.

Throughout the US Government Budgets, there are explanations of cuts, consolidations, additional spending etc. THE SEQUESTER, the beast that it is, does not offer or allow this reasoning. Some people think that’s the worst part. So is it not the size of the cuts, but where the cuts land that matters? Where they land certainly matters to those that are hit directly, but the Obama Administration argues that it will directly impact each of us. So who will be affected the most? Those loosing their homes? Those who can’t count on their pay check? There are infinite ways to view this situation.

When infinite perspectives present themselves, I usually meditate on the simple economics of the situation. The current politics of our government has led to uncertainty (for everybody). As long as the SEQUESTER goes forward without an accepted budget, we will experience continued uncertainty, in addition to less government spending. Less government spending (SEQUESTER) + less private investment (due to uncertainty) = slow/no economic growth.  I could add detail, but the picture does not look better close up.