New FY24 Spending Deal Has $2.8 Billion Plus-Up for THUD Bill

The revised fiscal 2024 appropriations framework agreed to by House Speaker Johnson and Senate Majority Leader Schumer last weekend includes a special $2.8 billion funding offset just for the Transportation-HUD appropriations bill.

Johnson and Schumer agreed to use the White House Office of Management and Budget’s estimates for the amount of offsetting receipts from Housing and Urban Development mortgage insurance programs, instead of the Congressional Budget Office’s estimates, when drafting the final 2024 appropriations bill.

OMB and CBO often differ on projections of future receipts (and outlays), and the differences are compounded when dealing with transactions in rapidly changing private markets. Here are the differences in the receipt estimates in the competing 2024 baselines (in millions of dollars):

Acct. # Account CBO OMB
# 0186 MBS loan guarantees -49 -150
# 0200 FHA general & special risk -560 -434
# 0236 FHA MMI capital reserve -718 -3,478
# 0238 MBS guar. capital reserve -1,344 -1,409
Total Offsetting Receipts -2,671 -5,471

Since OMB’s estimates would offset $2.8 billion more gross HUD spending than CBO’s, using the OMB numbers serves as one way to effectively give the Transportation-HUD Subcommittee $2.8 billion more to use when writing their bill.

(If Congress were ordering OMB to use CBO’s numbers, that would require Congress to pass a law ordering them to do so, a process called “directed scorekeeping.” But if Congress wants to order CBO to use OMB’s numbers, the House and Senate Budget Committees can apparently direct CBO to do so. In any case, a discrepancy between CBO and OMB offset estimates just winds up as a ledger entry in OMB’s 7-Day-After report explaining why OMB ignored CBO’s estimates when determining compliance with spending caps, so there is no substantive difference unless one really, really believes that CBO’s estimates in this instance are going to be accurate and OMB’s are not.)

The $2.8 billion scoring difference is the only item in the Johnson-Schumer spending deal that specifically applies to the Transportation-HUD Subcommittee and no one else. But other parts of the deal have implications for the THUD spending total.

Let’s take a step back and look at the House and Senate THUD bills for fiscal 2024. On gross appropriations, the two bills are $8.4 billion apart, with the Senate bill being higher. But once all of the offsets are totaled up, the two bills are $22.9 billion apart, with the Senate bill now being much higher.

Million dollars. FY23 Enact FY24 House FY24 Senate
Gross Discretionary BA 101,543 93,825 102,210
Offset by:
Rescissions of Discretionary BA -70 -684 -355
Rescission of Mandatory IRS Funding 0 -25,035 0
DOT User Fees -161 -170 -196
HUD Offsetting Receipts & Collections -10,356 -2,728 -2,728
Spurious “Emergency” Designations -3,623 0 -10,840
Equals Net Discretionary BA 87,332 65,208 88,091

The 12 Senate appropriations bills, collectively, contain $23 billion in spurious emergency designations that serve to hide appropriations from spending totals, and about half of that ($10.4 billion) was used by the THUD subcommittee, almost all of it on public housing renewals costs. The new budget deal would reduce that global total from $23 billion to $10 billion, which has obvious negative implications for the THUD bill.

However, the original agreement (and the Senate bills) only cut $10 billion in 2024 out of the $80 billion provided by the Inflation Reduction Act for IRS enforcement. The House cut much more, and the revised agreement allows $20.2 billion in total IRS cuts in 2024, meaning that some of the House THUD bill’s IRS offset might survive.

At a gross total of $102 billion, the Senate bill is still $4 billion short of the amount needed to cover the earmarked special projects made by the House bill. (The Senate bill had $2.1 billion of its own earmarks, but these things are additive.) Even if the final bill gets a spending total equal to the Senate bill, $4 billion in cuts would have to be found in order to give the House its earmarks.

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