After months of negotiations, on August 10, 2021, the Senate passed its bipartisan infrastructure plan by a vote of 69-30. Nineteen Republicans, including Minority Leader Mitch McConnell (R-KY) joined the 48 Democrats and two Independents in support of the bill.
The measure provides $550 billion in new spending over five years for traditional core infrastructure needs such as roads and bridges; rail, broadband, and ports and waterways. The bill was offset by a number of measures including, among others, terminating (for most businesses) the Employee Retention Tax credit three months ahead of its scheduled expiration date, extending fees on GSEs, reinstating certain Superfund fees, and extending customs user fees.
Following the vote on the bipartisan infrastructure bill, the Senate immediately turned to action on its $3.5 trillion Fiscal Year 2022 budget resolution, setting in motion the first step to consideration of a second infrastructure bill that will focus on “human or social” infrastructure priorities such as affordable housing, child-care, and paid family and medical leave. Because Republicans are not expected to support this second bill, Senate Democratic leaders plan to use the budget reconciliation process to advance the measure. Reconciliation is an especially important tool in the Senate because it allows a bill to pass by a simple majority rather than requiring the 60 votes generally needed to advance legislation in the Senate. A budget resolution must first be passed before a reconciliation package can be crafted and voted on. It is possible and somewhat likely that the size of the reconciliation package will be trimmed back from the $3.5 trillion price as some Democratic Senators have raised concerns about the size of the package. If this occurs, it will be incumbent on the affordable housing industry to advocate strongly for our housing provisions in a smaller reconciliation package.
The Senate budget resolution, released on August 9th, includes reconciliation instructions to congressional committees that will facilitate consideration of a number of initiatives from President Biden’s Build Back Better agenda. Senate Majority Leader Charles Schumer (D-NY) shared materials – including the bill text, a summary, and a memorandum outlining the framework for the budget resolution agreement. The memorandum reflects the understanding the committee chairs have for what the budget resolution is designed to fund. While the initiatives noted in the memorandum are not final or exclusive, the positive news is that housing initiatives are included. We want everyone to understand that the budget resolution is part of the reconciliation process and does not deal in specific proposals. The next steps are for each committee to take the amount of money designated to them and decide which proposals (AHCIA for example) will be included in the package to be considered by the Senate.
The Senate Finance Committee received an instruction that gives flexibility to make investment, revenue, and offset decisions consistent with policy recommendations. The recommended investments include “housing incentives.” The Finance Committee will decide the specifics, but we are very encouraged that housing has been prioritized. We are optimistic that important provisions from the Affordable Housing Credit Improvement Act (AHCIA) will be included in the reconciliation bill.
The Senate Banking Committee received an instruction providing $332 billion in the House instructions) to fund:
-Creation and preservation of affordable housing by making historic investments in programs such as the Housing Trust Fund, HOME, the Capital Magnet Fund, and rural housing;
-Improvement of housing affordability and equity by providing down payment assistance, rental assistance, and other homeownership initiatives;
-Community investment, development and revitalization through initiatives such as Community Land Trusts, investments in CDBG, zoning, land use, and transit improvements and creating healthy and sustainable housing, and
-Public Housing Capital Investments and Sustainability.
The Committee on Indian Affairs received an instruction providing $20.5 billion, a portion of which will fund Native American housing programs.
Just before 4 a.m. on August 11th, the Senate passed the budget resolution by a straight party line vote of 50-49 after considering numerous amendments in a fourteen-hour session known as “vote-a-rama.” Following the vote, the Senate adjourned for its August break.
Action on the budget resolution and the bipartisan infrastructure legislation now will shift to the House, which currently is in recess. Scheduled to be out until September 20th, House Majority Leader Steny Hoyer (D-MD) notified Members on August 11th that their break would be cut short. The House now will return on August 23rd to consider the budget resolution passed by the Senate, but it is unclear when the House will consider the Senate-passed bipartisan infrastructure bill. House Speaker Nancy Pelosi (D-CA) stated that she will not bring the bill to the House floor until the Senate passes the $3.5 trillion reconciliation bill. She is, however, being pressed by a number of House Democrats to consider it immediately.
September will be an extremely busy month for the House and Senate. Not only will they be working on the reconciliation legislation, but also will have to pass a short-term funding bill before September 30th to avoid a government shutdown. Also looming is the need to increase or suspend the debt limit to avoid the federal government defaulting on its obligations. Timing on when that must be done is unclear because the Treasury Department has measures it now is using to continue standard operations for a limited period. The Congressional Budget Office estimated that action would be needed by October or November, but stated it could be before then. Treasury Secretary Janet Yellen repeatedly has urged Congress to address the debt limit. Doing so has generally been a bipartisan exercise, but Republicans have indicated they do not intend to support an increase in the debt limit. Minority Leader McConnell stated that he does not expect a single Senate Republican to vote for an increase.
While Members are back home in their states and districts, we will continue to work with staff in DC on including the AHCIA and other housing priorities in the reconciliation package. We ask that you please take the opportunity to touch base with your elected officials while they are home and ask them to support including the Affordable Housing Credit Improvement Act in the reconciliation legislation. It’s important that they hear from you. Thanks for all you do, and please let us know if we can help.