California recognizes the important challenge facing our nation — reduce the federal deficit while protecting our fragile economy and core government services such as affordable housing and community development, which are vital to middle- and low-income families and communities.
At the end of this year, Congress will make several critical choices that will impact the country’s fiscal future for years to come. These choices will also directly impact the housing and communities of PEP Housing residents. California, as with other states across the country, has faced extreme rental and homeownership challenges in recent years and has not yet recovered from setbacks in the housing market.
In addition, policy makers will also face the start of automatic, across-the-board cuts to most domestic programs and defense programs in our federal budget beginning in January 2013 including HUD and USDA affordable housing and community development programs. These cuts, known as “sequestration,” were adopted as part of the Budget Control Act (BCA) in 2011 as a mechanism to spur deficit reduction agreement.
These indiscriminate cuts would have serious ramifications for our state and local economies and for thousands of middle- and low-income families in need of resources that support stable housing and vital communities. Indeed, for California, the effects would be devastating; 25,602 families in California who are currently affordably housed would lose their rental assistance and be at risk of homelessness. The state would also lose $28,775,482 in vital funding.
California already has an affordable housing shortage of 910,063 units for low-income families; reducing funding will only increase the housing challenges the state currently faces. This funding has been a critical source of funding for PEP Housing. We used Community Development Block Grant funds to help fund an affordable senior housing project, Acacia Lane Senior Apartments in Santa Rosa, a 44-unit senior property serving very-low-income seniors.
While there is broad agreement among lawmakers of both parties that sequestration could be very damaging to our economy, security, and investments in the future, there is not agreement on a deficit reduction replacement. Failure to include significant revenues in any effort to replace the sequester could be even more damaging to the middle- and low-income working families and to our state and municipalities that rely on funding from the departments of Housing and Urban Development and Agriculture.
The House-passed budget is an example of an approach Congress might take if it rejects a balanced approach to deficit reduction along with responsible budget cuts. The House plan would cut non-defense discretionary programs by 22 percent in 2014, much deeper than those resulting from sequestration. California alone would see a cut of $2,979,000,000 in 2014. Cuts of this magnitude would force our state and its municipalities to reduce the quality and reach of our basic public systems or to cut other services.
By contrast, a balanced deficit-reduction plan that includes significant new revenues almost certainly would lessen the resulting cost shift to states and localities.
We cannot expect middle and lower-income Americans to carry the burden of deficit reduction. The only way to prevent this from happening is to ensure that significant revenues are part of a deficit reduction package, just as every bipartisan deficit commission has concluded is critical.
The nation is on an unsustainable fiscal course, and substantial changes in policy will be needed to right the ship. Congress must adopt a balanced approach in tackling our nation’s fiscal challenges in order to protect the middle- and low-income households who are most at risk.
Mary Stompe of Novato is executive director of Petaluma-based PEP Housing, a nonprofit corporation dedicated to providing low-income seniors with quality affordable housing, housing support services and advocacy.