CARH’S BROADCAST E-MAIL – Legislative & Trump Administration Update

April 28, 2017

1) Short-term Continuing Resolution for Fiscal Year 2017

2) Sonny Perdue Confirmed as Agriculture Secretary

3) Pamela Patenaude Nominated as HUD Deputy Secretary

4) Administration Unveils Framework for Tax Reform

1) Short Term Continuing Resolution for Fiscal Year (FY) 2017

As CARH members know from previous emails (see March 16, 2017, Broadcast Email), the federal government has been operating on a Continuing Resolution (CR) for FY 2017. That CR is due to expire at midnight tonight. The inability for Congress to pass a long term CR is a direct result of efforts to revise legislation which would replace the Affordable Care Act, as well as legislative riders regarding Puerto Rico and health benefits for coal miners. Rather than causing a shutdown of the government, leaders in both parties in the House of Representatives and the Senate have agreed to another short-term CR that will expire next Friday, May 5, 2017.

CARH’s board of directors took rural housing’s message to Capitol Hill at the end of last month to remind key members of Congress and their staff of the importance of funding affordable housing programs at both the United States Department of Agriculture’s (USDA) Rural Development (RD) and the Department of Housing and Urban Development (HUD). The House passed the one week short-term this morning by a vote of 382-30 and the Senate by a voice vote followed suit shortly thereafter. Hopefully during the next agreement, all outstanding issues can be resolved and Congress can then pass an Omnibus Appropriations bill for FY 2017.

2) Sony Perdue Confirmed as Agriculture Secretary

The Senate confirmed Sonny Perdue as Agriculture Secretary on April 24th by a vote of 87 to 11. Secretary Perdue’s appointment was one of the last for the Cabinet and the Administration has been meeting with farmers and talking about rural prosperity to help counter the appearance that rural issues were not a focus of the Administration. Secretary Perdue is a former two-term Governor of Georgia and is a member of the Bipartisan Policy Center Governors ‘Council. Now that Secretary Perdue is in place, the various Under Secretaries will be nominated, along with Rural Development State Directors and Administrator for Housing and Community Facilities. However, it still appears several months before key players will be in place.

3) Pamela Patenaude Nominated as HUD Deputy Secretary

The Trump Administration today nominated Pamela Patenaude to serve as HUD’s Deputy Secretary. Ms.Patenaude is President of the J. Ronald Terwilliger Foundation for America’s Families and served as Assistant Secretary for Community Planning and Development under President George W. Bush. The appointment now moves to the Senate for confirmation.

4) Administration Unveils Framework for Tax Reform

On Wednesday, April 26, the Administration unveiled its framework for reforming the current tax code. The one page document, establishes several markers for the tax reform debate. The plan as proposed on Wednesday would double the standard deduction individuals can take to $25,200, thereby either eliminating or obviating the need to take itemized deductions. The plan would retain deductions for mortgage interest and charitable deductions, but, so far, no other deductions or credits. Deduction of state and local taxes would also be eliminated. Individual rates would be reduced to three brackets of 10 percent, 25 percent and 35percent. On the business side of the tax code, the plan would reduce the corporate rate from 35 percent to 15 percent, including for pass-through entities like S Corporations, partnerships and limited liability companies. Eligibility for this reduced rate would include small business to larger corporations. Based on discussions in the media, individuals within a certain income range would not be able to register as pass-through entities.

Initial reading of the Administration’s blueprint would also imply that credits such as the Housing Credit program would no longer be as valuable a tool for the affordable housing industry. Even if the Housing Tax Credit is preserved, Novogradac’s April 26th Blog estimates a 15 percent corporate tax rate, without any other offsets, would reduce available equity by $2 billion or more. Further analysis of the Administration’s proposal and Congress’ reaction and movement will be forthcoming in the next few months.

No doubt CARH’s Annual Meeting and Legislative Conference in June will be a pivotal meeting for the industry both in terms of funding for FY 2018 and the progress on tax reform. Indications are that the FY 2018 proposed budget will be issued in greater detail at the end of May, which is sure to include more information on how the Administration intends to reform the current tax code.

What You Can Do

It is now more important than ever to remind members of Congress and their staff of all of the excellent work you do by inviting them out to see your properties. We also have had great success when owners and managers arrange for transportation of residents to members of Congress’ District Offices to meet with staff and tell them how important it is to preserve their affordable housing. You can also use CARH’s issue briefs found on the members’ only section of the CARH website. However when you mail an electronic copy to your members of Congress and Senators, make sure that you add personal examples in the body of the email.

If you have any questions or comments, please contact CARH at 703-837-9001 or carh@carh.org.