Federal Housing and Poverty Programs Are Threatened by the Fiscal Cliff

Unless the Obama administration and Congress agree on a new plan to avoid falling over the “fiscal cliff,” several disastrous, across-the-board spending cuts to non-military programs are scheduled to go into effect on Jan. 2, 2013, and may cause great harm to programs serving the elderly, disabled, low-income and homeless people.

by Lynda Carson


The Berkeley Housing Authority administers about 1,939 subsidized rental-housing units for low-income families through the Section 8 Housing Choice Voucher Program and the Moderate Rehabilitation SRO Program.

Unless the Obama administration and Congress come up with a new plan to avoid what is called the “fiscal cliff,” disastrous, across-the-board spending cuts to non-defense programs are scheduled to go into effect on Jan. 2, 2013. Federal programs affecting the working class, elderly, disabled and the poor could lose billions of dollars in funding in 2013.

These looming cutbacks may never be imposed if legislators back away from the cliff, as many expect to happen. But if the cuts do occur, poor people will suffer great harm. The 8.2 percent spending cuts would damage poverty programs, homeless programs, public housing and Housing Choice Voucher Program (formerly called Section 8 vouchers).

Low-income tenants in the Housing Choice Voucher Program pay 30 to 40 percent of their monthly income for rent, and the rest of the rent is paid to the landlord by the voucher from the Section 8 Housing Choice Voucher Program.

The spending cuts threaten at least 250,000 voucher holders with eviction, if automatic spending cuts go into effect on Jan. 2, 2013, as scheduled.

The so-called “fiscal cliff” is the combination of Bush-era tax cuts about to expire, and massive, across-the-board spending cuts (sequestration) that could total $800 billion next year, according to the Congressional Budget Office (CBO).

Sequestration is a term to describe the implementation of mandatory spending cuts in the federal budget, such as automatic, across-the-board cuts that take place when annual budget deficits occur.

The expected outcome of sequestration could add up to $110 billion in spending cuts in 2013, according to CBO estimates, unless Congress and the White House take action to stop the automatic cuts.

A CBO forecast predicted that if a new budget agreement is not reached, automatic spending cuts could cause a new recession with 9.1 percent unemployment, and the Congressional Research Service predicted a loss of 1.4 million jobs next year.

Locally, the Berkeley Housing Authority continues negotiations to privatize 75 public housing units by selling them to out-of-state billionaires Jorge M. Perez and Stephen M. Ross of the Related Companies of California, LLC.

Some of Berkeley’s public housing tenants face pressure to trade in their public housing townhouses for federally subsidized Housing Choice Vouchers. Rep. Dick Norman, Democrat from Washington state and the ranking member of the House Appropriations Committee, wrote on Oct. 9, 2012, that if sequestration takes effect, 200,000 voucher holders may be evicted from subsidized housing across the nation.

In this powerful artwork by San Francisco artist Art Hazelwood, a homeless mother and her baby are abandoned to suffer on the sidewalk, their plight totally ignored by the “suits” locked in struggle – a perfect image of federal officials fighting over the so-called “fiscal cliff” while ignoring the suffering of the poor.


Furthermore, Rep. Norman writes that in some markets, the income provided by Section 8 tenants wouldn’t be replaced by new tenants, and landlords would lose income as a result. Norman also stated that cuts to the Homeless Assistant Grant account would result in approximately 100,000 more people on the streets if sequestration goes into effect.

However, in their own assessment of the situation, the Department of Housing and Urban Development (HUD) estimates that 250,000 voucher holders will lose their housing if sequestration takes effect, resulting in nearly one million people losing their federal housing assistance and being placed at risk of homelessness.

According to the Council of Large Public Housing Authorities (CLPHA), about 303,499 seniors rely on Section 8 Housing Choice Vouchers for affordable housing. Also, Section 8 housing is home to 458,124 households with one or more disabled family member. In addition, 59 percent of Section 8 households are families with children (more than 2,357,977 children in total), with an average annual family income of $11,049.

According to the Center on Budget and Policy Priorities, $17.37 billion will be needed to fully renew the 2,130,000 vouchers they estimated are being used by low-income families in 2011.

The 8.2 percent in spending cuts (sequestration) scheduled to kick in on Jan. 2, 2013, would make it much more difficult for public housing authorities to administer subsidized housing programs.

Activists are urging low-income families in federally subsidized housing to contact their representatives, and to urge the Obama administration and Congress to stop the automatic spending cuts that could result in the eviction of 250,000 voucher holders in HUD housing programs.

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