December 21, 2012
Yesterday evening, the House passed, by a vote of 215 to 209, H.R. 6684
, the Spending Reduction Act of 2012. The bill is similar to H.R. 5652, the Sequester Replacement Reconciliation Act of 2012, which the House passed in May and NCSHA described in a May 9 blog post
. H.R. 6684 would cancel the automatic defense and non-defense discretionary sequestration, or across-the-board spending cuts, scheduled to take effect on January 2, 2013.
The bill offsets the cost of canceling sequestration by finding savings in mandatory spending programs, such as the SNAP, also known as Food Stamps, program and Medicaid, and by reducing the discretionary spending cap for FY 2013 by $19.1 billion, from $1.047 trillion to $1.028 trillion—equal to the cap included in the House-passed FY 2013 budget resolution. The bill leaves in place sequestration for non-defense mandatory spending programs. An Office of Management and Budget (OMB) report estimates that if sequestration takes effect, it will require an 8.2 percent cut to all HUD and USDA rural housing programs.
Additionally, H.R. 6684 would terminate authority for Treasury to provide any new mortgage modification assistance under the Home Affordable Modification Program (HAMP). The bill would also make the Consumer Financial Protection Bureau (CFPB) subject to the annual appropriations process; under current law, CFPB draws its funding from the Federal Reserve.
The House was expected also to vote last night on H.J. Res. 66
, the Permanent Tax Relief for Families and Small Businesses Act of 2012, which has been referred to in recent news reports as “Plan B.” The bill would extend temporarily reduced marginal income tax rates for all taxpayers except for those making in excess of $1 million, instead of those making in excess of $250,000, as the President proposed and the Senate included in legislation passed earlier this year. Senate Democratic leader Harry Reid (D-NV) had said the Senate would not consider Plan B and the White House had said the President would veto it.
Prior to the scheduled vote, it became apparent that there were not enough Republican votes to pass the tax bill, so Republican leadership canceled the vote. After the vote was canceled, Speaker of the House John Boehner (R-OH) stated, “Now it is up to the president to work with Senator Reid on legislation to avert the fiscal cliff.” Boehner also referred to legislation, H.R. 8
, the Job Protection and Recession Prevention Act of 2012, the House passed in August that would extend for one year all current individual tax rates.
The House recessed last night and is not expected to return until after Christmas, but the exact timing remains uncertain. The Senate is expected to recess later today and return on December 27. The “fiscal cliff,” a combination of across-the-board spending cuts and tax rate increases set to go into effect at the beginning of 2013, will occur unless legislation is passed before the end of the year to alter or delay it.