Congress Unveils $1.2 Trillion Bipartisan Funding Package To Avert Partial Government Shutdown

Congressional leaders released the last four measures of a sweeping $1.2 trillion bipartisan funding package in a bid to avert another government shutdown on the last day of the month.

The 1,059-page package, known as a "minibus," would fund several key government agencies, including the Departments of Housing and Urban Development (HUD), Defense, Homeland Security, Health and Human Service, Labor, Transportation, and Education past the Jan. 30 shutdown deadline. 

It comes two months after the end of the longest shutdown in U.S. history that lasted 43 days and triggered the disruption of crucial services, from food assistance to the work of the National Flood Insurance Program, which underwrites more than 90% of residential flood insurance policies in the nation. 

To date, the House of Representatives has passed eight of the 12 appropriations bills required to fully fund the government for the fiscal year ending in September.

The Senate has adopted six of the measures. Lawmakers in the chamber will vote on the remaining bills when they return to Washington, DC, next week. 

Sixty votes are required to avert a partial shutdown, and with Republicans holding 53 Senate seats, Democrats would have to cross the aisle to send the bills to President Donald Trump's desk for signing.  

What's included in the funding package?

Nearly $839 billion, or 70% of the entire funding package, is earmarked for the Department of Defense. That includes a 3.8% pay raise for active military personnel.

Several agencies will see modest boosts in funding compared to the previous year, with $117 billion set aside for the Department of Health and Human Services, $79 billion for the Department of Education, and nearly $14 billion going to the Department of Labor, reported Politico.

The Department of Transportation, however, would face a $111 million cut, reducing its funding to $25.1 billion.

A major point of contention has been funding for the Department of Homeland Security, which operates the U.S. Immigration and Customs Enforcement (ICE).

Following the fatal shooting of U.S. citizen and mom-of-three Renee Goode by an ICE agent in Minneapolis earlier this month, Democrats had called for meaningful reforms aimed at reining in the agency overseen by Secretary Kristi Noem, including requiring personnel to present identification and barring them from wearing masks during raids, NBC News reported.

In the end, the proposed reforms were left out of the final package, which would keep ICE's budget at $10 billion while slashing funding for enforcement and removal operations by $115 million.

Under the bipartisan bill, however, DHS would be required to spend $20 million on body cameras for ICE agents and another $20 million on inspections of immigration detention facilities. 

Despite the compromise on broader reforms, Sen. Patty Murray, of Washington, the top Democrat appropriator in the Senate, argued in a statement that with this bill, "Democrats defeated Republicans' hard-fought push to give ICE an even bigger annual budget, successfully cut ICE's detention budget and capacity, cut CBP's budget by over $1 billion, and secured important, although still insufficient, new constraints on DHS."

House Appropriations Committee Ranking Member Rosa DeLauro, a Democrat from Connecticut, conceded that the package did not go far enough in restraining ICE but said she will vote for it anyway because it would thwart another shutdown and continue funding vital services that also fall under DHS' authority, including the Transportation Security Administration and the U.S. Coast Guard. 

"I understand that many of my Democratic colleagues may be dissatisfied with any bill that funds ICE, DeLauro said in a statement. "I share their frustration with the out-of-control agency. I encourage my colleagues to review the bill and determine what is best for their constituents and communities."

What the funding bills mean for housing

Among the agencies included in the "minibus" package, HUD is slated for the biggest funding boost of $7.2 billion, increasing its budget to $84.3 billion.

"Continuing funding to HUD is essential to the housing market because HUD administers FHA loans, a type of federally insured mortgage that allows first-time homebuyers to purchase a home with a lower down payment, says Realtor.com® senior economist Joel Berner. "If HUD shuts down, these loans stop being originated and demand for entry-level housing stock is depressed."

A HUD shutdown would also pause or slow the issuance of Section 8 vouchers, making it difficult for low-income renters to afford housing.

Created as part of President Lyndon B. Johnson’s War on Poverty in 1965, HUD was charged with addressing America’s housing needs, improving communities, and enforcing fair housing laws, according to its website.

More than 4.3 million low-income families currently rely on HUD to provide them with affordable housing through various means, including public housing, rental subsidies, and voucher programs like Section 8.

HUD also plays a major role in supporting homeownership among low- and middle-income families through the Federal Housing Administration, or FHA, which insures mortgages for homes and other properties.  

More broadly, Berner stresses that a government shutdown is an injection of uncertainty into a housing market that is already struggling to pick up momentum after experiencing the worst slowdown since 1995.

"Workers in industries that rely on government contracts are likely to experience some reservations about making a major purchase, and housing market professionals are forced to 'fly blind' without the issuance of regular data releases," he says.