Senator Proposes to Eliminate LIHTC Program
A few weeks before Congress passed the debt plan on Aug. 2, U.S. Sen. Tom Coburn released his own deficit-reduction plan, which included the elimination of the low-income housing tax credit program. Ending the tax credit program would save at least $57 billion over the next 10 years, according to his 620-page “Back in Black” report, his proposal to slash the deficit by $9 trillion over the next decade. The move to eliminate LIHTCs drew a sharp response from affordable housing advocates.
The plan included department-by-department descriptions of proposed program cuts and reforms. It argued that the Tax Code should not be used to promote affordable housing, a function it says should be left to HUD. The plan characterized the LIHTC program as developing housing for upper low-income tenants who can afford the monthly rent payments, instead of focusing on those who are more in need, such as the homeless.
The plan also proposed to eliminate the New Markets Tax Credit program, the Community Development Financial Institutions Fund, the Historic Preservation Tax Credit, and the Preservation Credit for Non-Historic Structures, characterizing them as duplicative of other federal grant programs. The plan also called for eliminating at least 12 HUD programs, including the HOME Investment Partnerships program and NeighborWorks America, and reducing the cost of five others, including Section 202 Housing for the Elderly, Section 811 Housing for Persons with Disabilities, and the Community Development Block Grant program (CDBG).