Public Policy Network (PPN) Newsletter
Washington D.C. Update 
Housing and Economic Development Update

March 2017


March 2017 - In This Issue:
President's 2018 Budget Proposal Released Today
President Donald Trump released his first budget proposal this morning for discretionary spending. 

The proposal funds HUD at $40.7 billion, which is a decrease of 13.2 percent. $35 billion of that amount will be spent on HUD's rental assistance programs.

The Community Development Block Grant (CDBG) program will be eliminated. The proposal said this will result in a savings of $3 billion and that the program is "not well-targeted to the poorest populations and hasn't demonstrated results." 

Click  here  for a  link to additional details on the proposal.The HUD budget can be found on page 25 of the document.

Presentation at Builders
Conference in Pittsburgh

We enjoyed introducing Keynote Speaker Stephen Melman from National Home Builders Association (NAHB) at the Builders Association of Metropolitan Pittsburgh's (BAMP) Housing Professionals Education Conference. He provided a very interesting outlook on housing and building trends. 

We also shared more about FHLBank Pittsburgh and the PPN during a breakout session during the conference. 
Is Your Organization Listed on the PPN Webpage? 
With so much going on in Washington, we have the resources to keep you updated and connected.

FHLBank Pittsburgh and the PPN are excited provide a webpage designed to keep you informed and connected to elected officials and policy stakeholders. The page provides resources to help you develop relationships with elected officials and organizations and keep you up-to-date on policy affecting banking, housing and economic development.
 
Explore this and more on  www.fhlb-pgh.com/public-policy-network. New features include a toolkit for interacting with elected officials, contact information for fellow PPN Partners and a calendar of Partner organization events.
 
Please let us know if your organization would like to be included on the PPN Partner list. 


Washington Policy Update
March 2017
Peter E. Knight

The beginning of any new administration brings new agendas and approaches to governing, but the Trump administration has injected a remarkable amount of change in style and practice. This should come as no surprise to anyone since the president's promise to disrupt the regular Washington order is exactly why he won the election.
 
Uncertainty currently dominates the Capitol. This will likely recede as rapidly approaching major policy challenges are confronted. These include funding government in April, and then again in October, and raising the nation's debt ceiling this fall. In addition to these central responsibilities of governing are the almost-impossible demands from the administration for Congress to repeal and replace the Affordable Care Act by April and enact comprehensive tax reform by August.
 
The president's track record over the next six months will bring into clearer focus the staying power of his approach to governing. One major rule in Washington that has not changed is that a president's power rises and falls with the administration's achievement or failure of policy goals.  Successful implementation of publicly supported programs leads to increased popularity and calms the nerves of members of Congress who are looking toward their next re-election campaign.
 
For bankers, affordable housing providers, economic development practitioners and other community leaders, there is a preference for more certainty and stability rather than less. At this point, the nation's fiscal and tax policy going forward is a big unknown. This lack of certainty in these and other important areas may present future problems, or may not, which is the classic definition of uncertainty. Maybe certainty is more a comforting idea than a truly achievable state, as Albert Einstein alluded to when he said, "As far as the laws of mathematics refer to reality, they are not certain; and as far as they are certain, they do not refer to reality."
 
Health Care, Fiscal and Tax Policies to Dominate Washington's Next Six Months
 
At the moment, all of Washington's attention is focused on the Republican House plan to revamp the Affordable Care Act. The process has been intense and chaotic, with public infighting between House and Senate Republicans, conservative organizations, Congress and the White House. This has taken much focus away from a number of deadlines, some hard-wired in statute and others self-made:
 
  • The debt ceiling was reached March 15 ("extraordinary measures" now needed through August-September).
  • FY 2017 funding ends April 29, and a new omnibus appropriations bill, with all of its added baggage, must be signed.
  • The White House is pressuring Congress to repeal Obamacare by April, an extremely tricky lift.
  • The White House is also pushing Congress to enact tax reform vote by August. Tax reform happens every 35 years for a reason. Senate Majority Leader Mitch McConnell has already said this timetable will not be met.
  • The government will shut down Oct. 1 unless FY 2018 appropriations are enacted. Look for another massive omnibus appropriations bill by that date or later in the year. The major point of contention over this legislation will be how to add money for discretionary defense spending ($54 billion) and cut non-defense spending, which is expected to be in the administration's budget blueprint.
 
Hanging over all of these issues will be whether or not bills will (or can) be passed if they add to the federal deficits. As discretionary spending takes a smaller and smaller percentage of federal budgets, efforts to force cuts on these programs to fund new initiatives will meet stiffer and stiffer resistance.
 
Bipartisan Senate Bill Increases Low-Income House Tax Credits
 
While most of the news today involves increased partisanship, bipartisan Senate legislation would represent a significant increase in tax credits to support affordable housing. The Affordable Housing Credit Improvement Act was introduced March 7 by Sen. Maria Cantwell (D-Wash.) and Senate Finance Committee Chairman Orrin Hatch (R-Utah). A coalition of 2,000 national, state and local affordable housing stakeholders has expressed strong support for the bill. National coalition members include the National Council of State Housing Agencies, the National Association of Homebuilders, the National Association of REALTORS®, the National Housing Conference and others.
 
The coalition statement noted, "This legislation would increase Housing Credit authority by 50 percent, taking a meaningful step towards addressing our nation's vast and growing affordable housing needs. It would also strengthen the Housing Credit by providing states with additional flexibility, making the financing of affordable housing more predictable and streamlined, facilitating Housing Credit development in challenging markets like rural and Native American communities, increasing the Housing Credit's ability to serve extremely low-income tenants, and supporting the preservation of existing affordable housing. The legislation also contains important provisions that would support development of rental homes using the Housing Credit coupled with multifamily Housing Bonds, which currently provide critical financing to roughly 40 percent of Housing Credit apartments."
 
Work Begins on Flood Insurance Reauthorization
 
The House Financial Services Committee and the Senate Banking Committee kicked off hearings and a legislative effort to reauthorize the National Flood Insurance Program, which expires Sept. 30. Timely reauthorizations has been challenging for Congress, with 17 short-term expirations and four lapses between 2008 and 2012. Chairmen and ranking members of both committees expressed a commitment to timely reauthorization.
 
OCC Offers Draft Licensing Manual Supplement for Evaluating Fintech Charters
 
On March 15, the Office of the Comptroller of the Currency provided additional detail on evaluating national bank charter applications from financial technology (fintech) companies that engage in the business of banking. The OCC will accept comments on the document until April 14.
Senator Capito Joined FHLBank Pittsburgh to Highlight Grants for Housing in 12 West Virginia Counties
Community groups, funders, elected officials an citizens joined U.S. Senator  Shelley Moore Capito and City of Richwood Mayor Bob Henry Baber recently to celebrate progres
s in recovering
from the flood that ravaged a 12-county area in West Virginia last summer. 

Other speakers included Jeromy Rose, former Mayor of the City of Richwood, Incident Commander; Ray Moeller, WVSU Extension Agent, New River Gorge Regional Development Authority, and Blueprint Community Team Leader; Patrick A. Bond, founding general partner at Mountaineer Capital LP, Charleston, and Chairman of the Board of the Federal Home Loan Bank of Pittsburgh (FHLBank); Winthrop Watson, President and CEO of FHLBank; and Jeff Miller, Market President of United Bank, Inc. 

FHLBank presented a ceremonial check for $2.3 million, representing grants made through its Affordable Housing Program (AHP) and a special Disaster Relief Program targeted directly to households affected by the flooding. All these grants were provided by FHLBank through member financial institutions United Bank, Summit Community Bank, Pendleton Community Bank, Bank of Monroe and Mars National Bank.

"The damage from last summer's flooding was profound, but I am so proud of the way West Virginians have joined together to rebuild the affected communities. It is wonderful to see community groups, faith-based organizations, businesses and local funders working together with government officials to offer relief and hope," said Senator Capito. "I applaud FHLBank Pittsburgh, our neighbor to the north, for setting aside significant funds to help in our recovery." 

Mayor Baber, who hosted the event at Richwood City Hall, expressed the resolve of the Richwood community. "We are a resilient community, and with the amazing support of everyone here today and many others, we are winning," he said. "We have a long, long way to go, but it's good to pause and celebrate how far we've come." 

Pat Bond spoke on behalf of FHLBank. "Management and the Board of FHLBank Pittsburgh considered what we could do to provide help for neighbors like Erica Jones in what the National Weather Service called a 'one-in-a-thousand-year event,' " he said. "We are privileged to make these grants available through our member financial institutions." 

United Bank, one of five financial institutions that served as a conduit for the $2.3 million in FHLBank funding, also contributed to flood recovery efforts through corporate donations and employee fundraising and volunteerism. Across the state, United Bank office locations served as collection sites for supplies. Jeff Miller organized efforts in the southern part of the state and told of driving a large boxcar truck, loaded with cleaning supplies, diapers and food, to flood areas multiple times. He also talked about the Women Helping Women campaign, an initiative started by his mother to help women in need. To help her efforts, United Bank collected more than 1,600 purses stuffed with toiletries and personal care items. 

Prior to the ceremony, Senator Capito, speakers and other dignitaries took a bus tour to see the damage and recovery efforts.