The respective House and Senate Transportation, Housing and Urban Development, and Related Agencies (THUD) Appropriations Subcommittees are charged with providing annual appropriations for the Department of Transportation (DOT), the Department of Housing and Urban Development (HUD), and certain related agencies. This report describes action on FY2021 annual appropriations for THUD, including detailed tables for each major agency and a brief overview of selected issues. An appendix lists the FY2021 funding provided to THUD agencies outside of the regular THUD appropriations act.

FY2021 Budget Process

Appropriations for DOT, HUD, and the related agencies typically funded in the THUD bill happen in the context of the broader annual congressional appropriations process. That process generally begins with the submission of the President's budget request in February and the adoption of the congressional spending limits (generally, in a budget resolution) that set the overall level of spending for that fiscal year's appropriations bills.

The framework for budget enforcement under the congressional budget process has both statutory and procedural elements. The statutory elements include limits on "defense" and "nondefense" discretionary spending established by the Budget Control Act of 2011 (BCA; P.L. 112-25); THUD appropriations are classified as nondefense spending. The procedural elements are primarily associated with the budget resolution and limit both total discretionary spending available to the Appropriations Committees (commonly referred to as "302(a) allocations") and spending under the jurisdiction of each appropriations subcommittee ("302(b) suballocations"). Certain spending, such as that designed as for an "emergency requirement," is effectively exempt from these limits (this type of exemption is commonly referred to as a "cap adjustment").¹

On August 2, 2019, the FY2020 and FY2021 BCA spending limits were increased via the enactment of the Bipartisan Budget Act of 2019 (BBA 2019; P.L. 116-37).² The FY2021 nondefense limit ($626.5 billion) was 0.8% (+$5 billion) more than the FY2020 limit. In addition, BBA 2019 provided procedures to establish the spending allocations to the House and Senate Appropriations Committees via statements submitted to the Congressional Record by the chairs of the House and Senate Budget Committees, without the adoption of a budget resolution.³ Among other requirements, these spending allocations must be consistent with the levels established by the statutory discretionary spending limits. These FY2021 committee-level spending allocations were submitted in the House on May 1, and in the Senate on May 4, 2020.⁴

Generally, the next step in the appropriations process is for each of the Appropriations Committees to adopt "suballocations" from the total amount allocated to them. These 302(b) suballocations provide a limit on current-year (e.g., FY2021) appropriations within each subcommittee's jurisdiction and incorporate any applicable scorekeeping adjustments made by the Congressional Budget Office. Revisions to suballocations throughout the appropriations process are a common practice to reflect actual action on appropriations bills and changes in congressional priorities.

The House Appropriations Committee adopted 302(b) suballocations for each of its 12 subcommittees on July 9.⁵ The House THUD discretionary suballocation for FY2021 was set at $75.924 billion, a 2.2% increase over the FY2020 enacted level (excluding emergency funding). The Senate Appropriations Committee did not adopt formal suballocations, although it released draft suballocations along with a majority draft THUD bill and explanatory text on November 10.⁶ The Senate majority committee draft THUD suballocation was set at $74.838 billion, which was slightly higher than FY2020 (0.8%) and lower than the House (-1.4%).

The final FY2021 funding level for THUD provided by Division L of the Consolidated Appropriations Act, FY2021 (P.L. 116-260) was $75.376 billion, which is between the higher House and lower Senate Appropriations Committee majority draft levels; however $718 million of that amount was designated as "emergency" and therefore did not count against discretionary spending limits. Thus, the cap-constrained total for THUD in FY2021 was $74.658 billion, which is lower than both the House and Senate Appropriations Committee majority draft suballocations.

FY2021 THUD Appropriations Process

President Trump's FY2021 budget request was submitted to Congress on February 10, 2020. Following the President's budget submission, appropriations decisionmaking proceeded on the basis of procedures and budgetary limits enacted in the BBA 2019 (discussed in "FY2021 Budget Process"), culminating with enactment of the FY2021 Consolidated Appropriations Act (P.L. 116-260). The steps in that process are briefly reviewed below.

In addition, congressional action on FY2021 appropriations was influenced by the ongoing Coronavirus Disease 2019 (COVID-19) pandemic. A number of emergency FY2020 supplemental discretionary appropriations measures were enacted in response to the pandemic; one, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act; P.L. 116-136), increased available budgetary resources for DOT and HUD in FY2020. The FY2021 Consolidated Appropriations Act also provided supplemental coronavirus relief funding, including $27 billion for DOT in FY2021. The American Rescue Plan Act of 2021 (P.L. 117-2) appropriated an additional $54 billion in mandatory COVID-19 relief and response via programs and activities typically funded in the THUD appropriations bill.

Table 2 tracks FY2021 THUD funding at the bill title level; supplemental and additional appropriations are included at the end of the table.

President's Budget

The Trump Administration's FY2021 budget request proposed cutting funding for THUD agencies by 20% (-$15 billion) from their FY2020 levels (regular discretionary appropriations, excluding supplemental CARES Act funding). Under the President's budget request, DOT discretionary funding would have been reduced by 13% (-$3 billion), HUD funding would have been reduced by 24% (-$12 billion), and the related agencies generally funded in the THUD bill would have been reduced by 33% (-$122 million) (see Table 2).

DOT's discretionary funding reduction was to be offset by a $4.9 billion increase in funding from DOT trust funds (classified as mandatory funding that does not count against THUD appropriation's 302(b) limit), producing an overall increase of 2% (+$1.7 billion) for DOT; among DOT agencies only Amtrak would have experienced a significant reduction under the President's budget, from $2 billion in FY2020 to $953 million for FY2021.

The reductions in HUD funding were proposed to come from zeroing out a half-dozen programs—including the Community Development Block Grant (CDBG) program—and reducing funding for many more programs. One related agency, the Neighborhood Reinvestment Corporation, was also proposed for reductions in the President's budget request.

CARES Act Pandemic Relief Funding

Following the declaration of a public health emergency related to the COVID-19 global pandemic, Congress enacted a series of supplemental appropriations and relief measures in the spring of 2020. Division B of the CARES Act included $36.1 billion in additional FY2020 discretionary appropriations for DOT accounts and $12.4 billion for HUD accounts. The law designated these funds as being for an emergency requirement, meaning they did not count toward enforceable spending limits. While the act provided FY2020 funding, it was debated and enacted subsequent to the release of the FY2021 President's Budget and thus may have served to influence the FY2021 appropriations process.

House Action

The House Committee on Appropriations ordered reported its FY2021 THUD appropriations bill on July 14, 2020, following subcommittee markup the week prior. H.R. 7616 proposed a $1.7 billion increase (+2.2%) in non-emergency discretionary funding relative to FY2020 THUD annual appropriations (see Table 2). The largest discretionary dollar increase was directed to HUD ($1.5 billion), although the related agencies would have received the largest relative increase (+17%). DOT's discretionary funding was proposed to be essentially level, but its overall funding would have increased by 24% ($21.1 billion), virtually all of which would come from DOT's trust funds and thus be classified as mandatory spending. In addition to regular appropriations, the bill included $75 billion in emergency funding for transportation and housing infrastructure improvements. The total emergency discretionary appropriations proposed by the bill was nearly equal to the total regular discretionary funding provided in the bill ($75 billion vs. $76 billion). Thus, the funding in the House bill can be thought of as being divided into three categories: regular discretionary funding ($75.9 billion), DOT mandatory funding ($82.3 billion), and emergency discretionary funding ($75 billion).

On July 28, 2020, the House Rules Committee granted a rule for the House to consider H.R. 7617, a bill combining the text of several appropriations acts as reported by the House Appropriations Committee. The Rules Committee included the text of H.R. 7616 as Division G of H.R. 7617.⁷ The House passed H.R. 7617 on July 31, 2020, with adoption of a number of THUD-related floor amendments. While some of the amendments moved money between accounts, they did not change the total funding level for any agency in Division G.

Senate Action

Although formal Senate Appropriations Committee action on the FY2021 THUD bill did not occur, the chair of the Senate Committee on Appropriations, Senator Richard Shelby, released drafts of all 12 annual appropriations bills along with draft accompanying committee reports on November 10, 2020.⁸

The majority draft proposed $74.8 billion in discretionary funding for THUD, which is a 0.8% increase over FY2020. Unlike the House-passed legislation, the Senate Appropriations Committee majority draft included no emergency funding.

Final FY2021 Full-Year Appropriations

Following a series of continuing resolutions,⁹ final full-year FY2021 appropriations were enacted as a part of the Consolidated Appropriations Act, 2021, which was signed into law on December 27, 2020. The law contained all 12 regular appropriations bills as well as supplemental coronavirus funding and other provisions.

Funding for THUD (in Division L) totaled $75.376 billion, which is 1% less than what was proposed by the House, but 1% more than was included in the Senate Appropriations Committee majority draft legislation. However, $718 million of that total amount was designated "emergency," which effectively reduced the cap-constrained total for THUD to $74.658 billion. In addition, Division M appropriated $27 billion in emergency funding to DOT for various coronavirus relief needs.

Separately, the American Rescue Plan Act (P.L. 117-2), passed in March 2021, provided an additional $54 billion in mandatory funding for COVID-19 relief and recovery to accounts typically funded in the THUD bill. (This funding was provided in a reconciliation bill, rather than through the regular appropriations process, and is thus not discussed in the remainder of this report, but is instead addressed in an appendix at the end.)

Department of Transportation

The majority of DOT's annual funding is established by two periodic authorization acts, one for surface transportation programs and one for aviation programs. Most of the funding for the programs in those acts is drawn from the DOT Highway Trust Fund and the Aviation and Airways Trust Fund, respectively. Highway Trust Fund revenues come largely from fuel taxes and increasingly from transfers from the general fund of the Treasury. Aviation and Airways Trust Fund revenues come largely from taxes on passenger tickets and aviation fuel and some general fund money.

The appearance of COVID-19 in the United States in spring 2020 devastated the finances of airlines and transit agencies. Aviation and transit usage dropped to a fraction of its usual level, as did passenger fare revenues. This was due not only to the impact of the pandemic on the economy, but also due to public concern about the risk of transmission of the virus in the confined spaces of airplanes and transit vehicles.

The Administration's budget request was developed prior to the identification of the pandemic in the United States. The House bill, passed in summer 2020, just a few months after the appearance of the pandemic in the United States, includes several provisions to help alleviate the impacts of the pandemic on transportation; the Senate Appropriations Committee majority draft bill was published in November 2020, subsequent to an agreement between the House and Senate to provide pandemic relief in separate legislation, and contained no references to pandemic relief.
Congress provided pandemic relief in separate legislation (see Appendix).

Administration Budget Request

The Administration's FY2021 budget requested a 2% (+$1.7 billion) increase in DOT funding. This reflected relatively minor increases for most agencies, and relatively significant reductions to the Federal Railroad Administration (FRA) (-29%, -$800 million) and Maritime Administration (MARAD) (-30%, -$310 million) budgets. The major differences in the Administration's request compared to what Congress enacted in FY2020 included reductions to the following activities:

• Amtrak: requested $936 million, down from $2.0 billion (FY2020);
• Federal Aviation Administration (FAA) grants to airports: requested $3.35 billion, down from $3.75 billion;
• FRA Federal-state Partnership for State of Good Repair: no funding requested, down from $200 million;
• MARAD Port infrastructure development program: no funding requested, down from $225 million.

The Administration requested $1 billion for a new grant program for nationally significant freight projects and $550 million for a new grant program for rail (National Network Transformation; no details provided).

H.R. 7616/H.R. 7617

The House Appropriations Committee recommended, and the House approved, $107.2 billion for DOT, a 24% (+$20 billion) increase over the FY2020 enacted amount of $86.156 billion (which was virtually the same as the FY2019 enacted amount). Every agency would have received an increase compared to FY2020. The largest percentage increases would have been for the Federal Transit Administration (+46%, +$6.0 billion), the Federal Motor Carrier Safety Administration (+30%, +$207 million), the Federal Highway Administration (+28%, +$13.6 billion), and the National Highway Traffic Safety Administration (+27%, +268 million). The details of the recommended funding can be found in Table 3.

The House bill also included additional emergency funding for DOT (and HUD) in a new Title V. This title would have provided an additional $25.7 billion in funding for DOT.

The Senate Appropriations Committee did not report out a bill. The committee released a draft approved by the majority of the Committee. The Committee majority draft bill proposed a 1% ($932 million) increase for DOT relative to FY2020, $20.2 billion less than the House bill, and did not provide any emergency funding (the House and Senate committee chairmen argued that emergency aid should be provided in a separate bill from the regular appropriations bill).

The final FY2021 full-year appropriations law provided $86.76 billion in regular new budget authority for DOT's programs and activities, an increase of less than 1% ($553 million) over the comparable figure for FY2020 (see Table 3 for details).

A separate division of the Omnibus Appropriations Act provided an additional $27 billion in emergency funding for grants to transit, highway, and airport programs, and the subsequent passage of the American Rescue Plan Act of 2021 (P.L. 117-2, enacted March 11, 2021) provided another $43.2 billion in emergency funding to DOT, mostly for grants to transit agencies and airports (the transportation sectors hit hardest by the pandemic). See Appendix for details.

Selected DOT Issues

Authorization of Surface Transportation Programs

The funding authorizations¹⁰ for the federal highway, transit, and passenger rail programs were scheduled to expire at the end of FY2020, but Congress enacted legislation extending the FY2020 authorization levels through FY2021.¹¹

Public Health While Traveling on Common Carriers

The House bill would have required passengers and crew members on airlines, Amtrak trains, and transit vehicles¹² to wear a mask or protective face covering while on board.¹³ The Senate Appropriations Committee majority draft bill did not have a similar provision, nor did the enacted bill.¹⁴

Infrastructure Funding

The House bill would have provided an increase of roughly $20 billion for transportation infrastructure.¹⁵ Virtually all of that increase would have gone to the Federal Highway Administration and the Federal Transit Administration, with small increases for FAA, FRA, and MARAD. The Senate Appropriations Committee majority draft bill, with a proposed DOT total appropriation of less than $1 billion over the comparable FY2020 figure, proposed infrastructure funding roughly similar to the FY2020 figures. The enacted bill also provided infrastructure funding roughly similar to FY2020.

Commercial Truck Safety

The congressional mandate¹⁶ for heavy trucks to be equipped with electronic logging devices (ELDs) to track the time worked by drivers went into effect at the end of 2017.¹⁷ The purpose was to improve safety by reducing violations of the federal hours-of-service limits (which limit the amount of time a driver can drive each day and each week to reduce the risk of truckers driving while fatigued). The limits were not changed when ELDs became mandatory; ELDs make it harder for drivers to exceed the limits without detection. Objections from certain sectors of the trucking industry have led Congress and the President to repeatedly bar enforcement of the ELD mandate with respect to livestock haulers in the annual THUD appropriation act. This action has been opposed by safety advocates. The Senate Appropriations Committee majority draft bill included the waiver for livestock haulers;¹⁸ the House bill did not. The enacted bill included the waiver in Section 132.

Department of Housing and Urban Development

As shown in Table 4, the President's FY2021 budget request for HUD proposed a decrease of $8.6 billion (-15%) in gross (regular, non-emergency) appropriations for HUD programs and activities relative to FY2020. (Because of an estimated increase in offsets in FY2021, net discretionary budget authority—used for budget enforcement purposes—would see an even larger decline than gross budget authority. However, gross appropriations is a better measure of the resources available to HUD's programs and activities.) Most of the proposed reduction in funding is attributable to requests to eliminate funding for several HUD grant programs, although most other accounts were also proposed for a funding reduction under the request.

Conversely, the House-passed bill proposed to increase FY2021 funding for HUD relative to FY2020 regular appropriations. The bill included an increase of $4.8 billion (+8%) in gross appropriations for HUD programs and activities. (Because of the estimated increase in offsets, the increase in net budget authority is smaller ($1.5 billion; +3%.) Similarly, the Senate Appropriations Committee majority draft bill proposed an increase in gross appropriations for HUD relative to FY2020, but a smaller increase than the House (+$2.9 billion; +5%).

The final FY2021 full year appropriations law provided $60.3 billion in gross new appropriations for HUD's programs and activities, an increase of $3.8 billion (+7%) over FY2020. Of that total, $696 million was designated as an emergency requirement and thus did not count as a part of the net budget authority total used for scorekeeping against discretionary spending limits.

Selected HUD Issues

Grant Program Funding

The President's budget request for FY2021 again included a proposal to eliminate funding for several HUD grant programs that support various affordable housing and community development activities. Among these are HUD's two largest block grant programs for states and localities, CDBG and HOME Investment Partnerships (HOME), as well as competitive grants funded in the Self-Help Homeownership Opportunity Program (SHOP) account (i.e., funding for sweat-equity programs, like Habitat for Humanity, and certain capacity-building programs). Additionally, the budget proposed eliminating funding for the public housing Capital Fund, which provides formula grants for the repair and modernization of low-rent public housing properties. HUD's Congressional Budget Justifications state that the activities funded by these grant programs should be devolved to the state and local levels.

These grant programs were also slated for elimination in the President's FY2018, FY2019, and FY2020 budget requests, although they were ultimately funded in each of those fiscal years. In lieu of defunding these accounts, the House bill, the Senate Appropriations Committee majority draft bill, and the final FY2021 full year appropriations law included either level or increased funding relative to FY2020 regular appropriations level (excluding CARES Act supplemental funding).

Rental Assistance Funding

Combined, HUD's rental assistance programs (tenant-based rental assistance via the Housing Choice Voucher program, public housing, Section 8 project-based rental assistance, and the Section 202 and Section 811 programs) serve roughly 4.7 million low-income individuals and families. Through the various programs, the federal government provides subsidies to allow families to pay low, income-based rents, generally set at 30% of a family's income.

The HUD Budget In Brief stated that the requested funding for the various rental assistance programs would be sufficient to continue to serve all currently assisted households.¹⁹ However, the President's budget documents assumed savings from a set of rent reforms designed to increase tenant rents and therefore reduce federal subsidies. These reforms were proposed in each of the previous several budget requests, but saw no legislative action in Congress.²⁰

The report accompanying H.R. 7616 stated that the committee rejected the President's proposed rent reforms and instead increased the funding levels for each of the rental assistance programs sufficient to fully fund all existing subsidies. Additionally, the House bill proposed $295 million for new, incremental Housing Choice Vouchers for specific populations, including homeless veterans, youth aging out of foster care, and survivors of domestic violence.

Similarly, the draft committee report released by the Senate Appropriations Committee Chair did not include the policy changes proposed in the President's budget and instead stated that the increased funding level it proposed, when combined with reserve funds, would ensure that no current voucher holders would be at risk of losing their housing assistance.²¹

The final FY2021 full-year appropriations law increased funding for HUD's rental assistance programs relative to FY2021 and included more than $100 million for new incremental Housing Choice Vouchers. Further, the law adopted a new account structure for the public housing program that was initially proposed in the Senate majority draft bill. Instead of separately funding the public housing capital and operating funds, the final FY2021 law created a new Public Housing Fund account, within which amounts were specified for the activities previously funded by the operating fund and capital fund accounts.

Policy Provisions

The House bill included a number of General Provisions to block HUD's implementation of various administrative actions that have been considered controversial:

• Section 237 would block HUD's implementation of a proposed rule to restrict the eligibility of certain families composed of members with varied immigration statuses from receiving housing assistance.²²
• Section 235 would block HUD from revising or repealing HUD rules related to equal access to housing based on sexual orientation and gender identity.
• Section 236 would codify other HUD guidance related to transgender persons' access to emergency shelters in accordance with gender identity.
• A new provision, added via floor amendment, would block the use of funding in the bill to implement a HUD rule related to the disparate impact standard under the Fair Housing Act.²³

The Senate Appropriations Committee majority draft bill included a provision to increase the cap on public housing conversions under the Rental Assistance Demonstration (RAD) from 455,000 units to 500,000 units along with several other changes to expand the range of properties eligible for RAD conversion (§236).

The final FY2021 appropriations law did not contain these provisions from the House or Senate Appropriations Committee majority draft bills.

THUD Related Agencies

As shown in Table 5, most of the related agencies funded in the THUD bill would have received level or increased funding relative to the prior year under the President's FY2021 budget request. The exception is the Neighborhood Reinvestment Corporation, which was proposed for a significant funding decrease that was not ultimately adopted.

Selected Related Agencies Issues

NeighborWorks America

As in FY2018, FY2019 and FY2020, the President's FY2021 budget included a request for legislation to begin the process of winding down federal funding for the Neighborhood Reinvestment Corporation (commonly known as NeighborWorks America), which was created via federal charter in 1978 to support affordable housing and neighborhood revitalization nationwide through a network of affiliated local organizations. The requested funding level of $27 million was intended to cover personnel, administrative, and other costs associated with winding down existing commitments. H.R. 7616 rejected this proposal and proposed to instead fund NeighborWorks at an increased level relative to FY2020. Of the amount provided for NeighborWorks in the House bill, $25 million was to be for competitive grants to support specified redevelopment activities in areas with high rates of abandoned or distressed properties. The Senate Appropriations Committee majority draft proposed to fund NeighborWorks at FY2020 levels. The final FY2021 appropriations law provided $165 million for NeighborWorks, an increase over FY2020. Of that amount, $5 million is designated for a multifamily housing program and $2 million is to support shared equity homeownership programs.

Emergency Funding for Transportation and Housing Infrastructure

The House bill included in the THUD division a new Title V—Additional Funding for Infrastructure Investments. As shown in Table 6, it would have provided $75 billion in additional discretionary resources for various accounts at DOT and HUD, as well as one related agency. This funding, which nearly matched the total discretionary funding provided in the preceding titles of the bill, would have been designated as an "emergency requirement" for budget enforcement purposes and would thus not count against the subcommittee spending limit (or 302(b)) or the overall discretionary spending limits established under the BBA.

The addition of this emergency spending package proved controversial. The bill was ordered reported by the committee on a party-line vote, with the ranking member stating: "Further, this bill includes $75 billion in new emergency spending including components of the infrastructure bill that was pushed through the House without Republican involvement. I did not support that bill because it was a departure from years of bipartisan work on transportation and infrastructure priorities and I can't support this additional spending until there's a serious discussion with members on our side of the aisle"²⁴ A committee press release accompanying the bill's passage quotes the chairwoman as stating: "The emergency funding in this bill is pivotal to kickstart a strong and equitable recovery from the coronavirus pandemic and the ensuing economic collapse. After an unprecedented year of challenges, the investments in this bill lay the foundations for sustained economic growth and expanded opportunity for every American in every corner of our nation."²⁵

The package was not included in the final FY2021 THUD appropriations act.

Appendix. Pandemic Relief Funding for Housing and Transportation Programs in FY2021

Congress provided significant FY2021 funding beyond regular annual THUD appropriations for housing and transportation programs in response to the economic consequences of the COVID-19 pandemic. Division M of the FY2021 THUD appropriations bill contained additional supplemental appropriations for DOT designated for emergency purposes, and thus not subject to discretionary spending limits. The American Rescue Plan Act (ARPA) provided additional mandatory funding to a number of DOT and HUD accounts. These mandatory funds are also not subject to discretionary spending limits. (For more information about ARPA funds, see CRS Insight IN11641, Housing Funding in the American Rescue Plan Act of 2021)

Appendix.