It’s been difficult to predict what’s going to happen in Congress next year. But one thing is for sure–Sec. 8 has a bull’s-eye on it, as it’s the biggest component of the Department of Housing and Urban Development’s (HUD) budget. And experts at the AHF Live conference earlier in November are even unsure about the possibility of sequestration.

The Sequestration Transparency Act of 2012 requires the president to submit to Congress a report on the sequestration for fiscal 2013 that is scheduled to be ordered Jan. 2, 2013. Critical federal housing programs, including rental assistance, public housing, and HOME, would face big across-the-board cuts through sequestration if Congress fails to enact a plan to reduce the deficit.

Sequestration could hurt Sec. 8 significantly, potentially cutting $1.5 billion to households.

“At the end of the day, when you cut Sec. 8, it’s a dramatic cut,” said Denise Muha, executive director at the National Leased Housing Association.

While the dynamics of power in discussing the fiscal shift have changed to the president’s favor, the industry as a whole is taking a hit with some major losses of allies in Congress and the overarching threat of tax reform. If Congress were to enact a tax reform, there’s likely a 50 percent chance that the low-income housing tax credit program is erased, said Robert Rozen, principal at Washington Council Ernst & Young.

After two years of lobbying, proponents for the housing industry were able to introduce legislation and garner co-sponsors to gauge support for making the 9 percent credit minimum permanent. “[In the new Congress], we did lose some big supporters just in terms of the numbers,” Rozen said of the recent political shift. “At first we had 25 sponsors on the Senate side. There’s a bit of an imbalance there.”

Now post-election, the industry is down to 17 Democrats, two Republicans, and an Independent on the Senate side, he added. Not to mention losing Olympia Snowe, who was a co-sponsor of S. 1989.

“The new members in Congress don’t necessarily have housing as their priority,” said Gira Bose from the National Council of State Housing Agencies. “We have to educate members, explain how you’re creating jobs, housing, revitalizing areas in their community.”

Along with education, panelists agreed it’s up to a committed bipartisan strategy in order to make this work, as House Speaker John Boehner even said he’s not in the position to accept new revenues.