The Obama administration said it would veto a bill that would cut the Department of Housing and Urban Development budget by $3.9 billion from last year.
The bill, which passed a House appropriations committee this week, would provide $51.6 billion in HUD discretionary spending, a $1.9 billion reduction from what the administration requested in February.
"This bill will help support a vibrant and safe transportation infrastructure, while making the difficult but necessary cuts needed to get our budgets back into balance," said Rep. Hal Rogers, R-Ky., chairman of the House Appropriations committee.
The White House said it strongly objected to specific cuts to services like housing counseling for distressed homeowners. HUD requested more than $55 million in counseling funds for next year, but the appropriations committee approved $45 million.
Last year, the House provided no money for housing counseling but ended up restoring some of the $88 million HUD requested before the year was out.
"These funds provide much needed counseling assistance to families facing foreclosure and others that are struggling to find or maintain adequate housing," the White House said in a statement.
The Obama administration also claimed the cuts would result in 30,000 families losing their assistance for services like rental housing. In the budget proposal, HUD Secretary Shaun Donovan admitted some reform was needed to rental housing programs.
"These tough choices include reforms to HUD rental assistance programs that save more than $500 million in 2013 without reducing the number of families served," Donovan wrote. "For example, the budget aligns policy across rental assistance programs and reduces costs by increasing the minimum rent to $75 per month for all HUD-assisted households."
Spending disputes will likely build to another budget impasse this year. Federal Reserve Ben Bernanke warned this week what the results of a "fiscal cliff" crisis would have on the overall economy.
"We heard anecdotal evidence about some firms that might be government contractors who weren't sure if those contracts were going to be in place in January, and they would make employment decisions because of that," Bernanke told reporters Wednesday. "That uncertainty is there. It might be an issue."