[Senate Hearing 107-343]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 107-343
 
                            NOMINATIONS OF:
                 JOHN E. ROBSON, PETER R. FISHER, JAMES
                J. JOCHUM, ALPHONSO R. JACKSON, RICHARD
                  A. HAUSER, JOHN CHARLES WEICHER, AND
                           ROMOLO A. BERNARDI
=======================================================================


                                HEARINGS

                               before the

                              COMMITTEE ON
                   BANKING, HOUSING, AND URBAN AFFAIRS
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                                   ON

                            NOMINATIONS OF:

         JOHN E. ROBSON, OF CALIFORNIA, TO BE PRESIDENT OF THE
                           EXPORT-IMPORT BANK
                               __________
       PETER R. FISHER, OF NEW JERSEY, TO BE UNDER SECRETARY FOR
           DOMESTIC FINANCE, U.S. DEPARTMENT OF THE TREASURY
                               __________
       JAMES J. JOCHUM, OF VIRGINIA, TO BE ASSISTANT SECRETARY OF
    COMMERCE FOR EXPORT ADMINISTRATION, U.S. DEPARTMENT OF COMMERCE
                               __________
         ALPHONSO R. JACKSON, OF TEXAS, TO BE DEPUTY SECRETARY
            U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
                               __________
         RICHARD A. HAUSER, OF MARYLAND, TO BE GENERAL COUNSEL
            U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
                               __________
        JOHN CHARLES WEICHER, OF THE DISTRICT OF COLUMBIA, TO BE
    ASSISTANT SECRETARY OF HOUSING AND FEDERAL HOUSING COMMISSIONER
            U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
                               __________
     ROMOLO A. BERNARDI, OF NEW YORK, TO BE ASSISTANT SECRETARY FOR
                   COMMUNITY PLANNING AND DEVELOPMENT
            U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
                               __________

                          MAY 10 AND 15, 2001
                               __________

  Printed for the use of the Committee on Banking, Housing, and Urban 
                                Affairs





                    U.S. GOVERNMENT PRINTING OFFICE
78-297                       WASHINGTON : 2002
____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov  Phone: toll free (866) 512-1800; (202) 512-1800  
Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001








            COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

                      PHIL GRAMM, Texas, Chairman

RICHARD C. SHELBY, Alabama           PAUL S. SARBANES, Maryland
ROBERT F. BENNETT, Utah              CHRISTOPHER J. DODD, Connecticut
WAYNE ALLARD, Colorado               TIM JOHNSON, South Dakota
MICHAEL B. ENZI, Wyoming             JACK REED, Rhode Island
CHUCK HAGEL, Nebraska                CHARLES E. SCHUMER, New York
RICK SANTORUM, Pennsylvania          EVAN BAYH, Indiana
JIM BUNNING, Kentucky                ZELL MILLER, Georgia
MIKE CRAPO, Idaho                    THOMAS R. CARPER, Delaware
JOHN ENSIGN, Nevada                  DEBBIE STABENOW, Michigan
                                     JON S. CORZINE, New Jersey

                   Wayne A. Abernathy, Staff Director
     Steven B. Harris, Democratic Staff Director and Chief Counsel
           Brian J. Gross, Deputy Staff Director and Counsel
                      Linda L. Lord, Chief Counsel
             Martin J. Gruenberg, Democratic Senior Counsel
         Jonathan Miller, Democratic Professional Staff Member
                       George E. Whittle, Editor

                                  (ii)













                            C O N T E N T S

                              ----------                              

                         THURSDAY, MAY 10, 2001

                                                                   Page

Opening statement of Chairman Gramm..............................     1

Opening statements, comments, or prepared statements of:
    Senator Corzine..............................................     4
    Senator Sarbanes.............................................    12
    Senator Bunning..............................................    14
        Prepared statement.......................................    22
    Senator Dodd.................................................    16
    Senator Hagel................................................    18
    Senator Allard...............................................    22

                               WITNESSES

Charles E. Grassley, a U.S. Senator from the State of Iowa.......     2
Dianne Feinstein, a U.S. Senator from the State of California....     3

                                NOMINEES

John E. Robson, of California, to be President and Chairman of 
  the Export-Import Bank.........................................     6
    Prepared statement...........................................    22
    Biographical sketch of nominee...............................    24
    Response to written questions of:
        Senator Miller...........................................    46
        Senator Santorum.........................................    46
Peter R. Fisher, of New Jersey, to be Under Secretary for 
  Domestic Finance, U.S. Department of the Treasury..............     7
    Prepared statement...........................................    26
    Biographical sketch of nominee...............................    27
    Response to written questions of:
        Senator Gramm............................................    47
        Senator Miller...........................................    48
James J. Jochum, of Virginia, to be Assistant Secretary for 
  Export Administration, U.S. Department of Commerce.............     7
    Prepared statement...........................................    37
    Biographical sketch of nominee...............................    38
    Response to written questions of:
        Senator Gramm............................................    50

                              ----------                              

                         TUESDAY, MAY 15, 2001

Opening statement of Chairman Gramm..............................    51

Opening statements, comments, or prepared statements of:
    Senator Sarbanes.............................................    57
    Senator Allard...............................................    58
    Senator Reed.................................................    59
    Senator Bunning..............................................    59
        Prepared statement.......................................    87
    Senator Schumer..............................................    69
    Senator Miller...............................................    80
    Senator Carper...............................................    82






                               WITNESSES

Christopher S. Bond, a U.S. Senator from the State of Missouri...    52
Kay Bailey Hutchison, a U.S. Senator from the State of Texas.....    53
Hillary Rodham Clinton, a U.S. Senator from the State of New York    53
James T. Walsh, a U.S. Representative from the State of New York.    54

                                NOMINEES

Alphonso R. Jackson, of Texas, to be Deputy Secretary, U.S. 
  Department of Housing and Urban Development....................    61
    Prepared statement...........................................    87
    Biographical sketch of nominee...............................    89
    Response to written questions of:
        Senator Reed.............................................   152
Richard A. Hauser, of Maryland, to be General Counsel, U.S. 
  Department of Housing and Urban Development....................    62
    Prepared statement...........................................    99
    Biographical sketch of nominee...............................   101
    Response to written questions of:
        Senator Reed.............................................   153
John Charles Weicher, of the District of Columbia, to be 
  Assistant Secretary for Housing and Federal Housing 
  Commissioner, U.S. Department of Housing and Urban Development.    64
    Prepared statement...........................................   118
    Biographical sketch of nominee...............................   121
    Response to written questions of:
        Senator Reed.............................................   154
        Senator Miller...........................................   156
        Senator Johnson..........................................   156
        Senator Schumer..........................................   157
Romolo A. Bernardi, of New York, to be Assistant Secretary for 
  Community
  Planning and Development, U.S. Department of Housing and Urban
  Development....................................................    65
    Prepared statement...........................................   141
    Biographical sketch of nominee...............................   143
    Response to written questions of:
        Senator Reed.............................................   160

              Additional Material Supplied for the Record

Statement of Jack Kemp, Former Secretary of the U.S. Department 
  of Housing and Urban Development...............................   162













                            NOMINATIONS OF:

                     JOHN E. ROBSON, OF CALIFORNIA

               TO BE PRESIDENT OF THE EXPORT-IMPORT BANK

                              ----------                              


                     PETER R. FISHER, OF NEW JERSEY

               TO BE UNDER SECRETARY FOR DOMESTIC FINANCE

                    U.S. DEPARTMENT OF THE TREASURY

                              ----------                              


                      JAMES J. JOCHUM, OF VIRGINIA

                      TO BE ASSISTANT SECRETARY OF

                   COMMERCE FOR EXPORT ADMINISTRATION

                      U.S. DEPARTMENT OF COMMERCE

                              ----------                              


                         THURSDAY, MAY 10, 2001

                                       U.S. Senate,
          Committee on Banking, Housing, and Urban Affairs,
                                                    Washington, DC.

    The Committee met at 10 a.m., in room SD-538 of the Dirksen 
Senate Office Building, Senator Phil Gramm (Chairman of the 
Committee) presiding.

            OPENING STATEMENT OF CHAIRMAN PHIL GRAMM

    Chairman Gramm. Let me call the Committee to order. I want 
to thank our colleagues for coming.
    Let me explain what we are going to do today.
    We have a hearing today on three of the President's 
nominees: John Robson, of California, to be President of the 
Export-Import Bank; Peter Fisher, of New Jersey, to be Under 
Secretary of the Treasury for Domestic Finance; and Jim Jochum, 
of Virginia, to be Assistant Secretary of Commerce for Export 
Administration.
    My intention is to hear from our three nominees, have a 
period of questions for them, and then we will vote on the four 
nominees who appeared last week: Grant Aldonas, of Virginia, to 
be Under Secretary of Commerce for International Trade; Ken 
Juster, of the District of Columbia, to be Under Secretary of 
Commerce for Export Administration; Maria Cino, of Virginia, to 
be Assistant Secretary of Commerce and Director General of the 
U.S. and Foreign Commercial Service; and Glenn Hubbard, of New 
York, to be Chairman of the Council of Economic Advisers.
    We will do a rolling vote today and give Members an 
opportunity, until 3 p.m. to cast their vote. I hope that each 
of our Members will be able to do so. My intention is that we 
will follow this procedure now until we get all these 
confirmations done.
    Let me welcome our nominees today. We have two 
distinguished Members of the Senate to introduce our nominees.
    I would like to suggest to Members of the Committee that we 
allow them to speak first. I am going to leave for a minute to 
introduce a Texan who has been nominated to be Secretary for 
the Army. I am going to ask Senator Dodd to Chair in my 
absence.
    But before I leave, let me recognize the distinguished 
Chairman of the Finance Committee, Senator Grassley, to 
introduce a person we all know because he worked for this 
Committee after he worked for Senator Grassley, and that is Jim 
Jochum.
    Senator Grassley.

                STATEMENT OF CHARLES E. GRASSLEY

             A U.S. SENATOR FROM THE STATE OF IOWA

    Senator Grassley. Even though Jim lives in Virginia now, 
Mr. Chairman, we are still going to consider him an Iowan. And 
obviously, I am pleased to introduce him, or I would not be 
here. I am pleased to call him a friend and, most importantly, 
he was a very loyal staff person. He is part of the Grassley 
family, as far as I am concerned.
    Jim Jochum is a distinguished Iowan. He has character, 
educational background and management skills and professional 
experience, both in the public, as well as the private sectors, 
that make him a really ideal candidate for the position of 
Assistant Secretary for Export Administration in the U.S. 
Department of Commerce.
    It was a short 7 years ago that I was able to have Jim come 
and join my staff here in Washington, as a counsel in charge of 
agriculture. And then later, he did all of our trade 
legislation.
    It is quite obvious for a legislator who represents a State 
that is number one in hog and grain production, that the staff 
person in charge of farm and trade policy in my office has big 
shoes and high expectations to fill.
    At the time, I may have raised a few eyebrows by hiring a 
Jochum who hailed from Dubuque because, in that part of our 
State, there is a couple of prominent State house Democrats 
with the name of Jochum. But then, again, family partisan 
squabbles would make him feel right at home here in the 
Nation's Capitol. Since that time, Jim has proven his mettle in 
the legislative, legal and lobbying briarpatch here in 
Washington, DC.
    Jim is also an Iowan through and through. He brought with 
him grit, most importantly, a work ethic that is really going 
to be challenged in this new job where international trade is 
so important for our prosperity. But he also brought smarts and 
he brought leadership skills.
    These are necessary to build a consensus among commodity 
and business groups inside the Beltway and at the grassroots, 
and to forge critical alliances with Congressional staff and 
Members from both sides of the aisle.
    As an example, during his tenure on my staff, Jim played a 
pivotal role in drafting the 1996 farm bill. He organized a 
bipartisan farm policy caucus comprised of more than half of 
the Members of the U.S. Senate.
    Later on, he joined me in my first experience with 
international trade endeavors on the worldwide scene by going 
with me to the first ministerial WTO Singapore.
    His expertise and sincere interest in international trade 
serve my home State constituents well, where one out of five 
jobs on the assembly line at the John Deere plant can be 
attributed to international trade, not to mention the fact 
that, fully, one-third of an Iowan farmer's income comes from 
export sales.
    Jim has an ability both to see the big picture and to break 
down complex situations into smart legislative and political 
strategies. After spending even a short time with Jim, I think 
everybody who works with him and gets to know him will see why 
people gravitate to him. With that, I will close my 
introduction and express my best wishes to all, including Jim. 
But I want to assure everybody that not only for myself, but 
also people in Congress who consider themselves stewards of the 
taxpayers' dollars, that I would say that I have a great deal 
of confidence that Jim Jochum will be an asset to the 
bureaucracy and a dogged advocate of U.S. interests.
    Thank you, Mr. Chairman.
    Chairman Gramm. Thank you, Senator Grassley. I know you 
have to get on about your business and we are very honored that 
you came here today. I am sure that Jim is very appreciative of 
your support.
    Let me recognize Senator Feinstein to introduce Mr. Robson. 
Dianne, we are happy to have you here. Thank you for coming.

                 STATEMENT OF DIANNE FEINSTEIN

          A U.S. SENATOR FROM THE STATE OF CALIFORNIA

    Senator Feinstein. Thank you very much, Mr. Chairman. I am 
here to indicate my strong support for John Robson, who has 
been nominated by the President to serve as Chairman and 
President of the Ex-Im Bank.
    Frankly, Mr. Chairman, I did not know Mr. Robson. And I 
began to get telephone calls, believe it or not, from 
Democrats, including a former Secretary of Commerce in the 
Clinton Administration. And the request was, would I sit down 
and meet with him?
    He comes from my home territory--San Francisco, CA. I am 
actually surprised that I had not met him before. I did sit 
down with him. I did have a chance to talk with him. He is 
currently a Senior Advisor to the firm of Robertson Stephens. 
He resides in my home city in San Francisco.
    He has a very distinguished past governmental service. He 
has been Chairman of the Civil Aeronautics Board and was 
actually the one who initiated deregulation of airlines, Under 
Secretary of Transportation, and Deputy Secretary of the 
Treasury.
    One of those was even in a Democratic Administration. He 
has also served as Dean of the Goizueta School of Business 
Administration at Emory University and he was an attorney at 
the firm of Sidley and Austin.
    He holds appointments as a Distinguished Fellow at Stanford 
University's Hoover Institution and as a Visiting Fellow at The 
Heritage Foundation.
    What was interesting to me is that the prominent Democrats 
that called said, meet him. He is really a good guy. He really 
knows his stuff.
    Well, Mr. Chairman, that is enough for me. I am very proud 
to be here and very proud to support your nomination as 
President of the Ex-Im Bank, John Robson. Thank you very much.
    Senator Dodd [presiding]. Thank you very much, Senator. It 
is an honor to have you here before this Committee.
    Senator Feinstein. Thank you. I appreciate that.
    Senator Dodd. And your remarks are very meaningful and 
important. And I know Mr. Robson appreciates them immensely. So 
we thank you for coming by. We know you are busy as well, so we 
will excuse you.
    Senator Feinstein. I appreciate it. Thank you.
    Senator Dodd. I am going to ask our colleague from New 
Jersey, Jon Corzine, to introduce his constituent, Mr. Fisher.
    Senator Corzine.

              STATEMENT OF SENATOR JON S. CORZINE

    Senator Corzine. Thank you, Senator Dodd.
    It is a real honor for me to introduce one of my 
constituents. It is great to have a New Jerseyan come before 
the Committee. I have been waiting for that for a long time.
    It is with great pleasure that I do introduce Peter Fisher, 
the nominee to become Under Secretary for Domestic Finance at 
the Department of the Treasury, with his wife, Mary Sue, who I 
believe is here, and his mother, Ms. Caroline Fisher, who we 
are pleased to have joining us.
    Peter comes before us as the Executive Vice President of 
the New York Federal Reserve Bank. He serves as the head of the 
bank's markets group.
    At the New York Fed, Peter manages the open market account 
for the FOMC and, as such, oversees domestic open market 
foreign exchange trading operations and provisions of account 
services to the foreign central banks.
    He served the Federal Reserve Bank for 15 years, worked his 
way up, beginning in the bank's legal department, and then to 
the bank's foreign exchange function, where, in 1993, he was 
promoted to Senior Vice President in charge of the Foreign 
Exchange Department. It is clear from his biographical profile 
that he is enormously qualified for the position for which he 
has been nominated. But, frankly, the profile does not tell the 
story.
    Having had the experience of working with Peter in my 
previous career, I can attest firsthand to his intellect, his 
wit, and quality of character. He is a gentleman who I consider 
to be one of the most intellectually honest people I have ever 
worked with, gifted in the world of finance and gifted in his 
relationships and ability to work with people.
    I can say without hesitancy, Senator Dodd, that he will 
make an outstanding Treasury Under Secretary. I am very, very 
proud to introduce him to the Committee and look forward to his 
speedy confirmation. Nice to have you here, Peter.
    Senator Dodd. Thank you very much, Senator.
    Let me ask, if I can, for all three of you to rise and 
raise your right hands, if you will, for the purpose of taking 
the oath.
    Do you swear or affirm that the testimony that you are 
about to give is the truth, the whole truth, and nothing but 
the truth, so help you God?
    Mr. Robson. I do.
    Mr. Fisher. I do.
    Mr. Jochum. I do.
    Senator Dodd. And do you agree to appear and testify before 
any duly-constituted committee of the U.S. Senate?
    Mr. Robson. I do.
    Mr. Fisher. I do.
    Mr. Jochum. I do.
    Senator Dodd. Thank you. Before we begin, as normal 
proceedings here, I am going to congratulate all three of you, 
and congratulate the President on choosing three very fine 
individuals to serve in the capacities in which you have been 
selected. And to thank you for agreeing to serve as well.
    I had a chance to see Mr. Robson yesterday because I know 
Mr. Jochum and have heard of Mr. Fisher. I am just very 
impressed you are willing to do this.
    In the case of John, I think this is your fourth time you 
have been confirmed by the Senate for positions.
    Mr. Robson. Five.
    Senator Dodd. Five. Excuse me. We do not cherish enough and 
celebrate enough public service, in my view. And people who 
could easily choose a different path and I am sure would be 
more financially attractive and less troublesome and time-
consuming for families and friends alike.
    I am deeply appreciative as I know all Members of the 
Committee are, for your willingness to serve your country. It 
is deeply, deeply appreciated. So we thank you.
    Why don't I begin just briefly with you, John, if you want 
to introduce any family or people who are here, for the 
purposes of the record. Do you have any family members present 
at all?
    Mr. Robson. I do not.
    Senator Dodd. All right.
    Mr. Robson. We are a long way from California.
    Senator Dodd. I know.
    Mr. Fisher.
    Mr. Fisher. Thank you. Senator Corzine has already 
introduced 
my mother, Mary Sue Fisher--excuse me--my mother, Caroline 
Fisher, and my wife, Mary Sue Fisher.
    [Laughter.]
    I got the sequence wrong, last name right.
    Senator Dodd. Mr. Jochum.
    Mr. Jochum. My wife Rita, who is behind me.
    Senator Dodd. Nice to have you with us. Very good. The way 
I am going to do this is we are going to start with you, Mr. 
Robson, with your testimony, and then we will go down to each 
of you. And any prepared remarks or information you would like 
to share with the Committee, we are happy to receive it.

           STATEMENT OF JOHN E. ROBSON, OF CALIFORNIA

              TO BE PRESIDENT AND CHAIRMAN OF THE

            EXPORT-IMPORT BANK OF THE UNITED STATES

    Mr. Robson. Thank you, Mr. Chairman. I have a brief 
statement.
    Mr. Chairman, Members of the Committee, I am very pleased 
to come before you as you consider my nomination to be 
President and Chairman of the Export-Import Bank of the United 
States.
    With your indulgence, I shall omit reciting my biographical 
background, which is submitted with this statement. If the 
Senate acts favorably on my nomination, it will be, as Senator 
Dodd just observed, my fifth confirmation.
    Some might say, it is about time this old warrior hung 'em 
up. But I relish this new challenge because I have never found 
a canvas as big to paint on as public service offers, and I am 
particularly excited about the prospect of leading the Export-
Import Bank.
    The Export-Import Bank is a venerable independent agency 
with a reputation for professionalism and objectivity. It has 
enjoyed strong bipartisan Congressional support since its 
establishment under President Roosevelt, and it performs 
important roles in fostering American exports and thereby 
stimulating economic activity and job creation here at home.
    It accomplishes this by helping to level the playing field 
for U.S. exporters in an increasingly challenging and complex 
global marketplace, where they contend with foreign competitors 
who may be very generously assisted by their sovereigns and by 
assuming the financiers responsibility and risk where 
commercial institutions fear to tread.
    Over the years, Ex-Im has handled the taxpayers' money 
quite responsibly. So Ex-Im has carried out its mission very 
well.
    But I would be disappointed if this Committee and, indeed, 
the entire Senate, did not expect of me and every nominee it 
approved, that the person would go to the job alert to 
opportunities to do things better and maybe differently.
    Without, at this point, having specific knowledge of what 
those opportunities might be at the Export-Import Bank, I 
welcome ideas from Congress, the exporting community, and 
anyone else. A couple of concluding points.
    First, in deference to the Senate confirmation process, I 
have always maintained a respectful distance from agencies for 
which I have been nominated until I am confirmed.
    Thus, you may find me deficient in specific knowledge or 
opinion on events and policies in which you are interested, a 
deficiency I expect to remedy with sufficient time at the Bank.
    And second, you have my commitment to deal openly and 
straightforwardly with this Committee and Congress. I solicit 
your interest, your questions, and your informed comments. And 
I will try my best to ensure that, even where we disagree, we 
maintain a civil and constructive relationship.
    Mr. Chairman, Members of the Committee, I respectfully ask 
for your favorable consideration of my nomination and will be 
pleased to respond to your questions. Thank you.
    Senator Dodd. Thank you. As Tip O'Neill said, it is always 
good to ask for the votes. So we appreciate your doing that as 
well.
    Mr. Fisher, welcome.

          STATEMENT OF PETER R. FISHER, OF NEW JERSEY

           TO BE UNDER SECRETARY FOR DOMESTIC FINANCE

                U.S. DEPARTMENT OF THE TREASURY

    Mr. Fisher. Thank you, Mr. Chairman. Thank you, Members of 
the Committee, for the opportunity to appear before you today. 
I have submitted a brief written statement for the record. Let 
me be even briefer.
    I am honored that President Bush has nominated me to serve 
as Under Secretary of the Treasury of Domestic Finance and, if 
confirmed, to have the opportunity to work with Secretary 
O'Neill, the Treasury staff, others in the Administration, and 
with this Committee, to advance the President's economic 
agenda.
    The strength and resilience of our Nation's system of 
financial intermediation is a precious asset. In addition to 
serving as an adviser to Secretary O'Neill, I especially hope 
to have the opportunity to work with this Committee to improve 
upon the efficiency with which our financial system converts 
the savings of the American people into productive investment.
    My work at the Federal Reserve Bank of New York I think has 
given me some understanding of the forces shaping our 
increasingly global banking and capital markets and, with the 
Senate's concurrence, I hope to bring that experience to 
Secretary O'Neill's team at the Treasury.
    Thank you again for the opportunity to appear before the 
Committee today. I hope very much that this will be the 
beginning of a strong working relationship. And I would be 
pleased to answer any questions.
    Senator Dodd. Thank you very much, Mr. Fisher.
    Mr. Jochum, welcome home.
    Mr. Jochum. Thank you.
    Senator Dodd. Back to this Committee. You have been highly 
regarded and well respected by Members of both political 
parties here. We are deeply appreciative of your service to 
this Committee over the years. And so it is exciting to have 
you back sitting on that other side of the table, if you will, 
and we are looking forward to working with you.
    Mr. Jochum. I think it is more comfortable on the other 
side of the table, actually.
    [Laughter.]
    Senator Dodd. Wait and see.
    [Laughter.]

        STATEMENT OF JAMES J. JOCHUM, OF VIRGINIA, TO BE

         ASSISTANT SECRETARY FOR EXPORT ADMINISTRATION

                  U.S. DEPARTMENT OF COMMERCE

    Mr. Jochum. Mr. Chairman, Senator Sarbanes, and Members of 
the Committee, I am honored to appear before you today as the 
nominee for Assistant Secretary of Commerce for Export Admin-
istration. I thank President Bush and Secretary Evans for plac-
ing their confidence in me with this nomination. I am humbled 
when I reflect on the distance traveled between a modest 
upbring-
ing in Iowa that Senator Grassley alluded to, and being asked 
by 
the President of the United States to serve the American people 
in 
this position.
    I am especially proud to appear before the Committee for 
which I served as a staff member. I have very fond memories and 
good friendships as a result of my time spent here. And I 
appreciate the support of my many friends on the Committee and 
in the audience today. I thank Senator Chuck Grassley for his 
very kind introduction and for supporting my nomination. I 
would also note, I think he has better speech writers since I 
left.
    [Laughter.]
    I know that the Finance Committee is busy working on a tax 
bill and his willingness to take the time to introduce a former 
staff member shows the kind of person he is. Senator Grassley 
brought me to Washington in 1987 as an intern. And over the 
years, I learned from him the value of hard work and 
perseverance.
    He often refers to this as a ``constancy of purpose.'' I 
will take this constancy of purpose with me to the Commerce 
Department if confirmed by the Senate.
    I must also express my deep gratitude to the Chairman, 
Senator Phil Gramm. When you work for Senator Gramm, you learn 
something new every day, since he is still a college professor 
at heart. But the most important lesson I learned is that as a 
public servant, you have a responsibility to stand on your 
principles, even if it makes people mad at you or your own 
friends uncomfortable. I will continue to stand on my 
principles as a public servant and trust that Senator Gramm 
will gently remind me when I fail to do so.
    On a final personal note, I want to thank my family in 
Iowa, who could not be here today, and my wife Rita, who is 
sitting behind me. Rita gives me more love and support than any 
one person deserves. She is responsible for any success I 
achieve in my career and I thank her for being my closest 
adviser and best friend.
    Mr. Chairman, as this Committee well knows, the Bureau of 
Export Administration has a critical mission--protecting and, 
indeed, enhancing, national security, while preserving the 
right of American businesses to export their products.
    I take this responsibility very seriously, as do the civil 
servants I have met at BXA. They are very conscientious, hard-
working people, who place the interests of their country above 
their own. It would be a privilege to work alongside them as we 
carry out this important mission.
    Finally, I commend the Committee on its efforts to 
reauthorize the Export Administration Act. A sound legal basis 
for controlling the export of dual-use items is critical to 
protecting national security. A new Export Administration Act 
will send a signal to the rest of the world that American 
leadership to reinvigorate the multilateral export control 
process is forthcoming.
    I look forward to working closely with this Committee on 
this important endeavor. Thank you again for holding this 
hearing and considering my nomination.
    Chairman Gramm. Thank you very much, Jim.
    Since we have a good number of Members here, let me ask 
unanimous consent that the four nominees I previously mentioned 
be considered en bloc, and that we do a roll call vote, begin 
that now, so that we can get the maximum number of people here 
to save 
everyone's time in coming back and forth. We will keep the vote 
open until 3 p.m., to give people an opportunity to vote.
    And so, I would like to ask unanimous consent that we 
consider: Grant Aldonas, Ken Juster, Maria Cino, and Glenn 
Hubbard, and their confirmation en bloc. Without objection, so 
ordered.
    I would like to ask the Clerk to call the roll.
    The Clerk. Chairman Gramm.
    Chairman Gramm. Aye.
    The Clerk. Mr. Enzi.
    Senator Enzi. Aye.
    The Clerk. Mr. Hagel.
    Senator Hagel. Aye.
    The Clerk. Mr. Bunning.
    Senator Bunning. Aye.
    The Clerk. Mr. Sarbanes.
    Senator Sarbanes. Aye.
    The Clerk. Mr. Dodd.
    Senator Dodd. Aye.
    The Clerk. Mr. Bayh.
    Senator Bayh. Aye.
    The Clerk. Mr. Miller.
    Senator Miller. Aye.
    The Clerk. Mr. Corzine.
    Senator Corzine. Aye.
    The Clerk. Mr. Chairman, for the time being, the ayes are 
nine.
    Chairman Gramm. And we will leave the vote open until 3 
p.m.
    Let me first, Jim, congratulate you. I want to thank you 
for your kind comments about me, I would like to simply say 
that I think you are a perfect example of the excellent staff 
that we have here in Congress and the remarkable work they do.
    It is an amazing thing to me when I am walking out the door 
to my building, and I am standing there waiting for my ride to 
pick me up, I watch all these people walk out and notice how 
young they are. Then I realize that the country is being run by 
children.
    [Laughter.]
    But they do a remarkable job. I do not think people 
understand the important role that our staffs play in making it 
possible for us to do the job we do. It is people like you who 
really make American Government work. We are very proud of you 
in your new position.
    I would like to ask you one question. You have taken a good 
look at our bill that we reported, Reauthorizing the Export 
Administration Act. Are you confident that you can use that law 
to strengthen export administration and to protect national 
security?
    Mr. Jochum. Senator, I am very confident in that regard.
    I think that the bill that you are debating in the Senate 
currently actually provides additional safeguards from current 
law. For instance, it involves the other agencies, to a larger 
extent. It requires, the first time in statute, license 
applications to be referred to DoD. It requires commodity 
classifications for the first time to be referred to DoD.
    It creates a statutory process by which, if agencies do not 
agree on a licensing decision, it can be elevated all the way 
up, even to the President, to make that determination. So there 
are several things in the statute itself that provide 
safeguards beyond what we have today.
    And I think a critical point is also that national security 
depends on having an underlying law in place. And inaction is 
probably the worst-case scenario.
    Again, I commend you on moving that along and look forward 
to getting in place to help you do that.
    Chairman Gramm. Thank you.
    Mr. Robson, let me congratulate you on your appointment. 
Some have complained that the President's budget actually 
proposes a lower dollar expenditure for the Export-Import Bank.
    Could you give us your reaction to that and your response 
to the conclusion that that means a reduction in the amount of 
export financing that Ex-Im can do?
    Mr. Robson. Let me say first, I was not present at the 
creation of the budget that was sent up. So I had no 
participation in its manufacture.
    As I said earlier in my opening statement, Senator, I have 
kept my arm's length from the agency until the Senate has 
decided to confirm me. But I do not know the answer to the 
question of whether every percentage reduction in the amount of 
funding proposed for the agency is equivalent to an equal 
percentage reduction in the amount of business that can be 
done. I simply have not had the opportunity or learned enough 
to answer that.
    One might presume that a 25 percent cut in the agency's 
budget is going to have a burden on the amount of export 
transactions it can finance. And at this point, I cannot tell 
you how much that might be.
    I can tell you, that by the time I have been at the agency 
a while and appropriations are before the Congress, that I will 
be educated on that subject and will give you my honest opinion 
as to what I think the impact will be and what I think we ought 
to do.
    Chairman Gramm. Many people would view the Ex-Im Bank as an 
export subsidy device. Would you give me your defense as to why 
the American taxpayer should be subsidizing exports?
    Mr. Robson. Well, let me start with an assumption with 
which I hope the Members of this Committee and the Senate would 
agree. And that is that exports are a good thing, that they 
create economic activity and they create jobs here in the 
United States.
    If you look at the world today, where some 50 to 70 
countries have export support mechanisms, you have three 
alternatives.
    First, you can unilaterally disarm and withdraw from any 
kind of export support that is taxpayer-funded. Second, you can 
get into an export subsidy arm's race, if you will, and match 
yen for yen, franc for franc, pound for pound, Deutschemark for 
Deutschemark, with American dollars every subsidy that is 
offered by our foreign competitors. And the third is that you 
can do something somewhere in between, which is, on the one 
hand, to try to moderate the dimension of export subsidies that 
are conferred by our industrial competitors, as is done under 
the OECD rules of engagement. And, on the other hand, to 
provide armament here at home to be able to enable our 
businesses to compete.
    So that is kind of where we are. Where it ought to be 
level-wise, I think is a matter of legitimate debate. But I 
think that, as long as the world is as it is, it strikes me as 
a respectable place for taxpayer money to go.
    Chairman Gramm. Let me ask just one question of Mr. Fisher.
    One of the things that we debate, at least in the abstract, 
is what we are going to do with the surplus--from Social 
Security and Medicare--the degree that we do not use Medicare 
money to pay for plus the potential of the on-budget surplus. 
If the projections we are looking at continue, at some point in 
6 or 7 years, we will have a situation where we literally will 
be buying debt back quicker than it is maturing.
    I understand that about a third of our debt is owned by 
foreign central banks and foreign governments.
    At that point, we obviously would face an important 
decision, and that is, should we pay a premium to buy that debt 
back, or should we try to deal with that problem, or that 
blessing, depending on your perspective, in another way?
    Have you given that any thought? What would be your initial 
thinking be?
    Mr. Fisher. Thank you, Senator.
    I have given that topic some thought, but from the 
perspective of the Federal Reserve. As I believe you have heard 
from Chairman Greenspan, the Federal Reserve has begun 
consideration of the challenge that the Federal Reserve will 
face in the need to accumulate private assets if the stock of 
Treasury securities is insufficient for managing the balance 
sheet of the Federal Reserve.
    I thought about that problem a great deal, but from the 
relatively narrow perspective of managing the central bank's 
balance sheet and its monetary operations. I have some thoughts 
on that. It is a very broad topic and I want to be clear, I 
have not thought about all the aspects of it.
    Chairman Gramm. Well, now, your duty is to manage the 
public debt, right?
    Mr. Fisher. Absolutely, sir.
    Chairman Gramm. You are not going to turn that over to the 
Federal Reserve.
    Mr. Fisher. No, we are not.
    Chairman Gramm. All right.
    Mr. Fisher. Not at all. The challenge will be to focus on 
maintaining the cheapest cost of financing in the long run of 
the Federal Government.
    Clearly, there will come a point, in all likelihood, where 
purchasing debt out of the market will be more expensive, maybe 
more expensive than our financing costs--that is, of new 
issues--there are various ways of measuring that, continued 
purchases would not make economic sense. You would be paying a 
premium over your cost of borrowing, however, the general fund 
will be accumulating cash. And at present, there is no 
mechanism other than the cash management vehicles that the 
Treasury has in the TT&L system to invest that cash.
    I have worked on the Federal Reserve's views on this and 
have worked cooperatively with the Treasury in the last 
Administration on the challenge of how and when the Government 
might accumulate assets.
    I share the perspective that Chairman Greenspan has 
expressed here of a reluctance for the Government to be 
involved directly in accumulation of assets.
    I think that this issue over the next 5 years is going to 
be looked at. I think it is the President's priority. I know 
Secretary O'Neill has said it is his priority to look at the 
Social Security system.
    And I believe the principles that President Bush has 
announced for the reform of the Social Security system that 
will guide the commission that was just formed are exactly the 
right ones.
    That still leaves a lot of work to do, to figure out how to 
fund politically and financially an acceptable way the Social 
Security system and Medicare system, as well as manage the 
Government's debt. I have not thought through all of the 
attributes of that, but the objective will be the cheapest 
financing for the Federal Government over the long run, while 
trying to maintain liquid markets in the Government's debt as 
long as those exist.
    Chairman Gramm. Thank you.
    Senator Sarbanes.

             STATEMENT OF SENATOR PAUL S. SARBANES

    Senator Sarbanes. Well, thank you very much, Mr. Chairman.
    First of all, Mr. Chairman, I want to commend you for 
expeditiously scheduling this confirmation hearing today, as 
well as the mark-up that we are currently engaged in with 
respect to the four nominees on whom we held a hearing last 
week. And we have also scheduled now the four HUD nominees for 
a hearing on Tuesday.
    I understand, with the exception of Roger Ferguson, that, 
in effect, takes care of everyone who is now appropriately 
before the Committee in terms of the completion of their 
papers.
    As I indicated to you at the outset, and I think on behalf 
of my colleagues as well, we want to be helpful and cooperative 
in trying to help the new Administration get its people into 
place.
    Chairman Gramm. We appreciate that.
    Senator Sarbanes. We are moving right along here. In fact, 
I do not know when you hope to take the four we are reporting 
out right now up on the floor, but, presumably, that could be 
done in the very near future.
    In any event, I would anticipate we get everybody in place 
before we break for the Memorial Day recess, which I know would 
be very helpful to the Secretaries. I also want to say that I 
regard these three nominees as very highly qualified for their 
positions and I look forward to voting to confirm them.
    I want to say that I think both Secretary Evans, Secretary 
Martinez--of course, Mr. Robson comes outside of a departmental 
structure. But I am willing to give the Administration a nod on 
the quality of the people they have sent up as far as they have 
come before this Committee.
    It is important to put good people in these positions. 
These are important positions with extensive responsibilities.
    I am sure if the Administration falls off that standard, we 
will have something to say about it. But thus far, it has been 
a good standard and I have been pleased to be supportive.
    I am reminded of a story.
    I went to an event once and received an award. My mother 
was present. They asked my mother to make a few comments. And 
in the course of it, she says--he has been a good boy--so far.
    [Laughter.]
    Chairman Gramm. Well, that is reserving judgment.
    [Laughter.]
    I was thinking the same thing as you were talking.
    [Laughter.]
    Senator Sarbanes. Let me just say a word or two about the 
nominees.
    Mr. Fisher is extraordinarily well qualified I think to 
take on these debt management responsibilities. It is a very 
complex and arcane area of responsibility. He has had this 
extended experience at the Federal Reserve Bank of New York. We 
are pleased to see him moving into the Government.
    I actually had the privilege of knowing his father, who is 
a very distinguished professor of law at Harvard Law School. We 
are delighted to see the family tradition of public service 
continue here.
    You have already talked about Jim Jochum. But I want to 
again express appreciation to him for the extraordinarily 
skillful work 
he did when he was here with the Committee on working on the 
Export Administration Act. He really helped to put together 
that 
consensus which resulted in the Committee overwhelmingly mov-
ing the bill in the last Congress and, of course, in this 
Congress, 
we worked off of the product of the last Congress in order to 
move 
it forward.
    We are now out there on the floor struggling with this 
situation. It is somewhat frustrating because a careful 
analysis of the bill, I think, would show not only that it does 
not do some of the things its critics are saying it does, but, 
in fact, it meets more successfully some of these objections 
that are being made than the existing 
regime does.
    Hopefully, we will be able to somehow get that across and 
be able to move it along. I know the Chairman is very 
interested in doing that.
    Mr. Robson, we welcome you back to Government service. I 
think this is the third time, you have been before this Senate.
    Mr. Robson. Fifth.
    Senator Sarbanes. Fifth, for confirmation?
    Mr. Robson. Unfortunately.
    Chairman Gramm. The man has trouble holding a job.
    [Laughter.]
    Senator Sarbanes. I apologize. I did not realize. Yes, I 
guess that is true we wish you well. This is an important 
responsibility.
    The Ex-Im Bank, as you know, has had bipartisan support in 
the Congress. John McCumber, of course, who was the present 
Chairman of the Ex-Im Bank under former President Bush, was an 
extremely able and effective head of the Ex-Im Bank. I think as 
long as other countries engage in these practices, we have to 
have some counter to that.
    In a perfect world, you can envision a situation in which 
no one provided any support and it was all left completely to 
the private marketplace.
    But the real world does not operate that way. We have tried 
hard to develop rules of the road through the OECD. But I think 
even those limited rules that we have been able to develop came 
about only as a consequence of the fact that the United States 
was prepared if we did not get the limited rules to provide 
strong backing to our exporters, which would put them in a 
competitive position.
    There are now all kinds of other ways that people are 
trying to develop to get around those restrictions, and I think 
we have to be very vigilant and supportive of our industry in 
that regard. The Tied Aid War Chest is an important weapon in 
that regard.
    We hear disturbing reports of people in OMB who want to 
curtail or limit this and, of course, we have this reduction in 
funding for the Ex-Im which we will have to come to grips with 
here in the Congress. You made a strong opening statement about 
the Export-Import Bank in terms of its professionalism and its 
objectivity and the responsible way in which it is carrying out 
its charge.
    I really have no questions.
    Mr. Robson, I would just say to you, maybe I can draw you 
out a bit. I think, given these pressures that I perceive from 
other sources within the Administration, the Ex-Im Bank will 
require an advocate and a leader within the Administration and 
that is a role I think that is necessary for you to assume. How 
do you warm up to that task?
    Mr. Robson. Well, you were kind enough when we met 
privately, Senator Sarbanes, to describe my situation as being 
on the spot. This is kind of a continuation of that discussion.
    Let me just say this. This will be the fifth agency or 
department that I have had a leadership role in. I have gone to 
each one pretty much the same way, which is to do the best job 
I can in what I think to be in the interest of this country. I 
will do so at the Ex-Im Bank. As I said in my opening 
statement, I am very pleased to be there. It has a long and 
honorable tradition. I expect to be a good leader and one who 
is looking to do everything that is in the national interest 
insofar as I can possibly perceive it. I expect, as I have been 
I think at other places that I have been, to be a pretty 
forceful leader as well.
    Senator Sarbanes. Thank you, Mr. Chairman.
    Chairman Gramm. Thank you, Senator Sarbanes.
    Senator Bunning.

                STATEMENT OF SENATOR JIM BUNNING

    Senator Bunning. Mr. Chairman, I have an opening statement 
that I would like to ask unanimous consent that it be entered 
into the record.
    Chairman Gramm. It will be entered into the record as if 
read.
    Senator Bunning. Thank you very much.
    Mr. Jochum, I welcome you back to the Committee on the 
other side of the table.
    What can the Department of Commerce do to help ensure the 
passage of the important legislation that we have before us, 
Export Administration Act? In other words, how can you advocate 
from your side to make sure that we get this bill that this 
Committee almost unanimously passed out, done?
    I know we have Foreign Relations. We have Armed Services. 
We have others on the floor of the Senate who are objecting in 
some way or another to the passage of this bill.
    As Senator Sarbanes said, most of us here think that there 
are adequate protections in the bill. I happen to think that 
the fines should be increased, but swallowed hard when they 
were reduced and not to add an amendment on the floor, hoping 
that that would help ensure the passage. It has not.
    What can Commerce do to help us?
    Mr. Jochum. Thank you, Senator. That is a good question. I 
would note that the President once again reiterated his strong 
support for the bill.
    I think maybe one factor is just having the people at my 
level in place to carry out the President's agenda will be very 
helpful. One thing that the Commerce Department can do is help 
address some of the misperceptions about the current system.
    We are the lead agency in processing the applications and 
so we have all the information. We have a very good story to 
tell that we have protected national security, that this bill 
will give us additional tools to protect national security. And 
I think we need to get that story out in a more forceful way, 
at probably a higher level than we have done here today.
    Senator Bunning. The present set of circumstances as far as 
a slap on the wrist if you are found in violation of the 
current law, looks like it is thrown in as the cost of doing 
business rather than a real deterrent.
    And I am sure that Commerce can do something to advance 
that and say that there is actual penalties involved now. I 
just want to make sure that we get this thing done and get it 
done before we get out of here in September.
    Mr. Jochum. As we discussed yesterday, Senator, I agree 
that the current law, and especially if we have to default to 
IEPA, the penalties are really the cost of doing business, as 
people have testified here, as you considered the bill the last 
2 years.
    The heightened penalty provisions are something that we are 
very supportive of. And actually, there is also some additional 
enforcement activities that will give the Commerce Department 
the ability to stop transshipments and other things that occur 
that are contrary to the Act.
    Senator Bunning. Mr. Fisher, I would like to ask you about 
the economy and the stimulant that they are talking about as 
far as fiscal policy. How would you propose to stimulate the 
economy, not only in monetary policy, but also in fiscal 
policy, since you are going to be in charge of reducing our 
debts and making sure that we have a debt-free economy and 
continue to have one?
    Mr. Fisher. Senator, that is a very broad question which I 
want to be clear, takes us well beyond----
    Senator Bunning. I gave you a large target to shoot.
    [Laughter.]
    Mr. Fisher. It takes me well beyond my areas of competence.
    Senator Sarbanes. Above your pay level, I think is the way 
that it is put.
    [Laughter.]
    Senator Bunning. We would just like to hear your ideas. You 
do not have to have them all, just a few.
    Mr. Fisher. I am eager to support the President's economic 
program and the tax provisions before the Congress now. I am 
not aware of the current state of play on the considerations in 
Congress in current year fiscal stimulus concepts.
    I know, I have been working as a consultant to the 
Treasury, giving the Secretary some advice. I am aware that the 
Treasury staff has been working to find a way to make sure that 
if Congress choose some immediate stimulus in the form of tax 
rebates, that that can be effectively implemented.
    The sphere of debt management I believe should be thought 
of as the tail and not the dog. I think Congress and the 
Administration should work on the appropriate mix of fiscal 
policy, spending and tax cuts. And then it is the duty of the 
debt manager to finance the Government as efficiently as 
possible.
    The current projections we are all working with is that the 
debt will be paid down over the coming 10 years. After that, 
longer-term forecasts would suggest a rising level of debt.
    I think the challenge for debt management is to deal with 
that volatility. I would see myself as trying to do that and 
engineer the cheapest cost of financing for the Government over 
time. And I wouldn't think it the role of the debt manager to 
be dictating the course of fiscal policy.
    Senator Bunning. Thank you, Mr. Chairman.
    Chairman Gramm. Thank you, Senator Bunning.
    Without objection, I would like to put Senator Allard's 
statement in the record as if given. He had to go preside on 
the floor.
    Senator Dodd.

            STATEMENT OF SENATOR CHRISTOPHER J. DODD

    Senator Dodd. Mr. Chairman, why don't we just do that for 
all Members. I presume they may have statements that they want 
to put into the record.
    Chairman Gramm. We will do that. Anyone who has a 
statement, we will be happy to put it in the record.
    Senator Dodd. Again, my congratulations to all three of you 
here. Just a couple of things. Rather than questions, and I 
think you all indicated pretty much getting into the details of 
these things, we will be dealing with you once you assume these 
responsibilities, as Senator Sarbanes has said, and Senator 
Gramm, the Chairman, has said, and I think all of us feel here, 
that you are all eminently qualified for the positions for 
which you have been nominated. And as I mentioned at the outset 
in my remarks, I am particularly grateful to all three of you 
that you are willing to do it. We are in a day and age when it 
is getting harder and harder to convince competent, good people 
to subject themselves to the rigors of public life.
    It is one thing when those of us get out and run for public 
office who must accept that these things are going to come. We 
ask people to serve in positions such as you have been chosen 
to and it can be difficult.
    I am grateful to all three of you. But I want to take 
advantage of your presence here just to share some thoughts. 
Again, I have had a chance to talk to Mr. Robson a little bit 
about some of these.
    In the case of you, Mr. Fisher, your immediate predecessor 
did a very fine job. He was highly thought of, I think, by both 
sides of the aisle here and played a very important role of 
policymaking decisions regarding the portfolio which you are 
about to assume.
    And this Committee, actually, with his help and others, we 
had a good Congress, with the repealing of Glass-Stegall, was a 
major achievement. I was pleased to work very closely with 
Senator Gramm on that and other Members of the Committee, and 
the House. It took us years working at that, and we think we 
passed a pretty good bill.
    The Modernization of Commodities Markets, Bill Rayner did a 
fabulous job. I know Members of the Committee--not one of the 
best known people in Washington, but a highly competent 
individual who just did a terrific job in taking a very 
difficult set of constituencies and wove together a proposal 
that many of us thought was never going to be possible to 
achieve. Again, people out of your office were helpful.
    Certainly, the reducing of paying down nearly $400 billion 
in debt over the last few years has been, I think, by all 
accounts, a significant, extremely positive achievement, to the 
point where the Gross National Product now, debt comprises 
about 34 percent, debt does, of the GDP, whereas it was about 
50 percent.
    And while I certainly appreciate your response to the 
Chairman's question about the Federal Government accumulating 
assets, we are not there yet. We are a long way from that.
    We ought to stay on the track, in my view, of continuing to 
pay down as much of this debt as we can without getting to the 
situation of accumulating resources. My hope would be that our 
budget considerations would have that as a major part of it.
    I come from the most affluent State in the country and, 
arguably, a State that on a per-capita basis would be a greater 
beneficiary of the President's proposed tax cut, than any other 
State in the country.
    And I can tell you, I can count almost on one hand the 
number of people who have advocated strongly for the size of 
the tax cut. I can tell you I get voluminous mail and e-mails 
from people who want to see us continue to pay down on the 
debt, who would like a tax cut as well, but believe we ought to 
have a balanced approach. So we look forward to working with 
you on that.
    In the case of Mr. Robson, I had a chance to chat with you 
yesterday, and I appreciate your response to the budget 
questions. But there are those of us up here who feel that the 
25 percent reduction in the Ex-Im financing vehicle is large. 
And I am not asking you to take a position on this. I am just 
going to tell you were I stand on it. I may be alone, but I 
suspect there may be others who want to revisit this.
    I am very worried that at a time when we have the President 
arguing for fast-track legislation, expanding export markets, 
at a time when we are now encouraging more mid-size and smaller 
businesses in America to become players in the international 
marketplace, not just the large corporations, but expanding 
those opportunities to smaller and mid-sized businesses, this 
is an opportunity, as Senator Sarbanes has said--it is a highly 
competitive world we are in. But I want to make sure that my 
businesses in Connecticut and others around the country are 
going to have a chance to compete out there.
    This is an agency that has returned dollars to the Federal 
Government. It has been a money-maker for the Federal 
Government. So while there is obviously a budget outlay 
associated with export financing to the Ex-Im Bank, it has been 
a net gainer for the country. And in this 21st Century, to the 
extent that we can expand America's presence in emerging 
markets, it has in everyone's advantage, in my view.
    Obviously, there can be, as you rightly pointed out to me 
yesterday, what that number is that allows you to continue to 
do that is subject to some significant debate. And I accept 
that and look forward to that discussion and moving forward.
    Finally, I just would raise with you, there has been some 
suggestion about consolidation. And again, you and I talked 
about this, about taking OPIC and Ex-Im Bank and others and 
somehow, just taking all of these and wrapping it into one 
nice, tidy agency.
    Again, I have strong and serious reservations about that, 
since there are distinct roles being played. I think there 
ought to be better communication, in my view, between the 
various agencies that have a portfolio charged with expanding 
export opportunities.
    And others may want to express themselves on this. But I 
have some strong reservations about the idea of having some 
sort of neat bureaucratic chart that disregards the distinct 
and unique missions performed by these agencies, instead of 
lumping them all together into one particular super-agency, as 
some have suggested.
    Again, I do not expect you here today to jump into this 
debate, but I thought I would at least take advantage of your 
presence here to express my concerns about that point and my 
concerns about the budget. But, again, I welcome your 
nomination and look forward to working with you.
    Mr. Robson. Thank you, Senator Dodd.
    Senator Dodd. Jim, we just welcome you and, again, as I 
said earlier, we are very pleased with your nomination. We know 
you will be in touch with us.
    Mr. Jochum. I will.
    [Laughter.]
    Senator Dodd. You know the numbers up here. So we will look 
forward to working with you.
    Mr. Jochum. Thank you.
    Mr. Robson. Mr. Chairman.
    Senator Dodd. You can respond to that.
    Mr. Robson. If Ex-Im Bank is indeed a profit center, it 
will be a first for me in working in the Federal Government.
    [Laughter.]
    Senator Dodd. Well, it has been.
    Mr. Robson. I am aware of that.
    Chairman Gramm. Senator Dodd, we will certainly get an 
opportunity to debate these issues because the Ex-Im Bank 
authorization bill expires this year and we will be looking at 
reauthorization.
    I think it is a very timely thing that it does and I look 
forward to working with you and Senator Sarbanes and everybody 
on the Committee to reauthorize it.
    Senator Hagel.

                STATEMENT OF SENATOR CHUCK HAGEL

    Senator Hagel. Mr. Chairman, thank you. I add my greetings 
and congratulations to each of you. And as Senator Dodd has 
said, we are grateful that you have each come forward to offer 
yourselves for these positions that have some rather 
significant responsibility, at a time when I believe the 
competitiveness of the world is at a state never before seen in 
the history of man. And that means that the decisions that are 
made in the next 4 years, during your watch, will be very 
critical as to where America is placed in this competitive 
cycle.
    We are so large and powerful today, that it is difficult 
for any of us to understand what is going on out there. And the 
rate of change in the world is so phenomenal in the areas that 
you have responsibility for, that we cannot chart it. We cannot 
calibrate it.
    I think your charge, as well as ours, is to make certain 
that we do not regulate and interfere with our market 
competitiveness to the point where in fact we inhibit our 
industries and businesses and services from competing in the 
world. That will have devastating consequences for our future.
    I believe you all know that, understand that. You have been 
practitioners in this area. And for all those reasons, I 
believe you are each eminently suited for your positions.
    As Senator Dodd and my colleagues have said, we are not 
here this morning to get into defined programming and thoughts 
on the specifics of those. But I would be interested in getting 
some general comments from each of you, starting with you, Mr. 
Robson.
    As you assume your responsibilities and prepare to launch, 
you obviously have taken some measure of the agency that you 
will head. You bring some practical experience to that, as you 
were over at Treasury and worked very closely with Ex-Im.
    In your view of the world today, without having the benefit 
of all the specifics and the knowledge of not being on the job 
yet, where are some of the more treacherous curves ahead for 
you and your agency?
    Mr. Robson. Well, I would like to reference again the 
statement that I have kept my arm's length relationship with 
the agency prior to, hopefully, the Senate acting on my 
confirmation. So I am not as well schooled as I might be.
    I think that, obviously, one issue is the question of 
whether--and I raise this in response to the Chairman's 
question--where do we sit in the global, competitive situation 
in respect of what we do for our exporters vis-a-vis their 
competitors?
    And as I said, I think that is a legitimate area for 
debate. You have choices to make there that are budgetary and 
that are policy in respect of what the taxpayers ought to do in 
that arena.
    I think that is clearly an issue that is legitimately 
subject to ongoing debate. And as almost everyone on the panel 
has said, it will surface in connection with our budget for 
2002. I hope to be able to look you in the eye and tell you 
what I think and tell you what I think the facts are.
    There is, as kind of a peripheral issue to that, the 
question of whether there are other mechanisms that have sprung 
up in other countries, the so-called market window agencies 
that are performing some of the activities that were once 
thought to be forbidden under the OECD strictures.
    And that is a matter which I expect I will be looking into 
and soon get some facts. It is a slippery path out there when 
you are dealing with multiple, millions of transactions. To get 
really good definition is hard to do. But I think it is worth 
trying.
    Senator Hagel. As you know, Mr. Robson, the Subcommittee 
that I Chair will hold a hearing next week on some of these 
issues and we intend to pursue market windows and tied 
financing and untied financing and some of the areas that you 
are going to have to jump right into that in fact are very much 
entangled around the axle of our competitiveness and directly 
relates to your mission over there. I appreciate your comments 
and look forward to working with you.
    Mr. Jochum, you have seen this close up. And I would be 
very interested in your general comments and from the 
perspective of what you will be assuming over at Commerce as to 
how we can maximize your position in dealing with this larger 
issue of competitiveness in the world.
    Mr. Jochum. Well, your statement hit the nail right on the 
head. The former Under Secretary used to call BXA the speedbump 
on 
the information superhighway. And it could turn into more than 
a speedbump if we are not careful. As you said, the high-tech 
in-
dustry is adapting to globalization. Indeed, they are leading 
globalization.
    We need authorities that meet the reality of today's 
marketplace. And currently, we do not have that. Our underlying 
statute, as you well know, is based on a cold war mentality, 
when we could control things and we had ally support for not 
exporting items to the former Soviet Union. And the world has 
changed.
    The other significant change, when you talk to people over 
at the Pentagon, is they now purchase their items from the 
commercial sector, where it used to flow from the defense 
sector to the commercial sector. This area of the world has 
changed dramatically and I think the most important thing that 
we can do to work together is give us the tools so we can adapt 
to that change.
    Senator Hagel. I think that you will, certainly on this 
Committee, find a willing audience and very receptive audience 
to deal with you on these things, evidenced by the Chairman's 
bill that we passed out of here that you helped construct, 19 
to 1, here a couple of weeks ago, and with Senator Sarbanes and 
others leading the effort on this. That is a good, very solid 
beginning point here.
    My time is up and I appreciate the three of you.
    Thank you, Mr. Chairman.
    Mr. Jochum. Thank you.
    Mr. Robson. Thank you.
    Mr. Fisher. Thank you.
    Chairman Gramm. Thank you, Senator Hagel.
    If there are no further questions, let me thank each of 
you. I want to especially thank Mr. Fisher. He will be voted on 
in the Finance Committee. But, actually, most of your 
jurisdiction is under the jurisdiction of this Committee.
    We look forward to working with you. We take what the 
Treasury does and the whole area of domestic finance, bank 
regulation, very seriously. And we will be reauthorizing in 
some form the Ex-Im Bank this year. I am sure that we will 
probably see you again, Mr. Robson, soon.
    Jim, we look forward to working with you. We are going to 
pass our bill. We would like to do it the easy way, but if we 
have to do it the hard way, we can do that.
    In any case, congratulations to each of you and thank you 
for being willing to serve our great country.
    Mr. Robson. May I just say one thing, Mr. Chairman, by way 
of nostalgia? Looking at you and Senator Sarbanes, the first 
time I came before the Banking Committee when I was Deputy 
Secretary of the Treasury was in connection with the savings 
and loan clean-up. This is a lot better.
    [Laughter.]
    Chairman Gramm. It certainly is a much happier time.
    Now would the Clerk call the roll for those Members who 
were not able to vote previously for our four nominees en bloc: 
Grant Aldonas, Ken Juster, Maria Cino, and Glenn Hubbard?
    The Clerk. Mr. Shelby.
    Chairman Gramm. Aye, by proxy.
    The Clerk. Mr. Bennett.
    Senator Bennett. Aye.
    The Clerk. Mr. Santorum.
    Chairman Gramm. Aye, by proxy.
    The Clerk. Mr. Crapo.
    Senator Crapo. Aye.
    The Clerk. Mr. Ensign.
    Chairman Gramm. Aye, by proxy.
    The Clerk. Mr. Johnson.
    Senator Sarbanes. Aye, by proxy.
    The Clerk. Mr. Reed.
    Senator Reed. Aye.
    The Clerk. Mr. Schumer.
    Senator Sarbanes. Aye, by proxy.
    The Clerk. Mr. Carper.
    Senator Carper. Aye.
    The Clerk. Ms. Stabenow.
    Senator Stabenow. Aye.
    The Clerk. The vote is 20 ayes, Mr. Chairman.
    Chairman Gramm. Thank you all. We stand adjourned.
    [Whereupon, the hearing was adjourned.]
    [Prepared statements, biographical sketches of the 
nominees, and response to written questions follow:]
               PREPARED STATEMENT OF SENATOR JIM BUNNING
    Mr. Chairman, I would like to thank all of our nominees for 
testifying today and I would like to thank you for holding this hearing 
and this markup in such an expeditious fashion. I think President Bush 
has once again demonstrated that he will continue to ask outstanding 
people to serve in his Administration. I hope that the Committee will 
report the nominations we are going to vote on today and the 
nominations we are going to vote on next Tuesday to the Senate floor.
    I worked with Grant Aldonas when he was on the staff of the Senate 
Finance Committee under former Chairman Bill Roth. We had a few sticky 
tariff issues that Mr. Aldonas helped us navigate through. Grant was 
very professional and helpful.
    I also think Ken Juster will be an outstanding official at the 
Department of Commerce. Secretary Evans will be greatly helped by Ken. 
I have met with Ken, specifically about the Export Administration Act, 
and let him know of my strong support for this legislation and to get 
his and the Department of Commerce's commitment to passing Export 
Administration Act legislation.
    I feel Glenn Hubbard will be an outstanding addition to the 
President's Council of Economic Advisers. I discussed at great length 
with Glenn my concerns that we are slipping toward a recession. We 
agreed that we must pass the President's tax plan, and have strong 
monetary policy to get us out of this economic slump.
    Finally, I would like to talk about Maria Cino. I have known Ms. 
Cino for many years. I worked with her often when both of us worked in 
the House. I have always found her to be extremely bright, and 
extremely capable. I think she will make a fine addition to the 
Department of Commerce.
    We also will have hearings on Jim Jochum, Peter Fisher and John 
Robson. As we all know, Jim Jochum served on this Committee as a 
counsel. I think Jim is an outstanding candidate and he will be a real 
asset to Secretary Evans.
    I was unable to schedule a meeting with Peter Fisher, but I do 
appreciate his making himself available to myself and the Committee. I 
believe his experience at the Federal Reserve Bank of New York will be 
invaluable to Mr. Fisher at Treasury.
    I have not had the opportunity to meet with Mr. Robson. However, he 
has a very impressive resume and has served his country with 
distinction. We are fortunate to have someone of his caliber at the Ex-
Im Bank. Once again, I urge all of my colleagues to support these 
worthy nominees.
    Thank you, Mr. Chairman.
                               ----------
               PREPARED STATEMENT OF SENATOR WAYNE ALLARD
    First, I would like to thank Chairman Gramm for holding this 
hearing. He has made it very clear that he intends to move expediently 
on the President's nominations, and I appreciate his effort.
    Today's lineup of nominees gives a good picture of the breadth of 
the Committee's jurisdiction, today we will hear from individuals 
nominated to Commerce, Treasury, and the Export-Import Bank. They will 
all play an integral role in the Banking Committee's work this 
Congress, and I look forward to working with them.
    I would like to offer a very special welcome to Jim, a former 
Banking Committee staffer. I know that you put a lot of work in on the 
Export Administration Act, 
and I am pleased that you will have the opportunity to continue your 
work over 
at Commerce.
    Again, I appreciate the opportunity to raise these issues. I am 
looking forward to discussing these matters in more detail with the 
nominees, and I look forward to hearing their testimony.
                               ----------
                  PREPARED STATEMENT OF JOHN E. ROBSON
       President and Chairman-Designate of the Export-Import Bank
                              May 10, 2001
    Mr. Chairman, Members of the Committee, I am very pleased to come 
before you as you consider my nomination to be President and Chairman 
of the United States Export-Import Bank. With your indulgence, I shall 
omit reciting my biographical background, which is submitted with this 
statement.
    If the Senate acts favorably on my nomination, it will be my fifth 
confirmation. Some might say, it is about time this old warrior hung 
'em up, but I relish this 
new challenge because I have never found a canvas as big to paint on as 
public 
service offers and I am particularly excited about the prospect of 
leading the Export-
Import Bank.
    Export-Import Bank is a venerable independent agency with a 
reputation for professionalism and objectivity. It has enjoyed strong 
bipartisan Congressional support since its establishment under 
President Franklin Roosevelt and it performs important roles in 
fostering American exports and thereby stimulating economic activity 
and job creation here at home. It accomplishes this by helping to level 
the playing field for U.S. exporters in an increasingly challenging and 
complex global marketplace where they contend with foreign competitors 
who may be very generously assisted by their sovereigns, and by 
assuming the financier' responsibility and risk where commercial 
institutions fear to tread. Yet over the years, Ex-Im has handled the 
taxpayers' money quite responsibly. So Ex-Im has carried out its 
mission well.
    But I would be disappointed if this Committee and indeed the entire 
Senate did not expect of me and every nominee it approved that the 
person would go to the job alert to opportunities to do things better 
and maybe differently. Without at this point having specific knowledge 
of what those opportunities might be at the Export-Import Bank, I 
welcome ideas from Congress, the exporting community and anyone else. A 
couple of concluding points.
    First, in deference to the Senate confirmation process, I have 
always maintained a respectful distance from agencies for which I have 
been nominated until confirmed. Thus you may find me deficient in 
specific knowledge or opinion on events and policies in which you are 
interested, a deficiency I expect to remedy with sufficient time at the 
Bank.
    Second, you have my commitment to deal openly and straightforwardly 
with this Committee and Congress. I solicit your interest, your 
questions and your informed comment. And I will try my best to insure 
that, even where we disagree, we maintain a civil and constructive 
relationship.
    Mr. Chairman, Members of the Committee, I respectfully ask for your 
favorable consideration of my nomination and will be pleased to respond 
to your questions.




                 PREPARED STATEMENT OF PETER R. FISHER
             Under Secretary-Designate for Domestic Finance
                    U.S. Department of the Treasury
                              May 10, 2001
    Chairman Gramm, Ranking Member Sarbanes, and Members of the 
Committee on Banking, Housing and Urban Affairs, thank you for the 
opportunity to appear before your Committee today. I am honored that 
President Bush has nominated me to serve as Under Secretary of the 
Treasury for Domestic Finance and, if confirmed, to have the 
opportunity to work with Secretary O'Neill, the Treasury staff, and 
others in the Administration to advance the President's economic 
agenda.
    If confirmed, I also look forward to working closely with this 
Committee, the Senate, and with Members of the House of Representatives 
on the broad range of issues addressed by the Office of Domestic 
Finance.
    The strength and resilience of our Nation's system of financial 
intermediation is itself a precious asset. In addition to serving as an 
adviser to Secretary O'Neill on debt management and fiscal policy 
issues and on capital market and financial institution issues, I 
especially hope to have the opportunity to work with this Committee to 
improve upon the efficiency with which our financial system converts 
the savings of the American people into productive investment.
    My 15 years of experience with the Federal Reserve Bank of New York 
has given me the opportunity to learn firsthand about the forces 
shaping the increasingly global banking and capital markets. As manager 
of the Federal Reserve's monetary operations since 1995, I have been 
afforded the unique vantage point of active participation in financial 
markets from a position of public responsibility. In this capacity I 
have worked with members of the Board of Governors and the Reserve Bank 
Presidents in the formulation and implementation of monetary policy. I 
have worked with senior Treasury officials on debt management and 
capital market issues and in the implementation of exchange rate 
policy. In both of these capacities, I have had the opportunity to 
learn from the experience of central bankers and finance ministry 
officials from around the world.
    Mr. Chairman, thank you again for the opportunity to appear before 
the Committee. I hope this will be the beginning of a strong working 
relationship. I would also like to thank Secretary O'Neill for the 
confidence he has shown in me by supporting me for this job. I would be 
pleased to answer any questions that you and other Members of the 
Committee may have.




















                 PREPARED STATEMENT OF JAMES J. JOCHUM
        Assistant Secretary-Designate for Export Administration
                      U.S. Department of Commerce
                              May 10, 2001
    Chairman Gramm, Senator Sarbanes, Members of the Committee: I am 
honored to appear before you today as the nominee for Assistant 
Secretary of Commerce for Export Administration. I thank President Bush 
and Secretary Evans for placing their confidence in me with this 
nomination. I am humbled when I reflect on the distance traveled 
between a modest upbringing in Iowa and being asked by the President of 
the United States to serve the American people in this position.
    I am especially proud to appear before the Committee for which I 
served as a staff member. I have very fond memories and good 
friendships as a result of my time spent here. And I appreciate the 
support of my many friends on the Committee and in the audience today.
    I thank Senator Chuck Grassley for introducing me and supporting my 
nomination. I am certain that the Chairman of the Finance Committee has 
more important matters to attend to, and his willingness to take the 
time to introduce a former staff member shows the kind of person he is. 
Senator Grassley brought me to Washington, and from him I learned the 
value of hard work and perseverance. He often refers to this as a 
``constancy of purpose.'' I will take this constancy of purpose with me 
to the Department of Commerce, if confirmed by the Senate.
    I must also express my deep gratitude to the Chairman, Senator Phil 
Gramm. When you work for Senator Gramm you learn something new every 
day, since he is still a college professor at heart. But the most 
important lesson I learned is that as a public servant you have a 
responsibility to stand on your principles. Even if it makes people mad 
at you, or your own friends uncomfortable. I will continue to stand on 
my principles, as a public servant, and trust that Senator Gramm will 
gently remind me when I fail to do so.
    On a final personal note, I want to thank my family in Iowa who 
could not be here today and my wife, Rita, who is in the audience. Rita 
gives me more love and support than any one person deserves. She is 
responsible for any success I achieve in my career and I thank her for 
being my closest adviser and best friend.
    Mr. Chairman, as this Committee well knows the Bureau of Export 
Administration (BXA) has a critical mission: protecting, and indeed 
enhancing, national security while preserving the right of American 
businesses to export their products. I take this responsibility very 
seriously, as do the civil servants I have met at BXA. They are 
conscientious, hardworking people who place the interests of their 
country above their own. It will be a privilege to work along side of 
them as we carry out this important mission.
    Finally, I commend the Committee on its efforts to reauthorize the 
Export Administration Act (EAA). A sound, legal basis for controlling 
the export of dual-use items is critical to protecting national 
security. A new EAA will send a signal to the rest of the world that 
American leadership to reinvigorate the multilateral export control 
process is forthcoming. I look forward to working closely with the 
Committee in this important endeavor. Thank you again for holding this 
hearing and considering my nomination.
















  RESPONSE TO WRITTEN QUESTION OF SENATOR MILLER FROM JOHN E. 
                             ROBSON

Q.1. How do you respond to your constituents who are concerned 
about the 25 percent cut in Ex-Im Bank funding?

A.1. First, for one thing they should understand that the 
fiscal year 2002 budget proposal for Ex-Im Bank was sent 
forward before President Bush named his Ex-Im Bank Chairman, so 
there was no participation by the Bush-appointed head of the 
agency in the budget proposals.
    Second, there have been many complaints from the exporting 
community and Members of Congress regarding the 
Administration's budget proposal. There is pressure to raise 
the budget level.
    Third, the new Ex-Im Chairman (who is not yet confirmed by 
the Senate) has stated that he will examine the actual impact 
of 
the proposed budget cut on the level of exports and other 
activity 
it would allow Ex-Im Bank to support and will be in a position 
to share that information and deliberate the matter with 
Congress 
as the appropriations process goes forward. It is here where 
the 
final decisions as to what Ex-Im Bank's budget for fiscal year 
2002 
will be.

RESPONSE TO WRITTEN QUESTIONS OF SENATOR SANTORUM FROM JOHN E. 
                             ROBSON

    In recent years, the U.S. steel industry has been 
struggling to compete against dumped and subsidized foreign 
steel. The industry has filed and won trade case after trade 
case. Last July, the Department of Commerce issued a report to 
the President, Global Steel Trade, Structural Problems and 
Future Solutions, which confirmed that there is a global 
overcapacity for steel production. The report noted that this 
overcapacity is one of the root causes of the market distorting 
conditions that gave rise to the steel crisis.
    Despite these dismal conditions for the steel industry, on 
December 14, the Ex-Im Board of Directors approved an $18 
million loan guarantee for U.S. products that would be used to 
modernize a Chinese steel mill. Specifically, Ex-Im voted to 
support the export sales of U.S. software, control systems, and 
main drive power supplies to the Benxi (Ben Chee) Iron and 
Steel Co. hot strip steel mill in China. The items supported by 
Ex-Im financing are manufactured by: General Electric in Salem, 
VA; Carlen Controls in Roanoke, VA; and CIC Co. in Glenshaw, 
PA.
    Ex-Im has offered several justifications for its decision. 
First, Ex-Im's mission is to promote U.S. exports. Second, if 
the U.S. companies did not receive Ex-Im loan guarantees, 
European companies were ready to supply the necessary equipment 
to Benxi. Third, 
Ex-Im's economic impact analysis determined it was unlikely 
that 
the increased production from the Benxi upgrade project would 
displace U.S. production--primarily because projected increases 
in 
demand for hot rolled steel in China could absorb the 
additional 
production from the project. However, due to sharp criticism of 
this 
decision, Ex-Im agreed to review its economic impact policy and 

to solicit views from interested parties as to how the policy 
may 
be changed.
Q.1. What changes, if any, do you feel should be made to Ex-
Im's economic impact analysis?

A.1. Of course I was not at Ex-Im Bank when this decision was 
made and I have not examined the record of the decision. Thus I 
cannot say whether the economic impact analysis in this 
instance brought to bear the appropriate expert analytical 
resources on the issues presented. So it is difficult for me to 
say whether this case suggests that broad permanent changes in 
the Bank's economic analysis methodology or process are 
required or whether this was a single instance where the 
economic analysis was legitimately amenable to differing 
interpretations.
    My goal will be to insure that, in carrying out the Ex-Im 
Bank's statutory mandate to consider economic impact, the 
proper expert resources are brought to bear on the case, 
including consultation with experts outside the Bank. The 
objective must be to do these analyses thoroughly and 
objectively in all cases. Should I come to the conclusion that 
changes in the Bank's economic impact analysis methodology or 
process are required in order to meet that objective, I shall 
undertake to see that they are made.

Q.2. Do you feel that Ex-Im's current economic impact analysis 
adequately takes into account how struggling domestic 
industries are affected by the loan guarantees?

A.2. It would seem to me that such considerations would and 
should be part of an economic impact analysis made by the Bank 
in connection with a loan or loan guarantee. I do not have 
knowledge as to what weight this particular factor is given in 
making an economic analysis or credit decision. I will, 
however, look into that issue after taking office and would be 
pleased to discuss it with you thereafter.

 RESPONSE TO WRITTEN QUESTIONS OF SENATOR GRAMM FROM PETER R. 
                             FISHER

Q.1. What is your view of cost and benefit analyses in the 
context of regulation? What are the sorts of items that you 
would include for analysis under the cost and benefit headings?

A.1. Our overriding objective should be the efficiency with 
which financial intermediaries convert savings into investment. 
The regulation of financial activities should be seen in this 
context. Specific regulations should be designed to achieve 
identifiable outcomes against which their total costs can be 
assessed. On the cost side, direct costs such as regulatory 
burdens should be included as well as indirect costs such as 
limits to competition. On the benefits side, one should strive 
to identify specific, measurable outcomes associated with a 
regulation's objective, such as the safety and soundness of 
insured depositories, investor or consumer protection, and 
improving the transparency and efficiency of the credit and 
capital allocation process. The distributional consequences of 
regulations should also be considered because of the risk that 
costs and benefits might fall in different places.

Q.2. What is your view of the future of the banking system and 
banking regulation, and Treasury's role?

A.2. The commercial banking system has been, and remains, under 
competitive pressure from other financial service providers. 
Overall, this is a positive development, and consistent with 
the objectives of the Gramm-Leach-Bliley Act, which helped to 
level the playing field among financial service providers. The 
public policy goal should not be the preservation of any 
particular form of financial intermediation but, rather, 
improving the efficiency with which savings are converted into 
investment. With respect to the future of bank regulation, I 
remain concerned that regulatory approaches developed before 
the enactment of Gramm-Leach-Bliley may impede the efficiency 
we seek. I believe that we should strive to ensure that the 
competitive landscape for financial services is shaped by 
market forces, not legal and regulatory boundaries.
    Treasury exercises a significant policy role in the 
financial institutions arena, for example, as a member of the 
President's Working Group on Financial Markets. In addition, 
Treasury normally takes the lead in developing and drafting the 
Administration's legislative proposals on financial regulation 
[examples are FIRREA, FDICIA, and recently GLBA and the CFMA] 
and frequently is designated by law to prepare reports and 
recommendations on financial regulation. As a result of GLBA, 
Treasury has responsibility--in conjunction with the Federal 
Reserve Board--for approving new financial activities for 
financial holding companies and financial subsidiaries of 
national banks.
    Treasury has only a marginal role in the direct regulation 
and supervision of financial institutions. By statute, Treasury 
has direct regulatory oversight responsibilities for Sallie 
Mae's safety and soundness during the GSE's transition to full 
privatization. The 
Office of the Comptroller of the Currency and the Office of 
Thrift 
Supervision, two Treasury bureaus, have direct responsibility 
for 
regulating and supervising national banks and Federal savings 
associations, respectively. However, by law Treasury may not 
intervene in matters before either bureau that affect specific 
institutions. Congress has given the Comptroller and the OTS 
Director authority to develop independently and present to 
Congress their own legislative proposals and testimony without 
review by Main Treasury. Also, although Main Treasury generally 
reviews OCC and OTS regulations, it may not prevent or delay 
their issuance. These arrangements are awkward because they 
give Main Treasury apparent responsibility but little actual 
authority.

 RESPONSE TO WRITTEN QUESTIONS OF SENATOR MILLER FROM PETER R. 
                             FISHER

Q.1. Please identify the issues surrounding paying down the 
Federal debt from the Treasury's perspective.

A.1. The Treasury Department has three fundamental debt 
management goals:

   To provide sound cash management;
   To achieve the lowest cost of funding over time; and
   To promote efficient capital markets

    Achieving all of these goals while paying down the debt 
creates a number of challenges. As the Treasury has responded 
to a period of budget surpluses and a corresponding reduction 
in the Federal Government's financing needs, both the frequency 
and amount of debt issued have been reduced, the issuance of 
certain securities has been eliminated altogether, and a 
program to buy back outstanding securities has been initiated.
    As the debt pay down continues over the next several years, 
achieving the multiple objectives of efficient cash management, 
lowest cost financing, and efficient capital markets will 
become more challenging, forcing the Treasury to adapt its debt 
management strategy.

Q.2. Please discuss how much privately and publicly held debt 
is outstanding and what the debt retirement schedule currently 
is.

A.2. The table below shows the current profile of the Federal 
debt:

           Figures in Billions of Dollars as of April 30, 2001
------------------------------------------------------------------------
                                            Dollars          Dollars
------------------------------------------------------------------------
GROSS FEDERAL DEBT....................            5,661  ...............
Of which,
Debt held by Government Accounts is...  ...............            2,363
------------------------------------------------------------------------
the remaining total is
PUBLICLY HELD DEBT....................            3,298  ...............
Of which,
Federal Reserve Holdings are..........  ...............              544
------------------------------------------------------------------------
the remaining total is
PRIVATELY HELD DEBT...................            2,753  ...............
Of which,
Marketable debt is....................  ...............            2,318
Nonmarketable debt is.................  ...............              435
------------------------------------------------------------------------

    Projections of debt levels going forward are based upon the 
Office of Management and Budget's analysis. Currently, OMB 
forecasts indicate that the publicly held debt will shrink to 
less than $1.2 trillion by fiscal year 2011. Over the same 
period, the holdings of nonmarketable securities in Government 
accounts is expected to increase to roughly $6.0 trillion.
    Currently, publicly held debt represents nearly 60 percent 
of the outstanding Federal debt. Of the publicly held debt, 
more than 85 percent is in the form of marketable securities 
(including Federal Reserve holdings). Based upon the current 
budget projections, by 2011 the debt held by the public will 
amount to roughly 15 percent of the outstanding total, with 
marketable securities representing an even smaller amount.

Q.3. At what point, if any, does the Treasury get concerned 
about retiring too much debt?

A.3. The majority of debt that is paid down is in the form of 
maturing securities that are not refinanced with new borrowing. 
There is no cost to this method of retiring debt. A small 
portion of the debt pay down is in the form of debt buy backs, 
which are closely monitored to ensure that the Treasury is 
purchasing securities in an efficient manner. To date the 
results of the debt buy back program have been very positive, 
and it is likely that it will remain a cost effective means of 
reducing debt for some time. Nevertheless, if at some future 
point the cost of purchasing securities were to outweigh the 
benefits, then Treasury would then reevaluate the status of the 
buy back program.
    With respect to the broader impact of a declining supply of 
Treasury securities, the markets are capable of adjusting. In 
many areas, this adjustment has already begun to take place. 
For instance, markets are increasingly using other instruments 
such as swaps or agency debt as a pricing benchmark.

 RESPONSE TO WRITTEN QUESTIONS OF SENATOR GRAMM FROM JAMES J. 
                             JOCHUM

Q.1. The President has been a staunch advocate of export 
control reform. During the campaign, he called for ``a tough-
minded, common sense, export control policy.'' More 
specifically, he noted that ``our national security and 
commercial competitiveness have been compromised by a broken 
export control system.'' In your view, would leaving in place 
the current ``broken export control system'' promote our 
national security?

A.1. As I stated at the May 10, 2001 confirmation hearing, I 
believe S. 149 provides several new tools to protect national 
security beyond those contained in current law. For example, 
for the first time explicit statutory authority is granted to 
control exports based on end-users, in order to prevent the 
proliferation of weapons of mass destruction. Furthermore, the 
bill provides an enhanced role for the Department of Defense 
and the Department of State in all licensing and commodity 
classification determinations. Finally, penalties for violating 
the Act are increased significantly and additional enforcement 
authorities are added.

Q.2. As Assistant Secretary, you will be working on the 
regulations to implement the bill. Some seem to think that to 
be effective, an export control system must impose burdensome 
regulations on exporters. I tend to agree with Rep. Chris Cox, 
who noted recently that ``Burdensomeness (sic) is not the same 
as effectiveness. A system that is less burdensome and more 
effective is our goal.'' Do you agree with that statement?

A.2. Yes. If confirmed by the Senate, I will work to ensure 
that all regulations are issued in accordance with the 
authorizing statute and intent of Congress and achieve their 
stated purpose in the least obtrusive manner possible.
                            NOMINATIONS OF:

                     ALPHONSO R. JACKSON, OF TEXAS

                         TO BE DEPUTY SECRETARY

                     U.S. DEPARTMENT OF HOUSING AND

                           URBAN DEVELOPMENT

                              ----------                              


                     RICHARD A. HAUSER, OF MARYLAND

                         TO BE GENERAL COUNSEL

                     U.S. DEPARTMENT OF HOUSING AND

                           URBAN DEVELOPMENT

                              ----------                              


                      JOHN CHARLES WEICHER, OF THE

                          DISTRICT OF COLUMBIA

                 TO BE ASSISTANT SECRETARY FOR HOUSING

                    AND FEDERAL HOUSING COMMISSIONER

                     U.S. DEPARTMENT OF HOUSING AND

                           URBAN DEVELOPMENT

                              ----------                              


                    ROMOLO A. BERNARDI, OF NEW YORK

                     TO BE ASSISTANT SECRETARY FOR

                   COMMUNITY PLANNING AND DEVELOPMENT

                     U.S. DEPARTMENT OF HOUSING AND

                           URBAN DEVELOPMENT

                              ----------                              


                         TUESDAY, MAY 15, 2001

                                       U.S. Senate,
          Committee on Banking, Housing, and Urban Affairs,
                                                    Washington, DC.

    The Committee met at 10 a.m., in room SD-538 of the Dirksen 
Senate Office Building, Senator Phil Gramm (Chairman of the 
Committee) presiding.

            OPENING STATEMENT OF CHAIRMAN PHIL GRAMM

    Chairman Gramm. Let me call the Committee to order. I want 
to welcome everyone to the hearing.
    We have Senators, Congressman, and other dignitaries to 
introduce some of our nominees, and what I would like to do is 
to give them an opportunity to introduce the nominee that they 
are supportive of. I know each of them is as busy as we are, 
and that they will be getting up and leaving to go on about 
their Senate chores.
    Let me first call on Senator Bond.

               STATEMENT OF CHRISTOPHER S. BOND 
           A U.S. SENATOR FROM THE STATE OF MISSOURI

    Senator Bond. Thank you very much, Mr. Chairman.
    As one responsible for the VA/HUD appropriations bill on 
this side, it is a pleasure to welcome Congressman Walsh from 
our sister committee on the other side because we both have a 
great interest in these very important nominations.
    We welcome all the nominees and we look forward to working 
with them. We will have some suggestions and advice for them as 
it goes along.
    Today, I am here for a special privilege, to be able to 
join with my colleagues from Texas in presenting Alphonso R. 
Jackson to the Committee, as the nominee to be the Deputy 
Secretary of the Department of Housing and Urban Development. I 
have known and worked with Al for over 30 years, since I first 
ran for Governor of the State of Missouri, when we both were a 
lot younger.
    Senator Hutchison may claim Al as a Texan----
    Senator Hutchison. No doubt about that.
    Senator Bond. But he certainly has good Missouri 
credentials.
    He holds a law degree from Washington University. He held 
many of the toughest positions in the city of St. Louis, 
including Director of Public Safety, Executive Director of the 
St. Louis Housing Authority. He went on from there to less 
privileged jurisdictions to help upgrade their activities. He 
served the housing authorities in Washington, DC and Dallas, no 
small tasks.
    But the most important thing about Al Jackson is his 
reputation for creativity, competence and dedication to the 
people whose service is under his jurisdiction. He is eminently 
qualified for the position of Deputy Secretary. I can assure 
you he is a man of energy, commitment, and integrity, who will 
bring all of these good qualities of character to the 
Department.
    My colleagues know that I share Al's passion for improving 
public and assisted housing, and reviving troubled communities. 
For 14 years, both as a former Member of this Committee and now 
on the Appropriations Committee, I have been deeply troubled by 
the lack of management protocols and leadership at this 
troubled Agency.
    This is a breath of fresh air with Secretary Martinez and 
the 
distinguished panel we have before us today. It is time we got 
a 
handle on this Agency.
    As for Al Jackson, the Deputy Secretary has the 
responsibility for the day-to-day financial operations of the 
Agency. He must be smart, competent, financially responsible 
and creative.
    Given all the problems that HUD has experienced in recent 
years, the new Deputy Secretary must also have leadership 
skills to overcome some inertia and to get the Agency back on 
the right track. Let me assure you, Mr. Chairman, that Al 
Jackson is the right man for the job. It is with great 
pleasure, excitement, and enthusiasm that I urge the 
Committee's expedited confirmation of Mr. Jackson.
    Thank you, Mr. Chairman.
    Chairman Gramm. Well, Senator Bond, let me thank you. And 
let me say that it has been a great pleasure for me and for the 
Banking Committee to work with you as one of our Appropriations 
Subcommittee's Chairman.
    You have always been responsive to us, and we appreciate 
it.
    Senator Bond. We appreciate your guidance and intend to 
continue to work very closely with you.
    It has been one of the great areas of cooperation we have 
seen and we are very grateful for all the help and guidance you 
have 
given us.
    Chairman Gramm. Thank you.
    Senator Hutchison.

               STATEMENT OF KAY BAILEY HUTCHISON 
             A U.S. SENATOR FROM THE STATE OF TEXAS

    Senator Hutchison. Thank you, Mr. Chairman.
    It is my pleasure to recommend to you a Texan. He does have 
a lot of Missouri roots, I must admit, but he is a Texan.
    He has blazed trails at every stage of his life. He was the 
first African-American to head the Dallas Housing Agency, when 
he served as its President from 1989 to 1996.
    During that tenure, I want to talk a little bit about what 
he did because I think it shows his qualifications more than 
any of his other attributes for the job in which he is going to 
be confirmed.
    He also had dreams, which he turned into a reality, both 
for himself and the many who struggle daily to keep their heads 
above water. One of those visions was of a public housing 
community that consisted of a state-of-the-art recreation 
facility surrounded by suburban-style houses that were true 
homes.
    As Mr. Jackson said at the time, I saw a community that was 
desolate and people who had given up hope. I realized that part 
of my responsibility was to give the community a reason for 
being, not just existing.
    My vision was creating a community that people would want 
to live in and would not have the stigma of public housing.
    Last year, 10 years after he looked at a lot of the people 
who he was hired to serve, and he looked at the broken-down 
apartment complexes throughout West Dallas, and when he had his 
vision, he presided over the grand opening of the Lake West 
Multi-Purpose Facility, a facility that was dedicated to him in 
gratitude for his efforts to make it happen.
    Of all the things that have been said about Alphonso 
Jackson, that dream turned into a reality is what I think 
qualifies him for this job. And I am proud to recommend him to 
the Committee, and to call him my friend.
    Thank you.
    Chairman Gramm. Thank you, Senator Hutchison.
    Senator Clinton.

              STATEMENT OF HILLARY RODHAM CLINTON 
           A U.S. SENATOR FROM THE STATE OF NEW YORK

    Senator Clinton. Thank you very much, Mr. Chairman.
    I am delighted to be here to introduce and add my words of 
support for Mayor Bernardi from Syracuse. Roy Bernardi is a 
very talented and dedicated public servant who has been 
nominated to serve as Assistant Secretary of HUD for Community 
Planning and Development.
    I am also delighted to support this nomination because of 
his work as Mayor, as well as his work previous to that in city 
government, has well qualified him to understand the 
instrumental role that can be played in bringing people 
together to work on behalf of community-based solutions for 
residents who are seeking a better life for themselves and 
their children. Roy's community-based housing programs gave 
community residents just that kind of a voice, in planning 
efforts to reinvigorate struggling neighborhoods. His Mayor's 
``Flight Blight'' program built partnerships between community 
organizations, law enforcement, and others, working together to 
clean up targeted areas.
    The Mayor also sought to draw families back into the city 
of Syracuse through homeownership programs that have met with 
great success. And he has forged alliances with landlords 
through a slum landlord program that provides landlords of run-
down facilities with much-needed training and assistance, so 
that they can contribute to a restored sense of pride in the 
neighborhoods.
    Mayor Bernardi's extensive efforts to make Syracuse a more 
vibrant urban center go hand-in-hand with his commitment to 
spurring economic growth and creating new jobs. New businesses, 
encouraged by the neighborhood revitalization efforts, have 
decided to call Syracuse home and, of course, Roy and I invite 
many people, along with Congressman Walsh, to call Syracuse and 
central New York home.
    He has also invested in bringing high-speed Internet access 
to Syracuse and in working to ensure that our businesses there 
have the latest technology that they need to compete.
    Many of these ideas that he has put into action on the 
ground in Syracuse are ideas that I believe have great merit to 
revitalize small- and medium-size cities throughout Upstate New 
York and throughout our country.
    Mayor Bernardi and his wife Alice, who has accompanied him 
here today, have been recognized as well for their service to a 
long list of community organizations.
    And I am convinced that his record in Syracuse has well 
prepared him to serve as Assistant Secretary of HUD for 
Community Planning and Development, and I highly recommend him 
to this Committee and ask you to act favorably on his 
nomination.
    Thank you, Senator Gramm.
    Chairman Gramm. Thank you, Senator Clinton.
    Congressman Walsh.

                  STATEMENT OF JAMES T. WALSH 
        A U.S. REPRESENTATIVE FROM THE STATE OF NEW YORK

    Representative Walsh. Thank you, Mr. Chairman.
    It gives me a great deal of pleasure to introduce to this 
Committee today my good friend and colleague, and fellow 
central New Yorker, Mayor Bernardi.
    It is my belief that he would make an ideal candidate for 
Assistant Secretary of HUD. As Chairman of the VA/HUD 
Subcommittee on Appropriations in the House, I know that he has 
a strong and keen interest in our cities and their needs.
    Mayor Bernardi was born in Syracuse to immigrant parents, a 
first-generation American Mayor. He has lived out the American 
Dream. To cap his impressive career in public service here in 
Washington would be the icing on the cake. I know his mom and 
dad, Carmella and Harold, as well as his wife, Alice, who I 
welcome here today, is as popular as the Mayor is back home. 
All central New Yorkers join me in our pride at his 
accomplishments.
    While serving as mayor, he celebrated our city's diversity. 
He brought people together. He worked hard to enhance 
Syracuse's quality of life. Crime went down. Taxes stayed 
level. People felt that he cared about them.
    Like many other northeast cities, the challenges are great 
in Syracuse. Population loss, disinvestment, poverty and 
homelessness are issues that he dealt with every day. And he 
always found a positive message, providing comfort and support 
and encouragement to our citizens.
    He always tried to take care of the little things that make 
a city livable. He has served as President of the New York 
State Conference of Mayors, as well as Vice Chair of the 
Northeast Region for the U.S. Conference of Mayors. And I am 
sure that if you confirm him, he will bring the same qualities 
of leadership and compassion to his role at HUD.
    I enthusiastically endorse his nomination and suggest that 
Syracuse's loss will be the Nation's gain.
    Mr. Chairman, just briefly, if I could also mention. I have 
had a working relationship with Dick Hauser, who is the General 
Counsel designee. Dick and I worked together when I Chaired the 
District of Columbia Subcommittee on Appropriations in the 
House.
    He was the Chairman of the Board of the Pennsylvania Avenue 
Development Corporation. And Dick, we did well. Unlike when we 
were there, the city now is flourishing and I think we have a 
lot to be thankful for. So good luck to all of you. So, Mayor, 
all the best. Thank you, Mr. Chairman.
    Chairman Gramm. Thank you, Congressman Walsh.
    Let me thank all of our distinguished colleagues for 
coming. We appreciate your interest and, obviously, your 
support for our nominees is duly recognized.
    We appreciate having the honor of you appearing here today. 

Let me review for everybody on the Committee what we need to 
do today.
    We have four distinguished nominees before us, and we are 
going to give them an opportunity to speak to us and then we 
will have the opportunity to ask them questions.
    As we did last week and as we will in the ensuing weeks, we 
are going to vote today with a rolling vote that will last 
through 3 p.m. on those who testified last week.
    What I would like to do, if the Clerk is ready, is to go 
ahead. I would like to ask unanimous consent that the 
nominations of John Robson, to be President of the Export-
Import Bank, and Jim Jochum, to be Assistant Secretary of 
Commerce for Export Administration, be considered en bloc.
    Without objection, so ordered.
    And we will do a roll call and then the roll call will be 
left open until 3 p.m., so that any Member of the Committee who 
wishes to vote can do so.
    The Clerk will call the roll.
    The Clerk. Chairman Gramm.
    Chairman Gramm. Aye.
    The Clerk. Mr. Allard.
    Senator Allard. Aye.
    The Clerk. Mr. Hagel.
    Senator Hagel. Aye.
    The Clerk. Mr. Sarbanes.
    Senator Sarbanes. Aye.
    The Clerk. Mr. Bunning.
    Senator Bunning. What are we voting on?
    The Clerk. Nominations of John Robson and Jim Jochum.
    Senator Bunning. Aye.
    The Clerk. Thank you, Senator.
    Mr. Reed.
    Chairman Gramm. Good question.
    [Laughter.]
    Senator Reed. Aye.
    The Clerk. Mr. Miller.
    Senator Miller. Aye.
    The Clerk. Mr. Chairman, the ayes at the moment are seven. 
There are no noes.
    Chairman Gramm. Thank you.
    We have before us today four distinguished nominees: 
Alphonso Jackson, who has already been introduced by two of our 
colleagues. I would just like to say that it has been a 
pleasure to work with Mr. Jackson in the leadership capacity he 
has had in public housing in Dallas. He has done an outstanding 
job, and I strongly support his nomination to be Deputy 
Secretary of Housing and Urban Development; Richard Hauser--is 
that pronounced right? What a nice name for a person working at 
HUD--Hauser.
    [Laughter.]
    Of Maryland, to be the General Counsel of the Department of 
Housing and Urban Development.
    John Weicher--is that right, of the District of Columbia, 
to be Assistant Secretary of Housing and Urban Development, and 
to serve as the Federal Housing Commissioner; and Mayor Roy 
Bernardi of New York, to be an Assistant Secretary of Housing 
and Urban Development for Community Planning and Development.
    I need to give you an oath. So if you will each rise and 
raise your right hand. Do you swear or affirm that the 
testimony you are about to give is the truth, the whole truth, 
and nothing but the truth, so help you God?
    Mr. Weicher. I do.
    Mr. Jackson. I do.
    Mr. Hauser. I do.
    Mr. Bernardi. I do.
    Chairman Gramm. Do you agree to appear and testify before 
any duly-constituted committee of the U.S. Senate?
    Mr. Weicher. I do.
    Mr. Jackson. I do.
    Mr. Hauser. I do.
    Mr. Bernardi. I do.
    Chairman Gramm. Please be seated and congratulations.
    Senator Sarbanes.

             STATEMENT OF SENATOR PAUL S. SARBANES

    Senator Sarbanes. Thank you very much, Mr. Chairman. I 
would like to make just a short opening statement.
    First, I want to welcome the nominees to the Committee this 
morning. I am pleased that we are taking up these nominations.
    The Chairman and I have talked and we agree that it is 
important to try to put people into position in the new 
Administration and we are trying to work with Secretary 
Martinez. I have a lot of confidence in him, but he cannot run 
the Department by himself. I think that is pretty clear. So we 
would like to get these policy and operational people into 
place.
    There is a considerable breadth of experience among this 
morning's nominees. Mr. Jackson has run three different public 
housing authorities, in each instance with considerable 
success, including the one here actually in the District of 
Columbia at an earlier time. Mr. Bernardi is a Major and a user 
of HUD programs, so he brings that perspective. Mr. Weicher 
served as an Assistant Secretary for Policy Development and 
Research at HUD. And Mr. Hauser has had extensive experience in 
economic development for the Pennsylvania Avenue Development 
Corporation.
    I want to note that housing has traditionally been a 
bipartisan endeavor. In fact, last year, we passed important 
new legislation out of this Committee and through the Congress 
dealing with manufactured housing and a host of other issues, 
including elderly housing, in the last Congress.
    In the previous Congress, we passed major legislation to 
restructure both the Section 8 project-based portfolio and the 
public housing program. That was all done on a bipartisan 
consensus basis.
    I just want to note that that has been the attitude that 
the Committee has brought to some of these problems, we look 
forward to working with all of you in that same spirit in the 
coming months.
    Mr. Weicher, I am going to focus on you just a little bit 
here, and I want to lay out a few things. Hopefully, you will 
respond to them either in your statement or subsequently in the 
question session.
    I do that because we have heard from quite a wide array of 
industry, nonprofit, and low-income advocacy groups concerning 
some of your writings. You have a paper trail and it always 
comes back, on occasions, such as this.
    You have expressed some varying degrees of opposition to 
some of the very programs that you would be charged with 
overseeing 
if confirmed.
    For example, and let me just mention a few, you have talked 
about eliminating the multifamily FHA program. Of course, FHA 
is an important partner in the construction of rental housing 
that is affordable to middle-income American families and at a 
low cost to the taxpayer. In fact, the administration of this 
program has been improved over the past 8 years to the point 
where its costs and default rates have dropped very 
significantly.
    You have talked about limiting the FHA single-family 
program, although its success and fiscal well-being and mission 
have been hailed by the GAO. Actually, previously, and I am 
encouraged by this, in your service at HUD, you helped to put 
the FHA back on the path toward solvency. There is, in a sense, 
a contradiction there in the record.
    You have also indicated support for vouchering out all 
public and assisted housing. Actually, that approach has not 
been accepted by the Congress. I strongly support adding 
vouchers to the budget, but only as part of a balanced approach 
to solving the affordable housing crisis.
    And just last year, Senators Bond and Mikulski included a 
provision in the HUD appropriations bill allowing housing 
authorities to increase their use of project-based assistance.
    I can appreciate that many of these statements were made in 
a different context, and we would like to get from you this 
morning the benefit of that context. I would like to be able to 
give these, as I said, a wide array of various groups, both 
industry, nonprofit, housing advocates, some reassurance that 
these programs will 
be strengthened and nurtured in the course of your tenure at 
the 
Department.
    We have heard from so many different sources, that I 
thought that I ought to lay it out here right at the opening of 
the hearing. I look forward, Mr. Chairman, to the testimony of 
all of these nominees as we try to move forward in putting a 
team in place for Secretary Martinez.
    Chairman Gramm. Thank you, Senator Sarbanes.
    Senator Allard is Chairman of the Housing Subcommittee, and 
I would call on him now.

               STATEMENT OF SENATOR WAYNE ALLARD

    Senator Allard. Thank you, Mr. Chairman. My remarks will be 

very brief.
    I would like to associate myself with the remarks of my 
colleagues, including Congressman Walsh. I look forward to 
hearing about the qualifications of this panel that we have 
before us.
    I think we have an outstanding line-up of nominees for top 
positions at the Department of Housing and Urban Development. 
I have met with all four nominees--Mr. Jackson, Mr. Hauser, 
Mr. Weicher and Mr. Bernardi. And I must say that I am very 
impressed.
    As Chairman of the Housing Subcommittee, I have held many 
HUD oversight hearings, and I know how important it is to have 
top-level appointees at the department. It is my hope that we 
can get these officials confirmed quickly.
    I would like to raise several important issues, and we can 
follow up on these in the question-and-answer process.
    My concerns are, first, we need program consolidation. We 
have 328 programs, which is too many, in my book. HUD should 
focus on the core mission of affordable housing.
    Second, we need results-based management and in particular, 
I would ask all the nominees to study carefully the Government 
Performance and Results Act and apply it to the HUD 
decisionmaking process.
    Finally, I would urge you to communicate regularly with the 
Congress and keep us informed and work with us to implement the 
laws in a timely manner. A good example is the recently passed 
legislation to reform manufactured housing regulations and 
provide additional incentives for homeownership and affordable 
housing. I hope we can see this law implemented in a timely 
manner.
    Mr. Chairman, I look forward to working closely with each 
of the nominees, and thank you.
    Chairman Gramm. Thank you, Senator Allard.
    Senator Reed, did you want to make an opening statement?

                 STATEMENT OF SENATOR JACK REED

    Senator Reed. Yes, thank you, Mr. Chairman. I appreciate 
you having this hearing today, and I look forward to the 
testimony of all these very capable and dedicated nominees.
    I would just briefly like to say that I had the chance to 
meet all of these gentlemen and they are dedicated, principled 
public servants who take their responsibilities very seriously, 
and they have serious responsibilities.
    Their Department has to help some of the most vulnerable 
people in this country--the disabled, the elderly, those in the 
margin of life because of income or disease or disability.
    We are facing, in my view, a housing crisis in many parts 
of this country. We have not been producing enough housing. We 
have a challenge of affordability. We have a challenge of 
accessibility to good, decent, safe housing. And our commitment 
for generations has been that we would have a country where 
everyone could live in a decent, safe and affordable home. We 
have to do much more.
    We have a homeless program in which we will review perhaps 
this Congress in detail. Too often, that program has been used, 
not to help the homeless, but to help those who are just on the 
fringe because our other public programs are not able to keep 
people in decent, adequate housing.
    The task before you is great and I am convinced after 
listening to these gentlemen that they bring goodwill and great 
energy to the task. We will explore some policy differences 
today, but we begin, I think, with some very dedicated 
individuals.
    Thank you, Mr. Chairman.
    Chairman Gramm. Thank you. Would anyone else like to make 
an opening statement?
    Senator Bunning. Yes, Mr. Chairman.
    Chairman Gramm. Senator Bunning.
    Senator Bunning. It is short.
    Chairman Gramm. Oh, please, take your time. Go ahead.

                STATEMENT OF SENATOR JIM BUNNING

    Senator Bunning. Mr. Chairman, I would like to thank you 
and all our nominees for testifying today and I would like to 
thank you for holding this hearing and this mark-up in such an 
expeditious fashion. First of all, it is always nice to come in 
in the middle of the vote and not know what you are voting on.
    I think President Bush has once again demonstrated that he 
will continue to ask outstanding people to serve in his 
Administration. I hope that the Committee will report the 
nominations that we reported on today--now we have seven ayes--
and are going to vote on in the future, who are testifying here 
today to the Senate floor very quickly.
    All four nominees have very impressive credentials. 
Alphonso Jackson has been the head of three housing 
authorities, as well as the President of a public utility and 
served on two national commissions. Richard Hauser has been an 
Associate White House Counsel and has worked at the Department 
of Justice and was Chairman of the Pennsylvania Avenue 
Development Corporation; John Weicher was an Assistant 
Secretary at HUD and worked for OMB; Romolo Bernardi is the 
Mayor of Syracuse, NY.
    Why would you want to give up being the Mayor of Syracuse 
to go to work at HUD?
    [Laughter.]
    And was the city auditor there, also.
    We are very fortunate that these fine nominees have chosen 
to serve the public at HUD. Their diverse backgrounds and 
unique experience will help fulfill HUD's mission.
    We are lucky to have them. Once again, I urge all my 
colleagues to support these worthy nominees.
    Thank you, Mr. Chairman.
    Chairman Gramm. Thank you, Senator Bunning.
    Anyone else want to make a statement?
    [No response.]
    If not, let me suggest that each of our nominees try to 
speak for a maximum of 5 minutes. There is a clock here and on 
each side of the room that you can see. I am not going to stop 
you if you go over, unless you go over by too much. But start 
collecting your thoughts when you hit the red light.
    Let me also say, Mr. Weicher, if when you finish your 
statement, if you had not in the statement responded to Senator 
Sarbanes, let me suggest that you just take a minute or two and 
do that.
    Given that I am from an academic background and spent much 
of my life trying to avoid perishing by publishing----
    [Laughter.]
    I understand what it is like to write things down on paper.
    I once was writing an article about the theoretical 
capacity of the market system to abate pollution and, in 
essence, predicting that there would be green products that 
would come on the market if people really cared about 
pollution.
    And even though people would be almost perfect competitors 
in the environment based on what they bought, I just as an 
afterthought stuck in the footnote that I had voted for Barry 
Goldwater. I also noted that if I hadn't voted for him--and I 
listed whatever the number of votes he had received--there 
would have been one less vote.
    Well, not knowing that some day, having grown up in the 
south and in a Democrat family, where all of the Republicans 
wore blue shirts and burned down my grandmother's barn--or my 
grandmother's mother's barn. She claimed they burned down the 
house, of course. That turned out not to be true when we looked 
at it closely.
    [Laughter.]
    But in any case, it was war and people say whatever.
    [Laughter.]
    The point is, I was debating my opponent in the Democratic 
primary, and my opponent pulled out that article and read that 
I had voted for Barry Goldwater. So he would say, I would like 
the name of all the Democratic Presidents you voted for, 
Democratic candidates for President that you voted for. So I 
swallowed hard and said, none.
    I still won the Democratic primary, you understand. In any 
case, I understand what it is to write things down. I want to 
give you an opportunity to explain.
    Al, you are first.

           STATEMENT OF ALPHONSO R. JACKSON, OF TEXAS

                     TO BE DEPUTY SECRETARY

        U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

    Mr. Jackson. Thank you, Mr. Chairman, Senator Sarbanes, 
distinguished Members of the Committee.
    Chairman Gramm. Please introduce any family members you 
have and let them stand up if they will.
    Mr. Jackson. I will, Senator.
    Thank you for the opportunity to appear before you today. I 
would also like to thank Senators Hutchison and Bond for their 
generous introductions.
    Let me express my sincere thanks to President Bush and 
Secretary Martinez for selecting me for this important job. I 
am honored by the trust and confidence that they have placed in 
me to be Deputy Secretary of the U.S. Department of Housing and 
Urban Development. And I would like to introduce to the 
Chairman and Senator Sarbanes and the Committee, my wife, 
Marcia Jackson.
    Mr. Chairman, I was born and raised in Texas, the youngest 
of 12 kids. Although my father had only a 5th grade education 
and my mother an 11th grade education, they made sure that all 
of their children got a good education. I am here because of my 
parents, because of the love that they showed and because of 
the education that they stressed.
    This is one of the reasons that I spent my early years, 6 
years of that, as a Public School Administrator and as a 
Professor at the University of Missouri.
    My interest in, and expertise in, urban law and housing 
issues has been a great challenge for me. I have been told that 
I am the first Deputy Secretary of HUD to have experience in 
both public housing and the community development field. I have 
run, as you noted before, three major public housing 
authorities and I have 
had the experience of knowing how well HUD can work, if given 
the opportunity.
    I think that the oversight that has been given and talked 
about by GAO, and the Inspector General, as it relates to HUD 
has merit, and I think that this Secretary and myself will 
address those issues. I also think that my private-sector 
experience has taught me about the importance of management and 
successful enterprise.
    I have spent the last 5 years in the private sector as 
President of American Electric Power of Texas, where I was 
responsible for the management and operation of an $11 billion 
corporation, 2,800 employees, and over 900,000 customers.
    I think it is important to understand that my management 
experience at the professional levels believes that the worst 
thing that can occur is that you micromanage your staff.
    I think at HUD we must again establish a relationship of 
trust and belief in the core staff that carries out the 
mission. In that process of establishing that belief in the 
core staff, we must also believe in the mission of GAO and the 
IG as not adversarial, but that of a partnership, to make sure 
that HUD functions well.
    We know that HUD has a long history of trouble. We know 
that it was one of the high-risk agencies, and there are a 
number of areas that are still high-risk within HUD.
    I am aware, of the concern of GAO and the HUD Inspector 
General and I have studied their reports.
    If confirmed, I will insist that the agency work in tandem 
with GAO and the IG's office to correct the Department's 
problems. We will avoid the adversarial stand that has too 
often marked HUD's relationship with these offices in the 
Senate and the Congress, and I can assure you we will avoid 
that.
    In conclusion, I realize that we have much work ahead of 
us. HUD has an important mission to accomplish. Many of 
America's neediest families need our service. We owe it to them 
to provide the best possible programs we can, in the most 
effective and efficient manner that we can. And we owe it to 
the American taxpayers to make sure that their tax dollars are 
spent efficiently and wisely.
    I am a man of optimism. When I see HUD, I see a Department 
with a lot of opportunities to do great things. I see the 
historical opportunities to improve HUD management.
    The Deputy Secretary functions as the Chief Operating 
Officer. I see one of the top duties of the Deputy Secretary as 
helping to solve the management problems that have plagued HUD 
for so long.
    If confirmed, I look forward to working with Secretary 
Martinez and the rest of the HUD team as we implement the 
Administration's mission. I also look forward to working in a 
bipartisan manner with Congress on all issues that challenge 
HUD.
    As Secretary Martinez said at his confirmation hearing, 
``our mission at HUD is not a Republican or Democratic mission, 
but rather an American mission.''
    My task is to carry forward and make sure that HUD 
functions in the best and most proper manner that it can in 
relationship with the Congress.
    And I can assure you that any recommendation that is made 
by the Congress will be adhered to by this HUD. Thank you.
    Chairman Gramm. Thank you, Mr. Jackson.
    Mr. Hauser.

          STATEMENT OF RICHARD A. HAUSER, OF MARYLAND

                     TO BE GENERAL COUNSEL

        U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

    Mr. Hauser. Thank you, Mr. Chairman, Senator Sarbanes, 
Members of the Committee.
    I too want to thank you for the opportunity to appear 
before you today. And with your indulgence, I would like to 
introduce my family--my wife Karen and three of my five 
daughters who are with me today. My daughters Kristin, Erica 
and Alissa.
    Chairman Gramm. It must be a very lonely house, being the 
only man.
    [Laughter.]
    Mr. Hauser. I tell people my retirement is spelled tuition.
    [Laughter.]
    Anyway, I would like to submit my statement for the record, 
if I may, but I also, with your indulgence, have a few points 
that I would like to highlight.
    First, I want to express my sincere appreciation to 
President Bush for his confidence in me. I am honored to be 
nominated for this very important position.
    I also want to thank Secretary Martinez for asking me to 
join his team. Secretary Martinez's life story is a compelling 
one and it is truly the embodiment of the American Dream. I 
will be proud to be at his side as he develops and implements 
his vision for the agency.
    I am committed to assist Secretary Martinez in his efforts 
to make the Department of Housing and Urban Development a more 
efficient, effective, and responsive institution, one that will 
operate with the highest ethical and professional standards, 
both for its employees and its program participants. And like 
my colleague, Alphonso Jackson, I too am very respectful of the 
independence of the GAO and the Inspector General. I appreciate 
the valuable oversight functions that they perform. And if 
confirmed, I will work hard to develop a constructive working 
relationship with both the IG and the GAO in furtherance of 
HUD's goals.
    With the confidence and support of Secretary Martinez, I 
expect to be involved in all aspects of HUD and its program 
responsibilities. And indeed, as General Counsel, I will be 
expected to provide guidance on the statutes and regulations 
that govern the operations of the Department to assure that the 
programs are administered as Congress intended and in the 
interest of those to whom the Department was established.
    Nothing, however, will be more important than to assure 
that the standards of conduct are clearly articulated and 
observed by HUD employees and HUD program participants. As 
President Bush stated on January 20, ``everyone who enters 
public service for the United States has a duty to the American 
people to maintain the highest standards of integrity in 
Government.''
    Secretary Martinez embraces that view, and so do I. But we 
want to do more. We want to create a culture that will attract 
and retain good employees. We want to create that which would 
allow employees to perform their duties without fear that the 
ethics laws and regulations will be used as sport to curb their 
initiative.
    We want to create a culture that will restore confidence in 
the integrity of HUD's programs on Capitol Hill, and throughout 
the HUD community. And finally, if confirmed, I look forward to 
working with the Committee and the Congress in fulfilling the 
duties and responsibilities of the Office of General Counsel of 
Housing and Urban Development. Thank you, Mr. Chairman.
    Chairman Gramm. Thank you, Mr. Hauser.
    Mr. Weicher.

               STATEMENT OF JOHN CHARLES WEICHER

                  OF THE DISTRICT OF COLUMBIA

             TO BE ASSISTANT SECRETARY FOR HOUSING

                AND FEDERAL HOUSING COMMISSIONER

        U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

    Mr. Weicher. Thank you, Mr. Chairman.
    It is a great honor to appear before this distinguished 
Committee today as the nominee for Assistant Secretary for 
Housing and FHA Commissioner. I am extremely grateful to 
President Bush and to Secretary Martinez for offering me the 
opportunity to serve in this important position.
    Mr. Chairman, like you, I am an economist married to an 
economist. My wife Alice is with me this morning, along with 
our daughter Jean, who has just finished her sophomore year at 
Washington University in St. Louis, Mr. Jackson's alma mater. 
Our son John graduated from college last year. He is now 
working in Louisville and could not be with us here today.
    FHA has been central to the American Dream of homeownership 
since the 1930's. It is widely and rightfully regarded as a 
social policy experiment that worked.
    FHA revolutionized the housing finance system and the 
mortgage instrument. Working with Ginnie Mae, it pioneered the 
Mortgage-Backed Security. FHA has a proud legacy and FHA has 
more work to do.
    As Secretary Martinez has pointed out, the homeownership 
rates among Hispanic Americans and African-Americans remains 
below 50 percent. That is a challenge for HUD and for FHA in 
particular.
    President Bush has proposed the ``New Prosperity 
Initiative,'' to expand homeownership opportunities for low-
income families. FHA will be part of the President's 
Initiative, helping more Americans realize the dream of owning 
their own home.
    In addition to promoting homeownership, FHA provides 
mortgage insurance for multifamily housing. FHA multifamily 
insurance serves important public services. Most of the 
projects provide housing that is affordable to families in the 
lower half of the income distribution. Almost half are located 
in underserved areas. These families and these communities need 
FHA.
    In my prepared statement, I address some of the questions 
which Senator Sarbanes has made in the statement that I have 
submitted for the record. I would be happy to explain in 
further detail when I made those statements and who I was 
making them to, and what other people were saying at the same 
time.
    Let me say with respect to what I hope to do at HUD, Secre-
tary Martinez has said that his first priority will be for HUD 
to 
continue putting its own house in order, building on the work 
of 
Secretaries Kemp, Cisneros, and Cuomo, and addressing the 
institutional weaknesses identified by GAO and by the HUD 
Inspector General. I am looking forward to working with him to 
make all of FHA's programs work as well as possible, serving 
the public purposes for which they were created.
    Mr. Chairman, I know the issues and problems of HUD from 
experience. I have served at HUD three times before. As Senator 
Sarbanes mentioned, I was Assistant Secretary for Policy 
Development and Research with Secretary Jack Kemp in the 
Administration of President George Bush. I was Chief Economist 
for Secretary Carla Hills under President Ford. As Assistant 
Secretary for PD&R, I worked several major policy issues that 
concerned FHA, including the reform of home mortgage insurance, 
the regulation of real estate settlement practices, and 
environmental issues in housing.
    In addition, I directed the Secretary's Advisory Commission 
on Regulatory Barriers to Affordable Housing.
    Mr. Chairman, you and your colleagues honored me by 
appointing me to the Millennial Housing Commission last 
September, for which I am very grateful. I have also served on 
the Committee on Urban Policy of the National Academy of 
Sciences, in the Census Bureau's Advisory Committee on 
Population Statistics, and I have worked on three other 
national housing commissions. All of this experience will be 
helpful at FHA.
    Mr. Chairman, I have devoted my entire professional life to 
housing and urban issues since my graduate school days. Most of 
my classmates chose to specialize in public finance or money 
and banking or labor economics. Quite a few decided to be 
agricultural economists.
    I felt that the cities presented the most urgent economic 
problems in America. Starting with my doctoral dissertation, I 
have spent my career on those problems and I have never 
regretted it.
    The Federal Government has two major housing policy 
objectives--helping families become homeowners and making sure 
that everyone lives in decent housing. Those are very important 
public purposes. They are FHA's basic missions, and I support 
them wholeheartedly as I have throughout my career.
    Mr. Chairman, Members of the Committee, the office of 
Assistant Secretary for Housing is a high honor, a great 
responsibility and a tremendous challenge.
    If I am confirmed, I pledge to work with Congress, with 
both Houses and with both parties. Working together, we can 
achieve the goals of housing policy and I will certainly do my 
part.
    Thank you very much for the opportunity to appear before 
you this morning.
    Chairman Gramm. Thank you.
    Mayor Bernardi.

          STATEMENT OF ROMOLO A. BERNARDI, OF NEW YORK

                 TO BE ASSISTANT SECRETARY FOR

               COMMUNITY PLANNING AND DEVELOPMENT

        U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

    Mr. Bernardi. Good morning, Mr. Chairman, Senator Sarbanes, 
Members of the Committee.
    I thank you for the opportunity to be here. I want to thank 
President Bush for his confidence in me, and Secretary 
Martinez.
    In the last few weeks, I have had the opportunity to spend 
some time with the other three designees that are here and I 
believe, under the guidance of President Bush, that Secretary 
Martinez is putting together a good team that can help the 
American people and the Department of Housing and Urban 
Development. I also want to thank Senator Clinton and 
Congressman Walsh for their kind introduction. The Congressman 
and I go back a long way.
    The Congressman talked about my immigrant parents. I grew 
up on the north side of the city of Syracuse in an Italian 
neighborhood. When my parents came to this country, they looked 
for their opportunity in the cities.
    My wife Alice and I, who I would like to introduce right 
now--Alice. Our young children, Dante and Bianca, could not be 
with us. But we want the American Dream for our children as it 
was for my parents and it was for myself and my siblings.
    I love cities. When I think of cities, I think of people 
that are disadvantaged. I think of the immigrant. I think of 
the young families struggling to make ends meet. I think of the 
renter who is saving for her first home. And I think of the 
businessman and the entrepreneur who sees the city as his best 
chance. But also, the homeless person that perhaps sees the 
city as his last chance.
    My background in the last 35 years, I have been in public 
service, 7 years in education as a public school teacher and a 
guidance counselor, 20 years as the elected City Auditor in the 
city of Syracuse, and I am in my eighth year as Mayor of that 
wonderful city.
    Senator Bunning, I am term-limited. That is not the only 
reason that I am here. But the fact of the matter is that I 
have had the opportunity firsthand with that practical 
experience to see what a Government agency, a Federal 
Government agency, can do for people, what it can do for 
cities.
    The Community Development Block Grant program, which would 
be under my responsibility, how we have utilized that money in 
Syracuse for housing and how we have helped groups in that city 
provide services to the most needy.
    I look at the brownfield redevelopment monies that we used. 
Many of our cities, especially in New York State, Upstate New 
York, and in the northeast, just reclaiming those industrial 
wastelands, turning them around, providing an economic 
opportunity and jobs for people.
    I am very proud of the HOME program that HUD has and what 
we have done in Syracuse. As you know, the proposal is to take 
12 percent of that HOME budget and use that so that people can 
buy their first home--low-income people, people that need some 
downpayment assistance. And we do that in Syracuse in a program 
we call Home Headquarters.
    Of our $2 million allocation, we spend approximately 
$300,000 for homeownership, and that is the American Dream. 
Another part of the American Dream is the economic advantages 
that you want for your children and your family.
    The Department of Community Planning and Development are 
varied. I also know that we have to have keen oversight. As 
auditor, I made sure that there was accountability, made sure 
that the monies were spent properly, and that they went to the 
people that were entitled to them. And I would do the same 
thing at HUD, working with Mr. Jackson and my partners to make 
sure that we cooperate with the GAO and the ID.
    As an auditor, I know full well that you do not look at 
them as the enemy. You do not look at them as the opposition. 
You look at them as people who provide opportunities, 
recommendations and how you can have a better work force, a 
better product, and how you can have a better delivery system.
    If I have the opportunity to be confirmed by this body, I 
pledge to you that I will give all of my energy and resources, 
my entire commitment and my experience to being the Assistant 
Secretary for Planning and Development and will work in 
conjunction with my colleagues here to provide the necessities 
for the people of our wonderful country. Thank you.
    Chairman Gramm. Thank you.
    Well, let me first thank each of you for being willing to 
serve. 
It is a very high calling to be called to serve the greatest 
country 
in the history of the world, and we appreciate your willingness 

to serve.
    What I would like to do is pose just one question--make a 
statement and then ask that each of you respond to it.
    Much of our public housing is focused on the elderly. I 
find that those public housing units or subsidies are uniformly 
popular 
everywhere. Other parts of our public housing have to do with 
younger families.
    I have always shared Mayor Bernardi's view that owning your 
own home is part of the American Dream.
    It seems to me that while we cannot always be successful 
and maybe in many cases, we would not be successful, that one 
of the goals we should have is to make HUD's subsidized housing 
a way station toward homeownership. Not something that somebody 
goes into permanently, but something that someone is in as a 
way station toward ultimately owning their own home. I would 
like to ask each of you to respond to that, give me some of 
your initial thoughts as to what HUD could do to help promote 
that.
    Mr. Jackson.
    Mr. Jackson. Mr. Chairman, I agree with you.
    Initially, if you go back to the Alley Drilling Act that 
was established when HUD was first established, that was the 
purpose of it. It was a way station. In the late 1970's, it 
became basically a place where people felt that they had a 
lifetime tenure.
    It is my belief that the first act that we must do to make 
sure that people understand that public housing is not forever, 
is to give them incentives to get them out.
    I believe that there are a number of ways that we can do 
that, Congress has answered that question in the sense that we 
have a number of programs, self-sufficiency is one, helping 
public housing residents leave public housing, giving them 
incentives to leave.
    We have the Section 8 program which will serve as a down 
payment for a home if they will find employment to subsidize 
that.
    I have a philosophical belief that my parents taught me was 
simple--if you expect performance from people, you get 
performance from people. I think for too long, we have not 
expected performance from public housing residents.
    While I was in Dallas, one of the things that I asked for 
and was given by HUD is that every resident in public housing 
pay rent.
    Some of my colleagues in the business at the time did not 
believe that it could be done. Well, people in Dallas pay rent. 
Every resident pays rent. And in the final analysis, what we 
have seen is no less, but better abilities to take care of the 
properties.
    We also, if you notice, Mr. Chairman, started the process 
of building 300 homes which will eventually be 900. The first 
300 are coming online now--for homeownership programs. And I 
think that we will be pretty innovative and believe that public 
housing residents can get out of public housing. We can help 
them get out of public housing.
    If we do not perceive them as human beings with the same 
sense of worth that we have, then it is not going to happen. I 
just believe that expectation is the key in order to make sure 
that we do have a way station and not a place of permanent 
housing.
    Chairman Gramm. Thank you.
    Mr. Hauser.
    Mr. Hauser. Mr. Chairman, I support your view on this and 
it is a view that is shared by the President and the Secretary. 
As General Counsel, I will have less to say programmatically 
about those issues than my colleagues here. But I can pledge to 
you that I will see that the Office of General Counsel gives 
the very best advice to see that these programs are carried out 
in an efficient way.
    And also, as President Bush said yesterday in his efforts 
to bring about, as he called it, domestic tranquility, to our 
streets and to our neighborhoods, that the Office of General 
Counsel can play a role there, too, as people move from what 
should be in a short period of time, into homeownership, which 
is the ultimate goal here.
    Thank you.
    Chairman Gramm. Mr. Weicher.
    Mr. Weicher. Mr. Chairman, as I said in my statement, I 
certainly agree with you that owning your own home is the key 
to the American Dream in our society. In fact, in published 
research which I did as a Visiting Economist at the Federal 
Reserve Bank of St. Louis, I documented the importance of home 
equity as a force for economic inequality in our society.
    And indeed, until very recently, the equity that we as 
Americans have had in our own homes was larger than the equity 
that all of us had in financial assets--stocks and bonds and 
mutual funds.
    It is a great force for stability in our society and we 
should be promoting it.
    Senator Sarbanes will certainly remember that in 1992, 
Secretary Kemp and President George Bush proposed to use the 
housing voucher as a homeownership support for low-income 
families. And Congress, a Democratic Congress, passed that 
proposal and it became law.
    Various reforms of that were proposed by Secretary Cuomo 
and enacted by the Republican Congress in 1998. President Bush, 
in the campaign, proposed making the voucher available for a 
down payment toward the house and Congress enacted that in the 
year 2000. And we at HUD are now in the process of writing 
regulations to implement that, trying to use housing assistance 
for lower income families to help them become homeowners.
    Chairman Gramm. Thank you.
    Well, I know, Mr. Bernardi, you agree with me because of 
what you said.
    Mr. Bernardi. Just very quickly, Senator, the Section 8 
voucher program that Mr. Jackson spoke of, Syracuse is one of 
the pilot communities, or the Syracuse Housing Authority.
    We are always going to have public housing. I think we need 
to do everything that we possibly can with our resources to try 
to provide people the opportunity to utilize those vouchers 
along with employment, so that, eventually, they could purchase 
their own home. The HOME program runs hand-in-hand with the 
Section 8 voucher. It provides the necessary dollars, but also 
the educational aspect that goes with it.
    In our HOME headquarters program in Syracuse for first-time 
homebuyers, we not only provide down payment assistance 
dollars. We also obviously pay for some points. But we also at 
the same time have training programs, so that people that end 
up in their first home can stay there so that defaults do not 
take place.
    I support, obviously, your concept.
    Chairman Gramm. Thank you very much.
    Senator Schumer, you were not here before when we were 
doing introductions and I knew you wanted to do one.
    Let me just recognize you briefly for that purpose, and 
then I will turn to Senator Sarbanes.

            STATEMENT OF SENATOR CHARLES E. SCHUMER

    Senator Schumer. Thank you, Mr. Chairman. I appreciate that 
and I thank my colleagues.
    I apologize to Mayor Bernardi and the others that I could 
not be here. When they changed the date of the hearing, I had a 
previous commitment that I could not get out of.
    I want to thank you, Mr. Chairman. I want to give a welcome 
to our nominees. But particularly to give a New York welcome to 
Mayor Bernardi from Syracuse.
    Mr. Chairman, it is an indication, whenever you come to a 
hearing, even if you think it is going to be a little bit pro 
forma, you learn something.
    What I just learned is that Mayor Bernardi's first name is 
not Roy, which we have always referred to him as, but Romolo.
    Mr. Bernardi. Romolo.
    [Laughter.]
    Senator Schumer. Romolo. I say to you, bello. Beautiful.
    Mr. Bernardi. Grasi.
    Senator Schumer. That is my foray into the Italian romance 
language.
    Anyway, Mayor Bernardi is not transplanted from New York 
like so many others who have come before us this year. The 
Mayor is an organic New Yorker, so to speak--homegrown, 
homeraised. I have a deep and abiding respect for him. We share 
a common, pragmatic approach to governing.
    Mayor Bernardi is the first Republican Mayor of Syracuse in 
20 years and in his two terms, he has consistently reached 
across party lines to get things done for the people of 
Syracuse.
    We spend a lot of time together, from walking in the St. 
Patrick's Day parade each year, where we make a strange pair, 
to, more importantly, working on a number of projects for 
Syracuse.
    The most important was bringing Jet Blue, a start-up, low-
cost air service to Syracuse. Now people from Syracuse are 
saving over $250 on trips to New York City and this has helped 
stimulate the Syracuse economy. Mayor Bernardi and Mr. Everett, 
his airport director, were instrumental in helping bring Jet 
Blue there.
    Because of the Mayor's work, the city of Syracuse is 
starting to turn the corner toward strong, economic growth. 
But, like so many other talented politicians, the Mayor is 
being term-limited.
    In his two short terms, the mayor has accomplished a great 
deal. On behalf of all New Yorkers, I want to thank you, Mr. 
Mayor, for the great work you have done for the people of 
Syracuse.
    But now, Syracuse's loss is Washington's gain. I want to 
thank Congressman Walsh for championing your nomination. He did 

another good deed for both Syracuse and for the country when he 

did that. And the Mayor's experience and accomplishments as 
City Auditor and Mayor, my colleagues, make him ideally suited 
to become Assistant Secretary for Community Planning and 
Development.
    I welcome the Mayor to Washington, wish him good luck, and 
fully support his nomination.
    Chairman Gramm. Thank you, Senator Schumer.
    Senator Sarbanes.
    Senator Sarbanes. Thank you very much, Mr. Chairman.
    First, let me make this observation. A theme, I think, that 
has characterized all four of the nominees is the need to 
improve the administration within HUD.
    Mr. Jackson, you said, put the house in order, or some 
phrase of that sort. But I am encouraged to see that that is 
coupled with the recognition that that is, as it were, a base 
or a foundation upon which then to move forward and to carry 
out the substantive programs which will actually provide 
housing, help people obtain housing all across the country.
    Mr. Hauser, you have a couple of paragraphs in your 
statement which you did not read, but which exactly address 
that. It is where you talk about the Secretary making the 
appropriate administration of HUD programs a major priority. 
And then you go on later to note that the Secretary has made it 
his priority to focus the agency on the core mission, and then 
you list the various programs that we are trying to encourage. 
So I think that is a very important coupling of objectives 
there.
    We very much want the improved administration. In fact, the 
Cuomo people did get HUD--the Department--off of the high-risk 
list, although some of its programs are still in that category. 
But it is a step leading on, then, to carrying through these 
programs.
    Mr. Weicher, you did not read the part of your statement 
that I was looking forward to you reading. I know we have now 
included it in the record. Let me develop a few sort of 
specific questions.
    Working with Senator Mack a few years ago, and the Members 
of this Committee, we addressed the situation of making 
assisted housing, ensuring that it remained affordable to low-
income people.
    That was the Mark-to-Market program.
    We saw that as preventing the loss of scarce, affordable 
housing. And in fact, I note that in this morning's Wall Street 
Journal, there is an article that says: Looming Need For 
Housing A Big Surprise. And then it goes on to say ``housing 
advocates have been complaining about the lack of affordable 
housing for low-income Americans for years. But now the problem 
appears to be spreading to the middle class.'' And further on 
in the article, one observer says ``a decade ago, there were 
discussions of a looming lack of demand and now there are 
discussions of a looming lack of supply.'' And they go on to 
talk about the demographics reflected in the 2000 census.
    Now in your 1997 book, you said the Mark-to-Market program 
should be rejected, although you allowed, of course, that it 
could cost the Government money where there was FHA insurance. 
Now, we reached the conclusion that we just could not allow, or 
we should try to retain these units in the affordable housing 
inventory.
    Over the next 4 years, approximately 1.2 million units will 
expire. In buildings where owners have opted out, rents have 
increased on average 44 percent. And in buildings where owners 
have prepaid their Federal mortgages, and in both instances, 
thereby getting out of the program, the increase in rents 
averages an 
astounding 57 percent. Almost three-quarters--72 percent of the 

residents of these buildings--are elderly or disabled, making 
it 
even more difficult for them to move or to find adequate 
housing.
    I really want to draw you out on what your attitude is with 
respect to these Section 8 contracts for property that are 
decent and safe with respect to their renewal over the next 4 
years.
    Mr. Weicher. Certainly, Senator. First, I wrote that paper 
for a conference in 1996, although with publication lags, with 
which Chairman Gramm is certainly familiar, it did not come out 
for a year after the conference at which I gave the paper. It 
has a publication date of 1997, but it was written in 1996. And 
it was written in the context of President Clinton's 
Reinvention Blueprint for HUD which introduced the concept of 
Mark-to-Market, but which, as I remember the discussions in 
both Houses and both parties, there was a great sentiment that 
Mark-to-Market, as formulated at that time, was not likely to 
work very well.
    There were many problems with it. And indeed, Congress 
wrestled with it through 1995 and 1996, without enacting it, 
and then revisited it and enacted a version of Mark-to-Market 
in 1998, if I remember correctly, as part of the housing bill 
that finally emerged that year.
    Since then you established the Office of Multifamily 
Housing Assistance Restructuring and Mark-to-Market has been 
going forward at HUD ever since then, and is going to continue 
to go forward as long as the need is there and the program is 
there. As I understand it, it is expiring later this year.
    I think the problems of the multifamily assisted inventory 
have been the most complicated problems, program problems, that 
HUD has experienced. Congress has wrestled with solutions for 
those projects since at least 1986. The Mark-to-Market 
approach, as finally enacted by Congress in 1998, is a serious 
attempt to address the problems. And I think when we complete 
that process, we will see what remains.
    I also think that Congress effectively indicated how the 
problem of rising rents should be addressed for the tenants 
with the enhanced voucher, which provides protection for the 
tenants who are in danger of being evicted because they cannot 
afford the rents when people opt out.
    I think serious efforts have been made in recent years to 
address that problem. I hope to work with you all to continue 
addressing the problems in that inventory as we move forward.
    Senator Sarbanes. Do you contemplate that we could lose 1.2 
million units over the next 4 years?
    Mr. Weicher. I do not see that we will lose 1.2 million 
over the next 4 years with the programs that you all have put 
in place.
    Senator Sarbanes. We will have to move that program through 
to continue to work it through the 4 year period. Is that 
correct?
    Mr. Weicher. I know that we will need to either reauthorize 
that program or we will all need to agree on an alternative for 
that program to address the problems of the remaining units 
that are going to be in a position to prepay over the next few 
years.
    Senator Sarbanes. Well, I do agree with you that I think 
Congress did come to grips with the problem in a constructive 
way in 1998, and that that is working pretty well. I do not 
think we ought to simply depart from that or jettison it.
    Mr. Jackson, you are going to be the Deputy. Do you have 
any views on this?
    Mr. Jackson. I agree with that. And I think that Mr. 
Weicher has answered it very well.
    I think that with the support and help from Congress, we 
can address the need and avoid the crisis that you spoke about 
just a few minutes ago.
    Senator Sarbanes. Now, Mr. Weicher, you criticized the 
multifamily insurance programs at one point. You said those 
problems can be solved by reforming the programs of FHA most 
directly by eliminating multifamily insurance.
    It is a little bit like getting rid of the headache by 
cutting off your head. We have tried to do something there. Let 
me just mention a couple of facts.
    The credit subsidy necessary to operate the 221(d)(4) 
program has dropped from 12.74 percent in 1993 to 3.35 in 2001. 
The credit subsidy for the 221(d)(3)program has dropped from 
29.89 in 1995 to 17.22 in 2001, and it is projected to drop 
even further in 2002 to 10 percent.
    The Apt report in 1999 shows that claim rates in each of 
the major multifamily programs have dropped significantly in 
recent years and found that, taken together, the five 
multifamily programs earned more in fees and premiums than they 
paid out in claims. As FHA Commissioner, you will be 
responsible for overseeing the multifamily insurance programs. 
What is your current view of those programs?
    Mr. Weicher. Well, as I said in my statement, I think 
multifamily insurance serves important public purposes for 
lower income families in underserved areas. The statement that 
you quoted is a statement I made in 1995, in a very different 
political context than we have now.
    In 1995, nearly every Republican who was interested in 
housing had a proposal to abolish HUD. There was a substantial 
group of freshman Republican Congressmen with a proposal to 
abolish the Department.
    Senator Faircloth, who was a Member of this Committee and 
Chair of the HUD Oversight Subcommittee at that time, had a 
proposal to abolish HUD.
    Senator Dole had a proposal to abolish HUD. The Republican 
platform of 1996 proposed to abolish HUD.
    In the House, Congressman Lazio was Chair of the Housing 
Subcommittee and he had a proposal to repeal the National Hous-
ing Act of 1935, which he carried through the House and into 
conference with this Committee. And it was my understanding 
afterwards that you, Senator Sarbanes, were responsible for the 

conference not agreeing to repeal the National Housing Act of 
1935, as the leader of the Democrats in the conference.
    And at the same time, President Clinton had his Reinvention 
Blueprint, which had very dramatic proposals for changing the 
way FHA worked for drastically revamping the single-family 
mortgage program, but leaving the multifamily mortgage program 
alone.
    I was saying to my colleagues in the Republican Party, in a 
number of venues and hearings before this Committee and the 
House Committee and other Committees, and also in various 
speeches and publications, I was saying we should not abolish 
HUD. HUD serves important public purposes, purposes that we as 
Republicans recognize as important, as well as purposes that 
Democrats recognize as important. And it serves those purposes 
reasonably well.
    There are programs in areas, in HUD, that do not work very 
well. You should fix those. You should make them run better. 
Or, if you like, you should abolish them. But you should not 
abolish HUD. And I was a lonely voice.
    At a hearing in this room, in front of two Subcommittees of 
this Committee, Senator Faircloth asked me directly, should we 
abolish HUD? And I said to him, point blank, no. And that was 
not the answer he wanted to hear.
    Senator Bond was about the only Republican who was speaking 
about the value of preserving HUD. And Senator Bond was saying, 
we should have a top-to-bottom review of FHA and we should 
sharply consolidate the number of programs.
    I thought that the problems in HUD, the management problems 
at HUD, had been concentrated in multifamily insurance and I 
think that that is something that there is also bipartisan 
agreement about among people who have worked at HUD in 
administrations back 30 years. That was 1995 and 1996.
    Now, 5 years later, no one in either party is talking about 
abolishing HUD or terminating HUD or terminating any of its 
major programs. Certainly, President Bush did not during the 
campaign, and I was one of his advisers as Chairman of his 
Housing Policy Task Force. Certainly, Secretary Martinez has 
not said that.
    The Republican Party position now is reasonably close to 
the position I was taking in 1995. Of course, what I wrote in 
1995 and 1996 remains in print. It is accessible on the 
Internet. But what is not there is the context, who I was 
speaking to and what other people were saying at the same time.
    Senator Sarbanes. Well, thank you. I see my time is up. I 
would just make the observation that Secretary Martinez has 
actually asked Congress to raise the FHA multifamily loan 
limits.
    Mr. Weicher. Yes, he has.
    Senator Sarbanes. By 25 percent, to ensure that multifamily 
housing can be built in high-cost areas. So he and the 
President have an initiative, actually, in that arena.
    Mr. Chairman, could I just very quickly----
    Chairman Gramm. Oh, sure.
    Senator Sarbanes. What is your view of the Low-Income 
Housing Tax Credit program?
    Mr. Weicher. I think the Low-Income Housing Tax Credit is 
one of the programs we have which is actually producing housing 
for lower income people. It was enacted, of course, in 1987, 
and when I was at PD&R, we were doing the first studies of the 
low-income tax credit. And we were also implementing the 
regulations for the qualified census tracks in difficult-to-
develop areas that you enacted, I believe, in 1990. It may have 
been 1989.
    And that is the important part of the housing finance 
system, the system of providing affordable housing, for making 
sure that every American lives in the most decent affordable 
housing that we have.
    Senator Sarbanes. Now what is your view of using HOME and 
CDBG funds for affordable housing production?
    The HOME program, of course, is being used by the State and 
localities in a matching way and they have drawn in the private 
sector for, I think, important housing production. And the CDBG 
funds as well in certain instances. What is your view about 
that?
    Mr. Weicher. I think those programs are available to cities 
to do what the cities think needs to be done in housing and 
community development. And that is a local option.
    My recollection is, and I haven't looked at CDBG in this 
light in some years, that it cannot be used for new housing 
construction.
    I believe that was certainly true when we were here in the 
Administration of the first President Bush. I do not really 
know if you all have changed that in recent years. But those 
programs are there to address the housing and community 
development needs of the cities as the cities see them.
    Senator Sarbanes. All right.
    Thank you, Mr. Chairman.
    Chairman Gramm. Thank you.
    Senator Allard.
    Senator Allard. Thank you, Mr. Chairman. I just think it 
should be pointed out that, in the late 1980's and early 
1990's, FHA was in very serious financial trouble. In fact, it 
was essentially broke. And Mr. Weicher, you played a major role 
in designing the proposals that rescued FHA.
    Mr. Weicher. Yes.
    Senator Allard. And FHA is today in great financial shape. 
In fact, some Members are wanting to take some of these extra 
dollars and divert them to other programs. Would you please 
share with this Committee your work in that area?
    Senator Sarbanes. Mr. Chairman, let me just say, I 
acknowledged that contribution in my opening statement about 
Mr. Weicher. Mr. Weicher has many skills and a lot of 
expertise. And if he would just assure us that they are going 
to be working in the right direction, we would be very 
comforted by that.
    Senator Allard. I just felt like they ought to be writing 
these things down.
    [Laughter.]
    Mr. Weicher.
    Mr. Weicher. Mr. Chairman, I promise not to write a single 
article as long as I am Assistant Secretary and FHA 
Commissioner.
    [Laughter.]
    For one thing, I won't have time. But I do promise to 
testify.
    Thank you, Senator Allard. I did work with Secretary Kemp 
and with my colleagues in the 1990 reform of the FHA single-
family program, as Senator Sarbanes mentioned. And the 
proposals that we made were passed by Congress on a bipartisan 
basis with the support of Senator Cranston and Senator D'Amato 
and the support of Congressman Gonzalez and Congressman Wylie 
in particular.
    I think that was an example of bipartisan cooperation to 
address an important problem in a major program and to address 
it in a hurry. I think the experience of the last 10 years 
indicates that we certainly were doing something appropriate in 
that situation.
    I think that the FHA insurance funds, according to the 
evidence we have now, is solvent. The MMI Fund, we have seen 
the new Deloitte & Touche actuarial study indicating that the 
Fund is not quite in as good shape as they thought it was a 
year ago.
    We have the GAO testimony before you, I believe, indicating 
that there are circumstances under which the Fund's reserves 
may be drawn down rather sharply. And I understand that there 
is a paper about to be published by a CBO analyst suggesting 
that both GAO and Deloitte & Touche may be optimistic.
    And of course, the last Administration lowered the up-front 
premium by 75 basis points. And I think we need to look closely 
at the effect of that on the MMI Fund.
    I certainly intend to monitor the status of the Fund 
carefully. I went through the process of restructuring it once 
and I really would not like to revisit that issue if I possibly 
can.
    Senator Allard. Mr. Jackson, as Chairman of the Authorizing 
Committee, I am greatly concerned about the vast number of 
programs at HUD that have never been authorized, as well as the 
current number of major programs with expired authorizations.
    Does this concern you, and do you plan to submit language 
for authorization or reauthorization?
    Mr. Jackson. The Secretary and I at this point in my 
consultant status has been reviewing that. I cannot give you a 
specific answer today, Senator. But after much evaluation, I 
can assure you that we will get back to you.
    Does the Secretary perceive that there are too many 
programs? Yes. How we will approach that at this point, I think 
it is important that we do it in a very systematic way and we 
will get back to you at that point in time.
    Senator Allard. You are looking at some language you might 
get to us for authorization or reauthorization. Is that 
correct?
    Mr. Jackson. Yes.
    Senator Allard. Thank you.
    Mr. Hauser, last December, Congress passed and the 
President signed a housing bill that modernized manufactured 
housing. And that legislation included an implementation 
timetable. Will you work with the Congress to see that this 
important law is implemented in a timely and an efficient 
manner?
    Mr. Hauser. Senator Allard, we will do that. And I know it 
is a concern in terms of time limits that Congress has placed 
in legislation. And my understanding is that we are on track to 
make these time limits. I think there are some appropriations 
or funding issues, but the answer is yes.
    Senator Allard. Are you willing to work with this Committee 
to ensure that housing laws are implemented and administered 
according to Congressional intent?
    Mr. Hauser. Yes, sir.
    Senator Allard. Mr. Bernardi, currently, HUD has a number 
of different homeless programs. Are you willing to work with me 

and this Committee to find ways to consolidate and improve 
these 
programs?
    Mr. Bernardi. Yes, I am, Senator. The billion dollars that 
is available for homeless programs, we use the emergency 
shelter grants back in Syracuse and they are very, very helpful 
for the various organizations that provide housing for people 
that are in desperate need.
    But we would be more than happy to work with you and with 
this Committee in any way in which we could consolidate it. As 
I understand it, they are looking at the formula-based program 
as opposed to the competitive grants.
    Senator Allard. Thank you.
    Mr. Chairman, I see that my time is expired.
    Chairman Gramm. Thank you.
    Senator Reed.
    Senator Reed. Thank you very much, Mr. Chairman.
    Mr. Weicher, we continually refer back to your writings and 
that is a compliment because these are not the extemporaneous 
musings of someone with a casual interest in housing. You are a 
serious scholar. You have thought about these issues.
    Just as recently as 1997, I believe, in your book, 
``Privatizing Subsidized Housing,'' you stated: ``Despite the 
concern about a shortage of available housing for the poor, in 
reality, the supply of available decent housing that families 
could afford if they were given tenant-based assistance at 
current subsidy levels, is large enough to accommodate them 
all.''
    Yet, the evidence, particularly in my part of the country, 
New England, is that 30 percent of families given vouchers are 
unable to use them because the rents are too high. And there is 
also anecdotal evidence from around the country that this is 
not a regional phenomenon.
    First, do you believe that there is sufficient housing out 
there by giving everyone a voucher which you wrote about 2 or 3 
years ago--4 years ago. I am sorry.
    Mr. Weicher. Senator, as I said before, I wrote that in 
1996, and I wrote that in the context of proposals by both 
parties in President Clinton's Reinvention Blueprint and by 
Senator Dole and the Republican platform to voucher-out public 
housing. The Reinvention Blueprint, as I think Senator Sarbanes 
mentioned, had a dramatic proposal to give everyone in public 
housing a voucher.
    I was invited to give a paper at a conference at the 
American Enterprise Institute. The subject of the conference 
was Getting Serious About Privatization. The conference was in 
July 1996. They first asked me to write a paper about getting 
rid of HUD, privatizing HUD, and I said, no. Then they said, 
well, how about privatizing public housing?
    And I thought that with leaders in both parties talking 
about vouchering out public housing, it would be interesting to 
look at what would happen, if we did that, if we took that 
seriously, how would it work, what would the benefits be, what 
would the problems be, and how would the problems be addressed.
    The quotation that you mentioned comes from a discussion, a 
very specific discussion of suppose you give everyone now 
living in public housing a voucher. How many of them would want 
to move? And for those who want to move, would there be enough 
housing for them?
    And working with census data, I calculated that about 
500,000 families living in public housing would want to move. 
That was based on those who said that they were very 
dissatisfied with either their housing or their neighborhood.
    At the same time, other census data indicated that there 
were about 1\1/2\ million available vacant rental units renting 
for less than the national average fair market rent. And so, 
with that data, I concluded that there was enough housing 
available if everyone who wanted to move was given a voucher.
    I then went on to say that those were national figures and 
that I did not have data for individual markets and there could 
well be local markets in which that situation would not apply.
    Senator Reed. So based on current data, would you still 
share that conclusion?
    Mr. Weicher. I haven't looked at current data on either of 
those questions. I do not know what the latest data shows about 
the attitude of public housing residents toward their housing. 
But that would be the key in determining how many might want to 
use vouchers to move. And I haven't really looked at the 
vacancy rates.
    First of all, that is not germane to anything I am likely 
to be doing as FHA Commissioner. But beyond that, I do not 
think, as Senator Sarbanes said earlier, Congress is likely to 
pass a proposal like that any time in the next few years.
    Senator Reed. My concern is that you are likely to 
recommend such a proposal to the Secretary and the President. 
Would you recommend such a proposal?
    Mr. Weicher. I do not have any expectation of recommending 
such a proposal to them.
    Senator Reed. I want to understand this because, again, you 
are a serious student and an accomplished academic.
    I seem to be hearing you say that this dynamic is based 
upon those who voluntarily want to leave public housing 
matching up with those who are in available housing. And that 
conditions your conclusion. Is that fair?
    Mr. Weicher. That is right. That is exactly right, Senator. 
There is about a three-page discussion in that monograph of 
that particular issue and the quotation is in that context.
    Senator Reed. Is it fair to conclude that for those who 
want to remain in public housing, we have to continue with 
public housing?
    Mr. Weicher. Yes, Senator. Senator Gramm said earlier that 
our experience is that public housing for the elderly generally 
works very well and most elderly residents seem to be very 
satisfied with their housing.
    We all know that there are public housing projects in this 
country which do not provide decent housing. And we know that 
there are troubled public housing authorities and that is a 
problem that Congress and Administrations have wrestled with 
for years.
    Senator Reed. My time is expired, so--is there a second 
round, Mr. Chairman?
    Chairman Gramm. Yes, go ahead.
    Senator Reed. Thank you.
    Chairman Gramm. I don't know that we will have a second 
round. Why don't you just take a couple more minutes?
    Senator Reed. Thank you, Mr. Chairman. Thank you very much.
    Just to note that Senator Sarbanes has raised the issue of 
the Mark-to-Market program. And one of the phenomenon that 
seems to happen, the data that is collected, is that when the 
owners opt out, rents have increased an average of 44 percent. 
And in buildings where owners have prepaid their Federal 
mortgages, got out early, the increase in average is an 
astounding 57 percent.
    Seventy-two percent of all the residents in these buildings 
are elderly or disabled, making it difficult just on a 
practical basis to go elsewhere besides the psychological 
attachment to a home, particularly for a senior.
    That seems to me to require two things. Either continuing 
the Mark-to-Market to keep these units in a subsidized form, or 
tremendous increases in vouchers, forgetting of course the 
psychological and physical dislocation. And again, I think 
those are the alternatives. What is your view?
    Mr. Weicher. Well, I think it does require continuation of 
the Mark-to-Market program until we have completed the process. 
And it requires the enhanced vouchers which Congress has 
enacted so that people who do not want to move are not required 
to move.
    Senator Reed, my mother lived in the HUD-insured project 
for a number of years in her later years, and she would not 
have moved out for anything. And she did not require financial 
assistance as an issue. That issue did not arise. But she was 
very comfortable where she was and that is where she intended 
to live out her days, and that is where she did live out her 
days.
    Senator Reed. I am glad that is your sense. That is my 
experience with my tenants in my building units. One final 
question.
    You will have a significant influence on the GSE's, Fannie 
Mae and Freddie Mac. Last year, HUD established significantly 
higher affordable housing goals for Freddie Mac and Fannie Mae. 
It did so in part because it found that the share of the 
affordable housing market, their share, was substantially 
smaller than their share of the total conventional conforming 
market. My question would be what are you going to do to 
continue this effort to increase the participation of these 
GSE's in the affordable housing market?
    Mr. Weicher. HUD will continue to monitor how the GSE's are 
performing in the housing goals and will continue to monitor 
the housing market. I have not participated in any discussions 
about specific changes in the goals and I have no plans to 
address that issue in the near future. I do not know what the 
timetable is on which HUD acts on that issue. I have not really 
followed it very closely since the legislation in 1992.
    Senator Reed. Thank you.
    Thank you, Mr. Chairman.
    Senator Allard. Mr. Chairman.
    Chairman Gramm. Thank you.
    Senator Allard. I would just make the observation, I think 
it was 3 years ago, I was the only Republican that voted with 
the Democrats in support of vouchers. And we see a lot of 
concern about vouchers here. What a difference 3 years makes.
    Senator Sarbanes. We support the vouchers as part of a 
balanced program that also maintains this project-based 
assisted housing. We think we need all of that in the inventory 
as weapons to address the housing issue.
    Senator Reed. Right.
    Senator Sarbanes. So I do not want the issue drawn as 
though we are rejecting the vouchers because we have supported 
the vouchers. But not totally in lieu of the other assisted 
housing that we are provided, which often deals with a 
different target population and a different set of housing 
circumstances.
    Senator Reed. Thank you.
    Chairman Gramm. Thank you.
    Senator Bunning.
    Senator Bunning. Thank you, Mr. Chairman.
    This is a toss-up question. Anyone who would like to can 
answer it. What priorities do you feel should be emphasized and 
how can we allocate resources better at the agency?
    I know that you have been a consultant only, Mr. Jackson, 
but I obviously think that all of you have been thinking how 
you are going to make HUD a much better place.
    Mr. Jackson. Senator, I think the Secretary has spoken very 
well to this. And I believe the same as he does, that we must 
go back to the core mission of HUD.
    I think we have extensive programs that have been at HUD 
and until we can, in essence, and I don't like necessarily 
using the term, consolidate, but facilitate those programs and 
bring them down to a manageable number, I think we will still 
have some problems. Our first objective and goal is to bring 
those down to a manageable number.
    Second of all is to make sure that we allocate the 
resources in the places they are needed the most within HUD.
    Third, if we do that, we think that the morale of the 
agency will be boosted, not necessarily in headquarters, but 
also in the field, and that is where we need it most. So I 
would say, in that order, that is the way that we should 
approach it.
    Senator Bunning. Does anyone else have any different ideas 
or comments?
    Mr. Bernardi. No different ideas, Senator, but to provide 
the technical assistance and the training to our field offices 
around the country. I think that that is very important so that 
we can monitor and assist localities in whatever program they 
are dealing with.
    Senator Bunning. Mayor, I would like to ask you 
specifically, this is not a special question, but I would like 
to put something on HUD's radar screen, so to speak.
    In Kentucky, we have a large number of tobacco warehouses 
that have been closed. Many of these buildings are brownfields. 
They have lead-based paint on the walls and asbestos in the 
roof.
    Unfortunately, these buildings also usually sit in 
downtown. In fact, in Lexington, in Maysville, and many of the 
towns in Kentucky have these right in the middle of the town.
    Because of the liability, they are not being torn down or 
resold. They just sit there vacant. A number of towns in 
Kentucky and other tobacco States need help finding funds to 
tear down these buildings and bring in new tenants to create 
jobs.
    I just wanted to make you aware of the problem and if HUD 
had some kind of interest in seeing to it. Once the area is 
cleaned up, we could build some really nice housing projects 
and/or supplement those buildings with buildings that are 
usable buildings. So when you are thinking of new ideas and 
places to spend money for either housing or whatever, I want 
you to keep that in mind.
    Mr. Bernardi. Senator, in Syracuse, we used the Clean Air/
Clean Water Bond Act. In the State of New York, we spent I 
think, $4 million to take down the old Smith-Corona plant that 
was just filled with violations and had an awful lot of 
asbestos and PCB's. That was 3\1/2\ acres. And that was a 
State-city combination effort. We have also had the good 
fortunate to use some HUD assistance on some of our brownfield 
remediation.
    But the budget, I believe, is $25 million, which is not a 
significant--it is a significant amount of money, but not 
enough money to do what you would like to do around the 
country. But to reclaim those properties, business people, for 
the most part, will not go in unless the property is ready. If 
the property is not ready, the cost is too prohibitive.
    So I agree with you, Senator. Any way we can find in which 
we can leverage our resources and work with our States and our 
communities to remediate those sites and put them back into use 
and create jobs.
    Senator Bunning. Thank you, Mr. Chairman.
    Chairman Gramm. Thank you.
    Senator Miller.

                COMMENTS OF SENATOR ZELL MILLER

    Senator Miller. Thank you, Mr. Chairman, and thank you, 
gentlemen, for being willing to serve in this arena. I have 
maybe two or three questions for Mr. Weicher.
    One is philosophical, a couple, more specific. And I 
realize you probably want to get on to the job before you 
answer these specific ones, but let me ask you anyway.
    In December 2000, Congress made an additional $40 million 
appropriation in the credit subsidy. And as you know, that 
money has not been released. There are 2,331 units in Georgia 
that will not be funded if that money is not released. What do 
you think about the release of those funds?
    Mr. Weicher. Senator Miller, the Administration's position 
has been that the program should be operated within the $101 
million that was authorized and appropriated within the regular 
procedure in the last fiscal year.
    This problem of excessive demand for credit subsidy has 
arisen three times in the last 8 years. And part of the problem 
this year is the fact that there was $12 million left over in 
demand last year which took up the first $12 million for this 
year. So the last Administration basically took the first $12 
million of this year's credit subsidy and then, of course, went 
on allocating subsidy through the end of the Administration.
    We also have an unusual problem this year in that we have a 
much higher proportion of D-3's in the program than we do D-
4's. D-3's, as Senator Sarbanes was mentioning, have a much 
higher credit rate. It is about 5 times the credit rate as D-
4's.
    We now have 25 percent of the portfolio this year being D-
3's instead of 10 percent. If we would have had the usual 
proportions, we would have $27 million more in credit subsidy 
than we now have and we would not be having the problem.
    The Administration's proposal, of course, is to raise the 
premium by 30 basis points, which will turn this into a demand 
program like FHA single-family and will resolve that problem.
    I also know, and I believe it was Senator Sarbanes who 
referred to the Apt study, I also know that there is some 
evidence that the mortgage bankers have argued that, in fact, 
the credit subsidy requirements are much too high and there may 
even be no need for credit subsidy because the losses in the 
program have been so low.
    One of the things that I would intend to do if I am 
confirmed is to do a systematic review of exactly how the 
credit subsidy is calculated. As far as I can tell, that issue 
has not been revisited in a number of years, and I would intend 
to see what the appropriate credit subsidy rate would be, what 
the appropriate premium would be, and make that recommendation 
to the Secretary and to the present OMB and, hopefully, to the 
Congress.
    Senator Miller. Thank you. Let me ask you this also.
    As you know, the HUD Secretary serves as a member of the 
Federal Housing Finance Board, which regulates the Federal Home 
Loan Bank system. And usually, he names the FHA director as his 
designee. What do you think in general about what is the 
appropriate role of the Federal Home Loan Banks?
    Mr. Weicher. I think they are an important part of the 
housing finance system. I think they provide a stable source of 
funds for community banks and other housing lenders. And I 
think they proved their worth in the 1980's and early 1990's, 
in particular, before and after FOREA, when much of the housing 
finance system was disintegrating around them. I think that I 
had the pleasure of assisting Secretary Kemp in his role as a 
member of the Federal Housing Finance Board.
    Indeed, when it was first created, he was the only member 
of the Federal Housing Finance Board because he was the only ex 
officio member and there was a question about whether Congress 
had intended to have a full-time board or a part-time board. 
And until that got resolved, it had a one-man board, one-person 
board, and I worked with him on that. So I am somewhat familiar 
with the issues that the Federal Housing Finance Board deals 
with on a day-to-day basis.
    Senator Miller. Thank you. One quick question, and this 
will be my last one.
    Have you had time to get an opinion on what you think about 
the streamlined down payment program that they put into effect 
in 1998 for 2 years and then renewed it for another 2 years?
    Mr. Weicher. No, I have not, Senator. I have not taken a 
look at that yet. I have been here as a consultant for about 4 
weeks and I know that that is important, I have not gotten to 
it. But I will.
    Senator Miller. Thank you.
    Chairman Gramm. Thank you.
    Senator Carper.

              COMMENTS OF SENATOR THOMAS R. CARPER

    Senator Carper. Thanks, Mr. Chairman. To our witnesses, 
welcome. I apologize for being late. We have another hearing at 
this time on the Postal Service rate hikes that you have been 
hearing about. So I apologize for missing your statements.
    Senator Sarbanes may have touched on this one issue, but I 
want to come back to it again just for clarification. And the 
issue is whether or not we ought to increase the multifamily 
loan limits by 25 percent.
    I think when Secretary Martinez was before us, maybe even 
before he was the Secretary, we talked about this. I think he 
said it is what I would like to do. And I would just like to 
ask you, Mr. Weicher, first, your thoughts more generally on 
multifamily housing and what we ought to be doing. But more 
specifically, your views with respect to that 25 percent 
increase.
    Mr. Weicher. Well, I certainly think that that increase is 
desirable. We have not had one, I believe, since 1992. And 
while we have not had a lot of inflation in the economy, we 
have had some inflation in this economy and those limits are 
now out of date.
    I believe the Secretary announced that in March, if I 
remember correctly. It may have been in February, that that was 
his intention to do that.
    As I said in my statement, and I know that, with all the 
hearings around here, I am surprised that there are very many 
Senators here at all. As I said in my statement, I think 
multifamily insurance serves important public purposes. Most of 
the projects provide housing for people who are in the lower 
half of the income distribution. About half of them are located 
in underserved areas. That is where the housing is needed and 
that is the people for whom the housing is needed. I think the 
program is very important.
    Senator Carper. How do you feel about maybe indexing the 
loan, some CPI, something like that in the future?
    Mr. Weicher. I haven't thought about that issue, whether 
you would want to index it. If you wanted to index it, there 
would be a question of whether you wanted to index it to 
something on the demand side of the market or something on the 
supply side of the market. There are some indexes of cost of 
construction which might be useful. But I think that, I know 
that the Administration would want to look at that issue before 
making any recommendation.
    Senator Carper. Thank you.
    If I could go to Mr. Jackson, I understand that you have 
run a number of housing authorities.
    Mr. Jackson. Yes.
    Senator Carper. Where?
    Mr. Jackson. St. Louis, Washington, DC, and Dallas.
    Senator Carper. Just those little ones, huh?
    [Laughter.]
    Mr. Jackson. Just those little ones.
    [Laughter.]
    And I had the opportunity of meeting with you when I was on 
the National Commission on Severely Distressed Public Housing 
and we came to Delaware.
    Senator Carper. To see how a place that doesn't have 
nationally distressed housing is run.
    Mr. Jackson. You did not have it.
    [Laughter.]
    Senator Carper. Thank you. I have just a couple of 
questions. One, when you look at the budget proposed by the 
Administration, with respect to operating support, operating 
subsidies, I think what they have done is they have collapsed 
one of the programs that we used to fight crime and that sort 
of thing in our public housing.
    And they sort of collapsed that money into providing a 
little increase in the operating subsidy money and said, I 
think it was a $300 million appropriation for the public 
housing, drug enforcement, or whatever it was called.
    We end up with zero in that program in the proposed budget. 
We end up with another $150 million a year I believe in the 
operating subsidy. And we are just basically saying to the 
housing authorities, you figure out how you want to do it. You 
want to use that $150 for drug elimination, for public safety, 
you can do that.
    Put on your old housing authority director hat for one of 
those places, DC or St. Louis or some other place. And you are 
asking in an environment with energy costs going up as they are 
to choose between meeting energy needs and trying to provide a 
safer place for people to live. How do you make that decision?
    Mr. Jackson. Senator, having run three housing authorities, 
I believe that the drug elimination money, had it been used for 
what it was set out to be, would have been a very good thing 
initially.
    What occurred is that many of the housing authorities in 
this country were using it for the operational expenses. Now 
you will get some to say, no. But having run housing 
authorities, I know, traveling around this country.
    I do believe that the monies that are allocated, the $150 
million, can be used as they so choose. If they so choose to 
use it for drug elimination purposes, it can be used for that. 
And I think that that gives them the flexibility to decide, 
rather than having a program that says, there is no 
flexibility. And yet, housing authorities are using it for 
purposes that it is not designed for. And that has gone on for 
some period of time.
    I do believe also that when we look at the budget that we 
have today, at almost $31 billion, I can tell you that back in 
the 1990's, when I visited your city, we had a budget of about 
$23 billion. So that is a tremendous increase today compared to 
what it was in the early 1990's and mid-1990's.
    I think that the program, as set up, with me reviewing the 
budgets in the consultant status, I think it is well organized 
and well established. The operating subsidies can literally be 
met.
    The other thing that I think is important is that the 
Congress allocated a specific allocation to address the energy 
needs of the housing authorities in this country because of the 
energy crisis.
    I think we will have to review it to see how much of that 
money has been used. I asked the other day--and clearly, I 
think it was about $101, $105 million that you allocated--as of 
today, through energy costs, I think only about $30 million of 
it has been used. And I can get the specific number for you for 
sure. But, still, we have a major portion of it that has not 
been used to date.
    So I think that if we see that it is necessary to allocate 
it for energy costs, yes, we will come back and speak to you. 
But as of today, my initial information is it has not all been 
utilized.
    Senator Carper. The Administration is going to roll out 
their other proposals with respect to energy policy in the 
weeks ahead.
    The President has had some comments. He is going to have 
more to say very soon. And I think the Vice President's 
commission is going to report to us next month.
    What role do you see on the energy conservation side? Do 
you see us pursuing through HUD--how does it relate, energy 
efficiency and public housing--what is the relationship here? 
And how does that relate to our funding for capital investment?
    Mr. Jackson. I don't think I am in a position to address 
the energy policy at this point of the Administration. I can 
tell you that I do believe in energy conservation, being the 
President of a major utility company.
    Senator Sarbanes. Careful. We may send you to California.
    [Laughter.]
    Chairman Gramm. That would be the end of your career.
    [Laughter.]
    Mr. Jackson. But I will say this to you, Senator. The most 
difficult thing that I have found out in running a utility 
company is to get people to conserve energy.
    I remember when I was in Corpus Christi and I was talking 
to a group of nuns. They were at the monastery. And I will 
never forget talking to the principal nun. And she says, well, 
if the people across the street save energy, then we will, too.
    [Laughter.]
    Well, it is very difficult to get people conditioned to 
conserve. 
I think that we will have to look at the President's policy. 
And 
we as HUD will work with them to make sure that the residents 
within our public housing complexes address those needs.
    I have always been a conservationist and even when in 
Dallas, we tried to conserve energy. In fact, we had a policy 
that, other than for senior citizens, if you expended so much 
energy, we expected you to pay the differences.
    Senator Carper. Let me just say, in closing, my time has 
expired, let me say in closing, we all need to be 
conservationists with respect to energy. Even the nuns.
    [Laughter.]
    Mr. Jackson. Yes.
    [Laughter.]
    But I was not going to tell the sister that.
    [Laughter.]
    Senator Carper. Probably would not. There are probably some 
opportunities here for us to conserve energy in our public 
housing.
    And I hope that we will be mindful of that as we consider 
the amount of money that we allocate to or take away from 
capital investments in the public housing. Thank you very much.
    Chairman Gramm. Senator Sarbanes, did you want to make some 
closing----
    Senator Sarbanes. I did. Mr. Weicher, Senator Mikulski 
yesterday held a hearing in Baltimore on the problem of 
property flipping and predatory lending.
    This is something we have met more than once with Secretary 
Martinez on. He has been very supportive of efforts there. And 
he has appointed Laurie Magiano, who is the Director of the 
Single-Family Asset Management Disposition Division at FHA, to 
be the point person. Are you familiar with this ongoing effort?
    Mr. Weicher. I am somewhat familiar with it, Senator.
    I do know that Secretary Martinez is very concerned about 
this and prepared to work with the Federal Reserve Board, with 
the industry, with consumer groups, and certainly with the 
Congress.
    Senator Sarbanes. Ms. Magiano has moved in. We are 
impressed by her efforts now just over a few weeks. So, 
presumably, we can count on your cooperation and support for 
this effort of the Secretary's and her activities.
    Mr. Weicher. Yes, that is right. I had heard that the 
people that went up from HUD thought that that was a useful 
town meeting. But I am very glad to hear it also from you.
    We know that this is a particular problem in Baltimore. 
But, of course, FHA had identified five cities where there were 
hot zones.
    Besides Baltimore, it is Atlanta, Chicago, New York and Los 
Angeles. In those cities, we are looking at the loans which 
counselors identified to us as predatory loans where people are 
in danger of losing their houses. We are working to prevent 
foreclosure, to write down the mortgages in some cases where it 
has been overvalued and where we have lenders who are engaging 
in predatory lending, to either bring them before the mortgagee 
review board or to have post-endorsement technical reviews to 
see what they are doing, in some cases, to bar them from the 
program.
    FHA, for about a year now, has been doing the heavy grunt 
work of fighting predatory lending. And I am sure that that is 
going to continue under Secretary Martinez and, if I am 
confirmed, it will continue with me.
    Mr. Jackson. I can tell you, Senator, that I have had that 
conversation and that is a priority. He believes that that is 
very important and he has stated that.
    That is why Laurie is taking the lead.
    Senator Sarbanes. Right. Well, thank you all very much.
    Mr. Chairman, I want to thank all of the witnesses. I want 
to say to the other three, other than Mr. Weicher, we are very 
interested in what you are doing as well. But, as it turned 
out, I think in this hearing you were sort of sailing in the 
wake of Mr. Weicher's ship.
    [Laughter.]
    So it was relatively easy duty for you. You owe a few to 
Mr. Weicher because of it. And I want to wish all of the 
nominees well.
    Mr. Jackson. We just did not write anything down. That was 
it.
    [Laughter.]
    Senator Sarbanes. All right.
    Chairman Gramm. Thank you all very much. We will finish our 
vote on the nominations of: John E. Robson, to be President of 
the Export-Import Bank; and James J. Jochum, to be Assistant 
Secretary of Commerce for Export Administration.
    The Clerk will call the roll of those Senators who have not 
previously had the opportunity to vote.
    The Clerk. Mr. Shelby.
    Chairman Gramm. Aye, by proxy.
    The Clerk. Mr. Bennett.
    Chairman Gramm. Aye, by proxy.
    The Clerk. Mr. Enzi.
    Senator Enzi. Aye.
    The Clerk. Mr. Santorum.
    Chairman Gramm. Aye, by proxy.
    The Clerk. Mr. Crapo.
    Chairman Gramm. Aye, by proxy.
    The Clerk. Mr. Ensign.
    Chairman Gramm. Aye, by proxy.
    The Clerk. Mr. Dodd.
    Senator Sarbanes. Aye, by proxy.
    The Clerk. Mr. Johnson.
    Senator Sarbanes. Aye, by proxy.
    The Clerk. Mr. Schumer.
    Senator Schumer. Aye.
    The Clerk. Mr. Bayh.
    Senator Sarbanes. Aye, by proxy.
    The Clerk. Mr. Carper.
    Senator Carper. Aye.
    The Clerk. Ms. Stabenow.
    Senator Stabenow. Aye.
    The Clerk. Mr. Corzine.
    Senator Corzine. Aye.
    The Clerk. The vote is 20 ayes, Mr. Chairman.
    Chairman Gramm. Thank you. And thank you all very much. The 
Committee stands adjourned.
    [Whereupon, at 11:50 a.m., the hearing was adjourned.]
    [Prepared statements, biographical sketches of the 
nominees, response to written questions, and additional 
material supplied for the record follow:]
               PREPARED STATEMENT OF SENATOR JIM BUNNING
    Mr. Chairman, I would like to thank all of our nominees for 
testifying today and I would like to thank you for holding this hearing 
and this markup in such an expeditious fashion.
    I think President Bush has once again demonstrated that he will 
continue to ask outstanding people to serve in his Administration. I 
hope that the Committee will report the nominations we are going to 
vote on today and the nominees who are testifying today to the Senate 
floor quickly.
    All four nominees have very impressive credentials. Alphonso 
Jackson has been the head of three housing authorities, as well as the 
President of a public utility and served on two national commissions. 
Richard Hauser has been a Deputy White House Counsel, has worked at the 
Department of Justice and was Chairman of the Pennsylvania Avenue 
Development Corporation. John Wiecher was an Assistant Secretary at HUD 
and worked for OMB. Romolo Bernardi is the Mayor of Syracuse, NY and 
was the City Auditor.
    We are very fortunate that these fine nominees have chosen to serve 
the public at HUD. Their diverse backgrounds and unique experiences 
will help fulfill HUD's mission. We are lucky to have them.
    Once again, I urge all of my colleagues to support these worthy 
nominees. Thank you, Mr. Chairman.
                               ----------
               PREPARED STATEMENT OF ALPHONSO R. JACKSON
                       Deputy Secretary-Designate
            U.S. Department of Housing and Urban Development
                         Tuesday, May 15, 2001
    Mr. Chairman, Senator Sarbanes, and distinguished Members of the 
Committee, thank you for the opportunity to appear before you today. I 
would also like to thank Senators Hutchison and Bond for their generous 
introductions.
    Let me express my thanks to President Bush and Secretary Martinez 
for selecting me for this important job. I am deeply honored by the 
trust and confidence they have placed in me by nominating me as Deputy 
Secretary for the Department of Housing and Urban Development.
    Mr. Chairman, I was born and raised in Texas, the youngest of 12 
children. Although my father had only a 5th grade education and my 
mother an 11th grade education, they made sure that all of their 
children received a good education. I am here because of my parents' 
love and devotion and the lessons that they taught my siblings and me. 
They stressed to us that with a good education and a strong work ethic, 
there was nothing that we could not accomplish in this world. No 
mountain would be too steep and no road too long. That is one reason 
why I spent 6 years of my early career as a Public School Administrator 
and a University Professor, helping to educate others.
    My interest and expertise in urban law and housing issues led me to 
a career in public service. I have been told that I am the first 
candidate for Deputy Secretary of HUD who has experience both in the 
field of public housing and in the field of community development.
    I have run three major urban public housing authorities: St. Louis, 
Washington, and most recently, Dallas. This experience has given me 
insight into the needs of public housing authorities and how HUD 
relates to them. It has also given me ideas about how to improve HUD's 
oversight of these authorities so that they can provide better services 
to those families living in public housing.
    Having chaired two community development block grant agencies--one 
in St. Louis and the other here in Washington, DC--I have also had 
extensive experience with that side of HUD's mission. I have been able 
to see HUD grants go to these urban areas. HUD has played an important 
role in the recent rejuvenation of American cities and I look forward 
to seeing HUD continue working in partnership with local governments to 
improve the quality of life for American families.
    My private sector experience has taught me about the importance of 
management to a successful enterprise. I have spent the last 5 years 
working in the private sector in Texas, most recently as the President 
of American Electric Power-TEXAS, where I was responsible for the 
management and operations of a nearly $11 billion company with 2,800 
employees and over 900,000 customers.
    My management style emphasized professionalism at all levels of the 
company. I believe in setting high expectations and holding managers 
and workers accountable. This is the kind of environment that I have 
sought to create in the private sector and I see no reason why we 
should not expect the same high standards from the employees at HUD. 
The taxpayers deserve such standards from their public servants, as do 
those who rely upon HUD's services.
    HUD has a long history as a troubled agency. Although the 
Department has been taken off the General Accounting Office's ``high-
risk'' list, many of its individual programs are still designated as 
``high-risk.'' My top priority as Deputy Secretary will be to assist 
Secretary Martinez in restoring complete credibility and accountability 
to HUD. Congress has repeatedly told HUD that it must get its house in 
order. This Administration is listening.
    I am aware of the concerns of the GAO and HUD's Inspector General 
and have studied their reports. If confirmed, I will insist that this 
agency work in tandem with the GAO and the IG's office to correct the 
Department's problems. We will avoid the adversarial stance that has 
too often marked HUD's relationship with these offices in the past.
    In conclusion, I realize that we have much work ahead of us. HUD 
has an important mission to accomplish. Many of America's neediest 
families rely on our services. We owe it to them to provide the best 
possible programs we can in the most effective manner. And we owe it to 
the American taxpayers to make sure that their tax dollars are being 
spent efficiently and wisely.
    I am a man of optimism. When I see HUD, I see a Department with 
lots of opportunities to do great things. I see this as a historic 
opportunity to improve the way HUD manages its programs. The Deputy 
Secretary functions as the Chief Operating Officer. I see one of the 
top duties of the Deputy Secretary as helping solve the management 
problems that have plagued HUD for too long.
    If confirmed, I look forward to working with Secretary Martinez and 
the rest of his team at HUD as we implement this Administration's 
mission. I also look forward to working in a bipartisan manner with 
Members of Congress as we meet the challenges before us. As Secretary 
Martinez said at his confirmation hearing, ``our mission at HUD is not 
a Republican or Democrat mission, but rather an American mission.'' 
Thank you.




















                PREPARED STATEMENT OF RICHARD A. HAUSER
                       General Counsel-Designate
            U.S. Department of Housing and Urban Development
                         Tuesday, May 15, 2001
    Mr. Chairman and distinguished Members of the Committee, thank you 
for the opportunity to appear before you today.
    Let me begin by expressing my sincere appreciation to President 
George W. Bush for his confidence in asking me to be part of his 
Administration as General Counsel of the U.S. Department of Housing and 
Urban Development. I am honored to be nominated. I also want to thank 
Secretary Mel Martinez for asking me to join his team. Secretary 
Martinez's life story is compelling and is the embodiment of the 
American Dream. I will be proud to be at his side, as he develops and 
implements his vision for making HUD an agency that will truly serve 
America consistent with its core basic mission.
    Mr. Chairman, I come before this Committee as an individual with 
previous public and private sector experiences which hopefully have 
prepared me for the challenges that lie ahead at HUD. From my early 
days as a Federal prosecutor with the U.S. Attorney's office in Miami, 
FL, at the Department of Justice in Washington in the Office of Policy 
and Planning, and two terms in the White House Counsel's Office, as 
Associate Counsel in the Nixon White House and Deputy Counsel to 
President Ronald Reagan, I have well understood the value of Government 
service and the need to approach that service with integrity and a 
sense of commitment. My experience in the private practice of law 
representing clients before departments and agencies has underscored 
the importance of integrity and responsiveness in the administration of 
our laws and programs. With that in mind, and with the Senate's 
approval I am committed to assist Secretary Mel Martinez in his efforts 
to make the Department of Housing and Urban Development a more 
efficient, effective and responsive institution--one that will operate 
with the highest ethical and professional standards--both for its 
employees and its program participants.
    It is my understanding that HUD has been an organization designated 
as high risk by GAO and often criticized by its own Inspector General. 
These areas of concern include--but are not limited to--FHA, the 
integration of financial management systems, consistent application of 
HUD program requirements and staffing capability. In this regard, let 
me state clearly that I respect the independence of GAO and the Office 
of Inspector General and appreciate the valuable, oversight functions 
that they perform, and if confirmed, I will work to forge a 
constructive working relationship with both entities.
    During his first months in office, Secretary Martinez has already 
begun the task of assuring that the appropriate use of HUD funds and 
the appropriate adminis-
tration of HUD programs is his top priority. He has delivered that 
message to the 
Congress in his confirmation hearing, and at subsequent budget 
hearings. He has 
delivered that message to HUD staff and perhaps most important he has 
delivered that message to the recipients of HUD programs. As General 
Counsel, it would be my intent to help the Secretary put the HUD house 
in order, and address the priorities of President Bush and Secretary 
Martinez, so that HUD will become a truly effective agency, which is 
capable of providing the housing and community renewal opportunities 
needed by so many American families and neighborhoods.
    Mr. Chairman, the Department of Housing and Urban Development has a 
wide range of responsibilities. To his credit, the Secretary has made 
it his priority to focus the agency on the core mission to: expand 
homeownership opportunities for low- and moderate-income families; 
renew distressed areas with decent and safe neighborhoods; enhance 
affordable housing opportunities for all residents particularly members 
of disadvantaged minorities; recognize the needs of the growing elderly 
population and provide incentives to address those concerns and 
encourage economic vitality while at the same time address the 
challenges of growth and its impact on the quality of everyday life.
    The Office of General Counsel cuts across all of those lines and 
helps the Department achieve its goals consistent with the laws passed 
by the Congress and signed by the President. The General Counsel is the 
chief legal officer for the agency providing advice on all aspects of 
Federal housing and urban development laws, regu-
lations and policies. These duties include: drafting legislation, and 
regulations; 
representing the Department in affirmative and defensive litigation and 
serving 
program clients as program counsel by providing guidance about the 
statutes and 
regulations that govern the operations of the Department to assure that 
the programs are administered as Congress intended and in the best 
interest of those whom the Department was established to serve.
    I would also like to mention one other prior experience that I 
believe is relevant to my prospective position at HUD. From 1987-1996, 
I had the privilege of serving as Chairman of the Pennsylvania Avenue 
Development Corporation (``PADC''), the Federally chartered and funded 
entity that was charged with the revitalization of Pennsylvania Avenue 
from the Treasury Department to the Capitol. In that capacity, I had 
occasion to work with executive branch agencies, the Congress, the DC 
Government, and the development community in a cooperative effort that 
resulted in new commercial, retail, and residential development along 
``America's Main Street.'' My work with the PADC gave me an 
appreciation of the complexities of development in the inner city and 
the benefits that can be achieved when working cooperatively with the 
Congress, Federal and local officials, and the private sector.
    With the confidence and support of Secretary Martinez, I expect 
that as General Counsel, I will be involved in all aspects of HUD and 
its many program responsi-
bilities. As I have already mentioned in this brief statement, a major 
focus will be 
ethics. One of President Bush's first acts was to meet with his White 
House staff and clearly articulate his expectations that all who work 
in his Administration will comply with the highest ethical standards. 
Secretary Martinez has embraced this mandate for administering HUD 
programs. It will be my intent, if confirmed as General Counsel, to 
assure that the standards of conduct are clearly articulated, clearly 
understood and fairly but firmly enforced by HUD, as they relate to 
both HUD employees and HUD program participants. That is the only way 
HUD can administer its programs and assure that the programs are 
delivered consistent with the responsibility entrusted by the public 
for the benefit of the people who need them most.
    It is an important time for our country and a critical time for 
HUD. It is time for HUD to address its mission with a sense of urgency, 
integrity, efficiency, and high ethical standards. If reported 
favorably by this Committee and confirmed by the Senate, I look forward 
to fulfilling the duties and responsibilities of the position for which 
I have been nominated. Thank you for your consideration.


































               PREPARED STATEMENT OF JOHN CHARLES WEICHER
                  Assistant Secretary for Housing and
                 Federal Housing Commissioner-Designate
            U.S. Department of Housing and Urban Development
                         Tuesday, May 15, 2001
    Thank you, Mr. Chairman. It is a great honor to appear before this 
distinguished Committee today as the nominee for Assistant Secretary 
for Housing/FHA Commissioner. I am very grateful to President Bush and 
to Secretary Martinez for offering me the opportunity to be part of 
this Administration, in this important position.
    FHA has been central to the American Dream of homeownership since 
the 1930's. It is widely and rightfully regarded as a social policy 
experiment that worked. FHA revolutionized the housing finance system 
and the mortgage instrument. Working with GNMA, it pioneered the 
Mortgage-Backed Security. It has helped to establish the viability of 
new mortgage instruments such as Graduated Payment Mortgages and Home 
Equity Conversion Mortgages. It has provided mortgage insurance for 
purchasers of manufactured homes. FHA has a proud legacy.
    Promoting homeownership remains important today. As Secretary 
Martinez has pointed out, the homeownership rates among African-
Americans and Hispanic Americans remain below 50 percent, even though 
the overall homeownership rate is at a record high. That is a challenge 
to HUD and FHA in particular. During his campaign, President Bush 
proposed the ``New Prosperity Initiative,'' to expand homeownership 
opportunities to lower-income families. The New Prosperity Initiative 
includes $1.7 billion for an investor-based tax credit to encourage the 
construction and rehabilitation of single-family homes in distressed 
communities, parallel to the Low Income Housing Tax Credit. It also 
includes the ``American Dream Down Payment Fund,'' to provide $1 
billion in matching grants to lenders to help low-income families 
become homeowners; and the down payment voucher, enacted by Congress in 
December, allowing low-income families and individuals with 
disabilities to use Section 8 rental vouchers toward the down payment 
on a home. The primary responsibility for developing and implementing 
these important initiatives will lie with other program offices in HUD, 
and with other agencies in the Administration, but FHA will be working 
with them, drawing on its long experience, to help more Americans 
realize the American Dream of owning their own home.
    In addition to promoting homeownership, FHA provides mortgage 
insurance for multifamily housing, supporting the construction of new 
apartment projects and the refinancing of older ones. FHA multifamily 
insurance serves an important public purpose--most of the projects that 
FHA insures are affordable to families in the lower half of the income 
distribution, and almost half are in underserved areas. These families, 
and these communities, need FHA. FHA also insures a large portfolio of 
assisted rental housing projects for lower-income families. It insures 
hospitals and nursing homes. It insures home improvement loans. These 
are important programs also.
    During his confirmation hearing, Secretary Martinez stated that his 
first priority will be for HUD to continue to put its own house in 
order, building on the work of Secretaries Kemp, Cisneros, and Cuomo, 
and addressing the institutional weaknesses identified by GAO and the 
HUD Inspector General. He mentioned specifically some of FHA's 
programs. If confirmed, I plan to work with these experts and with the 
senior management at HUD to remedy these problems. It is my intention 
to make all of FHA's programs work as well as possible, serving the 
public purposes for which they were created.
    Mr. Chairman, I know the issues and the problems of HUD from 
experience. I have served at HUD in three previous Administrations. 
From 1989 to 1993 I was Assistant Secretary for Policy Development and 
Research for Secretary Jack Kemp in the Administration of President 
George Bush. I was Deputy Assistant Secretary for Economic Affairs 
(Chief Economist) from 1975 to 1977 with Secretary Carla Hills in the 
Administration of President Gerald Ford. Before that, I spent 1 year 
(1973-1974) as a Division Director. I have also served as Associate 
Director for Economic Policy (Chief Economist) at the U.S. Office of 
Management and Budget, from 1987 to 1989.
    As Assistant Secretary for Policy Development and Research, I was 
active in addressing several major policy issues that concerned FHA. 
These included reform of FHA home mortgage insurance, regulation of 
real estate settlement practices, and environmental issues in housing. 
In addition, I directed the Secretary's Advisory Commission on 
Regulatory Barriers to Affordable Housing. I also worked on some of 
HUD's major management challenges of that time.
    Since 1993, I have been Director of Urban Policy Studies at the 
Hudson Institute. I was the Project Director for Hudson's Michigan 
Urban Policy Initiative, designing a State urban homeownership strategy 
and developing a reform of the State's property tax reversion process. 
After 2 years of work, all our proposals were passed with overwhelming 
bipartisan support in the State legislature and signed into law by the 
Governor in July 1999. I have also held the F.K. Weyerhaeuser Chair at 
the American Enterprise Institute, and I was Director of the Housing 
Markets Program at the Urban Institute. Before coming to Washington, I 
was a Professor of Economics at Ohio State University for 10 years.
    Last September I was very pleased to be appointed by Congress to 
the Millennial Housing Commission. I have also served on the Committee 
on Urban Policy of the National Academy of Sciences, and the Advisory 
Committee on Population Statistics of the U.S. Census Bureau, and I 
have worked on three other national housing commissions. All of this 
experience will be helpful at FHA.
    Mr. Chairman, as I have talked with Members of this Committee in 
the last few days, several have asked me about my views on FHA 
programs. They have referred to testimony that I have given and some of 
my publications during 1995 and 1996. I would like to take this 
opportunity to make my views clear, and place my testimony in the 
context of the policy discussions of the time.
    In 1995, the Clinton Administration published a ``Reinvention 
Blueprint'' calling for drastic change in nearly all of HUD's programs. 
(For example, it proposed to voucher out public housing.) At the same 
time, there were numerous proposals from Republican Members of Congress 
to abolish HUD, among them: a group of freshmen Congressmen; Senator 
Faircloth, who was Chairman of the HUD Oversight Subcommittee of this 
Committee; and Senator Dole, the Majority Leader and leading 
Presidential candidate. Representative Lazio, Chairman of the Housing 
Subcommittee in the House of Representatives, developed legislation to 
repeal the National Housing Act and he carried it through the House and 
into conference. In 1996, the Republican platform included a plank to 
abolish HUD.
    I was asked to testify and speak on these proposals, and I kept 
telling my fellow Republicans that they should not abolish HUD. HUD 
served--and serves--important public purposes, public purposes that are 
supported by both Republicans and Democrats, and it serves those 
purposes reasonably well. Rather than abolish HUD, I pointed out the 
parts of HUD that did not work very well, and suggested that Congress 
should fix them, or make sure they were better managed, or abolish them 
if they chose. But they should not abolish HUD.
    At a hearing before two Subcommittees of this Committee in March 
1995, Senator Faircloth asked me, ``Do you think we should abolish 
HUD?'' and I responded, ``No, Senator, I don't.'' I said further, ``I 
would leave the things that HUD does now with HUD doing them.'' I was 
almost the only Republican interested in housing policy who did not 
want to abolish HUD.
    At the same time, President Clinton's Reinvention Blueprint 
proposed drastic changes in FHA's Single-Family Mortgage Insurance 
Program, while leaving multifamily insurance unchanged. I thought that 
was the wrong approach. Home mortgage insurance worked well; it served 
a market that was not being served in the private sector; and it did so 
while covering its cost and building reserves. The multifamily programs 
presented the most serious management challenges in HUD. Both 
Commissioner Retsinas and the IG were talking about the problems in 
strong terms, and HUD was estimating that FHA would lose about 20 cents 
on the dollar for its entire multifamily portfolio. The Reinvention 
Blueprint had things backward.
    Now, 5 or 6 years later, nobody in either party is proposing to 
abolish HUD or terminate any of its major programs. Certainly neither 
President Bush or Secretary Martinez has offered such proposals. The 
Republican Party is much closer to the position I took in 1995 than it 
was back then. But of course what I wrote at that time is still in 
print, or available through the internet, without the policy context in 
which I was writing.
    Mr. Chairman, I have been concerned with housing and urban policy 
all my professional life, since my years as a graduate student in 
economics at the University of Chicago. Most of my fellow students 
chose to specialize in public finance, or money and banking, or labor 
economics; quite a few became agricultural economists. I thought about 
some of those fields. But I felt that the cities presented the most 
urgent economic policy problems in America, and indeed the University 
and the city threatened to be overwhelmed by them. Starting with my 
doctoral dissertation, I have devoted my career to housing and urban 
issues, and I have never regretted it. The Federal Government has had 
two major housing policy objectives for many years: helping families 
become homeowners, and making sure that everyone lives in decent 
housing. Those are very important public purposes; they are FHA's basic 
missions; and I support them wholeheartedly, as I have throughout my 
career.
    Mr. Chairman and Members of this Committee, the office of Assistant 
Secretary for Housing is a high honor, a great responsibility, and a 
tremendous challenge. Both President Bush and Secretary Martinez have 
stated a strong commitment to working on a bipartisan basis to address 
our urban problems. If I am confirmed, I pledge to work with Congress, 
with both Houses and both parties. Working together, we can achieve the 
goals of housing policy, and I will certainly do my part. Thank you for 
the opportunity to appear before you this morning.








































                PREPARED STATEMENT OF ROMOLO A. BERNARDI
                        Assistant Secretary for
              Community Planning and Development-Designate
            U.S. Department of Housing and Urban Development
                         Tuesday, May 15, 2001
    Good morning, Mr. Chairman, and distinguished Members of the 
Committee, my name is Roy Bernardi, Mayor of the City of Syracuse and 
President Bush's nominee for the position of Assistant Secretary for 
Community Planning and Development.
    I wish to thank the Committee for inviting me and for expediting 
the confirmation process for myself and the other nominees present 
today. With President Bush's guidance, Secretary Martinez has assembled 
a supremely qualified team with the experience and vision to act on his 
and your concerns for urban America. If confirmed, it will be a great 
honor to serve with these individuals.
    Before proceeding further Mr. Chairman, please allow me to 
introduce my wife Alice. Without her support and love I would not be 
here today. Unfortunately, our two young children Dante and Bianca 
could not be here, but it is because of them that I understand the true 
importance and seriousness of the task before me, before this 
Administration, and before this Committee.
    To paraphrase Senator Gramm's famous saying, ``A parent's dream 
dies hard in America.'' Alice and I dream that Dante and Bianca can 
grow up, work, and find happiness in the city where we were raised--
where neighbors were family, where jobs were plentiful, and where you 
always felt secure.
    Unfortunately, for many decades the tides of history seemed to flow 
the other way. In Syracuse, typical of many cities across the Northeast 
and the Nation, we have seen our population decrease while the needs of 
our citizens increase.
    For 20 years as City Auditor and now nearly 8 years as Mayor I have 
fought to reverse those tides and ensure that the mothers and fathers 
of Syracuse can still dream. And as the past-President of the New York 
Conference of Mayors and the past-Vice Chairman of the northeastern 
division of the U.S. Conference of Mayors' I have worked with other 
local leaders to make sure that the public trust is kept with all 
families.
    Throughout my 3 decades of public service the issue of housing and 
community development has remained at the forefront of my agenda. With 
the knowledge that can only come from hands-on experience, I understand 
the role of the Department of Housing and Urban Development in the 
lives of Americans. Because I have seen inefficient initiatives waste 
valuable resources I approach this new challenge with a sense of 
realism. I also approach it with a sense of hope. Hope, because I have 
seen how good programs, ones that are well-conceived and well-managed, 
can change lives and change communities.
    As an administrator, I will also draw on my firsthand knowledge of 
the CDBG process, the HOME program, and brownfield remediation efforts. 
I know the importance of CDBG dollars, and I also know the importance 
of keen oversight. These block grants fund valuable programs, but too 
often foster dependence, rather than development. My office will focus 
on using these resources for civic improvement, not civic welfare.
    Vital to civic improvement is greater homeownership. Owner occupied 
housing makes for cleaner, safer, and more livable neighborhoods. The 
Homeownership Downpayment Program authorizing legislation will be 
proposed that would require each participating jurisdiction to use, on 
a cumulative basis, 12 percent of each annual allotment for down 
payment assistance toward the purchase of single family housing by low 
income families that are first time homebuyers. I spoke earlier of a 
parent's dream, well homeownership has been a uniquely American Dream 
for hundreds of years. It is a dream that the HOME program has made 
real for hundreds of people in Syracuse. And the efforts of the Bush 
Administration will make it real for thousands of other families across 
the Nation.
    As the Mayor of a city with a long industrial history I also know 
that housing is an issue linked with economic development and 
redevelopment. Over the years I have addressed many audiences on the 
subject of suburban sprawl and the importance of brownfield 
remediation. I am proud to say that today in Syracuse our most sought 
after downtown residential addresses are in remodeled factories and 
several parcels of land--victims of decades of environmental abuse--are 
now prized pieces of commercial real estate. Similar scenarios across 
the country show the flexibility of our urban centers to respond to the 
changing needs of industry and individuals.
    This faith in cities as centers of commerce, and culture, and 
community, fuels my interest in aggressively reclaiming our industrial 
wastelands. It also fuels a desire to reclaiming our neighborhoods. In 
Syracuse we did that by literally attacking problems block by block. 
From my office to the dog control office we enter troubled 
neighborhoods as a team to tow abandoned cars, mow lawns, cite code 
violators, haul debris, and talk with residents. We have also attacked 
neighborhood issues by publicly identifying absentee landlords that 
take advantage of low-income renters. Meanwhile, to help responsible 
property owners we have set up classes to teach them how to be better 
landlords.
    That is the practical experience I bring before you today. With it 
I bring a commitment to urban America that transcends that facts and 
figures of public record. As a child of immigrants--raised in an 
Italian enclave on Syracuse's Northside--I know that when my parents 
sought opportunity in America they found it in the city. I want my 
children to find it there too. So that is where my heart has remained--
with the immigrant, and with the young family struggling to make ends 
meet, with the renter saving for her first home, with the man who sees 
the city as his best chance, and with the man who sees it as his last 
chance. For all of these reasons I am deeply thankful for the 
confidence President Bush and Secretary Martinez have placed in me and 
for the chance to address this distinguished body.


















         RESPONSE TO WRITTEN QUESTIONS OF SENATOR REED 
                    FROM ALPHONSO R. JACKSON

Q.1. Secretary Martinez has talked about the need to increase 
the number of personnel at HUD. Have you made any initial 
assessments in this regard? Please describe.

A.1. The Department has just completed the first phase of a 
three phase series of work measurement and work force 
requirement studies. These studies cover all major programs and 
occupational categories of the Department. In addition, the 
studies provide the Department with a system for calculating 
and validating work-
force needs based on workload, allocating resources, creating a 
workforce plan tied to the Department's Strategic and Annual 
Performance Plans, and legitimizing the resource needs included 
in the Department's budget request.
    Phase I covered:

 40 studies and four organizations; PIH, CPD, 
    Administration, and Housing;
 5,600 employees or approximately 60 percent of HUD's 
    work-
    force.

    According to the Phase I ``raw data'' results, the 
Department may need 140 additional employees for the four 
``studied'' organizations. Assuming that the Phase I results 
hold true for the remainder of the Department. HUD may need 
approximately 200 additional staff. However, these preliminary 
results are being refined, and assume that all employees are at 
the full performance level and are geographically located with 
their work. Refinements of Phase I, as well as the final 
results of Phases II and III, may further enhance the staffing 
requirements of the Department.
    Over the next 90 days the Department will:

 Refine Phase I results, complete Phase II, and begin 
    Phase III of the work measurement studies. Phase II covers 
    six HUD organizations (FHEO, FPM, PD&R, CIO, OMHAR, Healthy 
    Homes), involving approximately 25 percent of HUD's 
    employees. With the completion of Phase I and II, the 
    Department will have assessed approximately 85 percent of 
    its workforce. Phase III will cover the remaining 15 
    percent of HUD's staff and occupational categories.
 Begin implementation of the Phase I work measurement 
    validation process which will collect workforce data at set 
    intervals.
 Complete a preliminary analysis of employee skill 
    levels and training needs.
 Develop a workforce plan, to provide a more accurate 
    accounting of the Department's personnel needs, considering 
    employee skill levels and projected attrition, and 
    balancing employee skills and geographic locations with 
    workload.

    At that time, Secretary Martinez and I will have a better 
assessment of the staffing requirements of the Department.

Q.2. In your written statement you say that you have ``ideas 
about how to improve HUD's oversight of public housing 
authorities so that they can better provide services to those 
families living in public housing.'' Please describe these 
improvements.
A.2. From my experience I know that HUD's oversight can 
contribute substantially to, or detract from, PHA's efforts to 
deliver better services. HUD's oversight can provide a valuable 
boost to good management practices, but only if it is properly 
prioritized to emphasize the most important management 
functions, clear and easily understood, and broadly accepted as 
fair.
    Substantial improvements in HUD's oversight system need to 
be made. Reforms were promised in the long legislative debates, 
which led to the 1998 overhaul of the public housing law, and 
Congress and HUD rightly put new emphasis on the conditions in 
which public housing residents are living, but for various 
reasons HUD has not implemented some key reforms.
    I strongly support the addition of an independent physical 
inspection as part of the evaluation system, and the inclusion 
of financial and other evaluation components. These measures 
must be implemented, but we also have much more work to do 
before the evaluation system will satisfactorily meet the 
description I have put forward. The oversight system also 
includes not just the report card such as the Public Housing 
Assessment System (PHAS) or a successor, but also audits, field 
office reviews and other monitoring HUD (including the 
Inspector General) initiates, planning and application 
documents, and the actions HUD takes when the system indicates 
local success or failure. If HUD reexamines these actions and 
listens carefully to those who must live with our decisions, 
but always with our role as steward of tax dollars in mind, we 
can make the entire system better prioritized toward what is 
most important in terms of both risk and delivery of services, 
clearer, and more generally accepted as a fair basis an which 
HUD may take regulatory actions. If we can accomplish this and 
then implement the system consistently, PHA's will respond with 
better performance and the families they serve will benefit.

         RESPONSE TO WRITTEN QUESTIONS OF SENATOR REED 
                     FROM RICHARD A. HAUSER

Q.1. Do you believe that HUD should be involved in law 
enforcement through the IG's Operation Safe Home Program?
A.1. I understand Operation Safe Home to consist of two parts: 
curbing equity skimming in insured multifamily housing, and 
combating violent crime in public housing.
    Audits and investigations of FHA's multifamily programs for 
equity skimming would seem to be an appropriate HUD function 
and specifically authorized by the IG Act, 5 U.S.C. app. sec 
2(1). There is also a HUD specific statute relating to equity 
skimming that provides for a civil penalty and double damages, 
12 U.S.C. 1715z-4a. Although HUD program offices do not enforce 
the criminal equity skimming statute, the IG can and does 
involve itself in enforcing the civil statute against equity 
skimming,
    On the other hand, I do not believe that Operation Safe 
Home, as it relates to combating violent crime, is the type of 
program contemplated by HUD's basic enabling legislation or the 
statutes authorizing HUD's core programs. If confirmed, I 
intend to examine whether these activities are consistent with 
the IG Act, for the HUD IG to audit and investigate HUD 
programs and operations. In my view, the policing of public 
housing can be most effectively carried out by the appropriate 
law enforcement agencies.

Pennsylvania Avenue Development Corporation

Q.1. Please describe how your experiences with the PADC have 
informed your views about the mission of HUD and the 
Government's role in the community.

A.1. The Pennsylvania Avenue Development Corporation was a 
successful and perhaps unique experiment in urban 
revitalization. The PADC was able to leverage $150 million in 
taxpayer funds into a $1.5 billion investment by the private 
sector into new commercial, retail, and residential 
development. The result has been an en-
livened downtown with new residents, restaurants, art 
galleries, 
and retail stores. The PADC was the recipient of the 
prestigious 
Urban Land Institute Award for Excellence for having ``revamped 

a downtrodden and unsightly segment of the Nation's capital . . 
. 
and building the kind of Main Street that taxpayers can be 
proud 
of.'' The PADC's success was also attributable to the 
cooperative 
interaction among all interested parties--the Congress, the 
Federal 
and District of Columbia Governments, local groups, and private 

entrepreneurs--working out difficult urban problems with a com-
mon goal.
    I believe my experiences as PADC Chairman will be helpful 
at HUD; particularly, with respect to the Department's lodestar 
program for urban development--the Community Development Block 
Grant (CDBG) program. The CDBG is a formula grant program 
for large cities, very large counties, and States to assist 
smaller 
cities and counties. This program includes among its eligible 
activ-
ities public facilities, social services, and private 
development and 
redevelopment. I understand that much of its emphasis reflects 
communities' own local decisions about economic development and 

job-creating incentives.
    My PADC experience also aligns with the CDBG statute's 
objectives such as--

 eliminating blight and preventing blighting 
    influences;
 expanding and improving the quantity and quality of 
    community services;
 better rationalizing utilization of land and other 
    resources; and
 stimulating private investment and community 
    revitalization to alleviate physical and economic distress.

    The PADC demonstrated that Government can play an impor-
tant role in community development by ensuring community 
involvement in development planning; establishing standards and 
guidelines for development to achieve good design and historic 
preservation; providing infrastructure that encourages 
development, especially in areas developers are not pursuing on 
their own; and providing incentives so that goals and policies 
(such as housing where none exists) are achieved.

         RESPONSE TO WRITTEN QUESTIONS OF SENATOR REED 
                   FROM JOHN CHARLES WEICHER

Q.1. The authority for mortgage restructuring under the Mark-
to-Market program expires at the end of this fiscal year, as 
does the authorization for the Office of Housing Multifamily 
Assistance Restructuring (OHMAR). What will your 
recommendations be about either the continuation of Mark-to-
Market and OHMAR, or alternatives to ensure the preservation of 
affordable housing? (A). Do you believe that the Mark-to-Market 
program should be continued? (B). Do you believe that the 
existing Office of Housing can take over the functions of OHMAR 
without interruption?

A.1. It is my understanding that OMHAR expects to complete 
about two-thirds of its workload, by the end of the current 
fiscal year, when its authority will expire. In order to deal 
with the remaining workload in the most cost-effective manner 
and maximize the continued availability of safe, decent, 
affordable housing, the Administration is proposing an 
extension of the restructuring authority, and is submitting 
legislation to the Congress. There is as yet no final decision 
on whether to support the extension of OMHAR itself, but any 
institutional framework will be designed to continue the work 
that OMHAR has been doing and bring it to a timely and 
successful conclusion.

Q.2. Would you support pooling the various General Insurance/
Special Risk Insurance (GI/SRI) programs together, so that no 
appropriation for these programs is necessary?

A.2. The Administration certainly recognizes that different 
multifamily programs have different default patterns and claim 
losses. Cross-subsidization would be a significant change in 
the Credit 
Reform Act, and would reduce FHA's ability to control its indi-
vidual programs on an annual basis. The Administration prefers 
to 
reduce the cost of the individual GI Fund programs, and to 
estab-
lish an insurance premium that eliminates the need for credit 
sub-
sidy appropriations, as a means of serving all eligible loans 
in 
these programs.

Q.3. Mr. Weicher, you have written that the FHA single-family 
mortgage insurance program should be targeted to low-income and 
first-time homebuyers. In its 67 year history, FHA insurance 
has been available to anyone with qualified credit. Do you 
still believe that these programs should be scaled back?

A.3. FHA home mortgage insurance is a demand program; FHA 
insures the loans that are brought to it, as long as they meet 
the mortgage limits and other underwriting guidelines. That 
includes first-time buyers and repeat buyers. FHA has 
traditionally served first-time homebuyers, and middle-income 
families, and I expect that to continue. In the Clinton 
Administration, Commissioner Apgar boasted about the rising 
percentage of FHA homebuyers who were first-time buyers, 
approaching 80 percent. The latest analysis shows that 70 
percent of FHA homebuyers have incomes below the area median 
(half have incomes below 80 percent of the area median), and 
one-third are members of minority groups. The President and the 
Secretary want to increase homeownership, especially among 
minority groups, and families who are on the edge of the middle 
class and striving to improve their lives. At the same time, 
these priorities do not rule out anybody else who is now 
eligible for FHA home mortgage insurance.
    I made the targeting suggestion in 1995, when the Clinton 
Administration's Reinvention Blueprint was proposing to weaken 
the FHA home mortgage insurance program, in my opinion. My 
point was to stress that FHA home mortgage insurance worked 
reasonably well; it was, and is, a sound program. If Congress 
wanted to change the home mortgage insurance program, targeting 
made more sense than the Reinvention Blueprint proposals.

   RESPONSE TO WRITTEN QUESTIONS OF SENATOR MILLER FROM JOHN 
                        CHARLES WEICHER

Q.1. Mr. Weicher, do you have any reorganization ideas for FHA? 
Would you shift resources within FHA to favor one program over 
another?

A.1. I do not have any particular plans or ideas for 
reorganizing FHA. The Secretary has said that he doesn't plan 
to reorganize the Department. I know that the Secretary is now 
reviewing the REAP study, and putting a team in place to 
implement the study. The team would be headed by Mr. Jackson 
after confirmation as Deputy Secretary.

Q.2. The FHA Streamlined Downpayment Program started as a 
2 year pilot program in 1998. The program, which decreases down 
payment costs for borrowers and simplifies the down payment 
calculation, expired at the end of the year 2000, but was given 
an extension until 2002 by Congress. Would you support making 
this program permanent?

A.2. I have not reviewed the effect of the FHA Streamlined 
Downpayment Program. The Department will review this and make 
the 
appropriate recommendations for the fiscal year 2003 budget 
submission.

  RESPONSE TO WRITTEN QUESTIONS OF SENATOR JOHNSON FROM JOHN 
                        CHARLES WEICHER

Q.1. Mr. Weicher, last December, Congress appropriated $40 
million in an emergency supplemental appropriation to fund the 
FHA multifamily new construction and significant rehabilitation 
programs. Would you comment on whether this money, which has 
already been appropriated, should be released? Would you also 
provide your definition of what constitutes a ``budget 
emergency'' 
in the context of releasing appropriated funds? Is the shutdown 

of these programs an emergency?

A.1. The Administration believes that HUD should operate the 
multifamily insurance programs within the credit subsidy 
amounts that have been appropriated through normal budget 
process. Certainly there are negative consequences if the FHA 
multifamily insurance is forced to suspend activity for a 
period of time, but this does not constitute an emergency along 
the lines of an earthquake or flood.
    This is not a new problem. FHA has run out of credit 
subsidy 
3 times in the last 8 years, including fiscal year 2000 as well 
as fiscal year 2001. There are a number of special 
circumstances this year. Because there was excess demand for 
credit subsidy at the end of fiscal year 2000, the current 
fiscal year began with $12 million in subsidy being absorbed by 
projects that were shut out of the programs last year. In 
addition, an unusually large share of projects this year are 
Section 221(d)(3) projects, with nonprofit sponsors; these 
projects, require five times as much credit subsidy per dollar 
as Section 221(d)(4) projects. In recent years, Section 
221(d)(3) projects have been less than 10 percent of the 
portfolio; so far this year they constitute 25 percent. They 
were an especially large share in the first few months of the 
fiscal year. If they had constituted the same share as in 
recent years, FHA would now have $27 million left from the 
fiscal year 2001 appropriation, and would not have this 
problem. The Administration's proposal to raise the premium by 
30 basis points turns FHA multifamily insurance into a demand 
program, like FHA single-family insurance, and the credit 
subsidy problem won't occur again.
    I know that the Mortgage Bankers Association is concerned 
that the current subsidies are set too high, and MBA believes 
that the programs do not in fact lose money, so they should not 
be subject to a credit subsidy appropriation. If confirmed, I 
intend to look at the subsidy calculation process and see 
exactly how it works. I 
believe the process has not been studied systematically in sev-
eral years. Based on that study, I would expect to make 
appropri-
ate policy recommendations to the Secretary, depending on what 
we learn.

Q.2. It is my understanding that in order for all of the 
projects that are in the pipeline for fiscal year 2001 in the 
FHA multifamily new construction and significant rehabilitation 
programs to be completed, an additional $115 million will have 
to be appropriated. 
Mr. Weicher, do you support additional appropriations? If not, 
what would you recommend to encourage the private sector to 
con-
tinue to lend for purposes of creating affordable multifamily 
housing projects?

A.2. The appropriated subsidy of $101 million is large enough 
to support all projects that are currently in the FHA pipeline, 
but not projects in earlier stages of development. The estimate 
of $115 million in credit subsidy for additional projects in 
fiscal year 2001 seems high. That would involve a much larger 
volume of multifamily insurance than in any year of the last 
10.

  RESPONSE TO WRITTEN QUESTIONS OF SENATOR SCHUMER FROM JOHN 
                        CHARLES WEICHER

Predatory Lending

Q.1. Given the interest by policymakers, regulators, and the 
general public in understanding how the subprime market 
functions (and the lack of data), will you support the Federal 
Reserve's proposal to collect data on the pricing of subprime 
home loans, which was recommended in last year's HUD/Treasury 
report on predatory lending?

A.1. The Department has stated that it supports the Federal 
Reserve Board's proposal. The information will significantly 
enhance HUD's ability to perform research functions that 
support the Department's housing and fair landing mission. It 
will help in developing appropriate responses by HUD to 
addressing credit needs, particularly the availability and 
affordability of credit options for homeownership.

Q.2. On March 18, Secretary Martinez spoke at the National 
Housing Summit put on by the Mortgage Bankers Association and 
discussed the issue of predatory lending. He said, ``There are 
some lenders who choose to prey on those at the lowest end of 
economic scale--the elderly, the disabled, the minorities, and 
the men and women in our military. For those who participate in 
such schemes, you should know that such practices will not be 
tolerated by this Administration.'' What concrete steps will 
the Administration take to reduce the incidence of predatory 
lending?

A.2. Secretary Martinez and the Administration are very 
concerned about predatory lending. As he stated in the 
Congressional hearings 3 weeks ago, the Secretary is expecting 
to work with the Federal Reserve Board, with the industry, and 
with consumer groups. The Administration is already taking 
concrete steps to address the problem of predatory lending. On 
May 14, the Secretary sent a 
representative to the Baltimore town meeting on predatory lend-
ing, Laurie Maggiano, Director of FHA's Asset Management and 
Disposition Division in the Office of Single-Family Housing. 
Ms. Maggiano's presentation of the Department's activities was 
warmly received. The Department has expanded the ``Hot Zone'' 
in Baltimore to embrace the entire city, not just selected Zip 
Codes. A year ago the Department identified ``Hot Zones'' in 
five cities (Baltimore, Chicago, Atlanta, New York, and Los 
Angeles) where there was reason to suspect predatory lending. 
HUD identified Zip Codes with concentrations of possibly 
predatory loans; gave grants to counseling agencies; suspended 
foreclosure on loans suspected of being predatory, as 
identified by counselors; and cut the mortgage amount on 
overvalued properties. These efforts continue.
    In addition, the Department is reviewing the behavior of 
individual lenders where there is reason to be concerned about 
predatory lending: bringing them before the Mortgagee Review 
Board, withdrawing FHA approval, or requiring technical reviews 
of their underwriting. This is the hard work of fighting 
predatory lending.

FHA

Q.1. Last December, Congress appropriated an additional $40 
million in an emergency supplemental appropriation to fund the 
FHA multifamily new construction and significant rehabilitation 
programs. In spite of the fact that these programs ran out of 
credit subsidy last month and as a consequence many projects 
across 
the country have been shut down, Congress and the Administra-
tion have not released this money. Could you please comment on 
whether you think this money, which has already been 
appropriated, should be released? Could you also give us your 
definition of what constitutes a ``budget emergency'' in the 
context of releasing appropriated funds? In other words, do you 
think that the shut down of these programs is an emergency?

A.1. The Administration believes that HUD should operate the 
multifamily insurance programs within the credit subsidy 
amounts that have been appropriated through normal budget 
process. Certainly there are negative consequences if the FHA 
multifamily insurance is forced to suspend activity for a 
period of time, but this does not constitute an emergency along 
the lines of an earthquake or flood.
    This is not a new problem. FHA has run out of credit 
subsidy 
3 times in the last 8 years, including fiscal year 2000 as well 
as fiscal year 2001. There are a number of special 
circumstances this year. Because there was excess demand for 
credit subsidy at the end of fiscal year 2000, the current 
fiscal year began with $12 million in subsidy being absorbed by 
projects that were shut out of the programs last year. In 
addition, an unusually large share of projects this year are 
Section 221(d)(3) projects, with nonprofit sponsors; these 
projects require 5 times as much credit subsidy per dollar as 
Section 221(d)(4) projects. In recent years, Section 221(d)(3) 
projects have been less than 10 percent of the portfolio; so 
far this year they constitute 25 percent. They were an 
especially large share in the first few months of the fiscal 
year. If they had constituted the same share as in recent 
years, FHA would now have $27 million left from the fiscal year 
2001 appropriation, and would not have this problem. The 
Administration's proposal to raise the premium by 30 basis 
points turns FHA multifamily insurance into a demand program, 
like FHA single-family insurance, and the credit subsidy 
problem won't occur again.
    I know that the Mortgage Bankers Association is concerned 
that the current subsidies are set too high, and MBA believes 
that the programs do not in fact lose money, so they should not 
be subject to a credit subsidy appropriation. If confirmed, I 
intend to look at the subsidy calculation process and see 
exactly how it works. I 
believe the process has not been studied systematically in sev-
eral years. Based on that study, I would expect to make 
appropri-
ate policy recommendations to the Secretary, depending on what 
we learn.

Q.2. In order for all of the projects that are in the pipeline 
for fiscal year 2001 in the FHA multifamily new construction 
and signifi-
cant rehabilitation programs to be completed an additional $115 

million will have to be appropriated. Do you support this addi-
tional appropriation?

A.2. The appropriated subsidy of $101 million is large enough 
to support all projects that are currently in the FHA pipeline, 
but not projects in earlier stages of development. The estimate 
of $115 million in credit subsidy for additional projects in 
fiscal year 2001 seems high. That would involve a much larger 
volume of multifamily insurance than in any year of the last 
10.

Q.3. There has been debate in the past about whether the FHA 
single-family home mortgage program should be targeted to just 
first-time buyers or low- and moderate-income families. The 
reasons given by advocates for targeting is that FHA encroaches 
on the private sector's ability to make mortgage loans. Do you 
agree that FHA single-family programs should be targeted or 
restricted 
in any way?

A.3. FHA home mortgage insurance is a demand program; FHA 
insures the loans that are brought to it, as long as they meet 
the mortgage limits and other underwriting guidelines. That 
includes first-time buyers and repeat buyers, FHA has 
traditionally served first-time homebuyers, and middle-income 
families, and I expect that to continue. In the Clinton 
Administration, Commissioner Apgar boasted about the rising 
percentage of FHA homebuyers who were first-time buyers, 
approaching 80 percent. The latest analysis shows that 70 
percent of FHA homebuyers have incomes below the area median 
(half have incomes below 80 percent of area median), and one-
third are members of minority groups. The President and the 
Secretary want to increase homeownership, especially among 
minority groups, and families who are on the edge of the middle 
class and striving to improve their lives. At the same time, 
these priorities do not rule out anybody else who is now 
eligible for FHA home mortgage insurance.

Q.4. Several years ago Congress passed legislation to 
streamline and reduce the down payment requirements for FHA 
home mortgage loans. FHA borrowers can obtain loans with a 
minimum of 
3 percent down payment. The legislation that authorized this 
streamlined down payment program will expire on December 31, 
2002. All indications are that the legislation has simplified 
the process and made FHA loans more affordable. If this program 
is not made permanent or extended, the amount needed for a down 
payment will significantly increase, particularly for those 
borrowers purchasing homes in high-cost areas. Do you support 
making the simplified down payment calculation program 
permanent?

A.4. I have not reviewed the effect of the FHA Streamlined 
Downpayment Program. The Department will review this and make 
appropriate recommendations for the fiscal year 2003 budget 
sub-
mission.

Cooperatives

Q.1. Housing cooperatives are a different structure of 
homeownership. To make sure their sometimes unique 
characteristics are 
accommodated when existing laws are being executed, the law 
mandates the appointment of a Special Assistant for Cooperative 
Housing to serve under the direction of the FHA Commissioner. 
The position is now vacant. I would like your assurance that 
you will take the steps necessary to see to it that the 
Secretary fills this important position.

A.1. I certainly promise to work with the Secretary and make 
sure that this important position is filled as quickly as 
possible.

         RESPONSE TO WRITTEN QUESTIONS OF SENATOR REED 
                    FROM ROMOLO A. BERNARDI

Q.1. The Appropriations Committee has required that 30 percent 
of homeless funds be used for permanent housing. How do you 
intend to improve HUD's performance so that it achieves 
Congressional intent in this area?

A.1. The annual homeless assistance competition is largely 
based upon local decisionmaking and local priority setting. 
Mindful of this policy, the Department included language in the 
2001 NOFA that strongly encouraged Continuum of Care to begin 
planning for new permanent housing projects, if they haven't 
already, to be included as part of the 2001 and future 
competitions. In addition, as a powerful incentive in the 2001 
funding round, the ``permanent housing bonus'' for eligible, 
new permanent housing projects placed in the number one 
priority slot, was doubled to up to $500,000. Almost $40 
million in bonus funds were awarded to new permanent housing 
projects in the 2000 competition and this total is expected to 
more than double this year. Finally, by establishing a funding 
selection process that resulted in the replacement of over 300 
nonpermanent housing projects (valued at approximately $100 
million) with lower scoring permanent housing projects in the 
2000 funding round, the Department sent the strongest possible 
message, and inducement, for applicants to submit permanent 
housing projects instead of nonpermanent housing projects going 
forward. By having taken such dramatic action in 2000, HUD has 
made clear its seriousness in emphasizing permanent housing. By 
the nature of the competition, applicants can be expected to 
submit many more new permanent housing projects than would 
otherwise have been the case due to HUD's forceful stand in 
implementing the 30 percent requirement in the 2000 funding 
round.

Q.2. Congress has required that HUD obtain unduplicated counts 
of homeless people at a jurisdictional level, so that HUD can 
focus on who is homeless and what can be done to prevent and 
end homelessness? How is HUD implementing this request and what 
will you do to help us get this important data?

A.2. The Conference Report (H.R. Report 106-988) on the fiscal 
year 2001 HUD Appropriations Act cited the importance of local 
jurisdictions collecting client-level data. Furthermore, the 
report 
stipulated that ``HUD is directed to take the lead in working 
with 
communities toward this end, and to analyze jurisdictional data 
within 3 years.'' The conferees directed HUD to report to the 
Committees on its strategy for achieving this ``goal,'' 
including details on financing, implementing, and maintaining 
the effort. This required report is currently in Departmental 
clearance and is anticipated to be submitted to Congress in the 
near future. Let me summarize the key elements of our strategy:
    New Eligible Activity. HUD has implemented the new Homeless 
Management Information System (HMIS) eligible activity under 
the Supportive Housing Program (SHP) in the 2001 McKinney-Vento 
competition. This activity was created by the 2001 
Appropriations Act. HUD has implemented this new activity in 
such a way as to allow all applying communities to request SHP 
fund-
ing to implement and operate HMIS's. HUD highlighted the new 
activity in the grant application packet and in two live 
satellite 
broadcasts.
    Technical Assistance. HUD has two technical assistance 
products for use by all communities to help them establish and 
operate HMIS's. The first is the ``Homeless Service Tracking 
System Implementation Guide.'' This document assists 
communities in developing homeless service tracking systems. 
The second product is ``Homeless Management Information 
Systems: An In-Depth Look.'' This publication includes a review 
of several leading software products; an analysis of the costs 
involved in operating these systems; and a review of the data 
elements collected by available software products. HUD will be 
updating these guides as well as providing comprehensive 
technical assistance to communities from now through 2004 to 
help achieve the goal established by Congress.
                         STATEMENT OF JACK KEMP
               Former Secretary of the U.S. Department of
                     Housing and Urban Development
                              May 15, 2001
    President Bush's choice for FHA Commissioner at HUD, Mr. John C. 
Weicher, is exceptionally well qualified for the position.
    Mr. Weicher has a breadth of knowledge and experience about HUD 
that is unparalleled among housing policy experts. He has served at HUD 
with distinction under three previous Secretaries, including 4 years 
when I was Secretary under President George Bush. He has participated 
in several housing policy commissions, including the Advisory 
Commission on Regulatory Barriers to Affordable Housing in 1990-1991, 
which resulted in the first Federal legislation to reduce the cost of 
housing regulation.
    Mr. Weicher has been a strong defender of HUD's role in American 
housing and urban policy. He has frequently written and testified that 
HUD serves important public purposes and serves them effectively. In 
1995 and 1996 he opposed the numerous Congressional proposals to 
abolish HUD, testifying before several Committees in both the House and 
the Senate. Mr. Weicher was one of the few Republicans concerned with 
housing policy who argued for fixing the programs at HUD that do not 
work well, instead of abolishing the Agency. Mr. Weicher also opposed 
the last Administration's HUD Reinvention Blueprint for FHA, because it 
would damage FHA's successful home mortgage insurance program without 
doing anything to address long-standing management problems in FHA 
multifamily insurance.
    As Director of Urban Policy Studies at the Hudson Institute, Mr. 
Weicher headed a 2 year project in Michigan to create a framework for 
promoting urban homeownership and solving the problem of abandoned 
housing that plagued most of Michigan's cities. Hudson's proposals were 
passed with overwhelming bipartisan support in the State legislature 
and signed by Governor Engler in 1999.
    Mr. Weicher has been concerned about housing and urban issues since 
he earned a Ph.D. in economics at the University of Chicago with a 
dissertation about urban renewal. In his academic publications, he has 
strongly defended the mortgage interest deduction. His research on the 
distribution of wealth in America shows that homeownership is the most 
important force for a more equal distribution; he also has demonstrated 
the importance of small business, including rental housing, in creating 
wealth.
    Mr. Weicher is recognized as one of the leading experts on housing 
and urban problems. He has been President of the leading academic 
organization of housing economists, the American Real Estate and Urban 
Economics Association, and received the Association's award for career 
achievement in 1993. He is a member of the Millennial Housing 
Commission, created by Congress to advise it on housing policy; a 
member of the Editorial Advisory Boards of Housing Policy Debate and 
Housing and Development Reporter; and a member of the Advisory Board of 
the Center for Housing Policy, which is part of the National Housing 
Conference. He has been a Member of the Committee on Urban Policy of 
the National Academy of Sciences and the Census Bureau's Advisory 
Committee on Population Statistics.
