[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]



 
                     H.R. 1999--THE STATE AND LOCAL
                    HOUSING FLEXIBILITY ACT OF 2005

=======================================================================

                                HEARING

                               BEFORE THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 11, 2005

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 109-28




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                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                    MICHAEL G. OXLEY, Ohio, Chairman

JAMES A. LEACH, Iowa                 BARNEY FRANK, Massachusetts
RICHARD H. BAKER, Louisiana          PAUL E. KANJORSKI, Pennsylvania
DEBORAH PRYCE, Ohio                  MAXINE WATERS, California
SPENCER BACHUS, Alabama              CAROLYN B. MALONEY, New York
MICHAEL N. CASTLE, Delaware          LUIS V. GUTIERREZ, Illinois
PETER T. KING, New York              NYDIA M. VELAZQUEZ, New York
EDWARD R. ROYCE, California          MELVIN L. WATT, North Carolina
FRANK D. LUCAS, Oklahoma             GARY L. ACKERMAN, New York
ROBERT W. NEY, Ohio                  DARLENE HOOLEY, Oregon
SUE W. KELLY, New York, Vice Chair   JULIA CARSON, Indiana
RON PAUL, Texas                      BRAD SHERMAN, California
PAUL E. GILLMOR, Ohio                GREGORY W. MEEKS, New York
JIM RYUN, Kansas                     BARBARA LEE, California
STEVEN C. LaTOURETTE, Ohio           DENNIS MOORE, Kansas
DONALD A. MANZULLO, Illinois         MICHAEL E. CAPUANO, Massachusetts
WALTER B. JONES, Jr., North          HAROLD E. FORD, Jr., Tennessee
    Carolina                         RUBEN HINOJOSA, Texas
JUDY BIGGERT, Illinois               JOSEPH CROWLEY, New York
CHRISTOPHER SHAYS, Connecticut       WM. LACY CLAY, Missouri
VITO FOSSELLA, New York              STEVE ISRAEL, New York
GARY G. MILLER, California           CAROLYN McCARTHY, New York
PATRICK J. TIBERI, Ohio              JOE BACA, California
MARK R. KENNEDY, Minnesota           JIM MATHESON, Utah
TOM FEENEY, Florida                  STEPHEN F. LYNCH, Massachusetts
JEB HENSARLING, Texas                BRAD MILLER, North Carolina
SCOTT GARRETT, New Jersey            DAVID SCOTT, Georgia
GINNY BROWN-WAITE, Florida           ARTUR DAVIS, Alabama
J. GRESHAM BARRETT, South Carolina   AL GREEN, Texas
KATHERINE HARRIS, Florida            EMANUEL CLEAVER, Missouri
RICK RENZI, Arizona                  MELISSA L. BEAN, Illinois
JIM GERLACH, Pennsylvania            DEBBIE WASSERMAN SCHULTZ, Florida
STEVAN PEARCE, New Mexico            GWEN MOORE, Wisconsin,
RANDY NEUGEBAUER, Texas               
TOM PRICE, Georgia                   BERNARD SANDERS, Vermont
MICHAEL G. FITZPATRICK, 
    Pennsylvania
GEOFF DAVIS, Kentucky
PATRICK T. McHENRY, North Carolina

                 Robert U. Foster, III, Staff Director


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    May 11, 2005.................................................     1
Appendix:
    May 11, 2005.................................................    45

                               WITNESSES
                        Wednesday, May 11, 2005

Jackson, Hon. Alphonso, Secretary, U.S. Department of Housing and 
  Urban Development..............................................     4

                                APPENDIX

Prepared statements:
    Oxley, Hon. Michael G........................................    46
    Velazquez, Hon. Nydia M......................................    48
    Jackson, Hon. Alphonso.......................................    49

              Additional Material Submitted for the Record

Frank, Hon. Barney:
    American Association of Homes and Services for the Aging, 
      Council for Affordable and Rural Housing, Institute for 
      Real Estate Management, Institute for Responsible Housing 
      Preservation, National Apartment Association, National 
      Affordable Housing Management Association, National 
      Association of Affordable Housing Lenders, National 
      Association of Homebuilers, National Housing Conference, 
      National Leased Housing Association, National Muti Housing 
      Council, letter, April 28, 2005............................    58
    ACORN, American Association of People with Disabilities, 
      American Network of Community Options and Resources, The 
      Arc of the United States, Call to Renewal, Catholic 
      Charities USA, Child Welfare League of America, Children's 
      Defense Fund, Coalition on Human Needs, Consortium for 
      Citizens with Disabilities, Corporation for Supportive 
      Housing, Evangelical Lutheran Church in America, Jesuit 
      Conference USA, Lutheran Services in America, National 
      Advocacy Center of the Sisters of the Good Shepherd, 
      National AIDS Housing Coalition, National Alliance for the 
      Mentally Ill, National Allicance of HUD Tenants, National 
      Association of Protection and Advocacy Systems, national 
      Coalition for the Homeless, National Council for Community 
      Behavioral Healthcare, National Council on Independent 
      Living National Fair Housing Alliance, National Law Center 
      on Homelessness & Poverty, National Low Income Housing 
      Coalition, National Student Campaign Against Hunger and 
      Homelessness, National Mental Health Association, NETWORK, 
      A National Catholic Social Justice Lobby, Poverty and Race 
      Research Action Council, Technical Assistance 
      Collaborative, United Cerebral Palsy, United Jewish 
      Communities, United Spinal Association, United Way of 
      America, Volunteers of America, Wayne Sherwood and 
      Associates, letter, May 10, 2005...........................    60
    Consortium for Citizens with Disabilities, prepared statement    62
    Council of Large Public Housing Authorities, prepared 
      statement..................................................    68
    Lawyers Committee for Civil Rights, letter, May 10, 2005.....    70
Jackson, Hon. Alphonso:
    Written responses to questions from Hon. Deborah Pryce.......    75


                     H.R. 1999--THE STATE AND LOCAL
                    HOUSING FLEXIBILITY ACT OF 2005

                              ----------                              


                        Wednesday, May 11, 2005

             U.S. House of Representatives,
                   Committee on Financial Services,
                                                   Washington, D.C.
    The committee met, pursuant to call, at 2:02 p.m., in Room 
2128, Rayburn House Office Building, Hon. Michael Oxley 
[chairman of the committee] presiding.
    Present: Representatives Oxley, Ney, Kelly, Gillmor, Shays, 
Miller of California, Tiberi, Kennedy, Brown-Waite, Pearce, 
Neugebauer, Davis of Kentucky, Frank, Waters, Velazquez, Watt, 
Carson, Sherman, Lee, Moore of Kansas, Crowley, Lynch, Miller 
of North Carolina, Scott, Davis of Alabama, Green, Cleaver, 
Moore of Wisconsin, and Jones of Ohio.
    The Chairman. [Presiding.] The committee will come to 
order.
    Pursuant to rule 3(a)(2) of the rules of the Committee on 
Financial Services for the 109th Congress, the Chair announces 
he will limit recognition for opening statements to the Chair 
and ranking minority member of the full committee and the Chair 
and ranking minority member of the Subcommittee on Housing and 
Community Opportunity or their respective designees to a period 
not to exceed 16 minutes, evenly divided between the majority 
and minority. Prepared statements of all members will be 
included in the record. The Chair recognizes himself now for an 
opening statement.
    Today the Financial Services Committee again welcomes the 
Secretary of the Department of Housing and Urban Development, 
Alphonso Jackson, to discuss the details of the 
Administration's proposal to overhaul the housing choice 
voucher program. Commonly known as the Section 8 program, the 
Housing Choice Voucher Program reflects a major commitment on 
the part of the Federal Government to assist low-and very low-
income families who are unable to pay market rents in their 
communities.
    While this program has succeeded in providing secure, safe, 
and affordable housing, this program comes at a high cost. Over 
the years, the cost of the housing choice voucher has continued 
to increase. In 1998, the housing certificate fund consumed 42 
percent of HUD's annual budget. In 2005, HUD predicts that the 
program will consume 62 percent of its budget and in 2006 it 
will surpass 73 percent.
    These cost increases can be attributed to a number of 
factors. The current voucher program operates under a complex 
set of regulations which makes the program overly prescriptive 
and difficult to administer. The value of a voucher is 
calculated as roughly the difference between rents in a 
community and 30 percent of participating household's incomes. 
In recent years, rents have been rising faster than incomes, 
which have driven up the cost of a voucher and, therefore, the 
cost of the program. Even though the cost of the program 
continues to increase, the number of people served has remained 
roughly the same.
    Of equal concern is the fact that the rising cost of this 
program has begun to impact funding for other key housing 
programs. Funding levels for other important housing programs 
such as CDBG, HOME, and housing opportunities for people with 
AIDS, were reduced below their 2004 appropriation level to 
cover the cost of the Housing Choice Voucher Program.
    The spiraling cost of the Housing Choice Voucher Program 
dictates that we reevaluate the program to determine how best 
to create a more efficient and effective way of providing 
rental assistance to the neediest low-income families in this 
country. In 2003, the Administration proposed a State-run block 
grant model for housing assistance for the needy. The 
Subcommittee on Housing and Community Opportunity held a series 
of hearings on this proposal, but in the end no legislative 
action was taken on the Administration's proposal.
    In the last Congress, the Administration proposed a 
different approach. Instead of a block grant to the States, the 
Administration's Flexible Voucher Program envisioned a dollar-
based grant program to be administered by public housing 
authorities. While the Flexible Voucher Program was not 
considered by the 108th Congress, the appropriators did include 
provisions in the 2005 Consolidated Appropriations Act moving 
the program from a unit-based program to a dollar-based 
program. This year, in conjunction with the dollar-based budget 
approach, the Administration has proposed a new version of its 
flexible voucher program.
    I would like to take this opportunity to acknowledge 
Congressman Gary Miller for his excellent work on this issue. 
Mr. Miller, along with six original cosponsors from this 
committee, introduced the Administration's new proposal, H.R. 
1999, the State and Local Flexibility Act of 2005. This 
proposal makes significant changes to the Housing Choice 
Voucher Program by providing greater flexibility to public 
housing authorities to manage their individual budgets. I trust 
that the introduction of the Administration's proposal by 
Congressman Miller will move us closer to consensus on reforms 
that will not only preserve the program for those that truly 
need it, but that will address the program's spiraling cost.
    We are pleased to have Secretary Jackson with us again 
today. I believe this is your third appearance before this 
committee this year, but who is counting? I know that many here 
today are anxious to learn more about the new Section 8 
initiative.
    The Chair's time has expired. I yield to the gentleman from 
Massachusetts, Mr. Frank.
    [The prepared statement of Hon. Michael G. Oxley can be 
found on page 46 in the appendix.]
    Mr. Frank. Thank you, Mr. Chairman.
    I think it is probably because of the disruption of today 
that we are so sparsely attended, Mr. Secretary. It is no 
disrespect to you, but I think the evacuation kind of threw 
people's schedules off and I think several of our colleagues 
were disappointed to get the all clear. Not that they were 
hoping for any disaster, but that they thought we might as well 
just take the rest of the day off. So I think that accounts for 
the small attendance.
    I am very troubled by this proposal. Let me say first of 
all, it is, as the chairman mentioned, another effort by the 
Administration to reduce Section 8 costs. Previous efforts have 
encountered a firestorm of opposition, as you know, and people 
had to back off. I think there are some elements of this when 
they get carried out that would have the same kind of problem.
    I should say this. I understand this program costs some 
money, but as I look at money we spend elsewhere in the budget 
and as I look at the tax cuts and other factors, I think it is 
a mistake to say that we must start out with some kind of pre-
set target for cutting the Section 8 voucher program. I am all 
in favor of trying to improve the efficiency of this program. 
The gentleman from Ohio who is not here, Mr. Ney, had convened 
a couple of very important meetings with a variety of people, 
including HUD, to talk about how we might improve Section 8, 
how we might make it more efficient, how we might reduce costs.
    I continue to want to participate in that, and I think 
there are some things we can do. What we have here today are 
cuts that are driven, I believe, clearly by a need to save 
money at a time when we are spending money significantly 
elsewhere, on the military and elsewhere, when we are cutting 
taxes. I reject the notion that it has to come out of the 
poorest people.
    Here are some of the things that I have a problem with. 
First, the proposal to end enhanced vouchers. Enhanced vouchers 
are themselves a compromise. Enhanced vouchers, as we know, go 
to people who are living in housing that was built with Federal 
aid and where there were to be limitations on the rent. Those 
limitation periods having expired, the purpose of the enhanced 
vouchers was to prevent eviction for people who have been 
living in places for a long time.
    I will be interested, Mr. Secretary, if you could tell me, 
I assume you know this, having made this proposal, how many 
evictions we can expect when we get rid of the enhanced 
vouchers. That is, how many people who are now on enhanced 
vouchers will be unable to stay where they have been living for 
a long time, including many of them who are elderly, when we 
cut this back?
    I am also concerned about what this does for the homeless. 
You have said on other occasions, Mr. Secretary, that I have 
seen in the newspapers that we should be aiming to help people 
in Section 8 who are not quite as poor as the current group we 
are helping. This brings in more money. The Administration has 
proposed some very useful things with regard to Section 8, 
proposing to consolidate services with regard to the homeless. 
But we must remember the single overriding characteristic of 
the homeless is the thing that earns them their name. They are 
home-less. They do not have homes.
    If you are able to get the Section 8 voucher program geared 
at people at higher levels, if you get up toward 60 percent of 
median income rather than below 30 percent, then it seems to 
me, inevitably, you will be hurting the homeless. I would be 
particularly interested in HUD's analysis on what you expect to 
happen when we relax the targeting, when you no longer have 
this requirement that so much go to people below 30 percent of 
the income.
    I do not claim to be the world's expert, but I have 
encountered myself very few homeless people who have 50 or 55 
percent of the median income in their area. I believe when you 
consciously upgrade, as it appears we are trying to do, you 
will have a problem.
    I would also ask to put it in the record, Mr. Chairman, a 
letter from the Lawyers Committee for Civil Rights letter.
    The Chairman. Without objection.
    Mr. Frank. I have appreciated your affirmation of the 
importance of fair housing, of fighting segregation, of 
fighting the concentration of poor people. I was particularly 
troubled, therefore, to see in the proposal as it was explained 
to me, a proposal that would make it harder for people to take 
a Section 8 voucher in one community and go to another 
community. Basically, the bill appears to give the receiving 
community the right to veto people with Section 8 vouchers 
coming in. That seems to me to be an invitation to segregate 
and concentrate.
    As I understood it, you could get your Section 8 voucher in 
community A and then you could use that anywhere else you could 
find a place with community A's permission. To give all the 
receiving communities a right of veto over the people who would 
be coming with the Section 8 vouchers, I am very disturbed by 
that. I thought HUD agreed that we have a problem with people 
resisting the construction of housing and causing problems and 
causing segregation as a problem.
    We have the CDBG proposal that was going to say that money 
could only be spent in the poorest areas. Cumulatively, we are 
doing a lot to prevent effort concentration here, whether it is 
racial or economic. So I do not understand what the 
justification can be for giving receiving entities the right to 
say no to people bringing a Section 8 voucher. I do not even 
see how that saves money, and I do not think saving money ought 
to be every piece of it.
    So those are just some of the things that are very 
troubling to me about this. I look forward to our discussion of 
them.
    The Chairman. The gentleman's time has expired.
    We will turn to our distinguished witness.
    Again, Secretary Jackson, welcome back to the committee. We 
appreciate your efforts on behalf of the committee and your 
steadfastness in going through a number of hearings.

STATEMENT OF HON. ALPHONSO JACKSON, SECRETARY, U.S. DEPARTMENT 
                OF HOUSING AND URBAN DEVELOPMENT

    Secretary Jackson. Thank you very much, Chairman Oxley and 
Ranking Member Frank, distinguished members of the committee. 
Thank you for inviting me to join you this afternoon.
    I am pleased to appear before the committee to discussion 
H.R. 1999, the State and Local Housing Flexibility Act of 2005. 
I would like to thank Representative Miller and his cosponsors 
on this committee, Representatives Feeney, Harris, King, and 
Renzi, for their leadership in introducing H.R. 1999.
    Mr. Chairman, I ask that I be allowed to submit my full 
statement for the record.
    Each day, I bring more than 25 years of direct experience 
in housing, much of it gained in the public housing arena, to 
my job as Secretary. In fact, I am the first Secretary in the 
history of HUD to have run a public housing authority. I fully 
understand the importance of HUD's supportable housing program, 
and I support them wholeheartedly.
    My experience allows me to tell you without hesitation that 
reform of both public housing and Section 8 is needed. Under 
Section 8, HUD provides approximately two million low-income 
families with subsidies to afford decent rental housing in the 
private market, yet the program faces serious challenges. In 
recent years, Section 8 costs have spiraled out of control and 
positive results are being overshadowed by the lingering doubt 
about the program's effectiveness and viability.
    With Congress's support, however, I am hopeful that we can 
preserve and strengthen the program. The most telling indicator 
of the Section 8 structural challenge is the program's rising 
cost. In 1998, the housing certificate fund consumed 36 percent 
of HUD's budget. By 2005, that had risen to 57 percent. Between 
December 2000 and December 2004, the amount paid by the Federal 
Government increased by 36 percent, totaling more than $3.3 
billion.
    The cost increase occurred even as the market across the 
country exhibited record high vacancies and many PHAs reported 
that their rental markets were soft. In fact, in some rental 
markets Section 8 is leading the surge of rental increases. 
Despite rising costs, we are not seeking equally dramatic 
results in moving families from dependency to self-sufficiency. 
Families are staying in the program for a much longer duration 
of time and the waiting list remains troublesome.
    As currently structured, PHAs are required to give three 
out of every four vouchers to families making 30 percent or 
less of area median income. This has led to a high rate of 
subsidies per family and created a system where families are 
most likely to stay in the program much longer. We believe that 
since 1998, families have been in the program for longer than 5 
years, representing the fastest growing segment of the voucher 
recipients.
    Furthermore, the Section 8 program is overly prescriptive 
and too complex. Over the past 2 years, HUD has engaged in 
numerous discussions with PHA directors, housing policy and 
industry experts, Members of Congress, and interested parties 
on how best to address the challenges facing the Section 8 
program. The result of these policies is a proposed State and 
Local Housing Flexibility Act of 2005. The Administration is 
convinced that this approach will enable PHAs to better serve 
low-income families, reduce the waiting list for vouchers, and 
move more working families toward self-sufficiency and 
homeownership.
    The proposed legislation would put more decisionmaking at 
the lower levels and allow PHAs to run a more streamlined 
program while requiring them to control costs. As more families 
move up to self-sufficiency, the duration of assistance will 
drop and the dollars will be available to help additional 
families over time. H.R. 1999 also takes the initiative to 
provide long awaited rental simplification relief for PHAs in 
their operating public housing programs.
    Finally, Title I of H.R. 1999 is the flexible voucher 
program which allows the local PHAs to determine the 
approximate mix of low-income families to be served by 
targeting 90 percent of all assistance to those earning at or 
below 60 percent of the area median. PHAs would also be allowed 
to create incentives for voucher recipients to find work or 
improve their job situation and create new options for families 
pursuing homeownership. PHAs would be able to design their own 
tenant policies and simplify rent calculations, thereby 
reducing the number of errors.
    Finally, the proposal would significantly reduce 
unnecessary administrative burdens on the PHAs. The 35-year 
history of tenant-based housing assistance for low-income 
renters has been one of growth, refinement, and responsiveness. 
It has been a history of change. There is no question that 
change is urgently needed once again. It must happen soon if we 
are to continue to serve families that need Federal help and 
continue to provide for the individuals who seek the American 
dream of self-sufficiency.
    I look forward to the work ahead as we seek to improve the 
nation's largest rental assistance program. I would like to 
thank all the members of the committee for your support of this 
effort that we are doing at HUD. I welcome your guidance as we 
continue to work together.
    Thank you, Mr. Chairman, Mr. Ranking Member.
    [The prepared statement of Hon. Alphonso Jackson can be 
found on page 49 in the appendix.]
    Mr. Miller of California. [Presiding.] Thank you, Mr. 
Secretary.
    Currently, voucher recipients can keep their vouchers as 
long as they remain income eligible and adhere to the rules, of 
course.
    Can you explain the provisions that were included in the 
Administration's proposal regarding time limits and basically 
why you feel time limits would be important, and how the 
disabled and elderly would fit under that in particular?
    Secretary Jackson. I will answer the latter part first. The 
disabled and elderly would not be affected at all. They would, 
in effect, be grandfathered in because we realize that in many 
case their income level will never change. But we felt deeply 
that pre-1998 that the average stay on the voucher was about 3 
1/2 years. Today, we are looking at somewhere between 5 to 8 
years on the voucher.
    My understanding in filling the voucher program was that it 
was a transitional program, Mr. Chairman, not a substitute for 
public housing. We believe that giving the housing authorities 
the option of limiting the amount of time that recipients can 
stay on the Section 8 program will open up more space for the 
availability of those people on the waiting list. So we think 
that Section 8 is a transition between public housing and self-
sufficiency. If that is the real case, then it should not be in 
perpetuity.
    Mr. Miller of California. I also wanted to mention we had a 
roundtable, and Scott Keller was there, and Mr. Frank and other 
members, a few other members, Congresswoman Waters. I thought 
it was healthy. One thing that I guess is more of a comment, 
but prior to your becoming Secretary, we went through the first 
proposal, which was to block grant. We got no takers in the 
entire country. So we went through that whole thing.
    We did not have an authorization and, of course, 
appropriations comes in and Section 8 grows. I understand that, 
and then all of a sudden Section 8 grows, and if not, more 
money does not go in. The end result is other good programs 
such as the homelessness, AIDS, veterans, a lot of other 
programs are going to get eaten up, basically, after a period 
of time.
    So we had the roundtable. I guess it is sort of like 
education. You can reform education to death, and people have 
to catch a breath. So we kind of went from this one proposal, 
and then it stopped. Now we have this one. I want to thank you 
for coming. I think the roundtables are a more informal way to 
continue to get more issues laid out there.
    But on proposals like this, the caution that I have is that 
when they are done, how are they implemented after that; how is 
it carried out; what kind of huge turnover occurs, not turnover 
of people, but of the system, occurs out in the hinterlands? 
And does it cost more money to actually make change? I think 
those are some things with these kinds of proposals that are 
problems.
    A question I had, with my limited amount of time, but in 
the written testimony, the current voucher program encourages 
disincentives for very low-and extremely low-income families 
from seeking housing outside the Section 8 voucher program.
    The proposal today would broaden the target assisted 
population, so that if that proposal would be enacted, what 
happens to the very low and the extremely low families? Would 
there be some other assistance for the extremely low and very 
low?
    Secretary Jackson. Actually, Mr. Chairman, if we look at 
what we have designed, we said that 90 percent of the vouchers 
should be used for persons 60 percent or less of median. If we 
go back to the present proposal that we have before us, 75 
percent of those must be used for people 30 percent or less of 
median, and 25 percent for those up to 80 percent of median. We 
have effectively cut out those persons between 60 and 80 
percent down to 10 percent.
    So actually, we are serving more people when we said 90 
percent of the vouchers must be 60 percent of median or less. 
We believe that clearly those persons who are presently on 
vouchers will not be affected at all, unless they leave the 
voucher program. If they do, then the housing authority has the 
right to seek others to take up the voucher. But the housing 
authority also under our proposal, Mr. Chairman and Ranking 
Member, they do not have to go up to 60 percent if they choose 
not to. We are giving them that option. That is not something 
that we said is mandated. We are saying that they should have 
the option to serve 90 percent of their vouchers to 60 percent 
or better of median.
    I think that is a rational way of doing it. I do not think 
that anyone in the low-income bracket will be displaced, as 
long as they already have a voucher.
    Mr. Miller of California. I have heard from groups. They 
would say that this proposal would help the more higher 
affluent of the poor. In other words, not wealthy people, but 
this would not come in to help the poor of the poor. It would 
help the poor, but the more higher end of that, not that they 
are rich. I am not trying to say that. I do not know if you 
have heard this argument, but it still comes back to this 
really will not help the poor of the poor.
    Secretary Jackson. Well, my answer to that, Mr. Chairman, 
is that when we are talking about 30 percent of 60 percent of 
median, we are talking about marginal people, period, in our 
country. I do not believe that you should have two persons 
working every day who could benefit from the voucher, but 
because they make 35 percent of median, they are, in essence, 
foreclosed from having the opportunity to use the voucher. They 
are in need also.
    If you go back to pre-1998, there were two unique 
provisions to the law. The first was that the homeless 
population rose to the top of the list no matter where they 
were. Secondly, people who did make up to 50 percent of median 
had the same rights as the person making 30 percent of median. 
All we asked them to do was to go back to pre-1998 to that 
provision, where people stayed a lesser period of time in the 
voucher program.
    Now, the one provision that does not exist today is the 
homeless provision. I have heard the advocates talk about, 
well, the homeless persons are going to be disadvantaged. Well, 
they are clearly disadvantaged today. They do not rise to the 
top of the list anymore. They do not get the preferential 
treatment that they did pre-2000.
    So clearly I think we are going to serve more people. The 
voucher will turn over much quicker, and it will be more 
effective.
    Mr. Miller of California. My time has expired.
    The gentleman from Massachusetts?
    Mr. Frank. Let me begin with that one.
    Frankly, I am confused, Mr. Secretary, because I think you 
are arguing both sides of the issue. On page five, you seem to 
say that you want to get to people with more income in the 
program.
    Secretary Jackson. I am sorry. I did not hear you.
    Mr. Frank. You, on the one hand, have been arguing that one 
of the virtues of your proposal is that it will get people on 
the whole with higher incomes than are currently in it, but 
then you say it is not going to hurt the lower-income people. 
Well, it is zero-sum game, particularly under your approach.
    With regard to the homeless, I do not understand. You say 
that this does not hurt the homeless. To the extent that you 
ratchet it up, it seems to me that you are going to have a 
problem. People who were homeless and are now living in 
housing, no, they are not affected.
    But when you talk about people who are currently homeless 
applying, does your proposal do anything to enhance their 
ability to get into public housing or into Section 8 vouchers?
    Secretary Jackson. I think that is a fair question, Mr. 
Ranking Member. Let me say this to you. No, the preferential 
treatment of the homeless has been dismissed----
    Mr. Frank. Does your proposal do anything to improve the 
position of the homeless?
    Secretary Jackson. No, it does not.
    Mr. Frank. When you do not do anything to improve it 
substantively and when you bring the targeting basically from 
30 percent to 60 percent, I think you have a negative effect.
    Let me ask you about the enhanced vouchers. As I understand 
it, you are abolishing enhanced vouchers after a year. Right 
now, people who are now living in projects that are no longer 
income-limited are able to stay because of enhanced vouchers. 
If they cannot meet the new market rent, they will have to 
move. Is that right?
    Secretary Jackson. No.
    Mr. Frank. Well, how does it work then?
    Secretary Jackson. Again, if you look at my initial speech, 
we are talking about housing authorities having a great deal of 
flexibility with the move to work. What we are saying is----
    Mr. Frank. Excuse me. I am not talking about move to work. 
Now wait a minute. Enhanced vouchers, as I understand it----
    Secretary Jackson. I am going to get to that.
    Mr. Frank. But I want you to get to it before my 5 minutes 
expire. Here is the problem. Are you telling me that housing 
authorities would have the power to go above the FMRs?
    Secretary Jackson. Housing authorities have the power right 
now to go above the FMRs.
    Mr. Frank. On their own say, whenever they want to? They do 
not think that.
    Secretary Jackson. No, they have to come back to----
    Mr. Frank. Well, right now we have something called 
enhanced vouchers, which are for people who are in this 
situation which we know about, so they do not get evicted. You 
want to abolish them. What is the effect?
    Secretary Jackson. No, we are giving the housing authority 
the flexibility again, Mr. Ranking Member----
    Mr. Frank. Then your people did not do a very good job of 
explaining to me. Everything I have seen says you are going to 
abolish enhanced vouchers.
    Secretary Jackson. We believe that clearly----
    Mr. Frank. Are you going to abolish enhanced vouchers? Mr. 
Secretary----
    Secretary Jackson. No, we are not abolishing enhanced 
vouchers.
    Mr. Frank. Well, it says you are.
    Secretary Jackson. No, we are not. No, we are not.
    Mr. Frank. Then correct what your people give out.
    Secretary Jackson. No, we are not.
    Mr. Frank. That is what they told us.
    Secretary Jackson. They have a year.
    Mr. Frank. What does it say with regard to enhanced 
vouchers?
    Secretary Jackson. They have a year to have the enhanced 
voucher, and if they choose to stay in that particular 
building, they have a right to pay a higher cost.
    Mr. Frank. Would you read me the language that says that? 
Would you explain to me why your people came to me and showed 
me a paper that says we were going to abolish enhanced 
vouchers? Other people have that same impression.
    Secretary Jackson. They did not say they were abolishing 
enhanced vouchers----
    Mr. Frank. But they did, Mr. Secretary. I read it.
    Secretary Jackson. No, they said that they have a year. 
That is not abolishing enhanced vouchers.
    Mr. Frank. It says it would abolish them after a year.
    Secretary Jackson. Yes, but the way you just asked me a 
question----
    Mr. Frank. Excuse me. Okay.
    Secretary Jackson. You said----
    Mr. Frank. No, I did say you would give them a year. So you 
acknowledge that you are going to abolish them after one year.
    Secretary Jackson. Yes.
    Mr. Frank. That is not funny, Mr. Secretary----
    Secretary Jackson. It is not funny because----
    Mr. Frank. Look, I must say I try to be reasonable. I do 
not think you are cooperative in trying to give me honest 
answers. I asked you if you were planning to abolish enhanced 
vouchers. I did say after a year, so let's be careful. Your 
bill would if passed as submitted abolish enhanced vouchers 
after one year?
    Secretary Jackson. Yes.
    Mr. Frank. Thank you. What do you think the effect will be 
on the people who are living in those units where they have 
needed enhanced vouchers to avoid eviction?
    Secretary Jackson. I do not think they are going to be 
evicted.
    Mr. Frank. What makes you think that if their rents go up 
and they cannot pay it?
    Secretary Jackson. I think that they can.
    Mr. Frank. Oh, you think that the people you are giving 
enhanced vouchers to could all afford to pay the higher rent?
    Secretary Jackson. Yes, I do.
    Mr. Frank. Could I see HUD's study on that? How many people 
are there now receiving enhanced vouchers?
    Secretary Jackson. I cannot give you that answer.
    Mr. Frank. Has HUD studied that? There is a callousness 
about this in telling me this. A lot of these are elderly 
people, and they are going to----
    Secretary Jackson. It does not affect elderly or 
handicapped.
    Mr. Frank. Oh, if they are elderly they keep getting an 
enhanced voucher forever?
    Secretary Jackson. That is right, and the physically 
handicapped.
    Mr. Frank. But other people, families, they lose the 
enhanced voucher and you know as a fact that they can all pay 
the higher rent. I envy you your certainty, Mr. Secretary.
    Secretary Jackson. No, I cannot tell you that with 
certainty.
    Mr. Frank. I do not think it is a certainty, but that is 
what you just said. You said none of them would be evicted. I 
do not think it is a certainty. I think it is indifference.
    Let me ask you about this provision that says now if I get 
a voucher from City A and currently I can use it in Town B, but 
under your proposal if Town B does not allow me to use it 
there, I cannot use it there. What is the justification for 
that? It does not save money. It seems to me it is just 
enforcing anti-poor people. It is segregationist and 
economically restrictive.
    What is the justification for allowing receiving 
communities to veto someone coming in and renting an apartment 
with a voucher if the landlord is willing to rent it?
    Secretary Jackson. Let me say this. I think it takes away 
from the housing authority that issued that voucher because it 
limits the amount of money that they are going to have.
    Mr. Frank. No, no. Excuse me, but you are wrong. We are not 
talking about the housing authority's current agreement to do 
it. The current housing authority, the issuing housing 
authority could limit it. We are talking about the receiving 
housing authority. You could accomplish that by saying that the 
issuing housing authority could say you cannot use it here; you 
can only use it in this area.
    But why should the receiving housing authority be able to 
veto a use of a voucher, a rental unit in that town, if the 
issuing authority is willing for it to happen?
    Secretary Jackson. Well, either the issuing authority or 
the receiving authority can say no.
    Mr. Frank. I understand the argument with the issuing 
authority, controls of costs. Why would you allow the receiving 
authority to say no? Which I do not believe they now can, and I 
do not believe they should.
    What other than accomplishing various forms of segregation 
is that going to accomplish? It does not save money. Why do you 
let the receiving community veto poor people coming in and 
renting apartments in their town?
    Secretary Jackson. My position is that it is the issuing 
authority that has the right----
    Mr. Frank. Your bill gives it to the receiving authority. 
Your bill gives it to the receiving authority as well; both 
have to say yes. I do not understand why you are adding that. 
It is your bill.
    Secretary Jackson. I think that the housing authorities 
should have the right to decide.
    Mr. Frank. The receiving authority?
    Secretary Jackson. The receiving authority.
    Mr. Frank. Why? Why?
    Secretary Jackson. Because clearly----
    Mr. Miller of California. The time has expired.
    The gentleman, Mr. Shays from Connecticut?
    Mr. Shays. Sometimes, most of the time, believe it or not, 
I think Mr. Frank is right, and I think he is right about a lot 
of these issues. I have a hard time keeping up with how quickly 
he speaks.
    [Laughter.]
    But the bottom line is most Democrats tend to represent 
urban areas. Most Republicans tend not to. I represent an urban 
area, and HUD is very important to us.
    I believe that we have gotten ourselves in this mess out of 
a good motive. The good motive was we do not want publicly 
owned housing where we just warehouse the poor. We would like 
to be able to have these vouchers so we can have poor people 
basically live in units that are market-based, and so a kid can 
wake up in the morning and see someone go off to work. All of 
that is good.
    But we should not be surprised, now, that we are looking at 
what is really horrific. In 1998, 42 percent of your budget was 
vouchers; in 2005, 62 percent. I do not know why it goes up 
another 10 percent in just one year to be 73 percent of your 
budget, but basically your testimony before us is that 73 
percent of your budget is vouchers.
    Secretary Jackson. It will be, yes, if we continue the road 
that we are going down.
    Mr. Shays. And so we all know we have a huge challenge. The 
one good thing is that we are not spending our money on 
bureaucracy. We are spending it getting it out there. But the 
bad news is we basically, I would make the analogy to 
homeownership. You own your house, and the rents keep going up; 
you have a home, and your mortgage stays more or less constant. 
Your taxes may go up, and you have been swept up in this 
marketplace, and you can stay with it.
    What we have basically done is we have basically said the 
Government is going to be in the rental market and as the 
rental market goes up, we are going to pay these costs. I guess 
my point is, when we did it, we knew it was going to happen. 
What concerns me is I feel like we are just kind of pushing 
this program off a cliff, because, in essence, we are just 
trying to get the local communities to take it over. We are 
trying to give them the flexibility to basically dump some 
people off of it to weed it out.
    I feel in a way, candidly Mr. Secretary, that we are 
passing the buck. I feel like this has got to be a joint effort 
with the Federal Government. I do not think my housing 
authority has the capability to maintain this program on its 
own. I can just tell you, living in the highest-taxed city in 
the country, I am seeing homeowners in Bridgeport, Connecticut 
looking at a simple Cape paying $6,000 or $7,000 living on 
Social Security.
    So I guess my concern is not a question. It is to say I 
understand why you are here, because you are looking at so much 
of your budget in this program. I do not think it can be a 
program we just dump to the local communities and then 
basically give them more flexibility. I feel candidly we are 
doing the same thing with CDBG and CSBG. We are basically 
taking a $5.2 billion program, making it $3.7 billion, and then 
we are saying this is great because we have this new block 
grant out of Congress.
    So having voted for the war in the Gulf and seeing the 
money that we are spending there, I think people have a right 
to be critical that we have kind of forced our revenue in that 
area. I think we are shortchanging you. I think that we have 
got to be willing to spend more on HUD, and I think that we 
have to find a way to make sure that HUD is still in the game 
and not passing the buck.
    Secretary Jackson. Congressman, I do not disagree with you, 
nor do I disagree with the ranking member in the sense that the 
Section 8 program is a very valuable program that we have. It 
does help low- and moderate-income people. But we cannot 
continue to let it grow at this point.
    I do not think the Section 8 program should disappear, go 
away, nor people who have a voucher should be put off of those 
vouchers. I am in total agreement with that. But I do think 
that we should do everything in our power to assist people to 
become self-sufficient, and the creation of the voucher program 
was that bridge. That bridge was between public housing and 
becoming self-sufficient, not a program to substitute for 
public housing as we know it today.
    So my contention is I want the program at HUD. We want the 
program to work.
    Mr. Shays. But what confuses me is that we are basically, 
knowing that the program cannot even afford the folks that we 
have already, we are expanding and saying more can compete for 
this as you increase the income limits. So it seems like a 
little bit of a disconnect for me.
    Secretary Jackson. No, and I understand your concern. I 
have said a number of times before you, if housing authorities 
will do their job by enforcing the rent integrity program to 
make sure that every person that is on that voucher deserves to 
be on that voucher, and does not deserve to be paid for 
utilities or a negative-based or zero-based rent, I think yes, 
that 50 or 55 percent that are on negative-based or zero rent 
can afford to pay. There are few people other than the 
physically or mentally handicapped that might not be able to 
pay.
    The most important thing for us to note today is seniors 
pay their 30 percent. The bulk of the seniors in the Section 8 
voucher program pay every day. It is not seniors that do not 
pay. It is those persons who we would say are physically 
capable that are in that 50 percent that I am talking about. 
Yes, I believe they can pay. I will tell you why, because I 
used to run the rent integrity program. I used to go out and 
make sure. I found that a lot of people who have the ability to 
pay that were not paying. If housing authorities would do their 
job, I think we can change this, and we can house more people.
    Mr. Miller of California. The time has expired.
    The gentlelady from California, the ranking member, Ms. 
Waters?
    Ms. Waters. Thank you very much, Mr. Chairman.
    I feel as if I have been through this before. I think we 
all agree that there are a large percentage of people with 
extremely low incomes who have a need for affordable rental 
housing. Do we agree on that?
    Secretary Jackson. Right.
    Ms. Waters. Roughly how many people are we talking about 
who have low incomes?
    Secretary Jackson. About 2 million people.
    Ms. Waters. About 2 million people. So there is a big gap 
between the number of persons with these extremely low incomes 
who now have vouchers and the number of people who need them. 
Is that----
    Secretary Jackson. I think yes, there are still a large 
number of people who need vouchers.
    Ms. Waters. I heard you say more than once that we cannot 
continue to allow this program to grow. I mean, is there not a 
relationship between people who need it and the growth in the 
program?
    Secretary Jackson. No.
    Ms. Waters. There is not?
    Secretary Jackson. No.
    Ms. Waters. So you think the program is growing despite the 
fact people do not really need the program?
    Secretary Jackson. The program is growing, but we are not 
serving any more people. It is growing because we are paying 
more out in subsidies for rent and for utility allowances per 
person. It is not growing.
    Ms. Waters. What do you propose to do about that?
    Secretary Jackson. Well, as I said before, we have 
suggested in this bill that 90 percent of the people that are 
60 percent or less of median be accorded the right to have a 
voucher. I think that clearly if we put time limitations on it, 
that would be a way to make sure that they turn over. Pre-1998, 
the average person, Congresswoman, stayed on a voucher about 3 
1/2 years. Today, it is closer to 8. It is between 5 and 8 
years. That is a huge difference than what we had before.
    Ms. Waters. Let me see where we are going with this, 
because I do know that there are some basic philosophical 
differences between me and you and the Administration.
    Are you suggesting that this program that you call a bridge 
program should only serve people for a very limited period of 
time and that miraculously they are going to have more income? 
They do not need a voucher? Where do they go? What do they do?
    Secretary Jackson. Well, I do think that there should be a 
time limitation, and I have said that a number of times.
    Ms. Waters. What happens to the people?
    Secretary Jackson. I think that what people are saying, 
where do they go, I think that they will be fine in many cases.
    Ms. Waters. I beg your pardon?
    Secretary Jackson. I think they will be fine. I am saying 
to you that many people, as I just said to the Congressman a 
few minutes ago, of the 50 percent that we pay negative-based 
or zero-based rent, I believe that they have the ability to pay 
rent.
    But if the housing authorities will do their job, they will 
end up paying their subsidies and moving off the program much 
quicker. But if housing authorities do not do what they should 
be doing, that is consistently the rent integrity program, 
doing the inspections, no, they are not going to move.
    Ms. Waters. Do you think there is any relationship to the 
unemployment rate in poor communities, particularly minority 
communities, and the inability to pay for housing, people who 
need help? Is there any----
    Secretary Jackson. I think if you are unemployed, clearly 
you cannot pay for housing.
    Ms. Waters. Well, unemployed or under-employed, do you 
think that somehow folks who need help are going to be able to 
get help for 2 or 3 years and then they will be fine; they get 
pushed off the program and they just go into the wild blue 
yonder?
    Secretary Jackson. Yes, I do, because there are a lot of 
under-employed people today that are paying almost 50 percent 
of their income for rent who I think should have the same 
option as those who we say do not have a job. I think they 
deserve a hand-up just as well.
    Ms. Waters. Well, you know, I suppose we could go on with 
this conversation, except really we just come from two 
different places on these issues.
    As it was said before by my colleague on the opposite side 
of the aisle, HUD is a very important agency because of a 
number of the programs that you administer that are so 
important to low-income people, average working people, just 
having a simple decent quality of life.
    Secretary Jackson. I agree.
    Ms. Waters. We believe that it is inevitable that there 
will be growth in the program as we have economies that are not 
performing, as we have people who are losing their jobs, as we 
have jobs that are being exported or outsourced to world 
countries for cheap labor, as, as, as. We just believe that. 
And I think the data that we have shows us that we are 
basically on the right track.
    You either have to think that it is the Government's role 
and responsibility to try and help in a real way, or you do 
not. You are on the don't side, and I am on the belief side. 
And so we are not going to get anywhere with these meetings. We 
are not going to learn anything new. It is your job to come 
over here and talk to us, and it is our job to sit up here and 
ask you these dumb questions that we know we are not going to 
get any good answers from you about.
    So having said that, let me yield back the balance of my 
time and stop wasting my time. Thank you very much.
    Secretary Jackson. Let me say this to you. I would like to 
say something to the Congresswoman. I do think that the 
Government should make every effort to help people help 
themselves. So we do not disagree on that. I just do not think 
it should be in perpetuity.
    Mr. Miller of California. The gentleman from Texas?
    Mr. Neugebauer. Thank you, Mr. Chairman.
    Thank you, Mr. Secretary. I want to commend you for your 
long and distinguished service in housing. Basically, I came to 
Congress from the housing business. I started actually, if you 
are familiar with the old 236 programs, the D-4 and then served 
on a city council where we had a housing authority in Lubbock.
    What I am really interested in, and I think I hear you 
saying this, is that we need to do everything we can at HUD to 
help people transition to ownership, because ultimately when 
people own their homes, the family does better overall. We have 
a more stable household. A lot of studies have been done to 
confirm it.
    Kind of talk through with me and the panel today about what 
the flexibility that happens here and how this program will 
help us begin to transition those people to homeownership, 
because that is something of great interest to me.
    Secretary Jackson. Thank you very much, Congressman.
    I think that somehow people believe that persons, once they 
are in public housing or voucher, must be there in perpetuity. 
I ran three housing authorities; I have never met a person who 
understands public housing to stay on a voucher. Not one. They 
all want to get off, but they need significant help.
    One of the ways that we did it when I ran the Dallas 
Housing Authority is we had our own training program. We had 
our own program with the Dallas community about training 
people. It worked very well. We had sufficient turnover.
    That is what I am saying today, that the Section 8 program 
in the beginning after we left the project-based, but the 
voucher program, was a transitional program. It was to help 
people move from public housing who had acquired skills and 
jobs, give them a period of time to try to get those kills in 
jobs that they have learned in the trade down, and then move 
into rental housing that is market-rate or homeownership.
    I think that we had that program well in tact until 1998 
when we came up with the new proposal that 75 percent of the 
vouchers must go to people 30 percent or less of median, which 
at that point in time was not the case. So when you go and give 
it to 30 percent or less of median, you end up paying utility 
costs. You end up paying other allowances.
    But more importantly, which is very important to 
understand, is the housing quality inspection that we required 
each housing authority to do. We ended up, and most people do 
not realize this, we ended up paying landlords 2 or 3 months' 
rent with no one in those apartments because it takes the 
housing authorities so long to get to those quality 
inspections. Where if you and I go out and rent an apartment, 
we do in it the next week, once we give the security deposit.
    So we are saying, with this State and local flexibility, 
give the housing authorities the right to manage their housing 
like we would give a private landlord. So if we give a person a 
voucher, they can go directly into that apartment within 2 or 3 
days, not 2 or 3 months. And that is the average because it 
takes about 60 days to finish an inspection.
    So if they have that authority, and I wish we had had that 
authority, and we had very much similar to that before 1998, 
and that is why we were able to rent and keep the voucher 
turning over and over. I think something is very important to 
understand. In 2005, Congress gave us this budget and said work 
with it. We are working with the budget, and I think the way to 
work with the budget is to give the autonomy to housing 
authorities.
    I want to close by saying this. When I ran the housing 
authority, I always had a saying that HUD was not flexible. It 
always hid behind regulations, and we had too many regulations. 
And so my position was, I think I can manage my housing 
authority if you let me run it. That is one of the reasons 
today I am here before you to say, give the housing authorities 
the choice to run their authority.
    Mr. Neugebauer. So your opinion is that if we give the 
housing authorities more flexibility, they can do some more 
transition-type programs within the complex and help people 
start to prepare for the ownership piece of that.
    Secretary Jackson. I agree with you. This is going to sound 
very funny because when I was running housing authorities, I 
said in many cases there was not a capable, competent, or 
compassionate person at HUD. Well, since I am at HUD, I think 
we are competent, capable, and compassionate, and we are trying 
to do that at this point in time by giving housing authorities 
the flexibility to run their program. I think we are too 
prohibitive to housing authorities.
    Mr. Neugebauer. Thank you.
    I yield back.
    Mr. Frank. How many competent, capable people are there 
now? Do you have one or more?
    Secretary Jackson. A lot of them.
    Mr. Frank. Okay. I would just ask unanimous consent to put 
into the record some communications that came to myself and the 
chairman of the full committee.
    There is a statement from the Public Housing Authority 
Directors Association, the National Association of Housing and 
Redevelopment Officials, and the Council of Large Public 
Housing Authorities saying we are very concerned; the bill 
fails to address the most pressing problems facing our members 
and assisted families renewal funding; also a statement of 
opposition from a large coalition of groups from Catholic 
Charities and the Cerebral Palsy and others worried about its 
impact on low-income people; and a letter raising serious 
questions from the alliance of the groups that are generally in 
the housing supply business, home builders and the Housing 
Conference, et cetera; and also a statement in opposition to 
the bill from the Consortium for Citizens with Disabilities.
    I ask that all these be put in the record.
    Mr. Miller of California. Without objection.
    The gentleman, Mr. Crowley?
    Mr. Crowley. Thank you, Mr. Chairman.
    One of the concerns I have is that every time the 
Administration makes another change to Federal housing policy, 
it results in less funding and more troubles for many of the 
people that I represent in my district. You and I had a 
discussion the last time you were before Congress about the 
drug elimination program, a program that provided public 
housing units with police officers placed there to lower crime 
and to address the issue of drug abuse.
    I believe it worked. Many people believed it worked. The 
Bush administration eliminated that and said that agencies 
could use capital and operational funds that they receive from 
the Federal Government to subsidize those programs, when, in 
fact, both of those funding streams were cut as well.
    We look at New York City's housing authority, HPD. They are 
facing a $50 million shortfall. You have said before you want 
to give the authorities the right to deny and to do the 
inspections they need to do in order to make sure that the 
people who are receiving those vouchers are legitimate or that 
there is actually a person living in that apartment. And yet at 
the same time, they are saying they do not have the resources 
to do what they need to do as it exists right now on a local 
level.
    I just do not believe, Mr. Secretary, and this is my 
personal belief, that you believe half the things you are 
saying today. I say that because you went out of your way 
desperately not to admit to the ranking member that the Section 
8 enhanced vouchers were going to be eliminated. You danced 
around for a few moments there, about a minute or so, until you 
actually admitted that after 1 year, the enhanced Section 8 
vouchers would be eliminated.
    I have a building in my district in the South Bronx, in the 
Soundview section of the South Bronx, Mr. Secretary. It is 100 
percent Section 8 housing. I have a new landlord who wanted to 
take over that building, and he has indicated to folks in that 
building that he will not accept Section 8 vouchers, enhanced 
or otherwise. I do not know what those folks are going to do. 
Maybe you can tell me what they are going to do for those poor 
folks who live there now.
    Public housing is not a spa. Public housing is not a fun 
place to be. I have many constituents, and I visit them. They 
welcome me into their homes and to their abode. They are very 
gracious. They try to show me the best that they possibly can 
the side of their living that they are in. But quite frankly, 
it is not a spa. It is not a five-star hotel.
    The idea that somehow many of these folks will somehow find 
a way to pay for the increase that they will have to use in 
order to make up for the enhanced voucher is just ludicrous. 
People just do not have the resources in a city like mine to do 
that. They are being pushed out of the quasi-public housing 
that they are in right now, enhanced Section 8 housing, to make 
way for what the market rate will pay.
    Maybe you have answers to that. I do not know what you 
think these folks are going to do. I am going to ask you. What 
do you think these people are going to do? How do you propose 
to address that crisis?
    Secretary Jackson. First of all, when I understood what the 
ranking member's question was, did we have a year, I answered 
him yes. Before I thought he said, were we going to eliminate 
the enhanced voucher. I said no. That is the question I 
answered.
    Secondly, Congressman, I understand your concern, but I ran 
three housing authorities. I am well aware of the games that 
people play. Many of the persons that we are talking about have 
the ability because they are physically capable of doing it, to 
pay these rents. But if you do not do the necessary 
inspections, if you do not do the necessary rental integrity 
program----
    Mr. Crowley. Mr. Secretary, who benefits from the voucher? 
Who gets that money?
    Secretary Jackson. The landlord.
    Mr. Crowley. Yes, so it is the landlord who is at fault, 
not the individual who receives the voucher. Yet it is the 
person who receives the voucher, who gives it to the landlord, 
who is going to be----
    Secretary Jackson. No, it is the housing authority not 
doing their responsibility. We are the ones----
    Mr. Crowley. You are just passing the buck to unfunded 
mandates. As I said before, New York City----
    Secretary Jackson. You say I am passing the buck. The 
landlord does not do the evaluation of the persons, 
Congressman. The housing authority does that.
    Mr. Crowley. He gets the check, though.
    Secretary Jackson. Yes, but the point is----
    Mr. Crowley. But he gets the check. They benefit from the 
housing authority. They are not honest enough to come forward 
and say the person does not live there anymore; here is your 
money back.
    Secretary Jackson. In some cases, no.
    Mr. Crowley. So the individual who is on Section 8 housing, 
that is the individual who pays the price because of that.
    Secretary Jackson. No.
    Mr. Crowley. Yes. You are seeing that now. You are 
eliminating the enhanced vouchers.
    Secretary Jackson. No, no.
    Mr. Crowley. No, you are not eliminating them?
    Secretary Jackson. No, I think many of the people on 
enhanced vouchers have the ability to pay. And if the housing 
authority----
    Mr. Crowley. You actually said they have a right to pay a 
higher cost.
    Secretary Jackson. They have the ability to pay a higher 
cost.
    Mr. Crowley. But not a right. They have the ability to pay 
a higher cost, and you know that? You just empirically know 
that?
    Secretary Jackson. I am saying to you that 50 percent of 
the people on the voucher program today, or 55 percent, are 
physically in good shape and can pay. I am saying to you when I 
ran housing authorities, I did the necessary investigations to 
make sure that many of the people paid. I would not let anyone 
live in public housing or voucher program that did not pay 
rent.
    Mr. Crowley. Well, Mr. Secretary, I would love to have you 
come to my district in the South Bronx and see the people 
themselves, and you can explain it to them personally.
    Mr. Miller of California. The time has expired.
    You are next.
    Mr. Ney. Well, I was up, so it is great timing. We seem to 
be doing a lot of arguing about something that is not specified 
in the bill. The goal here is to do everything we can to create 
a venture between the Federal Government and locals.
    Secretary Jackson. That is correct.
    Mr. Ney. Now we say we are going to take 90 percent, and we 
are going to make sure that goes to the 60 percent range. 
Couldn't a local agency do just what they are doing now?
    Secretary Jackson. They can. It is totally left up to them.
    Mr. Ney. So we are not saying that you have to change the 
current system. If you like the current system and it works 
locally, you can do that. Is that not correct?
    Secretary Jackson. That is correct.
    Mr. Ney. So all this arguing is really about nothing. What 
the argument is that people in Washington do not trust local 
public housing authorities to meet the needs of local people.
    Secretary Jackson. Well, Congressman----
    Mr. Ney. That is what I am seeing. We want to try to give 
local agencies more control. I want you to respond to that.
    Secretary Jackson. That is baffling to me because a lot of 
times they say they trust them, and they do not necessarily 
trust HUD. We asked for the flexibility so they can run it, and 
now they are telling us they cannot run it. So I do not think 
they can have it both ways. Either we believe the housing 
authorities can run it or we do not. I am one who believes that 
they can. I ran three of them, and I ran them with limited 
resources, and people stayed and did very well.
    I also, in all three, I charged rent. No one lived in 
public housing free with me, because I knew if they lived 
there, they could afford to pay, other than those who were 
physically or mentally handicapped. Again, I go back to tell 
you. Seniors pay their rent. It is physically, able-bodied 
people that are in that 50 to 55 percent.
    Mr. Ney. And if you are handicapped and you are elderly, we 
are not going to do a thing to throw you out.
    Secretary Jackson. That is right. Nothing.
    Mr. Ney. You are going to continue where you are at.
    Secretary Jackson. That is right.
    Mr. Ney. I guess the thing that bothers me is the goal 
here--and I have told you my problems with HUD in the past.
    Secretary Jackson. That is correct.
    Mr. Ney. I did not think there was any accountability. I 
did not think they really cared. They had these guidelines that 
one size fits all, and you had to live with them, like it or 
not. But for us to go to say that Chicago, New York, Los 
Angeles, San Francisco, Pittsburgh, you all have different 
needs; you all have different situations. We are going to give 
you a guideline. We want to make sure that 90 percent go to 
that 60 percent or below, but you determine your needs in the 
community.
    What we have to do is you have to give PHAs an incentive to 
control costs to help people to become self-sufficient. That 
seems to be the goal because you just cannot continue a program 
that is just going to fail. We have a long waiting list even in 
my district. How do we move people into self-sufficiency so we 
can basically serve more people. That has got to be the goal 
here. Do you not agree?
    Secretary Jackson. I agree. Let me say this to you. First 
of all, I appreciate your sponsoring the bill, but what I have 
seen in dealing with many of the persons in public housing and 
dealing with many of the advocates is they come to those 
persons in public housing or on a voucher with a very 
paternalistic and patronizing attitude. They do not believe 
that they have the same sense of work that they have, and they 
must be in poverty for the rest of their lives.
    I do not believe that. I cannot believe that because the 
record is very clear. The last place that I was in in Dallas, 
we moved a lot of people out. In fact, we educated more than 
900 public housing kids through college, and they are not back 
in public housing. We have to believe that they have the same 
sense of work that we do, and as my mother used to say, get up 
on the same side of the bed and want exactly the same thing 
that we want. I do believe that.
    Mr. Ney. Some try to say that this shifts the need from 
those at the lower income bracket and just serves those who 
basically have higher income, those families. I want you to 
address that, and have the time to address that because I do 
not think you have had time to specifically deal with that. Do 
you really think we are in any way taking money away from the 
people who really are poor and giving it to people who have 
less of a need?
    Secretary Jackson. Absolutely not. What we have said is 
that 90 percent of the vouchers will go to 60 percent of the 
people who are less than median. Today, 75 percent of the 
vouchers go to 30 percent, and 25 percent can be used all the 
way up to 80 percent. So the top level between 60 and 80 
percent are effectively being cut out. It is 60 percent or less 
of median. That is very important.
    Again, we have heard people say, well, it is going to 
affect the homeless. The homeless population does not get 
preferential treatment, period, today. You have to go and apply 
for public housing. But I do think that in my travels, as I 
have traveled around this country, when I see people, as I have 
said before, when I was in Las Vegas, like the Gonzalez's, who 
are at about 40 percent, who are working every day and paying 
close to 50 percent of their income for rent, they deserve a 
hand-up too. They are working every day.
    And there are people with the same physical ability today 
sitting in public housing or on the voucher who are not 
working. And I do not think that that is right. We can all 
believe that everybody who has a voucher or even 50 percent of 
them or 60 percent of them, cannot work. I do not buy that. It 
was the most amazing thing when we made a decision in Dallas to 
charge everybody rent. I had the advocates. I had legal aid 
lawyers saying that people are going to be evicted overnight. 
Well, no one got evicted, but they came up with the minimum 
rent. When I demanded, they came up with it.
    Mr. Ney. And based on your experience, you believe that 
public housing authorities have a much better ability to 
determine who is able to pay and who is not than the Federal 
Government sitting here in Washington, D.C.?
    Secretary Jackson. Absolutely, because it is the same thing 
with the fair market rents that we put in place. I do not think 
we should be in the business of telling Boston or New York or 
Connecticut what the fair market rent is. I think that is best 
determined by the local housing authority.
    Mr. Ney. Thank you. My time has expired.
    Mr. Davis?
    Mr. Davis of Alabama. Thank you, Mr. Chairman.
    Mr. Jackson, Mr. Secretary, let me go back to one of your 
major premises in your colloquy with Ms. Waters earlier. You 
stated several times in your written testimony that people are 
staying on Section 8 too long; the lifetime of people in 
Section 8 is longer than it should be. That suggests, I guess 
to some of us, that this is a matter of choice, that people can 
be incentivized into making choices to leave the program, so I 
want to test that proposition for a moment.
    Looking at the bottom 30 percent of median income, what we 
call the very poor of the poor, over the last 4 years have the 
wages of those people in the bottom 30 percent gone up or down 
or stayed the same in this country?
    Secretary Jackson. You would have the individual housing 
authority. I do not think that question can be answered because 
most of the housing authorities----
    Mr. Davis of Alabama. No, I am asking you a basic question.
    Secretary Jackson. No, no. I cannot answer that question 
for you.
    Mr. Davis of Alabama. Okay, so you cannot answer the 
question.
    Secretary Jackson. Not that way. The question should be 
asked, if they do the necessary investigation, they will be 
able to answer that question.
    Mr. Davis of Alabama. Okay. Well, let me ask the questions, 
and you can tell me either that you cannot answer them or not. 
You are unable to tell us if the wages have gone up for people 
in the bottom 30 percent. I will represent to you based on my 
own personal knowledge from reading statistics in this country 
in the last several years that wages for the lowest income 
Americans have actually stayed stagnant or gone down in most 
communities. I will represent that to you, and you do not 
appear to be in a position to challenge it.
    I will ask the second question. Has the unemployment 
level----
    Secretary Jackson. No. Are you telling me that you know 
specifically that the 30 percent that we serve are in the low 
income----
    Mr. Davis of Alabama. No, sir, I am asking you. You can 
feel free to not like my question or like it, but I have the 
time, and I am going to struggle through and ask it.
    Looking at the bottom 30 percent of the population of the 
people, the bottom 30 percent income level, less than 30 
percent of median income, let's look at their unemployment 
levels. Have their unemployment levels gone up or down in the 
last 4 years?
    Secretary Jackson. I cannot answer that.
    Mr. Davis of Alabama. Okay. So you cannot answer that.
    Secretary Jackson. No, you are talking about the general 
population. I am talking about those persons who are in public 
housing or on vouchers.
    Mr. Davis of Alabama. Okay, well, then let's limit it to 
that. Let's limit it to those in public housing. The bottom 30 
percent of median income, have their unemployment levels gone 
up or down or stayed the same in the last 4 years?
    Secretary Jackson. That is for the housing authorities to 
decide.
    Mr. Davis of Alabama. Do you happen to know?
    Secretary Jackson. That is for the housing authority to 
decide.
    Mr. Davis of Alabama. So I take that as a no.
    Secretary Jackson. No, no. HUD does not do the evaluation 
or the work for housing authorities. Each housing authority is 
independent.
    Mr. Davis of Alabama. Let me make the point then fairly 
directly, Mr. Secretary. My proposition to you is that I think 
your major premise is wrong. Your major premise is that----
    Secretary Jackson. That is your right.
    Mr. Davis of Alabama.--people who are staying on Section 8 
are doing it somehow because of a behavioral choice, that they 
just like the idea of being on Section 8, that they want to 
linger on Section 8, and that if we have time limits, if we 
give the local housing authorities more ability to limit their 
timeframe, they will get their act together and get off the 
program. I would submit to you that I think that major premise 
is wrong.
    Secretary Jackson. That is your assessment. That is not 
what I said. That is what you said.
    Mr. Davis of Alabama. Well, let me finish my point, please, 
sir.
    I would submit to you that if you look at the unemployment 
levels, if you look at the percentage of people in Section 8 
who are in poverty, if you look at the percentage of the people 
in Section 8 who are not working or whose wages have been 
stagnant, that their conditions have not improved in the last 4 
years and that rather than it being a matter of laziness or 
behavioral incentives on their part, that that is why they are 
staying on Section 8 longer.
    Let me shift to another line of questions. When your boss, 
the President, came into office in 2001, he announced a goal of 
reducing chronic homelessness; let me get the exact quote here, 
ending chronic homelessness. Excuse me, not reducing it, but 
ending chronic homelessness within 10 years. We are approaching 
year 5 of the Bush presidency. Has chronic homelessness been 
reduced in half in this country, Mr. Secretary, in the last 4 
1/2 years?
    Secretary Jackson. No, and we are working very hard to----
    Mr. Davis of Alabama. Tell me how close the Administration 
is----
    Secretary Jackson. I am sorry?
    Mr. Davis of Alabama. Tell me how close the Administration 
is.
    Secretary Jackson. I think----
    Mr. Davis of Alabama. Let me finish my question, please.
    Secretary Jackson. Okay.
    Mr. Davis of Alabama. Tell me how close the Administration 
is to meeting its goal of eliminating chronic homelessness in 
10 years, because the answer can be we are really, really 
close, in which case you guys should be touting that; the 
answer could be we are no where near it; or the answer could be 
something more complex than that.
    Secretary Jackson. I think we are doing extremely well 
because we are funding it at the highest level it has ever been 
funded at in this country.
    Mr. Davis of Alabama. No, no, Mr. Secretary, you routinely 
tell us that funding is not the test now, so I do not want you 
to go there with me. Tell me the number of homeless people in 
this country in 2001. What is the number of homeless people 
today, and what was the number in 2001?
    Secretary Jackson. I will be happy to get back to you. We 
can get you a number.
    Mr. Davis of Alabama. You do not know that?
    Secretary Jackson. We can give you that.
    Mr. Davis of Alabama. You do not know that?
    Secretary Jackson. We will get back to you on that number.
    Mr. Davis of Alabama. Okay. Well then let me conclude with 
this proposition. Again, I would submit to you, and I think 
most people in this room know the number of chronic homeless 
people is actually a little bit worse today than it was 4 years 
ago.
    Secretary Jackson. That is absolutely not true, 
Congressman.
    Mr. Davis of Alabama. Well, you told me you did not know.
    Secretary Jackson. Give me the facts that you have. You 
have made a definitive statement. Tell me where you got it 
from, and I will be happy to look it up.
    Mr. Davis of Alabama. Well, I am basing it on what I have 
read, and I think again----
    Mr. Miller of California. The gentleman's time has expired.
    Mr. Davis of Alabama. Thank you, Mr. Chairman.
    Mr. Miller of California. Mrs. Kelly?
    Mrs. Kelly. Thank you.
    Mr. Secretary, I thank you for coming before the committee 
and explaining the Administration's intentions on the 
legislative text that is in front of us. It is deeply 
appreciated by this member and a welcome contrast to the 
Administration's performance on the CDBG bill because we still 
do not have legislative text or a full understanding of the 
impact on the States or the localities on CDBGs.
    I have been contacted by a number of public housing 
authorities who have shared some concerns with the bill before 
us and the Section 8 program administration. On their behalf, I 
would like to pose a couple of questions. H.R. 1999 allows the 
PHAs to target 90 percent of their assistance to those at or 
below 60 percent of area median income, as I understand it, 
while retaining the hard cap at 80 percent of income for any 
assistance.
    While I think this is admirable flexibility, many areas 
have housing markets that place the vast majority of people 
without adequate housing options between median income and 60 
percent of median income, rather than at 60 percent and below. 
I just want a yes or a no answer to this question. Isn't HUD's 
ability to declare the nonperforming PHAs as troubled 
protection enough against the fraud and ineffectiveness to 
allow the PHAs to determine their own income caps and targets 
below median income?
    Secretary Jackson. No.
    Mrs. Kelly. Okay. If H.R. 1999 is passed as drafted, what 
kind of streamlined process will HUD have in place to adjust 
income cap and target requests from the PHAs?
    Secretary Jackson. They will always be able to appeal to 
us.
    Mrs. Kelly. They will be able to do what, sir?
    Secretary Jackson. Appeal to us, to show us if they are----
    Mrs. Kelly. To appeal? In other words, you are not 
changing? You are not going to streamline the process? They can 
do it by appeal? That is not streamlining.
    Secretary Jackson. No, when we say we are streamlining the 
project, Congresswoman Kelly, we are saying we are giving them 
the flexibility to use the voucher as they see fit, not being 
dictated by our mandates from HUD. Right now, if they want to 
pay 110 percent of median, they have to get approval from us. I 
do not think they should have to. I think if they realize 
within their jurisdiction that 110 percent is the median cost, 
they should be able to do it. If it is 150 percent, 
understanding that they have a certain amount of money that 
they have to work with. I think they should have that.
    Mrs. Kelly. Okay. You mention in your testimony that 
Section 8 has expanded from 36 percent of HUD's budget in 1998 
to 57 percent of HUD's budget in 2005. In my analysis of your 
budget request, it shows that to me Section 8's percentage of 
HUD's budget increases next year to 72.9 percent of HUD's 
budget if the CDBG program is moved from your department. If 
you exclude the CDBG from the percentage of HUD resources that 
you spend on Section 8, then that expands the Section 8 from 
71.3 percent to 72.9 percent. That is a 1.6 percent increase.
    You say that H.R. 1999 can help contain the cost growth and 
improve the effectiveness, but the percentage of your agency 
resources being consumed by Section 8 goes up if your own 
proposals are enacted. How do you explain that?
    Secretary Jackson. No, it does not.
    Mrs. Kelly. Well, that is what your budget told me.
    Secretary Jackson. If we do not enact the State and Local 
Flexibility Act, it is going to go up, but we believe that 
clearly if we will let the housing authorities around this 
country have the flexible vouchers, it will go up minimally, 
but not like it has in the past. It will not go up. That is why 
we are here.
    You have given us a 2004 budget that said clearly we are 
going from unit-based to budget-based. We are on a budget base. 
Now what we are asking you to do is give the housing 
authorities the flexibility to be able to use the voucher as 
they see best for themselves. But if it does not, then yes, if 
we do not pass the flexible voucher program, yes, we are going 
to have to come up with more money. We believe with the passage 
of the bill, we will be able to minimize the increase.
    Mrs. Kelly. In your proposed budget for 2006, housing for 
the elderly is flatlined at $741 million, while Section 8 grows 
by 1.6 percent, and the funds for housing for those with 
disabilities declines by $118 million. Don't you think maybe 
now it is time to establish a firewall between Section 8 
funding and the other HUD programs to prevent a continuing 
drain on the discretionary resources that you have?
    Secretary Jackson. Absolutely.
    Mrs. Kelly. I am very concerned about the housing for the 
elderly and the housing for the disabled. My concern is what 
you are saying to us. When I look at your budget----
    Mr. Miller of California. The gentlelady's time has 
expired.
    Mrs. Kelly. Will the gentleman let me finish?
    What I am concerned about here is that there will be 
cohorts of people that are going to be ignored because Section 
8 is going to grow. I think you need to very strongly have a 
look at this, and I wish you would get back to this committee 
about how you are going to handle these people, the elderly 
flatlined and aid for disabilities declining by that much 
money.
    Secretary Jackson. I will be happy to do that, 
Congresswoman. I will say this to you. The $1.1 million that we 
added to the Section 8 voucher program is to help make the 
transition toward the flexible voucher program. That we think 
is very important.
    Secondly, I think that it is important to understand that, 
as I have said before, the physically, mentally, and seniors 
will be grandfathered in. They will not be affected by this. We 
are simply talking about those who can do it.
    Mrs. Kelly. It is reflected in your budget. When you see 
things like area housing----
    Mr. Miller of California. The gentlelady's time has 
expired.
    Mrs. Lee?
    Mrs. Kelly.--you know you are going to have more people in 
Section 8.
    Mr. Miller of California. Mrs. Lee?
    Ms. Lee. Thank you, Mr. Chairman.
    Good to see you, Mr. Secretary.
    All I have to say is, here we go again. You know, first of 
all, let me just say to you, the more and more I listen to you, 
the more and more I understand what you meant when you said 
poverty was basically a state of mind.
    Also, and you did not agree around CDBG, but again I am 
going to have to say to you, this block granting of Section 8 
and what you are doing under H.R. 1999 is another effort to 
dismantle HUD. For whatever reason, this administration has it 
out for the poor and the low income. Why, I do not know.
    Let me ask you a couple of questions. In terms of 
homelessness, don't you think first of all by changing this 
formula you are going to actually increase the numbers of 
homeless? And secondly, it is my understanding, and I want to 
ask you, how do you determine what mechanisms you use to count 
the number of homeless in this country?
    And thirdly, some numbers that I have, and you may want to 
go back and verify them, but you said that this is the highest 
budget we have had for the homeless, but 10 years ago it was 
$1.79 billion, and adjusted of course for inflation; in 2005 it 
was $1.2 billion; and in 2006, $1.4 billion. So that does not 
appear to be the highest amount of money that we have actually 
spent, which again is very minimal, if you ask me, given what I 
think may be 180,000 people who are homeless, but you guys do 
not tell us because you do not know how to count, I guess.
    So could you kind of give me some feedback on that first 
question?
    Secretary Jackson. Sure. Your figures as they relate to the 
homeless population are pretty close. It is according to what 
study you look at, whether it is 180,000 or 200,000 people. We 
believe that clearly we will do everything in our power to end 
chronic homelessness because it is very, very important.
    I do not think that this present budget that we are 
presenting for Section 8 we are trying to dismantle HUD. I do 
not see----
    Ms. Lee. Do you think this is going to increase the numbers 
of those who are homeless, though?
    Secretary Jackson. No.
    Ms. Lee. What is going to happen to all these people who 
are at the bottom of the barrel?
    Secretary Jackson. Until 2000, homeless people rose to the 
top of the Section 8 waiting list, the same in public housing. 
That provision was struck out by Congress. That is not the 
case. So we are not serving the homeless even today with the 
present vouchers that we have. We are serving those who are the 
top of the waiting list, and many of those persons are not 
homeless, Congresswoman.
    Ms. Lee. I am saying you are going to create more people.
    Secretary Jackson. I do not see how the two connect.
    Ms. Lee. If this goes through, in 3 years guarantee there 
will be another 50,000 to 60,000 people homeless as a result of 
this.
    Secretary Jackson. I do not believe so, Congresswoman.
    Ms. Lee. You do not believe so.
    Secretary Jackson. No.
    Ms. Lee. Okay, but would you let us know what mechanisms 
you have in place to provide the numbers in terms of 
statistical data for the homeless?
    Secretary Jackson. I will be happy to.
    Ms. Lee. Secondly, let me ask you about this provision 
which of course I am really quite shocked about, and I did not 
realize it until today. There is a provision of this bill that 
eliminates the housing agency requirement to consult with 
residents or the public in terms of changing the key housing 
policies, and it prohibits voucher holders from serving on 
public housing boards. Is that the case? And if it is----
    Secretary Jackson. Will you give me that again? I am sorry.
    Ms. Lee. Okay. There is some provision, and what is why I 
am trying to clarify this, that actually prohibits voucher 
holders from serving on public housing boards and also 
eliminates current requirements to consult with residents in 
public housing units and changes key housing policies as it 
relates to the involvement and the participation by tenants.
    Secretary Jackson. Let me say this to you, I am not 
familiar with that portion, but if it is in there, I will tell 
you personally I will look at that, because clearly I am a 
person who believes that the residents should have say-so about 
what affects their lives, whether they are in public housing or 
on a voucher. I believe that residents should also serve on the 
housing authority boards.
    Ms. Lee. If that is in there, we have a commitment from you 
at least to try to take it out?
    Secretary Jackson. Yes, you do.
    Ms. Lee. Okay. Thank you very much.
    Secretary Jackson. I will tell you that, yes.
    Ms. Lee. I appreciate that. And also, finally just in terms 
of following up on Congresswoman Waters's questions with regard 
to the time limits. You know, I am not an attorney, but I have 
many friends who are lawyers, many on this committee. Listening 
to you, you cite the worst cases, and I know they always say 
worst case makes bad law. And you cite, you know, no program is 
perfect, but you always cite some form of abuse or people 
trying to beat the system.
    But for the most part, that is a very small percentage of 
those living on Section 8 vouchers. So why do you keep saying, 
you know, giving us those examples when, in fact, those are the 
smallest number of people, rather than showing us how the 
program benefits people and how the majority of those on 
Section 8 play by the rules?
    Secretary Jackson. First of all, let me say this. I believe 
that the Section 8 program does benefit people. I do not want 
any misunderstanding. I think it does help the quality of life 
of people. But Congresswoman, I have had the unique ability of 
running three housing authorities. It is not a small number. It 
is not a small number, and I do not know why people believe 
that those persons who try to escape the system are small 
numbers.
    I can tell you, whether it was in St. Louis, whether it was 
in Washington, D.C, or whether it was in Dallas, it was a large 
number, and in many cases we were removing, in some cases 300 
or 400 people off of our rolls about every, not even a year, 
about every 6 to 8 months because we did find that they were 
not honest with us. And when you have valuable vouchers, I 
think it should be used for those persons who actually need the 
vouchers, not those who are, in essence, conning the system.
    So I do not think it is a small number. We disagree on 
that.
    Ms. Lee. Well, okay.
    Mr. Miller of California. The gentlelady's time has 
expired.
    Ms. Lee. Thank you, Mr. Chairman.
    Mr. Miller of California. Ms. Ginny Brown-Waite?
    Ms. Brown-Waite. Thank you very much, Mr. Chairman.
    Mr. Secretary, just a couple of questions. Why does it seem 
to take so long for vacant units to be inspected by housing 
agencies before the unit is actually approved for a lease-up? I 
am sorry I came in late. Someone may have already asked this 
question. Is the problem the standards, the current housing 
quality standards? Are they too stringent or too lenient? I 
would appreciate your response.
    Secretary Jackson. Yes. As I said before you came in, 
Congresswoman, in many cases when we find a landlord who is 
willing to rent to one of our voucher holders, it is somewhere 
between 60 and 90 days before they can move in. In many cases, 
the housing authority has said that their housing quality 
inspectors are overworked by checking other units.
    So what this bill has proposed is the same thing that we do 
in the regular rental market. If clearly the unit is stable and 
up to snuff, and the renter, that is the voucher holder, says 
it is, they have an opportunity to move in. If within the 60 
days of that period that they move in, we will do an inspection 
to see if the unit is up to snuff. If it is not, then we will 
hold the landlord responsible or tell the person they still 
have their voucher, but they have to look for a better place to 
live rather than waiting 60 to 90 days to move that person in, 
yet we are still paying that landlord.
    Ms. Brown-Waite. A follow-up question on the question that 
Ms. Kelly asked. When I came in, she was asking it. Do I 
understand you to say that the housing units and the 
expenditures for housing units for seniors and disabled are not 
being decreased?
    Secretary Jackson. No. What I said is that if we institute 
the flexible voucher program, many people have said, well, we 
are going to push seniors, physically and mentally handicapped 
people off of the rolls. No, we are not. They are not affected 
by the flexible voucher program that we are talking about here 
today. We are talking about those persons who are physically 
capable of carrying out their daily lives.
    Ms. Brown-Waite. Are there any provisions in the 
flexibility plan that will protect the seniors and the disabled 
in public housing?
    Secretary Jackson. Yes.
    Ms. Brown-Waite. Tell me what those protections are.
    Secretary Jackson. It clearly says that they are not 
included in the bill. It is just very clear.
    Ms. Brown-Waite. And the funding that will specifically be 
there for elder housing and for the disabled, that is the same?
    Secretary Jackson. Yes, it is all in the voucher program 
package.
    Ms. Brown-Waite. It has not changed any?
    Secretary Jackson. No, no.
    Ms. Brown-Waite. So the housing authorities will be given 
the same amount of money or more? Is it possible that there 
will be more?
    Secretary Jackson. There might be a possibility that there 
will, but they will clearly be allocated the amount of money 
that you all have given us for the 2005 and 2006 budget.
    Ms. Brown-Waite. Okay. And if I go to your specific budget 
request, I will see that the funding for seniors and the 
disabled are not reduced.
    Secretary Jackson. Yes. I cannot say you will see. The 
funding was increased by $1.1 billion, period, the voucher 
program, and that takes care of everybody. So it is not 
dissected into whether it is senior. We do have some specific 
811 program which is for the disabled.
    Ms. Brown-Waite. Okay. Thank you.
    Mr. Miller of California. Mr. Lynch of Massachusetts?
    Mr. Lynch. Thank you, Mr. Chairman and the ranking member.
    Mr. Secretary, thank you for your willingness to testify 
and help this committee with its work. I want to follow up on a 
point in your dialogue with Mr. Davis. You mentioned that a lot 
of folks just stay too long in public housing. In your own 
experience, how long do you think it should be before people 
have the ability to move out and move off of either Section 8 
assistance or move out of project-based housing?
    Secretary Jackson. I guess that would depend on the needs 
of each individual family. In a sense, I do think that 
traditionally I did not think that 3 1/2 years on a voucher was 
extensive. I do not think 3 or 4 years in a public housing unit 
is extensive. I think that it gives the person an opportunity 
to save and to increase the ability to go out in to the rental 
market or to buy a home. I think that any way we can help them 
increase their abilities to get off of public housing or a 
voucher, we should help them.
    Mr. Lynch. Yes, I just wanted to say this. I do feel that 
some of your approach is more blaming the tenant, quite 
frankly, in looking at their approach to life versus looking at 
what their options might be. In my area in the city of Boston, 
I actually grew up in the housing projects in South Boston in 
the Old Colony housing projects myself and my five sisters. My 
dad worked full time. My mom worked part time. It took us 15 
years to finally get out of public housing. My mom and dad 
wanted us out of there every single day. It is the poorest 
predominantly white census tract in the United States, a lot of 
single parents and a lot of hardship there.
    Believe me, the families there, and I think in most cases, 
they want to be out of public housing. I do not agree that they 
are laying back and they are being insensitive to the needs of 
their children to get out of that environment in many cases. In 
the situation of my own family, we were able to buy a house for 
$14,000 back then. Of course, it was across the street from the 
housing project, so my parents never did get us out of there 
even when we did ``move out.''
    I spend a lot of time with my folks in public housing. That 
is where I come from. Right now, a lot of those families are 
faced with a couple of options. One, they can try to move out 
and pay $1,500 a month rent. And if they want a two-or three-
bedroom, and a lot of these families have kids, they are 
looking at $2,000 a month rent. And that is about $500 or $600 
more than they make in a month, so there is a deficit here. 
They want to eat and pay for clothing for their kids.
    The other option is just to move out and go into a shelter. 
That is why we are seeing a lot of the overcrowding in our 
homeless shelters. I just do not, and you know, I have had some 
time to spend with these families and they want desperately out 
of public housing and they are working their way out, but there 
are no alternatives for other housing, other than public 
housing, for these families. We are trying to figure that out.
    I just want you to realize that for a lot of these 
families, they are doing the right thing and looking to get out 
of a tough situation. This Section 8 situation is the only hope 
that they have in many cases of getting their kids out of a 
tough situation.
    Mr. Miller of California. Would the gentleman yield for a 
second?
    Mr. Lynch. The gentleman will yield.
    Mr. Miller of California. In the bill when we introduced 
it, it is optional. We said that if you are going to have time 
limits, it is no less than 5 years. It is optional.
    Secretary Jackson. That is right.
    Mr. Miller of California. We do not mandate that they set 
any timeframe on it. The local public housing authority has the 
right to determine how long they want if they want a time 
limit.
    Mr. Lynch. Right. But what I am saying, if I could reclaim 
my time----
    Mr. Miller of California. Yes, absolutely.
    Mr. Lynch.--is that it obviously creates the opportunity 
for discrimination. If you are making a case-by-case rule by 
every individual in each individual circumstances with a couple 
of million people, I would dare say that from PHA to PHA, 
whether it is Baltimore or Boston, depending on that person's 
location and their luck, they are going to be treated 
differently under this policy. There is no hard and fast rule 
if you are going to treat it on a case-by-case basis.
    I am just very concerned about this. I do not see the 
resources being put in this area. I see a pullback, quite 
frankly. I understand because the budget is growing and we have 
less money because we have to support those tax cuts for folks 
in the top income brackets, and I understand the need to do 
that. But in all seriousness, I just see a complete 
retrenchment in terms of the Federal Government's commitment to 
public housing. I see it every day, and I see it especially in 
these hearings.
    Secretary Jackson. Well, Congressman, I understand what you 
said, but let me first say that I believe, and I think I said 
it before you came in, that I have not met one person who wants 
to stay in public housing or stay on a voucher. I agree wholly 
with you on that point of view. The difference is, as Chairman 
Miller just said, it is an option.
    Secondly and thirdly, we have been criticized over the 
years for being so prescriptive in the sense that we want 
unanimity for the housing authority in New York to be the same 
in San Francisco. They are totally different. They are totally 
different. What we are saying to you today is we want to give 
them the flexibility to be able to run their housing authority.
    Some years ago, Congress gave us a demonstration program 
called Move to Work. We have about 10 housing authorities. All 
10 of them are different. One is Cambridge, within your, I am 
not sure if within your congressional district, but Cambridge--
--
    Mr. Frank. No, no, Cambridge is not in the Congressman's 
district.
    [Laughter.]
    To their mutual relief, I think.
    [Laughter.]
    Mr. Miller of California. The gentleman's time has expired.
    Secretary Jackson. But the key to it is, what we recognized 
at that point in time, and I had said years before, these 
housing authorities are different, and they should have the 
flexibility to run their programs as they see fit. But 
initially when we started the Move to Work, they said the best 
model we have seen is Cambridge, so everybody should follow 
that model. Well, it just did not work in Atlanta, so we had to 
adjust the models and let the different agencies run their own 
Move to Work. It would not work in Chicago, so I think 
flexibility is very important.
    Let me close by this. You know, I am very, very sensitive 
to low-and moderate-income people, but I do not address them 
the same way as many people. I do not address them from a very 
paternalistic and patronizing manner. I think they have the 
same sense of worth that I do, and I am going to help them if 
they want to help themselves get out of public housing, get off 
of the voucher.
    I will do everything in my power to help them. I think that 
if you go to either one of the housing authorities I ran, you 
will do that. If you go to Brumley East and ask your people 
there, they will tell you that I have probably been one of 
their greatest advocates.
    Mr. Miller of California. Mr. Lynch, that was a very good 
question. The key to this bill is we do not mandate anything. 
If they want to leave the system as it is, they can.
    Secretary Jackson. That is right.
    Mr. Miller of California. We are just saying to the local 
PHA, if you want to mandate some type of time limits, you can 
do that, but it can be no less than 5 years, so we try to put a 
minimum standard on there.
    Mr. Frank. Mr. Chairman.
    Mr. Miller of California. Yes.
    Mr. Frank. I did want to say, because I would like to 
consult with the gentlewoman from New York, and I did think, 
Mr. Secretary, I hope you would address this. In her question 
when she talked about a 1.6 percent budget increase, someone 
got the impression that your answer was that would have been 
under the old system. I think the gentleman is accurate that 
the increase she talked about is the increase you asked for 
assuming the new system was in place. So the gentlewoman's 
assumption I think is that the 1.6 percent increase is what you 
are asking for under the new system.
    Secretary Jackson. Yes.
    Mr. Frank. Well, I think your answer came out differently 
to that.
    Secretary Jackson. I am sorry if it did.
    Mr. Miller of California. Okay, thank you.
    Mr. Green?
    Did that answer your question, Ms. Kelly? He rephrased his 
answer.
    Mrs. Kelly. I very much appreciate the gentleman's 
comments, because yes, there was a misunderstanding in the way 
that you responded to my question. So thank you very much, Mr. 
Chairman.
    Mr. Miller of California. Mr. Green?
    Secretary Jackson. Please excuse me. I did not understand 
it. Thank you.
    Mr. Green. Thank you, Mr. Chairman, and thank you, Mr. 
Ranking Member.
    And I thank the Secretary for giving us this portion of his 
valuable time.
    Mr. Secretary, perhaps I am restating what has been said, 
but I too believe that most people receiving welfare really 
want to say farewell to welfare. They do not care to be on 
welfare. I had the opportunity for 26 years to sit as a judge 
of a court that had exclusive jurisdiction over forcible entry 
and detainer lawsuits commonly known as eviction lawsuits. So I 
had an opportunity to interact with various housing 
authorities.
    I have had an opportunity to examine empirical data as it 
relates to the persons who had zero-based rent. Over the years, 
I consistently saw empirical data that indicated these persons 
were receiving zero-based rent because of their inability to 
afford some of the necessities of life. I saw justification for 
zero-based rent.
    My question is, if a person was receiving zero-based rent 
and you imposed a standard that required the person to pay some 
amount of rent, where were they to acquire these funds for this 
rent? Did it matter where they were to get the money from, 
given that they were qualified to receive zero-based rent?
    Secretary Jackson. I think, Congressman, I do believe that 
there are some people who are physically and mentally 
handicapped who deserve to be on zero-based rent. I am of the 
opinion that if you are physically capable of going to work and 
in many cases most of the people are, they can come up with the 
rent. As I said a few minutes ago, when I imposed a rent 
requirement many people said people could not pay it, that we 
would have huge evictions. We had no evictions. People came up 
with the money.
    Mr. Green. That was why I posed the question. Let me just 
interrupt for a second because my time is short. That is why I 
posed the question. Where do you think they are coming up with 
the money from? I say this to you because to have zero-based 
rent, by definition means that you could not afford some of the 
necessities of life. So where do you come up with the money to 
pay this rent?
    Secretary Jackson. Congressman, and I do not want to sound 
very harsh, but if they had zero-based rent, in many cases they 
would not have any amenities within their apartment. It is my 
belief that in many cases these people do have the ability to 
make a living and in a lot of cases they do make a living. They 
just do not report their income. I believe that if you are 
physically or mentally handicapped, in some cases elderly 
people, you might clearly have a serious problem with zero-
based rent. But I do not think if you are physically capable 
that that is an issue.
    Mr. Green. Let me go on. I have actually gone into homes as 
a part of the judicial process. I have actually gone to 
locations. I have seen the homes, and you are right. They had 
very little in their homes. I will also tell you that usually 
it was a female. Usually she had more than one child, more than 
two, probably three or four children.
    Notwithstanding what I would like America to be, they were 
in a position where they could not work and take care of those 
children, the needs of those young children. There was no day 
care available for those children. They did not have a spouse 
who was there to care for those children.
    Literally, there are some people who merit zero-based rent, 
who are physically capable of working. I marvel at the notion 
that they all paid. That is why I asked where did they get the 
money from.
    Secretary Jackson. I cannot tell you that, but I know they 
paid.
    Mr. Miller of California. The gentleman's time has expired.
    Mr. Green. Thank you.
    I thank you, Mr. Secretary.
    Mr. Miller of California. Did you have a conclusion?
    Mr. Cleaver?
    Mr. Cleaver. Thank you, Mr. Chairman.
    Mr. Secretary, thank you for being here. I am perhaps in a 
unique position. I think one other person may be in the same 
position. I both lived in public housing and appointed later in 
life a public housing authority. My mother, father, and three 
sisters, and I lived in this house for 7 years. It still stands 
not far from the last place you served in Dallas, Texas. We 
lived in here for 7 years.
    My father paid $5 a week for us to live in here, and that 
was too much, no running water, no plumbing. This is an alley. 
We paid the Templeton family $5 a week to live in what used to 
be a slave shanty. Mr. Chairman, we moved out of this shack 
into public housing. We lived in public housing for 7 years. My 
daddy is not trifling. My daddy worked two jobs and cut yards 
on the weekend. My mother worked ironing, doing everything 
else, and started college when I was in the eighth grade.
    We lived in public housing for 7 years. To show you how 
trifling my family was, all three of my sisters and I have 
post-graduate degrees from this shack. Mr. Secretary, people 
who live like this for the most part, and I am speaking 
experientially, are struggling to do better. I agree with you. 
Nobody enjoys living like this. Our disagreement comes when we 
have a disagreement on zero rent because there are people who 
are struggling every day, working hard, working two or three 
jobs trying to elevate their families, who cannot pay.
    I can call the names. This is not something I read in a 
sociology book. I know people. I grew up with people. I know 
people today who are struggling. It seems to me that the 
responsibility of the United States Government is to do 
everything conceivably possible to make sure that people do not 
live like this, particularly those who are struggling to get 
out.
    I am troubled that I would be a Member of Congress when we 
ended up passing legislation that would essentially put people 
in the streets. I do think people will become homeless in 
situations like this. We would have, my family would have 
become homeless. If that had happened, they would not have 
principals of schools in Houston, in Kansas City, Missouri, and 
in Flint Michigan.
    The proposed lower-income targeting in H.R. 1999 would 
change the voucher program serving primarily the lowest of the 
low, the extremely low-income families who are below 30 percent 
of the median, to families with income up to 60 percent of the 
median. Now, the change in the income targeting would have a 
damaging impact on African Americans and Latinos. According to 
the National Fair Housing Alliance, 53,000 African American 
families and over 12,000 Latino families would lose their 
vouchers.
    So what do we say to them? How do we respond to them? What 
help is available to them?
    Secretary Jackson. Mr. Congressman, I do not know where 
they got those figures from. Those persons who are presently on 
vouchers will not lose their vouchers. That is again the 
exaggeration that I go through every day. They are not going to 
lose their vouchers.
    Let me say something to you. It is clear to me that there 
are people out there every day that clearly are struggling. I 
am not in any way blind to that facet of life. I came from a 
family. My father had a fifth grade education. I am the last of 
12 children. They educated all 12 of us. We did not live much 
better, but I remember something that happened that has always 
stayed with me.
    When my father got cancer, Congressman, the welfare worker 
came by. She said, ``Mr. Barker,'' she called him, she says, 
``You are entitled to Social Security, Social Security 
supplement, welfare and food stamps.'' My father could barely 
talk, but he said something that has stayed with me. He said, 
``I have only earned two, that is Social Security and Social 
Security supplement; I will not take welfare, and I will not 
take food stamps.'' That was his belief, that he had the pride. 
He had earned what he wanted.
    So I am saying to you, I am in no way going to denigrate 
anybody who is low-income in this country because I have been 
through it. And due to the hard work of my mom and my dad, I am 
sitting here because they, too, my mom worked every day. She 
washed and cleaned white persons' homes. That is what she did.
    So I am totally in agreement with you, but I do believe 
this, that we must give people something to shoot for. If we do 
not give them something to shoot for, then we leave and we 
disrespect them. We are saying that they are not human beings 
with the same sense of work as me. I am not going to do that. I 
am not going to be patronizing and paternalistic to a person 
because they are low-income. I believe we can help them if they 
want to help themselves. My job is to help them, and that is 
what I did with the three housing authorities that I ran.
    I said earlier today, 900 kids came out of college because 
we started a program. I did not want to see them going back to 
public housing. I thought that they deserved better and we 
should give them better if they had incentives. And they did. 
Now we might disagree how we get there, but I think we agree 
philosophically that there are people who are suffering, and I 
do not disagree with that.
    Mr. Miller of California. The gentleman's time has expired. 
Thank you.
    Mrs. Moore?
    Ms. Moore of Wisconsin. Thank you, Mr. Chairman.
    And thank you, Secretary Jackson.
    I am focusing on page four of your testimony. I am looking 
at, I will start from number two since my time is limited, 
where you are really talking about 1998, those reforms that 
gave PHAs greater control. Because HUD was paying more money, 
that you gave them flexibility, thus allowing them to set the 
standards between 90 and 110 percent of the local fair market 
rate.
    Secretary Jackson. Yes.
    Ms. Moore of Wisconsin. So here you clearly laid out the 
problem and why there were escalating costs in the program, but 
then you concluded that it was the behavior or the wrong 
program incentives, which is why we now need to give 
flexibility to these agencies that already abused it. I was not 
quite understanding that. Could you just clarify that cause-
effect relationship because I do not get it?
    Secretary Jackson. What we are saying----
    Ms. Moore of Wisconsin. And do not take all my time because 
I have another question.
    Secretary Jackson. All right. I won't.
    Ms. Moore of Wisconsin. Okay.
    Secretary Jackson. What we are saying is that we gave them 
that incentive, but it was still based on units. It was a unit-
based cost. And they could go that high, but in the final 
analysis what we are saying today is if they choose to pay 150 
percent of median, that is their right if they think that is 
the way they are going to be able to get a person or a family 
of four into housing.
    Now in New Hampshire, in California, even at the ability of 
110 percent, they still cannot house a person. I am for giving 
them the flexibility that they need to address the locale in 
which they live.
    Ms. Moore of Wisconsin. But you said that it was that abuse 
that caused the costs to spiral, and now you----
    Secretary Jackson. No, what we are saying is this, 
Congresswoman, is that clearly because it was unit-based, there 
was no incentive for public housing authorities to really make 
an effort to bring down the cost of those units, even when the 
market was less than what it was.
    Ms. Moore of Wisconsin. Let me explain my background to you 
a little bit. Notwithstanding the fact that I have a very 
similar impoverished background, I want to tell you something 
else about my background. I was an employee of the Wisconsin 
Housing and Economic Development Authority for 15 of the 16 
years I served in the State legislature and was an employee of 
that agency.
    I saw our creating Section 8 project-based and unit-based 
Section 8 housing that offered opportunities to families with 
higher and higher and higher incomes, thus squeezing out the 
very, very, very low-income person. As a member of that board, 
I squealed and whined and cried about approving every Section 8 
project because, in fact, the lowest-income people were not 
going to benefit from the program. So I see this bill as just 
codifying what the public housing agencies are already doing, 
squeezing out low-income people.
    And let me tell you about those people who do not want to 
be on welfare. Let me tell you; I want my welfare. When I put 
in my mortgage interest deduction, the biggest housing welfare 
program we have, I want that welfare because those kinds of 
things really stabilize a family.
    If you have a mortgage, Secretary Jackson, you know, at 4 
percent, you have stabilized your housing costs. Maybe you 
bought or if you bought property here in the D.C. area, maybe 
you could direct me to how I can get some welfare or how I can 
have bought a property 20 years ago for $20,000 at 6 percent 
interest rate and maintained that same housing costs. Should we 
kick those people out because they have been there for 5 years? 
These poor people want the same sort of stability.
    So I guess when we start talking about the character of 
people and not changing the 30 percent, the Brooke amendment, 
eliminating that. You have asked for hard-core data. I am from 
Milwaukee, Wisconsin where according to the Bureau of Labor 
Statistics, 59 percent of African American men have no jobs. 
Our economy has changed. We have had loss of thousands of 
manufacturing jobs. These are not people who are just trifling 
and unwilling to work.
    So I can tell you that I see your testimony being very 
oxymoronic because you did identify the problem. You gave PHAs 
flexibility, and as my nephews would say, they vicked you. And 
you are now attributing those high soaring costs to the 
behavior of poor people, and it is totally unfair.
    Secretary Jackson. I would say this to you, Congresswoman. 
No, I am not attributing those high costs to low-income people. 
I do not believe that. I think that clearly the housing 
authorities, as I said earlier, have not done their job. I am 
not trivializing anyone because of their low-income status. I 
would not do that.
    Mr. Miller of California. The gentlelady's time has 
expired.
    Ms. Moore of Wisconsin. I just want a clarification, Mr. 
Chairman. I did not say that. I said that you identified the 
problem in your testimony that the flexibility that you 
provided them and the extra cost that you picked up was the 
problem, but you concluded with, we have to create an incentive 
for people who do not have more than 30 percent; we have to 
reward the bad behavior of the PHAs by giving them even more 
flexibility. That is my read of your testimony.
    Mr. Miller of California. Thank you.
    Would you like to respond?
    Secretary Jackson. I do not think, Congresswoman, that is 
what I am saying; at least not from my perspective, that is not 
what I am saying. I am not in any way trying to denigrate the 
person who uses the voucher. What I am saying clearly is this, 
is that HUD and the housing authority are both at fault because 
we let this get out of hand. Today, we are trying to correct 
it.
    There is no question about it. You are right. The housing 
authorities have not done what they should be doing, but HUD 
did not do what it should have been doing either. Okay?
    So I see this as a way and a mechanism to correct the 
problem and yet serve more people who are in need. That is all 
I am saying to you.
    Mr. Miller of California. Thank you.
    Mrs. Carson, it is good to see you up and about and here 
with us today. You are recognized for 5 minutes.
    Ms. Carson. Can I ask the gentleman a question?
    Mr. Miller of California. Yes, you may.
    Ms. Carson. Is it my turn?
    Mr. Miller of California. Yes, it is. It is your time. You 
are recognized for 5 minutes.
    Ms. Carson. Thank you very much.
    Mr. Miller of California. I am sorry. Mrs. Velazquez, you 
are first.
    I am sorry, Mrs. Carson. I am getting a look. I crossed you 
off. I am sorry, just a second.
    Ms. Velazquez?
    Ms. Carson. That is all right. We both look alike. No 
problem.
    [Laughter.]
    Ms. Velazquez. That is correct, sister.
    Mr. Secretary, I think that the problem that we have with 
this proposal is, and I am speaking in terms of myself and this 
side of the aisle, is that my understanding is that this bill 
rolls back 30 years worth of protection. I am here listening to 
you saying that everything is going to be fine, that low-income 
people are not going to be impacted, that they will not lose 
their vouchers. Is that what you said?
    Secretary Jackson. That is correct.
    Ms. Velazquez. Are you prepared to send to us in a written 
position stating and laying out how this will not happen?
    Secretary Jackson. I have no problems at all, 
Congresswoman, telling you that those persons who are currently 
on a voucher, we are not going to go in and take those vouchers 
away. If you want a letter from me saying that, I will be happy 
to give it to you. We are not going to take a voucher from 
anyone who presently has one.
    Ms. Velazquez. Mr. Secretary, we all know that increasingly 
more Section 8 buildings are reaching the end of their 20-year 
contract. There are nearly 2,000 units in my district with 
expiring contracts this year alone. Despite these figures, this 
proposal limits the use of enhanced vouchers which protect 
tenants from unmanageable rent increases.
    This is happening in my district in New York City, where we 
are facing a housing crisis right now. Rather than jeopardizing 
people's housing stability by limiting enhanced vouchers, 
wouldn't it be a wiser approach to preserve affordable units by 
helping tenants find ways to purchase their buildings?
    Secretary Jackson. I agree with that.
    Ms. Velazquez. And?
    Secretary Jackson. I agree with that.
    Ms. Velazquez. So how are we going to do that?
    Secretary Jackson. We are working every day to make sure 
that if the tenants can do it, they can do it. And we are 
working also to make sure that those persons who own those 
buildings do not take them out of the program.
    Ms. Velazquez. But do you have any specific ways to do it 
right now?
    Secretary Jackson. We work with the landlords who have 
project-based subsidies. We are doing everything in our power. 
Legally can we keep them from taking it out of the program once 
the 30-year period is gone? No, but we are using all of our 
moral persuasion to make sure that they do not. Because I agree 
with you, where would many of the persons, whether they are in 
New York or they are in Detroit or Chicago or wherever they 
are, where do they go if that person decides to make the 
complex market rate? I am totally in agreement with you, and we 
will continue to do everything.
    Ms. Velazquez. But what kind of assistance do you provide 
to the tenants so that they are in a position to purchase those 
properties?
    Secretary Jackson. Well, we cannot provide the tenants any 
provision to purchase the properties. What we can do is if the 
tenants get together, whether they create a co-op or whatever, 
and try to buy the property, we think that clearly we are going 
to work with them, but we do not have monies to give them to 
purchase the properties.
    Ms. Velazquez. So how would you prevent a landlord who 
wants to opt out and go to the market rate?
    Secretary Jackson. You cannot prevent him if clearly the 
project-based subsidy has run out. You can use moral 
persuasion. Legally, there is nothing we can do.
    Ms. Velazquez. I know that because this is happening in my 
district every day. What I am asking you is, what is it that 
you can do as a department who wants to end homelessness as we 
know it, because by having this, what you are going to do is 
increase homelessness everywhere in this country. What is it 
that you can do to help these people?
    Secretary Jackson. I think that you understand exactly what 
I have just said. Legally, there is nothing we can do once the 
subsidy has run. We cannot make the landlord stay in the 
program.
    Ms. Velazquez. I know that. What I am saying to you is, why 
can't we think out of the box and put together a program that 
will help tenants with resources so that they could purchase, 
like if they want to link up with not-for-profit organizations 
who will help them purchase those properties?
    Secretary Jackson. I wish I could give you an answer. I am 
saying to you that legally once the subsidy runs, the person 
has a right to leave the program. We do not want them to leave 
the program. We will ask them to sell the property to a 
501(c)(3).
    Ms. Velazquez. I am not talking about the landlord. I am 
talking about the tenants.
    Secretary Jackson. Well, when a tenant moves in on a 
project-based certificate, they know that the certificate goes 
with the apartment, not with them. They understand that.
    Mr. Miller of California. The gentlelady's time has 
expired.
    Ms. Velazquez. No, I have not finished.
    Mr. Miller of California. It has expired.
    Ms. Velazquez. Oh, it is expired. You know what, it does 
not make any difference. Thank you, Mr. Chairman.
    Mr. Miller of California. I apologize for passing over you, 
and I would never want that to happen again. It was an 
interesting look you gave me, and I will make sure I never do 
that again.
    [Laughter.]
    Mrs. Carson?
    Ms. Carson. You would notice, Mrs. Velazquez, that I did 
not allow him to do that either.
    Mr. Secretary, I have a question on the fair housing 
implications of H.R. 1999. I apologize if it is redundant or 
repetitive because I was not here. I was like a runaway bride 
when they had that airplane running around, so I was running 
with everybody else.
    Secretary Jackson. Okay.
    H.R. 1999, the State and Local Housing Flexibility Act of 
2005 would essentially eliminate portability in the voucher 
program. The bill would allow, for example, a suburban housing 
authority to reject a family from an urban housing authority. 
How does HUD intend to follow its own fair housing goals of 
desegregation, as well as the de-concentration of poverty by 
eliminating this important aspect of the program?
    Secretary Jackson. Congresswoman Carson, we are not 
eliminating that. What we are saying is that the housing 
authority will have the ability to say if you want to take the 
portable voucher with you, we are not going to pay other than 
what we agreed to pay when you were sitting here. They are not 
saying that you cannot take that voucher with you.
    You will probably end up paying more if it is a higher-
income area. But the way it stands now with portability, if you 
move from Dallas, Texas from an apartment complex, the best 
example I can give you, where it is two-bedroom and might cost 
you, let's say, $850 a month, and you take that same voucher to 
Chicago for a two-bedroom that is going to cost you $1,200 a 
month. We are saying that the housing authority has the ability 
to say we agreed when we signed the contract that we are paying 
you $850, and that is what we are going to pay you.
    It does not restrict the ability to take that voucher with 
you. It is just that we are giving them the flexibility to say 
no, we are not going to do it. Because when you move that 
voucher from Dallas to Chicago, you are effectively taking $400 
from some other person who could get that voucher. I think that 
is absolutely wrong. I think that clearly when the housing 
authority is allocated money, they should serve as many people 
as they can. Portability has drained on a lot of housing 
authorities. So we are not saying that the voucher is not 
portable. We are giving the housing authority the right to say 
we agreed on a contractual arrangement, but we will pay you 
$850. We are not going to pay any more than that.
    Ms. Carson. Just hypothetically, Mr. Secretary, if I can 
further inquire here. If you have a tenant who is already 
established as being eligible, number two, already establishes 
being eligible at a point, at a level, then are you saying that 
if something happens where the tenant cannot retain the housing 
that they had and they have to move, that is just tough luck?
    Secretary Jackson. No. That is not what I am saying.
    Ms. Carson. You are saying you are not going to increase.
    Secretary Jackson. I am saying the housing authority has 
the flexibility to tell them, no, they are not going to 
increase, because when you signed the contractual arrangement, 
it was for a certain amount of money, and that is what the 
housing authority agreed to pay. They must have, in my mind, 
some sure ability about what they are going to pay out in the 
coming year.
    Ms. Carson. What happens if a dire emergency exists? Do you 
make any exceptions?
    Secretary Jackson. Of course, of course. I think that 
clearly if a person in Dallas and the development that they 
lived in or the apartment complex burned and the next one that 
they came up to was $950, I think clearly the housing authority 
would make that adjustment if they could not find another 
apartment at $850 a month. Yes, we have to think that there are 
always going to be the probabilities that you will have 
emergencies or something very, very definitely could happen to 
the person's ability to live in that apartment complex. It 
could be lead or it could be some other things. All of that 
must be taken into consideration.
    Ms. Carson. So you do take some extraneous circumstances--
--
    Secretary Jackson. Circumstances, yes.
    Ms. Carson.--into consideration?
    Secretary Jackson. Yes.
    Ms. Carson. I yield back, Mr. Chairman.
    Mr. Miller of California. Thank you very much.
    Ms. Tubbs Jones, I know you left us to go on Ways and 
Means. Did you change your mind?
    Mrs. Jones of Ohio. Absolutely not.
    Mr. Miller of California. I will give you 5 minutes anyway.
    Mrs. Jones of Ohio. I have constituents that are concerned 
about housing, so I invited myself back to this hearing.
    Good afternoon, Mr. Secretary. How are you?
    Secretary Jackson. How are you doing, Congresswoman?
    Mrs. Jones of Ohio. I am doing great. Thank you.
    Secretary Jackson. I know you always do well.
    Mrs. Jones of Ohio. Blessed by the best, you know?
    Let me ask you this question; when Congresswoman Sue Kelly 
asked you the question about Section 8 vouchers and seniors and 
people on disability, in fact, people on disability receive 
Section 8 vouchers, don't they?
    Secretary Jackson. Say that again to me.
    Mrs. Jones of Ohio. Finish with your staffer, and then I 
will ask you.
    Secretary Jackson. I have it.
    Mrs. Jones of Ohio. Are you straight now?
    Secretary Jackson. Yes.
    Mrs. Jones of Ohio. All right. Now, Congresswoman Kelly 
asked you specifically about seniors, the people on disability 
and Section 8, and said that Section 8 increases were causing a 
loss on behalf of the seniors and those among the disabled on 
some functional charts she had. Correct?
    Secretary Jackson. Right.
    Mrs. Jones of Ohio. In fact, Section 8 vouchers include 
seniors and those on disability. Is that a correct statement?
    Secretary Jackson. That is correct, yes.
    Mrs. Jones of Ohio. So you are really not playing them one 
against another. You are actually all part of a Section 8 
program.
    Secretary Jackson. Well, yes, but also you have 811 which 
is----
    Mrs. Jones of Ohio. I understand that, but I am saying 
conceptually they are all part of a Section 8 program.
    Secretary Jackson. That is correct.
    Mrs. Jones of Ohio. Let me go on to something else. All of 
the proposals that you have under H.R. 1999 deal with concept, 
policy, philosophy. Is that correct conceptually?
    Secretary Jackson. I think that----
    Mrs. Jones of Ohio. Let me go through them and maybe you 
will have a better understanding.
    Secretary Jackson.--the bill that Congressman Miller 
introduced is pretty specific as far as we are concerned in 
that it addresses the needs that we think are very important at 
HUD.
    Mrs. Jones of Ohio. Number two deals with flexibility and 
simplification, right?
    Secretary Jackson. Yes.
    Mrs. Jones of Ohio. Number one deals with, I am picking up, 
having picked this up this afternoon, and section three allows 
new options for homeownership; one does something else. I am 
just not coming directly at it. But the law does not provide 
any additional dollars to the housing authorities. It just says 
that I used to give you $90,000, and under the old rules you 
could spend $90,000 X-way, but under the new rules I am giving 
you more flexibility, but I am not giving you any more money.
    Secretary Jackson. Well, we increased the budget by $1.1 
billion in 2006, so that is more money.
    Mrs. Jones of Ohio. But you are still not even with the 
changes under this law. If this should pass, there is no new 
money in this law to change.
    Secretary Jackson. It is not in the law per se, but there 
is never any new money in the law. The money comes by 
appropriation from you all.
    Mrs. Jones of Ohio. I understand that. It comes by 
appropriation, but this legislation does not provide for any 
additional dollars.
    Secretary Jackson. No, the legislation provides, 
Congresswoman, a guideline.
    Mrs. Jones of Ohio. All I am saying to you is, folks, 
change the way you do it, but I am not going to give you any 
more money to do what you do.
    Secretary Jackson. You allocate the money. That is Article 
I, Section 7. You are the authorizer and the appropriator.
    Mrs. Jones of Ohio. Absolutely, I am.
    Secretary Jackson. Okay.
    Mrs. Jones of Ohio. But understood, this is a piece of 
legislation that you are promoting, and you are not saying give 
me any more money; you are just saying allow me to do it in a 
different way.
    You do not want to take my line of questioning, Mr. 
Secretary, so I am going to go on to something else.
    Secretary Jackson. No, I think----
    Mrs. Jones of Ohio. But it is clear from talking to all 
that I see----
    Secretary Jackson. Congresswoman, I think that would be 
very presumptuous on my part to tell you how to do your 
business.
    Mrs. Jones of Ohio. I do not want you to be presumptuous. 
You are already that, generally, when we have a conversation.
    The point I am trying to make is you are asking your 
housing authorities to do more with less.
    Secretary Jackson. No.
    Mrs. Jones of Ohio. Because you are saying I am going to be 
flexible; I am going to make you flexible, but you still only 
have the dollars that you already had.
    Let me ask you about, I guess someone already really asked 
this question of you, and I am concerned, too. I was the 
Cuyahoga County prosecutor, and I worked very closely with the 
Cuyahoga Metropolitan Housing Authority when we had police 
officers, when we were doing drug elimination programs, when we 
were doing all of that. Clearly, there were a group of people 
within the housing authority that, A, we thought should not be 
there, B, did not deserve to be there, and C, were causing 
problems.
    But the majority of the people living in public housing, 
they do not love being there. They would love to be out of 
there. A lot of them would love to be out of there if they only 
had a job. But a lot of people right now are suffering even 
though the economy is supposedly going up. There are a lot of 
people suffering in my congressional district without a job, 
60,000 without a job since 2001, who would love to walk up and 
say, take your voucher and shove it, and then go buy a house, 
but it is not happening.
    And so when you sit there having come from where you come 
from and say, you know, pull yourself up.
    Mr. Miller of California. The gentlelady's time has 
expired.
    Mrs. Jones of Ohio. I am almost done, Mr. Chairman. Thank 
you very much.
    Pull yourself up by your bootstraps, you know, go on out 
here and get a job, and if you had a job, you would not have to 
be in the housing. It is really disingenuous because there are 
so many people out there who want a job and cannot get one.
    Secretary Jackson. Congresswoman, let me say this to you. I 
disagree with you. I have never said pull yourself up by your 
bootstraps.
    Mrs. Jones of Ohio. Same concept.
    Secretary Jackson. May I finish? I believe that no one gets 
anywhere without someone helping them. The problem becomes 
whether you want or seek the help. I am saying where there are 
people who want and seek the help, we should do everything in 
our power to make sure that we do everything that is possible 
to make sure they get out of the condition in which they live.
    If you do not want the help, I have no sympathy for you.
    Mr. Miller of California. I will answer the question you 
were unable to answer. This bill does not require anything 
additional of any housing authority anywhere in the United 
States. It does only require that they have flexibility to do 
what they want to do.
    Secretary Jackson. That is correct.
    Mr. Miller of California. But there is no additional 
mandate that costs one penny in this bill.
    Mrs. Jones of Ohio. I never said that it was, Mr. Chairman. 
That was not my question.
    Mr. Miller of California. You did not give me a chance to 
answer that one. You said we were mandating they do more and 
spend more money. No, we are not. We are just allowing them 
flexibility to do what they think is----
    Mrs. Jones of Ohio. I did not say that, Mr. Chairman.
    Mr. Miller of California. Then I misunderstood.
    Mr. Jackson, would you like to answer anything that you 
have not had a chance to answer today in your closing? I know 
there has been a lot asked of you that you would like to 
answer, and maybe you have not had a chance to.
    Secretary Jackson. No. First of all, I would just like to 
thank you for being the sponsor and the other cosponsors of the 
bill because I think the bill will be very important for 
housing authorities to have that flexibility. You know, it is 
important when you think about some of the housing authorities 
that welcome the flexibility. One of the most progressive 
housing authorities in the country is Atlanta. They welcome the 
responsibility of having the ability to do it, and they are not 
by themselves. There are a number of housing authorities.
    Now you have some that do not, and you have advocates that 
do not, but then the advocates are going to be there because in 
many cases their living is made off of the housing authority 
making sure that they feel that they need their help and 
support. I am saying to you in closing today that even when I 
ran housing authorities, Mr. Chairman and members, I had 
problems with the advocacy groups because they could disagree 
with me, and they would think that probably I am not sensitive, 
do not care. And I do.
    But I believe that public housing residents, Section 8 
residents, are human beings with the same sense of worth as me, 
and I am not going to them and telling them how to live, nor am 
I going to them being very paternalistic and patronizing to 
them, as if they are children. They are human beings, and our 
task and hopefully the flexible voucher will help housing 
authorities move many of these people out of dependency towards 
self-sufficiency.
    Mr. Miller of California. Mr. Secretary, thank you for your 
testimony. I am looking forward to working with my Republican 
and Democrat colleagues to end up with a better situation in 
public housing than we have today. That is our goal, not to 
create a situation that is worse.
    Secretary Jackson. Thank you, Mr. Chairman.
    Mr. Miller of California. The Chair notes that some members 
may have additional questions for this panel which they may 
wish to submit in writing. Without objection, the hearing 
record will remain open for 30 days for members to submit 
written questions to these witnesses and place their responses 
in the record.
    Without any additional comments, this hearing is adjourned.
    [Whereupon, at 4:10 p.m., the committee was adjourned.]


                            A P P E N D I X



                              May 11, 2005


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