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



 
                     THE U.S. DEPARTMENT OF HOUSING
                     AND URBAN DEVELOPMENT'S (HUD)
                        FISCAL YEAR 2007 BUDGET

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

                                HEARING

                               BEFORE THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 30, 2006

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 109-81


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

                 Robert U. Foster, III, Staff Director


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    March 30, 2006...............................................     1
Appendix:
    March 30, 2006...............................................    49

                               WITNESSES
                        Thursday, March 30, 2006

Jackson, Alphonso, Secretary, U.S. Department of Housing and 
  Urban Development..............................................     6

                                APPENDIX

Prepared statements:
    Brown-Waite, Hon. Ginny......................................    50
    Sanders, Hon. Bernard........................................    51
    Jackson, Alphonso............................................    55

              Additional Material Submitted for the Record

Frank, Hon. Barney:
    PHADA Letter to Secretary Jackson............................    65
Hinojosa, Hon. Ruben:
    HUD letter to OMB............................................    67
    OMB letter to HUD............................................    68
    Letter to OMB from Members of Congress.......................    69
    Additional letter to OMB from Members of Congress............    87
    Letters to Committee on Appropriations.......................    89
    Letters to House Budget Committee............................   100
    Letter to Committee on Appropriations........................   119
    Letter to HUD................................................   122
    Letter to Chairman Lewis and Ranking Member Obey.............   125
Tiberi, Hon. Patrick:
    Statement of Homes on the Hill...............................   131


                     THE U.S. DEPARTMENT OF HOUSING
                     AND URBAN DEVELOPMENT'S (HUD)
                        FISCAL YEAR 2007 BUDGET

                              ----------                              


                        Thursday, March 30, 2006

             U.S. House of Representatives,
                           Committee on Financial Services,
                                                   Washington, D.C.
    The committee met, pursuant to notice, at 9:05 a.m., in 
room 2128, Rayburn House Office Building, Hon. Michael G. Oxley 
[chairman of the committee] presiding.
    Present: Representatives Oxley, Baker, Pryce, Bachus, Ney, 
Kelly, Gillmor, Ryun, Miller of California, Tiberi, Hensarling, 
Pearce, Neugebauer, Fitzpatrick, Frank, Waters, Velazquez, 
Watt, Carson, Lee, Moore of Kansas, Hinojosa, Crowley, Israel, 
McCarthy, Baca, Miller of North Carolina, Scott, Davis of 
Alabama, Green, Cleaver, Wasserman-Schultz, and Moore of 
Wisconsin.
    The Chairman. The committee will come to order. Pursuant to 
Rule 3(f)(2) of the Rules of the Committee on Financial 
Services for the 109th Congress, the Chair recognizes--
announces, I'm sorry--that he will limit recognition for 
opening statements to the Chair and ranking minority member of 
the Full Committee, the Chair and ranking minority member of 
the Subcommittee on Housing and Community Development or their 
respective designees, to a period not to exceed 16 minutes 
equally divided between the majority and minority. Prepared 
statements of all members will be included in the record. And 
the Chair recognizes himself for an opening statement.
    Secretary Jackson, it's good to have you back before the 
committee. We appreciate particularly your flexibility in the 
scheduling, given our markup schedules and your hectic 
schedule, we appreciate you being in a relatively unprecedented 
9:00 a.m. hearing.
    With over 1 million Americans affected by the emergency 
housing and community crisis in the Gulf, the Federal 
Government's response in coordination with local and State 
governments, and nonprofit and faith-based organizations will 
be critical in the ensuing years. As a result, the committee 
places increased importance on the Administration's proposed 
housing and community development budgets that include the 
Department of Housing and Urban Development, the Rural Housing 
Service administered by the U.S. Department of Agriculture, the 
National Reinvestment Corporation, and the National Flood 
Insurance Program administered by FEMA.
    The President is to be applauded because the proposal 
includes a number of initiatives to continue narrowing the home 
ownership gap, such as continued funding for both the American 
Dream downpayment program and housing counseling services.
    This year, the Administration proposed a flexible FHA 
product that would increase home ownership in very low income 
communities. However, we see a significant decrease in funding 
for the Community Development Block Grant program at 
approximately 27 percent. Ohio's 2006 CDBG program will receive 
approximately $49 million. In Mansfield, in my district, which 
is one of our largest cities, the local government will receive 
$988,972 this year.
    In addition to these overall reductions, the 
Administration's proposal would reform the allocation formula 
to focus community development funds to the neediest areas of 
our country.
    I would also like to mention my support for HUD's 
brownfields economic development initiative. I was involved in 
writing the first brownfields legislation almost 10 years ago 
across the hall at a time when people were just starting to 
focus on what redevelopment of these could mean for jobs and 
cleaning up the environment.
    Aside from the contamination at these sites, we found that 
there were legal and financial obstacles to redevelopment. 
Unlike brownfield programs in other agencies, the main focus of 
the HUD program is economic development. It gives local 
communities a valuable tool to address blight, create new jobs, 
and expand their tax base. Last year the House passed H.R. 280, 
the Brownfields Redevelopment Enhancement Act, to provide 
greater access to this program. That was a bill that was 
sponsored by our friend Gary Miller from California.
    There are some 450,000 brownfield sites located in every 
State in the Nation. By redeveloping these properties, we also 
reduce the stress being put on pristine greenfields and 
farmland, something particularly important to my home State.
    And finally, I note that you have included in your budget 
summary the Department's intention to increase the affordable 
housing goal for Fannie Mae and Freddie Mac. This committee in 
the House passed H.R. 1461, which creates a world class 
regulator to provide stronger oversight of Fannie Mae, Freddie 
Mac, and the Federal home loan banks. In this legislation, we 
have rewritten the goals to realign the enterprise's affordable 
housing focus to match that of lending institutions that are 
meeting the requirements of the Community Reinvestment Act. 
It's my belief that when these goals are enacted, we will have 
made strides toward greater liquidity for making loans to low 
and very low income American families.
    Once again, Mr. Secretary, welcome. And I now yield to the 
gentleman from Massachusetts.
    Mr. Frank. Thank you, Mr. Chairman. Mr. Secretary, I share 
the chairman's appreciation of your accommodating us in this 
hearing.
    I am very troubled by--with regard to housing, and I think 
we have a serious problem regarding housing in this country. 
The HUD study, I think 2003, it goes through 2003, on worst 
case housing needs, which is mandated by Congress, and that is 
a study of the people who have the worst housing problems.
    According to that study, these are HUD's figures at the end 
of 2003, the number of people who have worst case housing 
situations, that is, unassisted renters--unassisted renters, 
not Section 8 voucher recipients, etc.--with very low incomes 
who pay more than half of those incomes for housing or live in 
substandard housing. We're talking about people who are below 
50 percent of the local area median and have to pay half or 
more of that already inadequate income for rent, or they live 
in terrible housing. And the number of people in that 
situation--households, not people--it went from 4.86 million to 
5.18 million. So we have 5.18 million households, that's got to 
be 8, 9, maybe 10 million people, maybe it's 7, living in these 
terrible situations. And those are people to whom we should be 
addressing our efforts in part, as well as trying to help 
communities, and this budget unfortunately doesn't do that.
    Some examples. The chairman has mentioned the Community 
Development Block Grant cuts. Now I know the Administration has 
again proposed revising the formula to cut out some of the 
communities that are wealthier. I don't believe that the amount 
you would save under that comes close to the $700 million 
you're proposing to cut in CDBG, and I think that's a very 
grave error.
    I would also say that proposing to cut the upper income 
communities continues what seems to me an unfortunate trend. 
When HUD sent up its language to change the Section 8 voucher 
program, inexplicably to me, it said that with regard to people 
getting a Section 8 and traveling to another area, the area 
that had the Section 8 could decide, and that, of course, is 
the case. They have to decide whether they want to let someone 
take their Section 8 and travel and how much it will cost. But 
it would allow the recipient community to veto people coming 
in. Other than perpetuating economic and/or racial segregation, 
I can't think of a single good reason for that, and I said a 
good reason.
    So if you give the receiving community the right to veto 
people coming with their Section 8's, if you say that CDBG will 
only go to the poorest communities, then to the extent that 
wealthy communities, the way to deal with this is not, it seems 
to me, to say that CDBG doesn't go to communities that may have 
a higher income level, but to make sure that they spend it on 
lower income people. Because if you say that CDBG only goes to 
the lowest income communities, then any effort to press upper 
income communities to accommodate lower income people becomes 
harder.
    You also have, I think, with the refusal to make Hope Six 
work well with its notion of integration, rather than simply, 
as this Administration is now proposing, put an end to it as of 
now.
    And so, I see a pattern here in which we are going counter 
to what I would have hoped would be our program of trying to 
integrate the communities economically and therefore racially, 
since income and race are somewhat correlated in this society.
    And there's some other troubling areas. Just a year ago, 
this Congress met to talk about the painful case of Terri 
Schiavo. And there were a lot of assertions about the 
importance of protecting the disabled. And while we differed 
among ourselves on the fate of Terri Schiavo legislatively, we 
also wanted to help the disabled. We now have a budget which 
for the second year in a row proposes to reduce by 50 percent 
from one year to the next the amount we spend on building 
housing for the disabled.
    I understand the power of the free market. I think the free 
market is very important. I don't know anybody who thinks that 
unaided, the free market is going to be able to build housing 
for severely disabled people. And I do not understand why the 
richest country in the history of the world has to cut by 50 
percent, a relatively small amount, from $350 million to $175 
million, that we can only spend $175 million according to this 
Administration in the next year building housing for severely 
disabled people.
    People who are disabled should be entitled to do more than 
breathe. They ought to be able to live somewhere, and you're 
making that, with this budget, extremely difficult.
    Finally, I lament the absence of more funding for 
production of housing in general, cuts in elderly housing from 
one year to the next, cuts in housing for the disabled, a 
failure to help preserve units, not individual tenants, but 
units that were originally subsidized.
    Here's the problem. I think the Section 8 voucher program 
is a good program. It does add some equity. But all we do is 
year-by-year vouchers, and we continue to shrink programs that 
either protect existing affordable units or construct new 
units, whether in public housing or assisted housing with 
private sector cooperation, housing for the elderly, the 
disabled--that's the current Administration's plan.
    Do more and more with Section 8, and Section 8 looks bigger 
and bigger, everything else looks smaller and smaller, and 
don't do any construction. Here's the problem. It does produce 
some equity, but let's use some good, conservative free market 
economics. Our housing policy is increasingly to increase the 
demand for rental housing in a way that does not add to the 
supply. And when you increase demand and freeze supply, what 
you get are higher prices.
    So I want to keep the Section 8 voucher program, but it 
needs to be accompanied, I believe, by some construction, 
because otherwise, these 5.18 million families that you 
document as being in worst case situations, will be even worse.
    Thank you, Mr. Chairman.
    The Chairman. The gentleman's time has expired. The 
gentleman from Ohio, Mr. Ney, chairman of the subcommittee.
    Mr. Ney. Thank you, Mr. Chairman. I'll be very brief 
because I know that everybody wants to hear from the Secretary.
    Last week the Housing Subcommittee held hearings, 2 days of 
them. I want to thank Congressman Barney Frank; Jeff Riley came 
in from his staff. We had Clinton Jones, Cindy Chetti, and 
Tallman Johnson. They spent a lot of time listening to local 
officials, Republicans, Democrats, county commissioners, and 
township trustees. There was a great, of course, outpouring of 
concern with those hearings. We're going to have one more, too, 
in Los Angeles with Ranking Member Maxine Waters.
    Also, the Administration proposed the FHA housing product. 
I think that is something that's very interesting, and I look 
forward to working with you on it.
    I saw about RESPA, so that's a real simple one, I'm sure, 
to determine at the end of the day.
    The last comment, I do want to continue to work with the 
Department because there has been, I think, some concerns at 
least expressed to us about the Manufactured Housing 
Improvement Act of 2000. I think the manufacture of housing is 
important for so many reasons in the country. We look forward 
to working with you.
    Thank you, Mr. Chairman.
    The Chairman. I thank the gentleman. The gentlelady from 
New York, Ms. Velazquez.
    Ms. Velazquez. Thank you, Mr. Chairman. Mr. Secretary, 
affordable housing represents a way out of poverty and despair 
for families and individuals. Moreover, it is a basic human 
right. And it is unthinkable and immoral that the President 
slashes spending for the Housing and Urban Development budget 
again this year.
    These cuts are especially troubling since HUD, itself, 
reports that 5 million very low income families face critical 
housing problems. And the Gulf Coast is in the midst of a 
housing crisis, one of the worst in our Nation's history.
    The President's proposal makes painful cuts and wrong 
choices, leaving the Nation's neediest families and individuals 
out in the cold. For the fifth straight year, the Bush 
Administration's Fiscal Year 2007 budget proposes harmful 
funding cuts amounting to 4 percent of $1.5 billion when 
adjusted for inflation. These cuts jeopardize the housing of 
low income elderly and disabled families and individuals across 
the country, and they represent yet another wrong priority for 
America's working families.
    Year after year, this Administration has left our Nation's 
vital housing programs with limited resources and gaping budget 
shortfalls, forcing them to scramble to serve families. 
Although this year's budget spares Section 8 from dangerous 
proposals of block granting the program, public housing 
agencies are still recouping from the uncertainty and 
instability these proposals caused. The Fiscal Year 2007 
proposals allows current voucher levels to be maintained but 
falls far short of providing vouchers to all those families and 
budgets who need them.
    What we need is not band-aid solutions that attempt to fix 
past failures, but comprehensive policies that meet the housing 
needs of low income families nationwide.
    The President's budget proposes a deep cut of $261 million 
to the public housing capital fund, and comes at a time when 
PHA's already face an $18 million backlog in capital 
improvement needs. As a result, the overall number of units in 
the affordable housing inventory will be drastically cut. This 
will leave millions without decent, safe, and affordable 
housing and with no place to turn, since other housing programs 
are subject to the same type of irresponsible cuts.
    Another troubling cut is that to the Office of Healthy 
Homes and Lead Hazard Control, which faces a reduction of 23 
percent, or $35 million, despite bipartisan support. We put it 
back last year, and we're going to fight again to put it back.
    This budget puts America's housing programs on life 
support. Not one program received enough funding to fulfill the 
needs of those it serves. And a cut to one program amounts to a 
cut for every program, because they are interconnected, relying 
on one another to fulfill the housing needs of communities, 
families and individuals.
    The President's inability to recognize that the Nation 
needs integrated, fully funded housing policies illustrates his 
failure to understand the needs of those trying to climb the 
ladder of opportunity toward economic and personal independence 
and stability.
    Mr. Secretary, quite a recipe in compassionate 
conservatism.
    Thank you, Mr. Chairman.
    The Chairman. The gentlelady's time has expired. We now 
will turn to the distinguished Secretary of Housing and Urban 
Development, Alphonso Jackson. Secretary Jackson, it's good to 
have you back before the committee, and you may begin.

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

    Mr. Jackson. Thank you very much, Mr. Chairman, and good 
morning to you and to the ranking member, and to the other 
members of the committee. I want to thank you for the 
opportunity to present HUD's budget for 2007.
    The President is very concerned about helping all Americans 
have access to decent, affordable housing, and his $33.6 
billion budget request for HUD demonstrates that concern. At 
the same time, the President understands that fiscal restraints 
are necessary if we want to reduce the deficit and keep the 
economy growing and create more jobs and higher wages.
    I want to highlight how the President's budget would help 
HUD achieve the mission Congress has assigned to us, 
particularly in three areas: Housing more Americans who own 
their own home, helping those not ready or willing to own their 
homes to find decent rental housing in the market, and 
reforming the way the Federal Government supports community 
development by developing and focusing resources toward the 
neediest, by beginning to consolidate the community development 
programs under one umbrella at HUD.
    First, Mr. Chairman, is helping more Americans achieve the 
dream of home ownership. If Congress will enact HUD's proposed 
changes to the National Housing Act, the FHA will make its 
mortgage insurance more flexible, so that more Americans can 
qualify for mortgages without paying sub-prime rates. This will 
help more low income families own and keep their own home.
    Speaking of FHA, I am pleased to say that HUD has recently 
announced a further extension of the FHA foreclosure moratorium 
for victims of Hurricane Katrina. Borrowers with FHA loans now 
have until March 31st to show us that they have made long-term 
payment arrangements with their banks. If they do, they will 
have foreclosure protection until the end of June. And this is 
in addition to what HUD has agreed to--to make interest free 
loans for hurricane-affected families to pay the FHA insurance 
mortgage for a year.
    The President's budget is $1.9 billion for the HOME 
investment partnership program. In the past, every HOME dollar 
has attracted $3.60 in private sector investment. Under that 
program, the President proposed that the American Dream 
Downpayment Initiative, or ADDI as we call it, be funded at 
$100 million. Though it is a new program, ADDI funds have 
already assisted 14,000 low income families become first time 
home buyers.
    Another young but important program helping low income 
families become home owners is the housing choice home voucher 
program, which allows families on Section 8 rental assistance 
to use their vouchers to pay the mortgage on their homes for up 
to 10 years. This program has already helped 5,000 low income 
families own a home in the last 4 years, and we expect to help 
3,000 more by the end of Fiscal Year 2007.
    The President has also proposed $45 million for housing 
counseling. This is a proven method for helping low income 
families prepare themselves for responsible home ownership, 
avoid predatory lending practices, and avoid foreclosure. This 
program would be able to assist approximately 600,000 families 
in 2007 if the President's proposal is adopted.
    Second, Mr. Chairman, is helping other low income families 
find decent, affordable rental housing. HUD's largest program, 
at $16 billion, is the housing choice rental assistance 
program.
    Because of the unsustainable cost increase, Congress wisely 
changed this dollar-based system. But for the new system to 
work better, Congress needs to pass legislation to allow the 
local PHA's to design their own rent policies. That is why the 
Administration is asking Congress to pass Representative Gary 
Miller's State and Local Housing Flexibility Act, House Bill 
1999. And I want to thank the Congressman for his leadership on 
this important issue. And also Representatives Tom Feeney, 
Katherine Harris, and Rick Renzi for co-sponsoring the bill.
    The 2007 budget also proposed funding an additional 3,000 
housing units for the elderly or persons with disabilities. All 
expired rental assistance contracts are being renewed. In order 
to help more Native Americans become home owners, President 
Bush has proposed increasing the Section 184 loan guarantee 
program by 100 percent, to $251 million. He also wants to 
increase funding to support housing for persons with HIV AIDS 
to $300 million, enough to provide assistance to an estimated 
75,000 households.
    Our budget request includes a provision that will allow us 
to allocate these funds more fairly, based on housing cost 
differences across the country. The Administration also remains 
committed to helping the homeless. HUD has aggressively pursued 
policies to move the homeless into permanent housing. This 
budget proposed to increase the homeless assistance to $1.5 
billion, enough to house more than 160,000 individuals.
    Third, Mr. Chairman, is laying the groundwork for reform of 
the Federal resources that are used to support community 
development. A key part of HUD's mission is to strengthen 
communities so that they can be better places to live, work, 
and raise families.
    HUD is committed to developing a better performance measure 
for the block grant program. But we need a better way to target 
the block grant funds to those most in need. So HUD will 
propose a new formula for the block grant allocation very soon 
to Congress. Also, since the block grant is staying at HUD, the 
President's budget consolidates three similar programs in HUD 
into the block grant program, laying the groundwork for further 
government-wide consolidation later, after HUD proves that the 
reforms will work.
    The Administration has just asked for a supplement of $4.2 
billion. The $6.2 billion already allocated to Louisiana from 
the previous supplement still leaves another $5.9 billion to 
mitigate needs for Louisiana, $4.8 billion for housing that was 
severely damaged or destroyed, and $1.1 billion for other 
infrastructures. We estimate that FEMA can provide $1.7 billion 
of the $5.9 million for mitigation. Thus, Louisiana still needs 
$4.2 billion to mitigate, and that's why President Bush is 
requesting the amount.
    In conclusion, Mr. Chairman and Mr. Ranking Member, the 
Administration's budget provides ample resources for promoting 
home ownership, fair affordable housing, and community 
development--the key elements of the mission that Congress has 
assigned to HUD.
    This is a good budget, Mr. Chairman, and I respectfully 
urge Congress to adopt it. And I thank you for the opportunity 
to speak. I also want to take this opportunity to thank 
Congressman Rick Renzi for introducing the President's 
consolidated homeless bill yesterday. We appreciate your 
leadership in the fight against homelessness, and I am now 
available for questions.
    [The prepared statement of Mr. Jackson can be found on page 
55 of the appendix.]
    The Chairman. Thank you, Mr. Secretary. And let me begin. I 
know you stated publicly last week that HUD is starting to look 
again at RESPA reform, and obviously there have been some fits 
and starts, mostly fits, with that issue, despite the fact that 
it's incredibly important to consumers; it's very important to 
the housing market.
    Could you give us some idea about the goals and the ways 
that you would propose this particular effort?
    Mr. Jackson. As you know, Mr. Chairman, just about 8 months 
ago I called for a moratorium on RESPA reform. And I did that 
because, clearly, there was so much concern about how we 
address that issue.
    I gave an analysis the other day when I was speaking to 
mortgage brokers, and I'm sure that Congressman Ryun would 
understand this. I was a sprinter in college, an All American. 
And it's like having a 400 meter relay. If there's no one to 
hand the baton off to, you can't be there for the people, and 
that was the case with RESPA. And I looked around. We had no 
support period for RESPA. And I said let's go back to the 
drawing board, and let us listen to you, to the industry, and 
come up with a solution.
    I think we are very close to coming up with that solution. 
And as I said to the mortgage brokers yesterday--day before 
yesterday--I think that you will be very pleased. We have taken 
the good advice, the bad advice, and sometimes the ugly advice, 
from the industry, and from Congress, to try to come up with a 
proposal that will address the issues that are most important 
to RESPA reform. And we think we've done that. And hopefully 
within the next 60 to 90 days, we will have a proposal before 
you.
    The Chairman. I appreciate that. And you were clearly in 
the belly of the beast there with the mortgage brokers, given 
the past history of RESPA reform. So my congratulations for 
your bravery and courage.
    Let me ask you also whether you see any link between RESPA 
reform and efforts on this end to deal with predatory lending 
practices?
    Mr. Jackson. Absolutely. I think it's very important, and 
that's one of the reasons we're asking you to look at the FHA 
legislation, H.R. 1999, because clearly there's a group of 
people right in the middle. They're not truly low income, but 
they're not truly high income. And in the subprime market, 
they're being eaten up. The interest rates are entirely too 
high. And that's predatory lending in many ways.
    So if we can pass H.R. 1999, that would put HUD and FHA in 
a position to address that large group--and it's not a small 
group of buyers--that large group of buyers, to make sure that 
they have the opportunity to be home owners. And I say that 
because we would not in any way do this risk based. If you had 
good credit, your interest rate would be lower. If your credit 
was not so good, it would be higher. But after you demonstrate 
a period of time of paying your house note, then we could 
reduce the interest rate.
    Now I must tell you this, Mr. Chairman. We have not been at 
our best at Housing or FHA. That's why today that I am very 
pleased that Brian Montgomery chose to come and be the 
Assistant Secretary for FHA in the commissioning, because we 
need an innovative man to try to gain back our share of the 
market. We've lost a great deal. But not only gain back our 
share of the market, but address the needs of low and moderate 
income Americans who want to become home owners.
    The Chairman. Thank you, Mr. Secretary. Let me finally ask 
you a question regarding H.R. 1461. As you know, the committee 
passed that legislation, GSE reform, on a large bipartisan 
basis and indeed, it passed the House with almost 400 votes, 
and we were quite proud of that. And a part of that 
legislation, as you know, was to set affordable housing goals 
for Fannie Mae and Freddie Mac.
    And I'm just wondering if you could comment as to how it 
might enable Fannie Mae and Freddie Mac to better meet their 
objectives, their housing objectives, and in particular the 
affordable housing goals as approved by our committee. We want 
to work with you obviously in that regard and obviously be 
helpful.
    And hopefully, the Senate will take up their legislation on 
the Floor so we can get to conference and not only create a 
world class regulator, but also start towards achieving those 
affordable housing goals.
    Mr. Jackson. First of all, I think that we really need a 
world class regulator, a first rate regulator, to make sure 
that Fannie Mae and Freddie Mac addresses their charter 
mandate.
    I must say that over the last year dealing with both Fannie 
Mae and Freddie Mac, and the leadership of the organization, I 
think they clearly are making an effort to address the 
affordable housing goals for the first time, from my 
perspective. They might not get there, but it's a true effort 
at this point in time. And I must commend both persons leading 
each individual organization.
    It is imperative that we provide low and moderate income 
not only rental housing but home ownership. Fannie Mae and 
Freddie Mac were chartered to do that, and we're going to work 
with them to do that. But at the same time, the argument that 
they've made in the past that if they serve this market they 
can't, in essence, serve the high end of the market has no 
validity at all.
    It is my belief that they can serve both markets, and I 
must tell you I think that we're working towards that, and I've 
seen great progress and strides. But I do think still, Mr. 
Chairman, that we need a first class regulator to make sure 
that they continue to do what they should.
    The Chairman. Let me ask you, does HUD, and do you 
personally, support the goals of the specific language in our 
bill in regard to the housing goals?
    Mr. Jackson. I can't remember the specific language today. 
I'll have to go back and review it.
    The Chairman. I guess the effort was to--the committee's 
effort was to try to simplify the process to make it more 
understandable. And I would appreciate maybe a response at a 
later time in writing.
    Mr. Jackson. I will do that.
    The Chairman. Thank you. The gentleman from Massachusetts.
    Mr. Frank. Mr. Secretary, thank you for those words. I 
appreciate this effort of cooperation between Fannie Mae and 
Freddie Mac. I agree with you that the new leadership, Mr. Mudd 
and Mr. Syron, are trying to hard to move forward. So I 
appreciate your doing that.
    And while I'm in the complimentary mode, let me tell you 
how much I appreciate--I mean this very seriously. On the 
bottom of page 3 of your statement to the top of page 4, 
there's a very important statement here that too often gets 
unsaid, and I want to read it and thank you in your leadership 
position for saying it. ``While home ownership is one of 
President Bush's top priorities, the President realizes that it 
is not a viable option for everyone. The largest component of 
HUD's budget promises decent, safe and affordable housing for 
families and individuals who may not want to become home owners 
or who may not yet be ready to purchase a home.''
    We're in the business of trying to help people get homes. 
Home ownership is a very desirable piece of that. But I 
appreciate this, because too often it just becomes home 
ownership without any understanding that this is for most 
people, we hope, but not for everybody.
    I did want to go back now to the Fannie Mae and Freddie 
Mac, because I appreciate what you're saying, but first of all, 
let me ask you, on March 7th, there was an article by James 
Tyson, whom I have found to be a reliable reporter at 
Bloomberg, and he quotes you, indirectly--he says Fannie Mae 
and Freddie Mac shouldn't be ordered by Congress to cut their 
combined mortgage portfolios, the head of HUD said today. 
Quote, ``the regulators should decide,'' unquote, the 
appropriate size. Quote, ``we will have faith and confidence in 
the regulators to look at the issue and come up with a 
conclusion,'' end quote, that Fannie Mae and Freddie Mac, 
quote, ``can live with.'' Unquote.
    That appeared to have been--from the record, that appeared 
to have been your position for about an hour. Because about an 
hour later, we had a statement--I was about to call you up and 
congratulate you for it--when you beat me to the punch by 
retracting it. Did you change your position? Were you asked to 
change your position? Or did the reporter just get it 
completely wrong?
    Mr. Jackson. Honestly, Mr. Ranking Member, he got it wrong. 
That is not what I said. And I was a little baffled when I saw 
all of that in quotes.
    Mr. Frank. Well, I appreciate you--let me just say, I check 
with Mr. Bloomberg. You say that. I have no way to doubt it, 
but it disappoints me.
    Let me then say with regard to affordable housing; I 
believe that goals are very important. But precisely, and the 
goals would particularly help us with home ownership, because 
the goals tend to be in the home ownership area to some extent, 
although there's rental housing.
    But we also in this committee added overwhelmingly a 
requirement that was sort of based on the Federal Home Loan 
Bank model, that 5 percent of the after-tax profits of Fannie 
Mae and Freddie Mac go for affordable housing for people who 
would be at the level below the goals.
    Leaving aside other differences on the bill, what's the 
Administration's position and your position on that particular 
provision?
    Mr. Jackson. First of all, I think, Mr. Ranking Member, we 
shouldn't have to do that.
    Mr. Frank. Well, I didn't ask you whether we should or 
shouldn't have to. What's your position on it?
    Mr. Jackson. I don't think we need it. Their charter 
mandates--
    Mr. Frank. No, you're quite wrong about that. Their charter 
does not mandate that they make grants for people who are in 
low and very low income. Their charter mandates and we have 
increased their lending activity should not just be at the high 
end, but nothing in the charter mandates grants. And if you 
think that Mr. Secretary, you better go re-read the charter.
    The charter does not mandate a grant program for the 
construction of affordable housing. Where in the charter is 
that?
    Mr. Jackson. No, that is not what I said, Mr. Ranking 
Member. I said that their charter mandates that they serve 
needs of low and moderate income families.
    Let me say this--
    Mr. Frank. No, excuse me, Secretary, because you're evading 
my question. What about families in the rental--in their 
mortgage, secondary mortgage business? That--we're talking 
about not low and moderate, but low and very low. And there is 
no way without this 5 percent requirement that they're going to 
achieve a significant improvement in the affordable housing 
start for the lowest income people. But I--
    Mr. Jackson. Let me say this to you, Mr. Ranking Member, 
I'm not questioning. You have the authority. You're Congress, 
not me. If you--
    Mr. Frank. I understand that, Mr. Secretary. But you're 
wasting my time when you say that. I know we have the 
authority. The question is whether you support it or don't 
support it.
    Mr. Jackson. I don't think it's necessary.
    Mr. Frank. So you don't support it?
    Mr. Jackson. No, I don't.
    Mr. Frank. Okay. I'm very disappointed in that, and I think 
it's inconsistent with your professed concern about low income 
housing.
    The other question I had was this. I know on CDBG, you 
proposed a $736 million cut, and you say that's not something 
the Administration wanted--you fully support that. You said you 
got every penny, you told the appropriators, that you asked for 
the budget. You proposed cutting back on some of the upper 
income amounts. We listed like about 70 or 80 communities. Does 
the amount you would save by your formula change equal the $736 
million you would reduce in CDBG?
    Mr. Jackson. Yes, I do.
    Mr. Frank. Would you give me that chart? Because we haven't 
seen the formula change, so I don't know how you can say that. 
But would you give us a chart that gives that?
    Mr. Jackson. Well, we'll be happy to give that to you. 
We'll be happy to submit it.
    Mr. Frank. Okay. Last point. The reduction in the amount we 
would spend from one year to the next in construction for 
housing for the elderly and housing for the disabled. Is it 
your view that those programs have not been good programs, or 
that the private market would meet the need, or that we don't 
need the housing? What's the justification for reducing by 50 
percent the amount we would spend from one year to the next to 
build housing for the elderly and housing for the disabled?
    Mr. Jackson. Because I have to make very, very difficult 
choices, and we have a Section 8 program that is absolutely 
eating at the heart of our Agency. And those programs, as 
difficult as it was, I had to make those choices.
    Mr. Frank. So you don't justify those on the grounds that 
they're bad programs? It's just there wasn't enough money 
available to you?
    Mr. Jackson. No, sir.
    Mr. Frank. Okay. I agree. Because what that shows is that 
if we weren't doing a level of tax cuts we were doing, if we 
weren't planning to send a manned mission to Mars, and we 
didn't have the war in Iraq, we wouldn't have that problem.
    I would also say I think you have exaggerated the Section 8 
issue. But you do make this point. One reason the percentage of 
the Section 8, the budget that Section 8 is increasing, 
although by our calculations, only to 54 percent from 50 
percent, not as much as you say, is that you're shrinking 
everything else.
    So the notion of this Federal budget with these tax cuts 
and this war in Iraq, etc., that we have to cut $300 million 
approximately out of housing for the disabled and the elderly, 
which you admit are good programs, because we have to make, 
quote, ``tough choices,'' unquote, the problem is that the 
tough choices that have been made, essentially is choosing to 
spend the money elsewhere, and saying ``tough'' to the people 
at HUD.
    The Chairman. Mr. Ney.
    Mr. Ney. I want to thank the gentleman. Mr. Secretary, I 
just had a few questions. One is on the manufactured housing to 
follow up on my statement when we opened up. The consensus 
committee, and I wondered how you envision the role of the 
consensus committee because--this is on manufactured housing, 
because I think a lot of people feel that the consensus 
committee, that it would be feasible for all the policy 
decisions on manufactured housing, their general applicability, 
could go through the census committee. Do you believe that, or 
do you think there's--
    Mr. Jackson. I share your concerns.
    Mr. Ney. So you do think--
    Mr. Jackson. Yes.
    Mr. Ney.--it could all go through the consensus committee?
    Mr. Jackson. Yes.
    Mr. Ney. The Federal preemption on the installation 
standards for manufactured housing, some people are arguing to 
us that the language in Section 604(d) of that 2000 Act is 
broad enough to cover installation standards. Do you have any 
thoughts on that?
    Mr. Jackson. You have me. I can't answer you right now on 
that one.
    Mr. Ney. The other thing I wanted to ask you was about--you 
will follow back up--
    Mr. Jackson. I will get that information to you.
    Mr. Ney. The other question I wanted to ask you was on 
Hurricane Katrina. We had just, in the last couple of weeks, 
found out the housing authority had gotten a Section 8 voucher, 
and they gave it, you know, obviously to some people who were 
forced to move out of there and move into Ohio. Now that family 
was already receiving--and this is something you can't know 
about. I understand that.
    Mr. Jackson. Okay.
    Mr. Ney. But in theory. The family is already receiving a 
voucher. They took one of their vouchers they had in Ohio and 
they applied it to the family. Now along the line, is that 
housing authority going to be able to capture that original 
voucher that was applied to that family in New Orleans?
    Mr. Jackson. Yes. After we go through the disaster period, 
the voucher that the person had in New Orleans will go with 
that person whether they're in Ohio, Pennsylvania, wherever 
they are, that voucher will stay with them.
    Mr. Ney. But the housing authority used one of its own. 
Does it then go through a formal process to say we used one of 
our own, can they recapture that voucher back? See, that's what 
they did.
    Mr. Jackson. Well, actually, Mr. Chairman, they shouldn't 
have used their own, because we have the Katrina fund and we 
have the disaster voucher fund. And the moment that those run 
out, they will capture their voucher from New Orleans. So the 
housing authority shouldn't have had to use those, because 
we've allocated funds to follow the family.
    Mr. Ney. Probably I'm guessing that it happened in 
September, probably happened right away, you know, they headed 
up to Ohio. So maybe everything wasn't in place yet. But they 
should probably then contact HUD, I assume?
    Mr. Jackson. Absolutely.
    Mr. Ney. I've heard this in just scattered parts, you know, 
around the country.
    Mr. Jackson. Right.
    Mr. Ney. Some housing authorities have said that. One other 
question on the Katrina situation, too. There were some 
emergency vouchers created, and I think that was FEMA money I 
believe that went over.
    Mr. Jackson. That's correct.
    Mr. Ney. Are those vouchers in addition to the vouchers 
that people already had down there, or were there any new 
vouchers created for people who didn't have vouchers before but 
were in emergency situations?
    Mr. Jackson. Actually, since the tragedy, they were Katrina 
disaster vouchers, we had an interagency agreement with FEMA to 
serve those persons who were either in public housing, on 
Sections 8, 202, or 811. And many of those persons did not have 
any means of being housed. So they used the Katrina money to 
house them. But we had not at any time shifted the vouchers 
from New Orleans to follow them at that point. And those 
vouchers are now beginning to be shifted to people who are 
coming off of the Katrina fund.
    Mr. Ney. Mm-hmm. Because I just always wonder if there was 
a future problem in the fact that there was money taken from 
FEMA to pay for, quote, ``emergency vouchers.'' And then down 
the line, all of a sudden, you know the Congresses in the 
future, of course, it's a Congressional question, but maybe 
also the Executive Branch would come back and say, well, you 
know, we put the money to FEMA, but now HUD's going to have a 
squeezed budget. In other words, I always thought that the FEMA 
money used for vouchers should always, eventually at the end of 
the day, I felt should apply to HUD, so that HUD's not 
penalized.
    Mr. Jackson. Absolutely. We will not be penalized.
    Mr. Ney. That's what I thought. One question I had on the 
new operating subsidy rule for the housing authorities. Some 
housing authorities, you know, are complaining it's 
micromanaging. For example, some of the smaller ones say that 
with this, they've given some additional amount of money, but 
they're told to hire ``X'' amount of people that in some cases 
they don't need, and they have no way out of it. Have you 
looked at or heard concerns about some of those?
    Mr. Jackson. Well, that's new to me. When we talk about the 
operating subsidy changing, we're giving great flexibility to 
the housing authorities. I can tell you when I ran three 
housing authorities, I would have loved to have had the 
flexibility. Because my position is, sitting here as Secretary, 
we do exercise too much control over the housing authorities. 
You know, Mr. Chairman, I'd love to see the expansion of the 
Move to Work Act. That is, to give housing authorities more 
latitude to run their budget. Because I think the Move to Work 
program, and it's been in a demonstration stage, has been 
absolutely wonderful. Because if the housing authorities tell 
us what they want to do and do it, I don't think we should on a 
day-to-day basis be interfering with them.
    Mr. Ney. [presiding] I have a couple of other questions 
real quick, because I want to go on generally. Stop loss. Do 
you have a comment on stop loss?
    Mr. Jackson. Stop loss is in the operating subsidy 
agreement, but it was--we agreed to do it, and it's there. And 
that was because clearly we heard the voice of Congress, but 
also we--it was only fair. We had proposed that to the 
industry, and I don't think you should backtrack once you--
    Mr. Ney. So you think stop loss is fair. Because of the 
votes, I'm going to move on to the gentlelady from California.
    Ms. Waters. Thank you very much, Mr. Chairman, thank you 
for the hearing. Thank you, Mr. Secretary, for being here. I 
come to this hearing this morning a bit disgusted, really. 
Because I am watching what is happening in this country to poor 
people, and we should all be a little bit ashamed about what 
we're not doing to assist the poor.
    I am really sick and tired of going into these 
dysfunctional housing developments, commonly referred to as 
housing projects, where people are jobless, where there's 
little being done to deal with drug prevention, where there are 
not adequate programs for the children. And on top of that, in 
cities like Los Angeles, the homeless population is growing. We 
have a great need for our nonprofits to be involved with 
providing services and supporting the city, and the President's 
budget is cutting the CDBG and striking altogether Section 108 
that could go a long way toward community development.
    In addition to that, you know, this budget attacks the 
disabled and the elderly. What are you doing? What is your 
vision for dealing with all of these programs, individuals that 
come under your mandate to help? What do you agree with? What 
do you disagree with in the President's budget? I mean, what--
what can you do to give some direction to this Administration 
about dealing with the needs of all of those poor people, poor 
working people and others who depend on the resources that come 
under the HUD budget?
    Mr. Jackson. Congresswoman, I think that's absolutely a 
fair question. But let me say that I clearly think that 
President Bush and the Administration takes my advice.
    Ms. Waters. They do?
    Mr. Jackson. And I've said--yes.
    Ms. Waters. This budget is your advice?
    Mr. Jackson. This budget is my advice.
    Ms. Waters. Well, then I'm going to stop being nice to you.
    Mr. Jackson. All right. I won't stop being nice to you.
    Ms. Waters. Yeah, you go ahead. Tell me. If this is what 
you advise the President, then you come on in here and get 
what's coming to you. Go ahead.
    [Laughter]
    Mr. Jackson. I'm prepared. Let me say this to you. I think 
the budget addresses the needs. We're in a very difficult time, 
and I have to make choices. The Section 8 budget, as I said 
before, is eating at the core of HUD's budget. I think that we 
must have the flexibility to allocate monies the way it was 
pre-1998 and stop the growth of the Section 8 program. And I 
think in stopping the growth of the Section 8 program, we can 
address other programs.
    Ms. Waters. Let me just interrupt you. I hate to do this, 
we just have such limited time. How do you stop the growth of 
the Section 8 voucher program when the need is there?
    Mr. Jackson. Well, first of all, the need is there, but the 
point is, is that many of the housing authorities are not doing 
what they should be doing by purging their rolls. Now, you 
don't have to believe this. I ran a housing--I ran three of 
them.
    Ms. Waters. Yes, you've said that a hundred times.
    Mr. Jackson. No, it's okay. And that puts me in a different 
position where I know that they might come to you and tell you 
one thing, but I know they're not doing what they should be 
doing.
    Ms. Waters. All I know is that we have a growing waiting 
list for Section 8 all over the country. There is a great need.
    Mr. Jackson. You're right about that.
    Ms. Waters. What do we do to try to meet the need of 
desperate people who have nowhere to live?
    Mr. Jackson. I'll tell you what we do is we start, if 
housing authorities will start purging their rolls and getting 
people off of Section 8 that don't belong, then we will be able 
to turn over the certificates. Second of all, if we can have a 
gradation of people being able to use the Section 8 program, it 
will flip--it will turn over much quicker.
    Ms. Waters. Do you have proof that housing authorities have 
people on Section 8 who don't belong in the program?
    Mr. Jackson. Yes. It is clear that they are, because every 
year I purge the rolls, and it was somewhere between 18 and 20 
percent of the people shouldn't have been receiving. They 
declared no income, but they all had income. And we found that. 
But there's no incentives for housing authorities to do that 
today because they get the Administration--
    Ms. Waters. Would you supply to this committee--Mr. 
Chairman, your evidence of Section 8 participants that you have 
discovered are on the rolls, who should not be on the rolls. I 
would say it should be done for every city, but I certainly 
want to see it for Los Angeles. I want to see your 
documentation for that.
    Mr. Jackson. What I said to you, Congresswoman, is that 
when I ran housing authorities, I purged the rolls. Eighteen to 
20 percent of the people who were on the rolls didn't deserve 
to be there, and I don't think that's changed. If you ask me 
have I--
    Ms. Waters. Do you have the proof of that?
    Mr. Jackson. Not today.
    Ms. Waters. Well, look. If you don't have the proof of 
that, don't--please don't tell us that the same thing is going 
on that went on when you--
    Mr. Jackson. It still is.
    Ms. Waters.--managed--but you don't have any proof.
    Mr. Jackson. It still is.
    Ms. Waters. You don't have the proof.
    Mr. Jackson. I'll tell you this. You need to go ask your 
executive director if--
    Ms. Waters. No, no, no. I'm asking you. You said--
    Mr. Jackson. I think if you asked him--
    Ms. Waters. No. You said it in this committee, and I want 
to ask you for the proof.
    Mr. Jackson. Congresswoman, I stand by it.
    Ms. Waters. Great. Provide us with the proof. Go ahead.
    Mr. Jackson. I stand by it.
    Ms. Waters. Provide us with the proof. What about Section 
108? You advised the President to cut that, too?
    Mr. Jackson. Yes, because it was highly not being used.
    Ms. Waters. Provide us with that proof also.
    Mr. Jackson. I'll be happy to--
    Ms. Waters. What about the elderly? Did you advise the 
President to cut that, too?
    Mr. Jackson. Yes I did, because the Section 8 budget is 
eating at the core of our budget, and I had to make some tough 
decisions.
    Ms. Waters. And so many how many people are left without 
support, the elderly in that program?
    Mr. Jackson. Well, at the present stage, for the Fiscal 
Year 2006 budget, we're funding 7,000 new units. And in the 
2007 budget, we're funding 3,000 additional units.
    Ms. Waters. What about the disabled? Did you advise the 
President on that, too?
    Mr. Jackson. We're funding 3,000 units.
    Ms. Waters. I beg your pardon?
    Mr. Jackson. We're funding in the 2007 budget 3,000 units, 
and we're not taking away any of the existing contracts from 
any of the 202 or 811's.
    Mr. Ney. The time has expired.
    Ms. Waters. Thank you, Mr. Chairman. I just want to make 
sure that it's in the record that I've asked for documentation 
and proof on Section 8 in the way that we discussed it, and 
particularly for Los Angeles. I want to see if the Secretary 
knows what he's talking about, okay?
    Mr. Ney. The gentlelady has requested that to be entered 
into the record.
    Mr. Jackson. That's fine with me.
    Mr. Ney. And entered into the record is fine with the 
Secretary. Mr. Baker? And it's fine with us. Thank you.
    [Laughter]
    Mr. Baker. Thank you, Mr. Chairman. Mr. Secretary, I hope 
you know something's up when I have a Secretary of HUD before 
the committee and I don't ask a question about GSE's. Secondly, 
something is up when I'm not going to mention that the LSU 
men's and women's team have made it to the Final Four. I'm not 
going to bring it up.
    The reason for my focus, of course, is the response to 
Hurricanes Rita and Katrina, and I wish to express appreciation 
for the actual and proposed CDBG funds available to the State 
for resolution. I know you are aware, but members might not be, 
that before the State can expend those funds, they must submit 
to you for approval a plan that outlines how they intend to 
utilize those important resources.
    You are probably aware that this committee passed by large 
margin a proposal H.R. 4100 some time ago that would have 
created a Federal resolution corporation to assist in the 
recovery to which the President expressed some concerns after 
its passage from committee.
    My belief is that, and I may stand to be corrected here, 
that the standards or rules or procedures by which the State 
will be judged have not yet officially been promulgated and 
made public. And the State legislature convened in regular 
session this week. So they have a clock running on them to be 
able to put together a package.
    And so this morning, I want to outline a suggested 
potential remedy and get from you a perspective as to it being 
likely or unlikely that such a plan would gain your approval at 
the end of the day. The plan would be subject to, of course, 
the Governor's support, the legislature having adopted it, and 
in essence would create at the State level a very similar 
structure to what was proposed in H.R. 4100 at the Federal 
level, in that it would be a State-chartered corporation to 
make some partial resolution with home owners as to pre-Katrina 
equity, make some partial payout of mortgage obligation to the 
lenders, would enable the restoration of large tracts of land 
to be sold back into the private market for development, would 
utilize to great extent a lot of free enterprise management 
resources, would enable the restoration of all essential 
emergency service, would enable the ability up to some dollar 
limit of restoration of small business function.
    As you know, particularly in the urban area of Orleans, we 
are a community of innumerable small business, and the likely 
recovery of those enterprises at this point is in question. 
If--it would provide also for significant environmental 
remediation. If the plan described achieved those goals, 
achieved local political acceptability, are the elements we've 
outlined within the scope of what you intend to look for? And 
if not, could you outline for me the items that you think are 
important before Louisiana can spend those funds?
    Mr. Jackson. I think, Congressman, you've addressed a 
number of the issues that are important to us. And what I said 
to the Governor and to Dr. Norman Francis, who chairs the 
committee, is to come back with a plan that addresses the needs 
of many of the things you just said; housing, making sure 
people are paid for their homes, decide how the money will be 
used in the respective communities for infrastructure. And if 
you come back with that, you all have told us to be extremely 
flexible in listening to the Governor and the Louisiana 
Recovery Commission, and we're going to do that.
    So I think that with a number of the things that you just 
said, if the Governor comes back with a plan that's addressed 
those issues, especially issues of housing and infrastructure, 
yes, we are very open to listening to that and working with 
Louisiana.
    Mr. Baker. I thank you, Mr. Secretary. I yield back my 
time, Mr. Chairman. I yield back, Mr. Chairman.
    Mr. Ney. The gentlelady from New York, Ms. Velazquez.
    Ms. Velazquez. Thank you, Mr. Chairman. Mr. Secretary, it 
has been 6 months since Katrina hit the Gulf Coast, and FEMA 
still has not issued guidelines for continued eligibility for 
rent assistance. And this is in defiance of a Congressional 
directive.
    Efforts to provide temporary trailers have been 
ineffective. They have been marked by delays. Further, 
mismanagement of the housing crisis has been seen in FEMA's 
erratic and careless effort to kick families out of motel and 
hotels on short notice and with no back-up housing options.
    Can you tell us what is the Administration's comprehensive 
plan to rebuild and restore housing in New Orleans? And can you 
outline how this plan will be implemented?
    Mr. Jackson. Congresswoman, what you just stated absolutely 
in many cases are correct. And if you look at the lesson 
learned that was just done by the Administration, it says that 
clearly we should be the agency for intermediate and long-term 
housing. But that requires you to change the Stafford Act, 
which says that FEMA has the responsibility. Once that Act is 
changed, then clearly, we take responsibility. But right now, I 
can't comment on why FEMA has not done certain things.
    Ms. Velazquez. But isn't it true that FEMA and HUD should 
be working together?
    Mr. Jackson. We are working--
    Ms. Velazquez. Putting together a plan?
    Mr. Jackson. And I don't disagree.
    Ms. Velazquez. Are you working on a plan?
    Mr. Jackson. We are working together on assisting residents 
who were in public housing on Sections 8, 202, and 811, not 
those who are not.
    Ms. Velazquez. I'm not talking about the assistance you're 
providing now, I'm talking about a comprehensive plan.
    Mr. Jackson. But the comprehensive plan can--
    Ms. Velazquez. To rebuild and restore housing.
    Mr. Jackson. We're working to rebuild, but in order for us 
to work, we're going to have--it's going to be required that we 
change the Stafford Act.
    The Stafford Act makes clear that FEMA is the housing of 
immediate resort, not us. That's your language. That's your 
bill, I mean, your Congressional mandate.
    Ms. Velazquez. So you're going to come back to us and 
you're going to ask for more money in the supplemental, and 
you're not going to provide us with a plan for us to say this 
is the right way to do?
    Mr. Jackson. I think, Congresswoman, I've tried to answer 
you honestly. It's not--
    Ms. Velazquez. Let's go to the next question.
    Mr. Jackson. Okay.
    Ms. Velazquez. Because--it's the rule and the trend here 
for you not to answer the questions. You have recently released 
new rules that will require housing authorities to convert to 
an asset-based management system or suffer financial penalties. 
I understand that HUD will punish the New York City Housing 
Authority with a 24 percent cut in the first year alone if it 
does not comply. These are understandable actions.
    However, I am troubled that HUD will withhold funding for 
up to 6 months while it checks to see if NYCHA is compliant. 
That is not fair, and to presume guilt instead of innocence. So 
will you agree to a more reasonable implementation and forbear 
cuts until HUD can accurately and definitively determine 
compliance?
    Mr. Jackson. We've already done that with the stop loss 
provided in the regulation. We've given them time to 
transition. So, I'm not sure what they're telling you, but--
    Ms. Velazquez. So you're not going to withhold any funding 
now?
    Mr. Jackson. They have time to transition. We've given them 
time. And I can't answer that question because I'm not--
    Ms. Velazquez. Well, they are taking steps and they're 
working on that.
    Mr. Jackson. But I'm not sure what you're asking. We have a 
transition period which we call the stop loss rule within the 
regulations.
    Ms. Velazquez. The proposed increase in the housing 
counseling program does not keep pace with the proposed 
increase in American Dream downpayment grants, American Dream 
downpayment is quadrupled, while housing counseling is only 
increased by 7 percent. What is HUD doing to ensure these 
families will have access to housing counseling, and that the 
counselors and programs will have the skills and resources to 
equip the families with tools they need to stay in their homes?
    Mr. Jackson. When we came first under Secretary Martinez, 
and I was Deputy Secretary then, the housing counseling program 
was $20 million. It's $45 million today, because President Bush 
believes that in order to help people in the American Dream 
Downpayment, they must know what they're getting into. So we've 
increased the counseling program multifold compared to what it 
was in 2001 when we came in. And it's serving about 600,000 
people, while before it was serving about 300,000 people. So I 
think that speaks for itself.
    Ms. Velazquez. Well, I don't think that it speaks for 
itself. I'm talking to you about an increase of 7 percent while 
you are quadrupling the grants for downpayment. So what it 
means that a lot of the people in this country are not going to 
be ready. They might be ready to purchase a home, but they'll 
not be ready to keep their homes.
    Mr. Jackson. Well, I think, Congresswoman, we've 
demonstrated our commitment, because as I said before, 2001 --
    Mr. Ney. The time has expired.
    Mr. Jackson.--it was $20 million. Today it's $45 million.
    Mr. Ney. The time has expired. The gentlelady from New 
York, Ms. Kelly.
    Ms. Kelly. Thank you, Mr. Chairman. Secretary Jackson, this 
year you proposed to reform the CDBG program by cutting it by 
more than $1.1 billion, even as the total discretionary budget 
authority and outlays increase for the Department.
    Would it be fair to say that the CDBG program is paying the 
price for HUD's inability to control costs in its core 
programs? And if not, how else can you explain that your 
budget--your budget has increased, but community development, 
senior housing and housing for the disabled all have double-
digit cuts? I think that's unacceptable. I'd like an 
explanation.
    Mr. Jackson. I will tell you, Congresswoman, it is a very 
difficult decision to make. The Section 8 program is eating at 
the core of HUD's budget. I disagree with the congresswoman who 
said that it hasn't. The case is, it's 64 percent of our budget 
now, and I have to make very difficult decisions.
    Ms. Kelly. Sir, we have to make very difficult decisions 
about funding as well. But certainly, cutting senior housing, 
housing for the disabled, and the CDBG grants, those are the 
things that put our people into housing.
    Mr. Jackson. I will say this to you, again. I have to make 
some very, very difficult decisions because Section 8 is eating 
at the core of our budget. And unless we--
    Ms. Kelly. Well, then why would you want--
    Mr. Jackson.--have flexibility rules, it's going to 
continue to do that.
    Ms. Kelly. Why would you cut your budget if you obviously 
need more money?
    Mr. Jackson. I think that clearly we can live within the 
budget. And let me say this about Community Development Block 
Grant programs. I think that if we reform the program and 
address the issues of the cities that are most in need, where 
poverty exists for economic development, we have enough money 
to do that. But if we continue the path that we're going on, 
the best example I can give you is Palm Beach doesn't need 
block grant funds. Or the city that I am from, Dallas, in many 
cases, used the block grant fund for housing inspection. That 
should be the city taking that responsibility.
    So if we use the money properly, yes, we have enough money 
to address the needs.
    Ms. Kelly. Well, you're trying to shove off your 
responsibility, I think, on having the cities pay for it rather 
than talking to us. You administer programs. In theory, you 
ought to be able to administer these programs in a way that 
will help the people that they're intended to help. What you've 
just said to me is that you are cutting--we know that you're 
cutting the budget by $1.1 billion, and yet you're simply--
you're sitting there saying, well, I have to make hard 
decisions. Why would you cut your budget if you have to make 
such hard decisions that it's falling on our seniors, falling 
on our disabled, falling on our cities who have to also provide 
housing?
    The budget you submitted for this year recommends a 26 
percent decrease in funds for senior housing. It goes from $735 
million to $545 million. I want to know if you're aware that 
the Census Bureau has reported that growth for the senior 
population is faster than any other population group. In a city 
that I represent, Beacon, New York, the small public housing 
authority there is going to see a $300 million cut; it's going 
to make a difference to the seniors there between paying their 
fuel bills and keeping the units safe and in good repair.
    These are tough choices that local small authorities have 
to make. But you're not here asking us for more money. You're 
asking us to cut your budget. That is an oxymoron in my mind. I 
don't understand that.
    Mr. Jackson. Well, let me say this to you, Congresswoman. 
It might seem as if it's an oxymoron. I think the budget 
addresses the needs that I think we should address. It's very 
difficult times, and I think I said that in my opening 
statements. We have to make very difficult decisions. But I 
stand by my position that in the 2006 budget, we have 7,000 
units. In the 2007 budget, we have 3,000 units, and we're not 
taking one contract from any of the elderly or disabled 
programs today. We're funding every one of those contracts. 
Community development, I go back to what I said to you before. 
I think that we have permitted cities to use the money for 
things that they should be doing and should continue to do. And 
I don't think we should continue to fund those. I think we 
should look to those cities. And you might have one of those 
cities in Beacon that actually needs more Community Development 
Block Grant fund and address those needs, rather than 
addressing the needs of some of the cities that don't.
    Mr. Frank. Will the gentlelady yield for 10 seconds?
    Ms. Kelly. Yes.
    Mr. Frank. Because I would just like to remind her that the 
last time we saw this same proposal for changes, as I remember, 
most of the communities in her district were going to be 
eliminated altogether.
    Ms. Kelly. That's correct. That is correct. Thank you for 
pointing that out.
    Mr. Ney. I thank the lady.
    Ms. Kelly. I wanted to ask one more--one more--going back 
to reclaiming my time--you said that you would look into the 
high energy costs on public housing. Did you look into it?
    Mr. Jackson. Yes I did.
    Ms. Kelly. And what are we talking about here with regard 
to high energy prices?
    Mr. Jackson. Last year we allocated energy monies, and I 
think that clearly most housing authorities can address the 
needs.
    Secondly, during this transition period of the operating 
subsidies, there are reserves in many of the housing 
authorities to address the needs. And we really feel at this 
point that there is no need to ask for any more money for that.
    Mr. Ney. Thank you, Mr. Secretary. Mr. Watt.
    Mr. Watt. Good morning, Mr. Secretary.
    Mr. Jackson. Good morning.
    Mr. Watt. I welcome you here and just have one line of 
questioning to pursue with you. I'm looking--I guess I should 
anticipate your response to all of this as these are difficult 
times and, you know. So that's the response I guess. So if 
that's going to be your response to every question, I guess I 
shouldn't even bother.
    But I'm looking at your testimony before the Senate. 
Senator Murray asked you about a cut of what she says was $1.15 
billion from CDBG. You disputed that and said it was actually 
$635 million from CDBG. But in that response, this is what you 
are quoted as saying. This is from the transcript. ``When I 
look at the block grant program''--and this is your quote--``I 
think we should zero in on those communities that have been in 
distressed conditions, that really need our help both 
economically, housing, infrastructure-wise, and gear our money 
toward those programs to help them move forward, and if they're 
moving forward, continue to help them until they come to the 
level that they don't need our help.'' Which I--was consistent 
with what you've been saying and what we've been saying about 
what the Hope Six program does.
    The thing that's troubling is, I'm having trouble 
reconciling that with no request for Hope Six funds this year, 
and I'm having even more trouble reconciling it with your 
request to rescind $99 million in Hope funds from last year. 
And I'm having trouble reconciling that recision with what you 
just told Mr. Frank, that it's Congress's decision. We ought to 
have the authority to tell you what to do. We told you what to 
do and appropriated $99 million worth of money last year for 
Hope Six.
    Now, somewhere in this I'm losing--I'm losing how to 
reconcile this, you know, so help me, please. I mean, I don't 
want to get in a shouting match with you today.
    Mr. Jackson. I refuse to get into a shouting match with 
you.
    Mr. Watt. Okay. All right.
    Mr. Jackson. Let me say this, Congressman.
    Mr. Watt. Help me reconcile those three things. You say 
that there are still distressed communities. We've been saying 
that in Hope Six. You say that Congress should tell you what to 
do. We told you what to do last year. We appropriated money for 
it. And yet you're here saying we should rescind the $99 
million we did for Hope Six last year, and we should reduce 
CDBG money this year.
    So, I mean, I just can't put that together in my head.
    Mr. Jackson. Let me say this to you, Congressman. I made 
a--
    Mr. Watt. These are difficult times.
    [Laughter]
    Mr. Jackson. No. I'm not--
    Mr. Watt. Oh, okay. All right. Okay. I'm sorry. I thought I 
was going to get it out there ahead of you.
    Mr. Jackson. No. I will try to answer your questions.
    Mr. Watt. Okay. Thank you.
    Mr. Jackson. I made a request to rescind the $100 million. 
I think when I was in the Senate, and it's been made clear to 
me here today that that request is not going to be granted, so 
we're going to send out the NOFA for the Hope Six. I still 
believe--
    Mr. Watt. Hallelujah.
    Mr. Jackson. I still believe this today, that with over $3 
billion still in the pipeline unspent, we've only had 54 
projects completed out of 235 that we have issued.
    Mr. Watt.--committed, though.
    Mr. Jackson. That is not a great track record.
    Mr. Watt. They're committed to good plans. Have you gone 
back to review the plans? I mean, you know, you can't build a 
community overnight. We've recognized that for a long time. I 
mean, you know, you can't commit one day to spend money to 
revitalize a community and have it spent the next day. It takes 
a while to build a vibrant community. You acknowledge that?
    Mr. Jackson. I agree with that, but--
    Mr. Watt. Okay.
    Mr. Jackson. Congressman, it doesn't take 8 or 10 years to 
do it. It might take 3 or 4 years to do it. But every place 
where they had not had a developer who could leverage the 
money, the monies are sitting there. And I don't want to name 
any specific cities. But the key to it is, is that in place--
and I will name these cities--places like Dallas, Atlanta, 
Charlotte, where they've had developers, they've spent their 
money and they've created beautiful communities. But that's 
only 54 out of 235.
    Mr. Watt. One of those communities I represent, and if we 
do a good job and revitalize communities and then you turn 
around and tell us that this isn't a worthy program and we got 
other communities, why don't you take the monies to where the 
people aren't responding and transfer it to the places where 
they are?
    Mr. Miller of California. [presiding] The gentleman's time 
has expired.
    Mr. Jackson. And I think that's an excellent question. We 
can't take the money. You can take the money back and tell us 
to reallocate it, but we can't take the money back once it's 
allocated.
    Mr. Miller of California. The gentleman's time has expired. 
Mr. Ryun from Kansas is recognized for 5 minutes.
    Mr. Ryun. Mr. Secretary, thank you for being here today, 
and knowing your interest in running after this meeting, you 
might want to take a run to work through some of these tensions 
and these tense moments. I want to engage you in an issue that 
I believe deserves prompt attention both by your Agency and 
this committee. Your Agency has the responsibility to institute 
proper guidelines for Federal housing the way--I think it 
should be consistent in the way Congress wanted it and intended 
it to be.
    I want to specifically address one such guideline that I 
believe is unintentionally hurting our men and women in our 
uniform that are serving, standing harm's way for us, even as 
we speak. Currently, when an individual applies for residency 
in an affordable housing property, they are considered based on 
their income requirements, as they should be. However, not all 
income is treated the same. Many civilian applicants are in 
possession of a Section 8 voucher. This voucher is not counted 
as income for the purposes of qualifying. Service members are 
not eligible for Section 8 housing, but they do receive a basic 
allowance for housing in the military, BAH. The problem is that 
HUD currently views this assistance as income, eliminating 
virtually every service member from being eligible.
    Mr. Secretary, this affordable housing program should 
benefit those who need them most, regardless of whether or not 
the applicant happens to wear a military uniform. And I'm not 
proposing anything other than an equitable treatment to the men 
and women who voluntarily put their life on the line for us.
    I firmly believe that we must act now to correct this 
inequity. A BAH held by a service member should be treated the 
same I think as a Section 8 voucher held by a civilian. And I 
know the gentleman from Texas, Mr. Green, is working with me on 
a legislative fix to this. I would actually prefer that HUD 
would correct it through some change in its regulation, but it 
doesn't appear that at this point you're willing to do that.
    In fact, my question is this. Do you believe that a 
soldier's Basic Allowance for Housing should be treated the 
same as Section 8 voucher when applying for affordable housing 
property?
    Mr. Jackson. Congressman, I'm in agreement with you. We 
don't have--but we don't have the power to change it. That's 
what we're doing with the State and Local Housing Flexibility 
Act.
    Mr. Ryun. It's my understanding you actually do have the 
power.
    Mr. Jackson. No, we do not.
    Mr. Ryun. You can actually make that language change.
    Mr. Jackson. No, we do not. That's why we are asking you to 
pass the State and Local Housing Flexibility Act, because we're 
seeing that clearly the way Section 8 is designed today, 30 
percent of median is where all of the vouchers are. Well, many 
of the personnel in the armed forces might be at 50 or might be 
at 60 percent.
    I agree with you. They should not be excluded. But at the 
present time, we don't have it. If we did, I'd do it tomorrow.
    Mr. Ryun. Well, I know we have approximately 50 bases as 
we're going through global realignment right now that are in 
the process of some enormous growth, and some of those members 
coming back will have an opportunity, if we can get this 
passed--I'm taking what you're saying is that you can't fix it 
and you would prefer that Congress would fix it?
    Mr. Jackson. Yes. And all we have to do, Congressman--
    Mr. Ryun. And that's exactly where I'd like for it to be, 
and I appreciate your statement. Thank you very much for your 
time.
    Mr. Miller of California. Ms. Carson, you're recognized for 
5 minutes. Mrs. Lee? Are you ready? We'll get Ms. Carson 
afterwards.
    Ms. Lee. Okay. Thank you, Mr. Chairman. Well, Mr. 
Secretary, I really can't say I'm glad to see you today based 
on your testimony.
    Mr. Jackson. Well, I'm pleased to see you.
    Ms. Lee. You know, it's really amazing that here you are at 
the helm of an agency that's the only agency primarily for the 
poor and the most vulnerable, and you're advising the President 
on this budget that really lacks any sense of morality. It is 
awful, Mr. Secretary, what you said today. What you proposed is 
awful, and I'm very sorry to see you in this position.
    Now let me ask you with regard to this Section 8 issue. You 
know, going back now to your testimony at the House 
Appropriations Committee, you said something like 20, 25 
percent, 30 percent of the people on Section 8 really don't 
need to be there. Okay. Yet, in response to Congresswoman 
Waters' question, you really didn't have any empirical 
evidence. It was kind of like based on your experience running 
housing authorities, based on your instincts, your gut, what 
you see out there, really kind of vague.
    But it's my understanding now--I'm looking at a report with 
regard to GAO in 2005. And they're indicating that about 2 
percent, which is $377 million, that's about what it was in net 
overpayments. Now that's 2 percent of the entire voucher 
spending. Now that's about the only factual information that 
we've been able to come up with. And so how in the world do you 
continue to justify this? I know just in my own district there 
are 7,000 people on the waiting list.
    Mr. Jackson. Right.
    Ms. Lee. And where there are bad actors at housing 
authorities that are allowing what you say to go on that's 
taking place, then you know how to deal with those individuals. 
But, you know, come on, you can't just decimate this housing 
initiative that's for the least of these, for those who don't 
have a lot of money. How do you justify that? Again--
    Mr. Jackson. First of all, I don't want to decimate any 
housing needs for those who are in need.
    Ms. Lee. Well, you're decimating a lot of housing programs 
for those in need.
    Mr. Jackson. But you asked me a question. I do not want to 
decimate housing for those that are in need. And we do--we know 
that there is a clear disparity when we check the figures on 
the zero income claim versus that of the Internal Revenue 
Service. And I will get that to the ranking member. There's a 
great disparity. And I'm not wrong on that.
    But the key becomes, what you asked me, Congresswoman, is 
that housing authorities, from my perspective, are not doing 
what they should be doing, that is, consistently purging their 
rolls--
    Ms. Lee. Well, Mr. Secretary, if you know where these 
housing authorities are, they're three people, four people, ten 
people, you know how to deal with that.
    Mr. Jackson. But I can't deal with that Congresswoman. 
That's their right.
    Ms. Lee. Oh, Mr. Secretary, come on.
    Mr. Jackson. No, I cannot.
    Ms. Lee. What are you going to do, just throw people out on 
the streets? You're not going to allow for the--I mean this 
budget is--that's what you're doing with this budget.
    Mr. Jackson. No, we're not.
    Ms. Lee. Yes, you are.
    Mr. Jackson. No, we're not.
    Ms. Lee. Mr. Chairman--Mr. Secretary--Section 8, when you 
look at what you're doing with Section 8 alone, you're throwing 
people out on the streets.
    Mr. Jackson. No, we're not. We're not. I mean, we increased 
Section 8 in this budget by $1.1 billion. And it keeps eating 
at the heart of our budget. But no one--but no one is coming of 
the rolls pre-1998.
    Ms. Lee. But people--7,000 people just in my own district 
need it.
    Mr. Jackson. I believe that, Congresswoman.
    Ms. Lee. People all over the country need it.
    Mr. Jackson. But then your housing authority should be 
doing their job.
    Ms. Lee. They're doing their job, like the majority of 
housing authorities--
    Mr. Jackson. I seriously doubt--
    Ms. Lee.--are doing.
    Mr. Jackson. I seriously doubt that. I seriously doubt 
that.
    Ms. Lee. Mr. Secretary, how do you say you seriously doubt 
that when we know--
    Mr. Jackson. Because I was in this industry and I know the 
caliber of people who are running these housing authorities.
    Ms. Lee. When were you in this industry? A couple of years 
ago, 3 or 4 years ago?
    Mr. Jackson. I was in it for about 10 years, and I know the 
caliber of people who are running it.
    Ms. Lee. And what about the caliber of people? What's 
happening there? How do you see their caliber?
    Mr. Jackson. Well, I don't think they're doing their job, 
many of them.
    Ms. Lee. You don't think they're doing their job?
    Mr. Jackson. No I don't.
    Ms. Lee. And so people who need, the 7,000 people, the 
10,000 people, the people who need Section 8 vouchers are being 
penalized because these housing authority people who you know 
aren't doing their job because of their caliber?
    Mr. Jackson. Well, I think that--
    Ms. Lee. That's a doggone shame, Mr. Secretary, and I don't 
see how you can tell the President that he needs to do this. It 
is about as awful and as low as any agency can get.
    On discrimination, when you look at what's happening now, 
the National Fair Housing Alliance, they looked at housing 
discrimination. Sixty-six percent against African Americans. 
Housing discrimination. Look at what's happening in the Gulf 
region. You know, what are you all doing about that?
    Mr. Jackson. The moment we thought that there was 
discrimination going on, we had a team of people from Fair 
Housing and Equal Opportunity go down, and it was a team of 
seven people, and they're still there. And anytime we find 
discrimination, it's not--we can't tolerate that, period. And 
we've been working tirelessly to make sure that people are not 
discriminated against, not only in the Gulf Coast, but for 
those people who went to other places, because we've had 
other--
    Mr. Miller of California. The gentlelady's time has 
expired.
    Mr. Jackson.--we've had other incidents in other--
    Ms. Lee. Well, you're not asking for more money in this 
budget for housing discrimination?
    Mr. Jackson. We have money in the budget for housing 
discrimination.
    Ms. Lee. More money?
    Mr. Jackson. No.
    Ms. Lee. More money?
    Mr. Miller of California. The gentlelady's time has 
expired. Secretary Jackson, welcome. Have you turned into a 
racist since we talked last time? I'm kind of shocked at you, 
sir.
    Mr. Jackson. Well, I think I woke up this morning black and 
bald-headed, and I'm still black and bald-headed.
    Mr. Miller of California. You look like the same man I 
respected last year when we talked about turning more authority 
over to public housing agencies, and we got beat to death, as 
you recall, because nobody trusted them.
    Mr. Jackson. Right.
    Mr. Miller of California. Now all of a sudden they're 
walking on clouds and nobody trusts you. So it's amazing how 
this has changed. But if you look back in about 1998, only 36 
percent of your budget went to Section 8. Now you have, what, 
53 percent?
    Mr. Jackson. About 63 percent.
    Mr. Miller of California. Sixty-three now? I'm sorry. I'm 
going to correct my numbers. Fifty-three to 63. The goal we 
have is moving people out of Section 8 into their own homes. 
Therefore, opening up more Section 8 housing for the people who 
need it out there, nobody better than housing authorities to do 
that.
    Mr. Jackson. That's correct.
    Mr. Miller of California. And the best way to do it is to 
turn more authority over to housing authorities as we sit here 
with a panel of housing authority agencies saying trust us, we 
can do it. We can work with you if you give us the authority, 
but nobody wanted to give them the authority.
    Mr. Jackson. Let me say this to you, Congressman, that's an 
excellent point. They've been asking for authority to be able 
to do what they think is best with the authorities. We have 30 
agencies in the country to date because of the move to work 
legislation that was passed and the demonstration program.
    Here we are trying to give them more authority, and they're 
saying, in the process of giving them more authority, we're 
putting on more restrictions. To me, that is the oxymoron.
    Mr. Miller of California. They're guidelines. They're 
guidelines. These are the guidelines you must work within, and 
you have the authority to do your job. But I've attended 
numerous events with you with housing agencies begging you for 
the authority to do their job, to have discretion to determine 
how to get people into government housing and get them out of 
government housing, thereby opening up the whole process. 
You've worked with them talking about new voucher programs, 
using the money for downpayment assistance. Would you respond 
to some of that, please?
    Mr. Jackson. Well--
    Mr. Crowley. Mr. Chairman? Mr. Chairman, would you yield 
for a moment? Is it possible to have the first part of your 
question--
    Mr. Miller of California. I'll be happy to let you talk 
when it's your turn, but right now--
    Mr. Crowley. I'd like to hear the first part of your 
question.
    Mr. Miller of California.--Mr. Jackson. We're having a good 
dialogue here, so I'm very happy--
    Mr. Crowley. For purposes of objecting to your question--
    Mr. Miller of California. I resume the point of order that 
it's my time, not yours, so I ask you to turn the microphone 
off.
    Mr. Crowley.--the chairman's words be taken down.
    Mr. Miller of California. Well, he can take my words down, 
but I'll let you speak when it's your turn, please.
    Ms. Waters. Unanimous consent--Mr. Chairman? Mr. Chairman?
    Mr. Miller of California. Yes.
    Ms. Waters. I request unanimous consent to ask you why you 
asked Mr. Secretary if he had turned into a racist? Is that 
what your question was?
    Mr. Miller of California. Certainly.
    Ms. Waters. Is that what your question was?
    Mr. Miller of California. I was responding to the comment 
that he is a racist. And I said have you turned into one since 
I last saw you?
    Ms. Waters. Why did you ask that question?
    Mr. Miller of California. It was kind of a rhetorical 
comment that I thought was kind of funny.
    Ms. Waters. Mr. Chairman, nobody's been discussing race 
here this morning. Why did you ask that question?
    Mr. Miller of California. Well, Ms. Lee, you asked him if 
he's a racist.
    Ms. Waters. Mr. Chairman--
    Mr. Miller of California. You were laughing at the comment.
    Ms. Waters.--I ask for unanimous consent, please, sir.
    Mr. Miller of California. Yes.
    Ms. Lee. I asked the Secretary with regard to housing 
discrimination and their fair housing compliance efforts and if 
in fact there were any additional funds that he requested to 
enforce fair housing.
    Mr. Miller of California. Let's move on. Let's move on with 
the conversation.
    Ms. Waters. No, let's just stop this committee right now, 
Mr. Chairman. You interjected race into this discussion, and I 
want to know why, and all of us want to know why. Why did you 
do that?
    Mr. Miller of California. Because of the comments made 
against Mr. Jackson. I know him to be a fair, above-board 
individual.
    Mr. Cleaver. Mr. Chairman, may I inquire--may I inquire, 
Mr. Chairman? Mr. Chairman, may I inquire? Mr. Chairman?
    Mr. Miller of California. We're going to move on, and 
you'll be recognized in a moment. Mr. Jackson and I are 
personal friends. I know him to be a fine man, and I know him 
to be an honorable man, and my comments were based on that. But 
would you continue with your response to the issue in Section 
8?
    Mr. Jackson. I think that unless we stifle--
    Ms. Waters. Mr. Cleaver, don't leave.
    Mr. Miller of California. Mr. Jackson, you may continue.
    Ms. Waters. We'll deal with it.
    Mr. Miller of California. Please turn the microphones off.
    Mr. Jackson. Unless we--unless we stop the growth of the 
Section 8 program in its present form, it's going to eat at the 
heart of all of HUD's budget.
    Mr. Miller of California. I agree. And I think that it's 
very important that people who are in need, as the 
Congresswoman said, from California, get the vouchers. If you--
pre-1998, Mr. Chairman, people spent about three-and-a-half 
years on a voucher.
    Mr. Jackson. Today they're spending about 8 years on a 
voucher. And that means that those persons who the 
Congresswoman alluded to a few minutes ago--our budget has 
increased from 42 percent up to 63 percent, but we're not 
serving any more people. The budget has gone, mushroomed out of 
control.
    Mr. Miller of California. Thank you, sir. I'll recognize 
Mr. Carson. Ms. Carson? You're recognized for 5 minutes, Ms. 
Carson. You can turn the microphone on, ma'am.
    Ms. Carson. Welcome, Mr. Secretary.
    Mr. Jackson. Thank you.
    Ms. Carson. I'm Julia Carson from Indianapolis, Indiana. 
The Indianapolis housing authority has a special unit called 
the Office of Special Investigations. It helps root out fraud, 
corruption, and misuse of Federal funds. This unit has 
prevented over $1 million of Federal funds going to fraudulent 
schemes, and has found and arrested over 180 people who have 
stolen Federal funds.
    However, this special unit does not receive nearly enough 
funding. Last year, it received a grant of $42,000, but more 
realistically needs close to $400,000 a year to continue its 
great success.
    In your testimony to the Appropriations Committee earlier 
this year--earlier this month, you claimed that housing 
authorities do not do enough to check on where or who the 
Federal dollars are going to, supporting an inspector corps. 
OSI basically acts as this type of corps you spoke of. However, 
the OSI in Indianapolis is underfunded. If you support a way 
for public housing authorities to investigate and stop fraud, 
as you claim to have done in the past, do you plan on finding a 
way to fund an investigatory division in public housing 
authorities?
    In your testimony to the--I'm just going to run through 
these quickly. You can answer them. In your testimony to the 
Appropriations Committee earlier this month, you stated that 
you support the idea that would allow housing vouchers to go to 
families that make up 60 percent of the local median income, 
thus eliminating or making it very hard for the extremely lower 
income families to benefit from a housing voucher.
    According to the National Committee for Lower Income 
Housing in the City of Indianapolis, in order for a person who 
makes minimum wage, which is $5.15 an hour, they'd have to work 
2.5 jobs, 100 hours a week, to afford a two-bedroom apartment 
at $673 a month. Can you explain to me how you would justify 
removing that person who is working two minimum wage jobs from 
the housing voucher program, or even removing a person who is 
working for the median income hourly wage, which is $12.94 an 
hour in one job, going to be removed from the housing voucher 
program?
    And finally, the brownfields redevelopment program is a 
vital program in this country. And in my district in 
Indianapolis, Indiana, however, the Administration feels that 
the program is not necessary, because CDBG funds can be used 
for such projects.
    Can you explain to the committee why the Administration 
completely eliminates a project and then underfunds the 
program, CDBG, that's supposed to support brownfields 
redevelopment?
    The budget being proposed eliminates Section 4 capacity 
building programs, a program that supports a public-private 
partnership in order to revitalize communities by stimulating 
private investment. GAO study cites the program's success in 
783 cities and in 990 counties. It's been proven to work, yet 
the Administration is eliminating it. Mr. Secretary, please 
provide some insight as to why the Administration would end a 
program that is a proven success in redevelopment and spurring 
private investments in affordable housing markets.
    Mr. Jackson. Congresswoman, first of all, I applaud 
Indianapolis if they are doing what you said by inspections. 
But that should be an intrinsic part of their budget already, 
as it's an intrinsic part of all housing authorities' budgets 
to make sure that they have an inspector corps to make--to 
purge the list to make sure only the people who should be on 
the program are on the program.
    Secondly, I do believe that the Community Development Block 
Grant program should be targeted to those communities, as I 
said earlier, that are most in need. An example, maybe 33 years 
ago when the program was created, Palm Beach needed funds. I 
don't think Palm Beach needs funds today. Or maybe Dallas 
needed certain funds for housing inspectors. But I think that's 
something that the city of Dallas should take care of itself. 
It should not be based on Community Development Block Grant 
programs. They should be used to create housing infrastructure 
and economic development.
    Mr. Miller of California. The gentlelady's time has 
expired.
    Mr. Jackson. So I do believe that clearly we can target the 
money to those cities most in need.
    Mr. Miller of California. Mr. Hensarling, you're recognized 
for 5 minutes.
    Mr. Hensarling. Thank you, Mr. Chairman. Mr. Secretary, let 
me be one of the few to both welcome you and actually mean it. 
Apparently there's at least two of us here. If I did my 
homework correctly, is it true that under President Bush's 
leadership and yours that we now have historic high rates of 
home ownership in our country?
    Mr. Jackson. It is true. Not only just high home ownership 
rates, we have the highest ever for minority populations, 
specifically Hispanic and Black Americans.
    Mr. Hensarling. So if you're in the housing mission 
business and you head up HUD, I would think perhaps one of the 
most important milestones you could achieve is a historic rate 
of home ownership in our country. It sounds as if you have 
achieved that, and I want to be one to congratulate you for 
that achievement.
    And I know that it is not necessarily within your 
responsibility, but since we passed President Bush's economic 
growth program, over 5 million new jobs have been created in 
this economy. So there are millions who have gone from welfare 
checks to paychecks. And there seem to be some in this 
committee who believe that the only housing that ever takes 
place in America is that with a government check. Isn't a 
paycheck a better way? Isn't that a better housing program?
    Mr. Jackson. I think so. And as I've said before, and I'm 
on record, that if you live in public housing or have a Section 
8 voucher and you're physically capable of working, you should 
be working. And we have a lot of people living in public 
housing and on Section 8 vouchers who are physically able to 
work who are not working. And I believe they should be working. 
And I don't back off of that.
    Mr. Hensarling. Mr. Secretary, there's been a consistent 
theme here among some, and it's not a four-letter word, a 
three-letter word, cut. As I look at the OMB historic tables 
for housing functions, since President Bush became president, 
it appears that housing certificate and rental assistance is up 
39 percent, public housing operating fund up 14 percent. This 
is still the full--the last full budget year. Home investment 
partnership program up 21 percent. Homeless assistance grants 
up 33 percent. Housing opportunities for persons with AIDS up 
16 percent. In total, it appears that we've gone from roughly 
30 billion to roughly 38 billion, a 26 percent increase in 
housing assistance, not all of which is under HUD. But that is 
at least two-and-a-half times the rate of inflation. So I know 
people are entitled to their own opinions. I'm not sure they're 
entitled to their own facts. And I know certain programs have 
been decreased. But in total, it appears that under President 
Bush, if we believe that spending, Federal spending is the 
answer to all of our housing challenges, is up considerably. I 
mean, why--the question I might have is, if we had kept the 
programs as we had under President Clinton and we merely 
adjusted them for inflation, it looks like you're spending two-
and-a-half times the amount that otherwise you would have had 
to have spent.
    Mr. Jackson. Let me say this, Congressman. When we came in, 
our budget was almost $30 billion. It got up to about $36.8 
billion. This is the first time since I've been here either as 
Deputy Secretary or Secretary, because of these difficult 
budgetary times, that our budget has been decreased. In fact, 
until this year, there were only three areas that had a 
decrease since President Bush has been president. That was 
Homeland Security, Defense and HUD.
    So I think that when asked do I think that the cut in the 
community development block program if we target the cities 
most in need, we can make it work, yes, I do. So I agree with 
you. We have had a steady flow, an increase in this budget 
every year since I have been here either as Deputy Secretary or 
Secretary.
    Mr. Hensarling. I see my time is beginning to run out. Let 
me turn your attention to the hurricane relief. Congress has 
provided $11.2 billion in CDBG disaster assistance for the Gulf 
Coast recovery. Recently the House passed another $4.2 billion 
in additional CDBG funding. Can you tell me how these funds are 
being used? I know that FEMA is required to provide obligation 
reports to the Appropriations Committee. Does HUD make similar 
information available on who's receiving these funds, how are 
these funds being used?
    Mr. Jackson. Absolutely. We will have to go in and audit 
all of these funds. As of today, none of the funds have been 
distributed. We've gotten the plans in from Mississippi, but we 
are awaiting the plans in from Louisiana, and I think they're 
supposed to be in very, very soon.
    Once the plans are submitted to us, we will evaluate to 
make sure--
    Mr. Miller of California. The gentleman's time has expired.
    Mr. Jackson.--that those plans address the needs that you 
all have allocated the monies for. And once that's done, we 
will begun to fund the project. But we will also do audits on a 
consistent basis to make sure the money is spent according to 
what you said.
    Mr. Hensarling. Thank you.
    Mr. Miller of California. Secretary Jackson, we've talked 
in the past about FHA multi-family mortgage and increasing the 
amounts allowed. But in the new proposal I see that we're also 
talking about doubling mortgage insurance premiums. And in the 
past, FHA has always made money for the Federal Government. 
Don't you think that's a disincentive to people using the 
program?
    Mr. Jackson. No, I really don't. I think that we had it 
in--we've always had that part of our business in private 
hands. We're bringing it in house. But I don't think it's going 
to hurt the program.
    Mr. Miller of California. It won't--
    Mr. Jackson. No I don't. Not if we pass--give us the 
flexibility to be able to go out and deal with that middle 
market group of people who are now in the subprime market and 
make them offers.
    Mr. Miller of California. Okay. Great. Mr. Moore is 
recognized.
    Ms. Waters. Will the gentleman yield for a second?
    Mr. Miller of California. Mr. Moore yields time.
    Ms. Waters. Not on his time, because the Secretary said the 
budget is $36.8 billion?
    Mr. Jackson. It's $33.6 billion.
    Ms. Waters. That's different than what you said.
    Mr. Jackson. I said--
    Ms. Waters. That doesn't increase--
    Mr. Jackson. No, I said it got up to, at one point it was 
up to about $36.8 billion.
    Ms. Waters. Well, your budget now is $33.6 billion?
    Mr. Jackson. That's correct.
    Ms. Waters. So that is a decrease of how much or an 
increase of how much?
    Mr. Jackson. That's a decrease of about, I think it was 
$34.2 billion last year.
    Mr. Miller of California. Mr. Moore is recognized for 5 
minutes. Mr. Moore? You're recognized.
    Mr. Moore of Kansas. Mr. Secretary, what is the total 
proposed budget cut in your Agency?
    Mr. Jackson. From last year I think it's about $600 
million.
    Mr. Moore of Kansas. I'm sorry?
    Mr. Jackson. About $600 million.
    Mr. Moore of Kansas. Six hundred million dollars. In these 
times when we're dealing with problems like Hurricane Katrina 
and other problems around our country, do you think it's 
appropriate to be making cuts in your Agency?
    Mr. Jackson. Mr. Congressman, I think you've allocated 
supplemental money to address Hurricanes Katrina, Rita, and all 
of those. So that has no effect on our Agency.
    Mr. Moore of Kansas. All right. Was there a cut or a 
proposed cut in the Administration's budget for supportive 
housing for persons with disabilities?
    Mr. Jackson. Yes. Yes, there's a reduction.
    Mr. Moore of Kansas. All right. And in fact it's about a 50 
percent reduction. Isn't that correct?
    Mr. Jackson. That's correct.
    Mr. Moore of Kansas. Is it appropriate, do you think, for 
us to be cutting back on people who really need our help the 
very most?
    Mr. Jackson. I think that in these budgetary times, it's 
very difficult, and I go back to what I said before, to the 
Congresswoman, the Section 8 budget is eating at the core of 
HUD's budget. I think that right now in 2006 we have 7,000 
units for elderly disabled in the budget. In 2007, we have 
3,000 units for elderly disabled, and we're not taking any of 
the contracts that already exist for the elderly. And I think 
it's enough to address the needs.
    Mr. Moore of Kansas. Is the aging population in this 
country growing or shrinking?
    Mr. Jackson. I think it's growing.
    Mr. Moore of Kansas. I think it is, too. And so it makes me 
concerned when we start cutting back in that area, especially 
for people with disabilities.
    Mr. Jackson. I can't say I don't share your concern, but I 
had to make some very hard budgetary decisions. And I think if 
you will work with me and help me pass the State and Local 
Housing Flexibility Act for the Section 8 program, where it 
will stop eating at the core of our budget, I'll be able to 
address many of the issues you said.
    Mr. Moore of Kansas. Mr. Secretary, what concerns me, I'm 
on the Budget Committee. I believe--I believe strongly in a 
balanced budget and fiscal responsibility. We have an $8.2 
trillion national debt the Senate just voted last--2 weeks ago 
to increase the debt limit to $9 trillion. I got seven 
grandkids, and I'm very concerned that we're putting our kids--
the grandkids in a hole so deep they'll never be able to climb 
out. But I don't think we should be balancing the budget on the 
backs of people who desperately need our help, and I don't 
think we should be doing that just so we can have bigger and 
better tax cuts. That's my concern.
    Mr. Jackson. My position is, is I don't think I'm balancing 
the budget on anyone's back. I think this budget addresses the 
needs of low and moderate income Americans.
    Mr. Moore of Kansas. Well, we're cutting back, sir, on 
people with disabilities. Right here, this program. We're 
cutting back on child support enforcement. We're cutting back 
on Medicaid for children who live in poverty. We're cutting 
back, we're imposing a veterans tax on people who want health 
care by increasing the co-pay. That disturbs me, and I--
    Mr. Jackson. Well, Congressman, my answer is that Congress 
is the authorizer and the appropriator, not HUD.
    Mr. Moore of Kansas. And I'll do my best. Thank you, sir.
    Mr. Miller of California. Mr. Neugebauer, you're recognized 
for 5 minutes.
    Mr. Neugebauer. Thank you, Mr. Chairman. Mr. Secretary, 
it's good to have you here, a fellow Texan. How about we talk 
about something besides the budget for a few minutes? First of 
all, I do want to, in reference to that, is I appreciate the 
fact that you've taken a good fiscal stand on this.
    There are tough choices. And one of the things that we do 
know is that some of these mandatory programs are eating away 
at all of our discretionary money, and this is another example 
of that.
    I had--you talked about the mortgage brokers. I've been in 
the housing business nearly 32 years in one form or fashion or 
the other, and I've watched a lot of innovation in the mortgage 
area and change during that period. But one of the things that 
FHA has not really changed a lot in some of their core 
programs, so I'm looking forward to working with you on coming 
up with some ways to make FHA more creative and innovative and 
competitive. Because as you know, your originations are down.
    But one of the issues that was brought up by the mortgage 
brokers was the fact that coming up with a program, and they're 
now I think originating over 60 percent maybe of the loans in 
America. But many of them are ineligible to originate FHA 
loans, and some of these are small brokers, that would like to 
work out a plan where they could put up bonds rather than going 
to the expense of a very expensive financial, annual financial 
audit.
    What would be your response to that? These are folks that 
originate a lot of loans. We need them on our team.
    Mr. Jackson. I would say this. They are free to come and 
discuss it with Commissioner Montgomery, and I think he would 
be very receptive to looking at new and innovative ways of 
doing things.
    In fact, as I said earlier, Mr. Congressman, that's why I'm 
really pleased that he's on the staff, because he has been 
innovative, and that's the deal that we're proposing, would 
give him flexibility so we could address those people who are 
being addressed now in the subprime market, and if we can find 
quicker, easier ways to do it, we will work with anyone. He's 
very open, and I'm very open.
    Mr. Neugebauer. And also I would hope that some of the 
reform that we look at is that we've done a good job of 
standardization of mortgage documents, and I know that, you 
know, was pleased to hear some of the things that you're saying 
about RESPA.
    I would hope that, you know, we could make that 
documentation process and origination process really very 
similar across ways that are already accepted by the 
marketplace. I think that ought to be a part of that.
    Mr. Jackson. I think that the process we had before and 
we're trying to negate at this point was extremely cumbersome. 
And I think that's why a lot of persons didn't want to deal 
with, or brokers didn't want to deal with HUD. And we accept 
that full responsibility. And again, Brian is working with the 
industry to try to change that. Because if we're going to be 
competitive in the market, we've got to be very flexible.
    Mr. Neugebauer. And then finally, and I'll yield back the 
balance of my time, but I also want to thank you. I was here 
last year when you came and talked about RESPA, and I had some 
concerns about that process. I felt like that train was loaded 
up with nobody but was headed down the path, and I appreciate 
the fact that you stopped that process, brought the industry 
into--and listened to them, and I'm looking forward obviously 
to seeing what the final product of that is.
    But that's what I think government's about. We ought to be 
partners and not regulators. And I think the fact that you're 
trying to forge partnerships is--you are to be commended for 
that, and I appreciate that.
    Mr. Jackson. Thank you very much, Congressman.
    Mr. Neugebauer. I yield back the balance of my time.
    Mr. Miller of California. Mr. Hinojosa, you're recognized 
for 5 minutes.
    Mr. Hinojosa. Thank you, Mr. Chairman. I want to say 
welcome, Mr. Secretary. I am glad that we're having this 
hearing. I also wish to express my ire in what you had to say 
in your testimony about HUD's budget for 2007. Mr. Secretary, I 
want to thank you for working with me in the past on RESPA, and 
I look forward to continuing to work with you as you move 
forward with RESPA reform, especially the yield spread premium. 
I want to work with you to find ways to enable mortgage brokers 
to provide loans at lower rates than the current system allows. 
That is very important to my Congressional district.
    I want to note that I will submit questions in writing to 
you, Mr. Secretary, and the committee, for the hearing record 
on such subjects as the recommendations I recently received 
that might lower mortgage rates to the low income, especially 
to minorities in South Texas.
    The proposal would allow the mortgage brokers to access the 
FHA loan program and employ surety bonds to reduce the rates 
they charge. Mr. Secretary, I have in my hands several 
important and critical letters from constituents. All these 
letters indicate that my constituents aren't happy with HUD's 
budget propsals, particularly cuts to CDBG. I've had to write 
or co-sign and send to my colleagues on the Appropriations and 
Budget Committee these many letters requesting that they 
counter the ill-conceived, poorly crafted, and in places, 
hollow budget that you, Mr. Secretary submitted to Congress. 
Chairman Miller, I ask, respectfully ask that these letters be 
included in the record.
    Mr. Miller of California. Without objection, so ordered.
    Mr. Hinojosa. They request that the appropriators level 
fund the USDA Section 515 rural rental housing program at its 
fiscal year appropriation of $99 million in one of the letters.
    Another is a letter from the entire Texas delegation, both 
sides of the aisle, expressing dissatisfaction with HUD's 
allocation of the CDBG funds to Texas for Hurricanes Rita and 
Katrina. The first one is signed by Senator Kay Bailey 
Hutchison and Senator John Cornyn, in addition to the entire 
Texas Delegation in the House.
    Mr. Secretary, I want to emphasize that the proposed budget 
would harm public housing authorities. It would eliminate the 
Housing Assistance Council program. It would eliminate the 
Rural Housing Economic Development program. It harms the 
program for National Council of La Raza, championed by the 
Congressional Hispanic Caucus members.
    And the most egregious proposal is the reduction in funding 
for the Community Development Block Grant that so many 
communities across the country rely on for funding. Numerous 
constituents have come to visit me in my office to express 
their concerns about CDBG reductions. They have asked me to 
express to you their anger that you would attempt to cut CDBG 
funds and pit the CDBG program against others for funding. I 
want to note that I have co-signed many letters to ensure that 
the programs are funded at an adequate and appropriate level.
    Mr. Secretary, as the chairman of the Congressional Rural 
Housing Caucus, I can't believe that you, as our Secretary of 
HUD, would launch an all-out attack on rural America by 
proposing to zero out housing programs and grants that benefit 
those areas and the people in them, particularly the low income 
and minorities, including the African Americans and Hispanic 
Americans and Asian Americans.
    In conclusion, Mr. Secretary, I want to ask--I want to ask 
you that you knowing that the budget is going to harm those in 
need, as I expressed, especially the low income minorities and 
those in rural America--
    Mr. Miller of California. The gentleman's time has expired.
    Mr. Hinojosa.--which constitutes the majority of my 
district, can I count on you to change directions and 
encourages Congress to fight and restore the cuts to HUD?
    Mr. Miller of California. You can respond to the question, 
Mr. Secretary, if you want to.
    Mr. Jackson. Congressman, as I said before, I think that we 
have an appropriate budget level to address the needs of those 
low and moderate income people in the country.
    Mr. Miller of California. Mr. Bachus, you're recognized for 
5 minutes.
    Mr. Bachus. Thank you. Mr. Chairman--I appreciate that. Mr. 
Secretary, last week in Tuesday's Washington Post I saw a very 
nice article about you, and the fact that you're mentoring 
college students, and I appreciate that.
    Mr. Jackson. Thank you very much.
    Mr. Bachus. It was a good personal insight into what kind 
of person you are. It also said in that article that you were 
very successful in heading public housing for the city of St. 
Louis. Washington hired you because you had done such a good 
job, and then Dallas hired you because you had done such a good 
job in Washington.
    And your record has been that you come in and you do things 
more effectively.
    Mr. Jackson. I try.
    Mr. Bachus. And that you get results. And we've heard a lot 
about cuts in this program or that program. I think what we've 
not heard today that's part of the true story is there are 
several programs that you've instituted that are working 
phenomenally well and have resulted in tremendous increases of 
home ownership for fewer dollars.
    One such program is the prison reentry program. We have 
over a half million prisoners leaving prison every year, and 
the prison reentry program is a success in decreasing the 
number of ex-prisoners going back into our prisons, and 
instead, getting jobs and actually getting into homes.
    Let me ask you, and you can answer this as a result of your 
experiences, or let me give you mine. I don't know how many of 
the members have owned Section 8 housing, but I actually own 
several of them. And I always wondered why my tenants, who were 
paying their rent every month, didn't contact me and say that 
they want to buy the house. I've never had one do that.
    And I finally wrote them. I decided I would just give them 
an opportunity to do that. I almost felt guilty getting, you 
know, rent every month. And about three of them responded, but 
I talked to all of them, and they basically said that they 
don't know how to do it.
    Mr. Jackson. That's right.
    Mr. Bachus. Which shocked me. Almost every one of them 
said, ``I want to, but I don't know how to do it.'' One of them 
had gone and talked to somebody who said that it was going to 
cost all this money.
    You have a counseling program that has resulted in a lot of 
Americans owning homes, part of the total picture of a record 
number of minorities and others owning their homes. And I know 
with me, they received counseling. I referred them to 
counseling, and five of them bought those homes.
    But would you talk about some of the programs that have 
been a success?
    Mr. Jackson. Let me say this to you, Congressman. When we 
came into office, we allocated about $7 million for housing 
counseling. When the President made the declaration in Atlanta 
in June of 2002 that he wanted to close the home ownership gap 
that existed between whites and minorities, specifically blacks 
and Hispanics, and wanted to increase home ownership by 5.5 
million new black and Hispanic home owners by 2010, one of the 
things that I advised him on is that if we're going to do that, 
we must have more money for housing counseling.
    So we went from $10 million to $45 million. We went from 
serving about 20 million people--I mean, about 300,000 to 
600,000 a year. So in that process, we said, if you're going to 
own a home, we're going to tell you what to expect so you won't 
lose that home. We don't want to put you in a home and then you 
lose it.
    And we've been very successful. Today we've launched 2.6 
million new minority home owners. And many of these people are 
still in their homes. But many of them didn't have a clue, like 
Pearl Cardaden, who was a lady in Philadelphia. They had told 
her she would never own a home. But when she went through our 
counseling program with her kids, she now owns a home, and we 
check periodically on Pearl, and she is doing very well with 
the home ownership. But it took us about 9 months to get her 
ready to go in and be prepared to buy a home.
    I think that's very important. I will say this to you, too, 
Congressman. I've never seen anybody who wanted to stay in 
public housing on a Section 8 voucher. Whenever you talk to 
people, they want something better. And my perspective is, is 
to try to give them something better. But if they have no 
incentives to get anything better, then they're going to accept 
what they have.
    And I guess I'm concerned because a lot of times when I 
talk to people, they look at low income people as an object, 
something to be very paternalistic and patronizing to.
    Mr. Miller of California. The gentleman's time has expired.
    Mr. Jackson. I see low income people as human beings with 
the same sense of worth as me, who should be given an 
opportunity to do better.
    Mr. Bachus. I would just like to say that I appreciate the 
fact that we have a Secretary who sees people out there and 
families and wants them--doesn't want to keep them in these 
programs if, you know, when they can own a home and reach 
financial security. And I appreciate the work you've done.
    Mr. Jackson. Thank you very much.
    Mr. Miller of California. Just to remind the committee, we 
have votes in approximately 15 minutes. So if we can move 
forward. Mr. Crowley, you're acknowledged for 5 minutes.
    Mr. Crowley. Thank you, Mr. Chairman. Mr. Secretary, I 
welcome you as well.
    Mr. Jackson. Thank you.
    Mr. Crowley. And I welcome you here to grill you as well, 
because that's part of the job we have--
    Mr. Jackson. I understand.
    Mr. Crowley. So, this is not personal. But let me just say, 
I want to follow up on Ms. Velazquez's questions regarding 
asset based management. I understand from the New York City 
Housing Authority that HUD will begin withholding funds, a 
punishment, of the $30 million, if NYCHA, starting in January 
2007, if they do not comply with your asset based plan by 
January of 2007. But HUD will not actually approve of NYCHA's 
assets-based plan until 6 months later, June of 2007, after 
penalties are slated to begin.
    My question is, would you pledge to hold off making any 
cuts until HUD actually approves of each PHA's asset-based 
conversion plan, and if a PHA fails, would you then give them 
an opportunity, a window of a few months to revise their 
conversion plan before cuts actually begin?
    Mr. Jackson. Let me say this, Congressman, I am willing to 
work with them to make sure they go to the asset-based model. 
I'm not out, and I mean this sincerely, to hurt any housing 
authority, because I know it's very difficult to run housing 
authorities. So we're going to work with NYCHA. We're going to 
work with every housing authority to make sure they need. I 
believe as long as they make a good faith effort, and the 
effort's in good faith, we're going to work with them.
    Mr. Crowley. Thank you. I appreciate that answer. I had 
another question, but I'm going to in a moment yield to the 
gentlelady from California. Before I do that, this is a very 
sensitive discussion and topic we're having today, a very 
serious one, and that is of housing.
    And much of this--there's an underlying sense of race in 
terms of separation of the quality of housing in this country 
to begin with. And I appreciate the chairman when he said that 
he meant this in a humorous way. But I don't think injecting 
race even in a humorous way is productive here in this 
committee. And it took me a while to understand what the 
questioning was, because I was, quite frankly, stunned when the 
question was first asked, and I did not object in time to have 
the words taken down.
    Having said that, what my mother always said, if it's not 
something we can all laugh at, it ain't that funny. And I 
appreciate the attempt to inject some humor into this, and I 
always look for it to be funny, and I can laugh just like 
anyone else.
    I didn't on that question, and that's why I injected, Mr. 
Chairman. With that, I will yield the balance of my time to the 
gentlelady from California.
    Ms. Waters. Thank you.
    Mr. Jackson. Just a second. Congressman, Mr. Chairman--
    Mr. Crowley. This is not against you.
    Mr. Jackson. Let me say this to you. I think I must--
    Mr. Crowley. My time is limited. I would like the 
gentlelady to first--
    Mr. Jackson. Mr. Chairman?
    Mr. Crowley. And you'll have an opportunity--I didn't ask 
you a question.
    Ms. Waters. I thank the gentleman for yielding, and I just 
want to say to the chairman, I'm going back to this, as you 
said, humorous comment that you made. I thought it was kind of 
strange and off the wall and fairly weird. When I was talking 
with the Secretary, I wanted to make this point again, that in 
September of 2000, the National Fair Housing Alliance conducted 
an investigation of housing discrimination among Katrina 
evacuees and found that 60 percent were African American and 
Latino evacuees. And they found that about 66 percent of those 
evacuees who were African Americans were discriminated against.
    And so the question I was asking you once again had to do 
with your fair housing enforcement and why in fact given what 
we see now as an upsurge in housing discrimination, why you're 
not asking for additional funds for fair housing enforcement 
efforts.
    The chairman's--I guess, humorous, as he saw it, remarks 
weren't very humorous to me, because so many times people are 
accused of playing the race card. And when everyone is accused 
of that, I think we need to deal with it. I think it's very 
unfortunate, because I don't think this discussion with regard 
to the poor, with regard to those who need HUD's assistance, 
has been addressed in a way that warranted that type of humor.
    And so, thank you, Mr. Crowley, for yielding, and I hope 
the Secretary understands what we're concerned about, and 
that's discrimination, housing discrimination, and fair housing 
efforts on behalf of your Agency. Your Agency is the only 
agency that can look out for these persons who need help.
    Mr. Jackson. And I agree with you, Congresswoman. And we're 
going to look out to make sure that there's no discrimination. 
But I would like to add this. I know Chairman Miller very well. 
I was not offended, and I took it as humor, because he has been 
extremely fair and open with me. And so I'm not disturbed at 
all.
    Ms. Waters. I know you're not disturbed, but I'm disturbed, 
because it wasn't funny.
    Mr. Miller of California. The time has expired. Mr. Tiberi 
is recognized for 5 minutes. None of my comments were meant to 
impugn anybody's integrity at all on this committee.
    Mr. Tiberi. Thank you, Mr. Chairman. Mr. Secretary, thank 
you for being here today. It's been a real honor and privilege 
to work with you and your staff. Thank you for your leadership 
in home ownership opportunities.
    Mr. Jackson. Thank you.
    Mr. Tiberi. As a former realtor, I think you've done more 
for home ownership opportunities in America than any Secretary 
in the past, and I look forward to working with you and 
Commissioner Montgomery to not only increase home ownership 
among all Americans, but also reform our FHA program to help 
the private sector as well.
    As you know, FHA's Title I program provides insurance for 
home only manufactured home transactions.
    Mr. Jackson. Right.
    Mr. Tiberi. I was a State legislator and was involved in 
that program from the State's perspective, and it truly is an 
affordable housing program. Oftentimes these home buyers can 
only afford the home and must lease the land on which the home 
sits.
    The program has fallen into disrepair, as you and your 
colleagues know. For instance, in 1992, over 30,000 
manufactured housing loans were insured under Title I, compared 
to the past 3 years when less than 2,000 manufactured housing 
loans were insured. Congressman Frank and I have introduced 
legislation, H.R. 4804, which would make statutory changes 
intended to restore the program to what it once was.
    We're both serious about the legislation and want to pass 
the legislation with the Department's help. And I'd like you to 
give the committee and us at least the assurance that you and 
the Department are committed to Title I reform and will work 
with us to make those changes this year.
    Mr. Jackson. I can assure you that we share your concerns, 
and we're going to work with you.
    Mr. Tiberi. I appreciate that, and I hope that the 
Department continues to work with us on making home ownership 
available to every American who'd like home ownership.
    Mr. Jackson. Thank you so much.
    Mr. Tiberi. Thank you for your work.
    Mr. Miller of California. Mr. Baca or Mr. Scott? Mr. Baca, 
do you yield to Mr. Scott?
    Mr. Baca. Yes, I do, right after just I make additional 
comments. I think this is--
    Mr. Miller of California. You're recognized for 5 minutes.
    Mr. Baca. Thank you very much, Mr. Chairman. This is a very 
important hearing, and I appreciate the Secretary being out 
here. As we look at a lot of our areas, like in my immediate 
area where housing becomes very important, affordable housing, 
and especially as we look at Section 8 as well as the ability 
for Section 8 vouchers to be available, and having this kind of 
hearing and having you here and to make sure that we do not 
discriminate against an individual, but provide an opportunity 
to individuals to own a home for the very first time.
    As we look at housing continues to go up, and many 
individuals within our communities, especially the Hispanic, 
African Americans and poor disadvantaged don't have the same 
kind of opportunity because they don't obtain the same kind of 
wealth, and it's important that we continue to provide an 
opportunity to own a home for the very first time.
    And I know what it's like to own a home for the very first 
time, because coming from a large family of 15 as I did, I know 
when we were able to finally have a home and have stability, 
became very important for my family and for myself in terms of 
not only my attitude and behavior within that area, and I hope 
that we can continue to have HUD provide service, especially to 
the low income individuals to make sure that they could afford 
to buy a home, whether it's through Section 8 or through the 
CDBG that's important to a lot of us.
    And I hope that you look at urban communities like San 
Bernardino or the Empire where we have everybody moving from LA 
and Orange County, because homes are a lot less, but not --
they're still not affordable for a lot of us, even though they 
say the average is $345,000, that's still a lot for someone on 
an income of maybe, you know, $10,000, $20,000 a year and you 
have two parents who are working trying to buy a home for the 
very first time. So I appreciate that.
    And I appreciate the services that you've done for our area 
too as well in the homes that have been available through 
TALECO and others for seniors to obtain a home as well.
    Mr. Jackson. Thank you very much.
    Mr. Miller of California. Secretary Jackson, you and I have 
talked about brownfields in recent years. And in the recent 
budget, that wasn't included. And I think we have a real 
opportunity for probably half a million sites in this country, 
also bringing up CDBG for other purposes. And I--what's the 
chances of getting you back in line or the Administration back 
in line on the CDBG issue as far as it applies to brownfields?
    Mr. Jackson. Mr. Chairman, I am open to any advice that you 
all give me.
    Mr. Miller of California. I think it's an important tool 
for us.
    Mr. Jackson. Right. And I think that in the present form of 
it we do the reforms of Community Development Block Grant, we 
will also be able to clearly clean up brownfields.
    Mr. Miller of California. Great. Thank you, sir. Mr. Scott, 
you're recognized for 5 minutes.
    Mr. Scott. Thank you very much, Mr. Chairman. Mr. Jackson, 
I can't begin to adequately express again my range of 
disappointment and discouragement on behalf of the American 
people in terms of the incompetence and the lack of sensitivity 
that this Administration, and particularly HUD, has towards its 
basic constituency, the very people that you are referring to 
as ``those people,'' your reference to ``my budget,'' there 
seems to be a very personalized effort here on your part.
    But let me just remind you on two important points. First 
of all, it is Congress's duty to appropriate this money. 
Second, this money that Congress is appropriating is the 
people's money. It's not yours. It's not mine. And the people 
in this country now are hurting.
    They are needing this country to respond to these hurts. 
They're hurting from Katrina. They're hurting because of an 
Administration, and most expressly, the key agency in that 
Administration being HUD, not responding as they should. There 
are families that have been devastated because of that failure. 
And instead of this Administration talking about ``my budget'' 
and these restraints and this and that, cutting aid to 
disability with housing or disabilities by 50 percent, cutting 
CDBG grants by 20 and 25 percent, cutting HUD and just trying 
to completely eliminate that is not what the American people 
want. And I'm here to tell you, they've had enough.
    And quite honestly, I've had enough. I can't wait till the 
day that in all due respect to you, I can't wait until you're 
gone, until you're away from HUD. I like you as a person. This 
is not a personal attack on you. But when you sit there and say 
what you say in the manner in which you say it, you are hurting 
an awful lot of people. You are killing the hope in a lot of 
people, seniors who need these programs.
    Now that I have said that, and I wanted to say that on 
behalf of my constituency, a constituency that is suffering 
this day with great angst because you're proposing to cut the 
CDBG, Community Development Block Grants, based on some formula 
that completely negates my district. When you talk about--
    [Interruption to the proceedings]
    Mr. Scott. When you talk about developing and changing the 
formula for Community Development Block Grants, for example, 
and you talk about emphasizing the need in the cities, you take 
out of the consideration the dramatic demographic changes in 
America.
    I represent a metropolitan district in Atlanta that is 
around Atlanta, Clayton County, Cobb County, Douglas County, 
with great needs. And these communities are highly dependent on 
their life blood for the Community Development Block Grants. So 
that formula is not a cookie cutter represents all.
    I have repeatedly begged and pleaded before this committee 
on Hope Six. Why in good faith in Atlanta and Fulton County 
Hope Six programs, which have been the best examples of 
success, why would your policy be to throw the baby out with 
the bath water? If there are specific areas, and you've pointed 
to them, question after question was asked, and you would come 
out, well, I know these people, or these are bad performing 
people in HUD. Why should the people suffer who we're targeting 
who need these programs because of some bad personnel or people 
who are not doing their jobs? Get rid of the people who are not 
doing their jobs. Or if there's some Hope Six programs that are 
not working, get rid of them, but don't punish the programs 
that are being effective.
    We're going to fight tooth and nail, and I believe there is 
strong bipartisan support on this committee and in Congress to 
make sure that we keep the Community Development Block Grants--
    Mr. Miller of California. The gentleman's time has expired.
    Mr. Scott.--and we keep the Hope Six program.
    Mr. Miller of California. I'm going to ask you to respond 
to this question in writing. We're going to give everybody 2 
minutes. I understand you have to leave. We have votes. This 
way, everybody has 2 minutes, we have time to complete our 
process here and not have to come back after the vote.
    So, Mr. Fitzpatrick, you're recognized for 2 minutes.
    Mr. Fitzpatrick. Thank you, Mr. Chairman. Mr. Secretary, 
thanks for your service to our Nation.
    Mr. Jackson. Thank you.
    Mr. Fitzpatrick. And your testimony here today. 
Congratulations also on the outstanding home ownership numbers. 
I represent a district in southeastern Pennsylvania, 
Philadelphia, Bucks County, Montgomery County, where housing 
prices are very high.
    Mr. Jackson. Right.
    Mr. Fitzpatrick. We're especially interested in the first 
time home buyer programs, housing prices being high. Once the 
home owner gets into their first home, they're pretty much 
okay. I was a county commissioner in Bucks County for 10 years, 
and I also want to put in a positive plug for the Community 
Development Block Grant program. I've written to the budget 
chairman. I'll make sure that your office gets a copy.
    We've done some great things in Pennsylvania with Community 
Development Block Grants. We appreciate the flexibility at the 
local level, especially to leverage other resources to match 
the Federal dollars and do some pretty good things. But I want 
to talk specifically on a different issue; it has to do with 
reverse mortgages.
    I introduced a bill in the House, it's a bipartisan bill 
endorsed by AARP, that would remove the volume cap on what HUD 
refers to as the home equity conversion mortgage program. So 
it's passed the House. There's a bill pending in the Senate, 
that identical bill.
    We're going to try to have a hearing up in southeastern 
Pennsylvania in mid-May. It would be great, Mr. Secretary, if 
you could find the time to either come up or have one of your 
senior staff come up and testify with regard to that bill. But 
if you could maybe give our office in response or in writing 
HUD's position on how this bill may or may not help seniors. We 
think it would be a great help for seniors and how it may 
impact the mortgage market, the second--reverse mortgage 
program.
    Mr. Jackson. Thank you. We will. And we're in agreement 
with you. I truly believe that it will help.
    Mr. Fitzpatrick. Okay.
    Mr. Jackson. And we will give you a response, though.
    Mr. Fitzpatrick. Thank you.
    Mr. Miller of California. The gentleman's time has expired. 
Mr. Davis, you're recognized for 2 minutes.
    Mr. Davis. Thank you, Mr. Chairman. Let me, since I missed 
a lot of the fun, Mr. Jackson, I'll try to get you out of here 
as quickly as I can. What I will do is just ask one question in 
these few minutes.
    This is the fourth time, as you know, that the 
Administration has wanted to do away with Hope Six. It's the 
fourth time or the fifth time the Administration has tried to 
make cuts to CDBG. We've established that. What I'm always 
curious about is, as you know, Congress had a vote last year on 
Hope Six. In fact, Ms. Harris from Florida and I sponsored an 
amendment on the floor restoring funding. The Senate followed 
suit. We had 60 Republicans vote for our amendment.
    Mr. Jackson. Right.
    Mr. Davis. You know there's been a strong bipartisan 
support for CDBG's. What's curious to me and my one question to 
you is, does the Administration make any effort to in any way 
factor in the opinion of the Republicans in Congress who 
disagree with you and the many Republican mayors around the 
country who disagree with you?
    Mr. Jackson. Of course we take into consideration. I take 
advice and--
    Mr. Davis. Do you ever follow it?
    [Laughter]
    Mr. Jackson. Sometimes.
    Mr. Davis. Sometimes? Just not on Hope Six and CDBG's?
    Mr. Jackson. No, because I think that Hope Six, out of the 
230 or so projects that we've allocated, only 54 have been 
completed in 15 years.
    Mr. Davis. I don't want you to repeat yourself. But since 
this is my last 10 seconds--
    Mr. Jackson. All right.
    Mr. Davis.--I just want to make this point. A lot of people 
on the other side of the aisle disagree with you. You know how 
rare it is to get 60 Republicans to vote with Democrats on 
anything. So I would just ask you to take note of that rare 
cosmic event around here.
    Mr. Jackson. Believe me, I take note of it.
    Mr. Miller of California. Thank you, sir. Mr. Green, you're 
recognized for 2 minutes.
    Mr. Green. Thank you, Mr. Chairman. And I thank the ranking 
member in her absence or his absence, excuse me. And I will try 
to be brief as I can. What I'd like to do is revisit something 
that Congresswoman Davis spoke about, and that is 
discrimination in housing.
    I, too, have the statistical information, and will tell you 
that I was very appreciative that you came to Houston to 
announce an initiative to fight discrimination in housing. I 
understand her passion on this issue because she and I worked 
together to add an additional $7.7 million--
    Mr. Jackson. That's correct.
    Mr. Davis.--to fight discrimination in housing, and we had 
the assistance of the ranking member. We had Congresswoman 
Waters. They were on the point to help us to get it done. And 
the passion runs deep on the issue.
    And what I'd like to do is ask a question that will give 
you an opportunity to tell us what we may do to get additional 
funding in that area, because there is so much passion. What 
can we do, given that that was--that was passed, by the way, 
with bipartisan support, that $7.7 million. What can we do to 
get additional funds in an area where it is clearly needed, the 
discrimination is clearly there?
    And by the way, for edification purposes, we're not just 
talking about racial discrimination; there are other forms of 
discrimination. What can we do to get the additional funds?
    Mr. Jackson. Congressman, Congress is the authorizer and 
the appropriator. I mean, you--if you allocate the funds, they 
will be used. But I am--I'm going to say this--I am as 
concerned as you are, as Congresswoman Waters is. I think that 
you were with me when I made the announcement.
    As a Black American sitting as the HUD Secretary, I have to 
be concerned with discrimination. I was brought up in a 
discriminatory fashion. I didn't go to white schools. I went to 
segregated schools until I got to college. I did not go to 
school with whites, Hispanics, or anyone else. So I am very 
concerned. And today, discrimination still exists in many 
places. So I am very, very concerned. And that's why I sent a 
team of people to Mississippi and to Louisiana once I found--I 
was informed that discrimination was taking place, because I 
will not tolerate that, not as long as--
    Mr. Miller of California. Mr. Cleaver, you're recognized 
for 5 minutes.
    Mr. Jackson.--as long as God gives me breath.
    Mr. Miller of California. Thank you, Mr. Secretary.
    Mr. Cleaver. Mr. Secretary, thank you. This really doesn't 
impact you. I did get quite angry earlier, Mr. Chairman, at 
your joke, and tragically, our Nation is not where we hoped to 
arrive with regard to race, and so some things at this point 
probably should not become a joke. I didn't respond to 
something a few months ago when someone made a joke about 
slavery. Mr. Watts responded to that. And so it's unfortunate. 
I don't like being there, and I don't like the--I was told when 
I was sworn in by many people how much--about the acrimony and 
the acerbic dialogue here, and I pledged never to participate 
in it. And I want at this time, I've expressed myself, I think 
Mr. Crowley was articulate enough on the issue.
    Mr. Secretary, thank you. The pin-up and the pop up was 
very good. I have it here. You did a study in 2005 on 
discrimination against persons with disabilities.
    Mr. Jackson. That's correct.
    Mr. Cleaver. And one of the findings was that there is in 
fact widespread discrimination against persons with 
disabilities. What is the follow-up of the studies, a HUD plan?
    Mr. Jackson. Yes it is. And with the new Assistant 
Secretary, she is working very hard. I wish I could tell you 
that I was surprised, but I wasn't surprised. I was surprised 
by the magnitude, but not surprised that there was 
discrimination based on disabilities. And we're doing 
everything in our power to correct that. And I have great faith 
in our Assistant Secretary for--
    Mr. Miller of California. The gentleman's time has expired. 
Ms. Wasserman-Schultz, you're recognized for 2 minutes.
    Ms. Wasserman-Schultz. Thank you, Mr. Chairman. Mr. 
Secretary, I can appreciate that your time is valuable, as is 
ours. This is a 70-member committee.
    And in the future, given the shorter tenure and less 
significant seniority on this committee of the members on the 
front row, I'd appreciate it if you would afford the time in 
your schedule to make sure that we could get through without 
having to rush our questions and not get adequate answers from 
you. So, I'm appreciative of the time limit since we have to 
vote, but I did want to add that.
    I'm from Florida, as you know. We're 62 days from the 2006 
hurricane season, and I want to follow up on what I know 
Congresswoman Velazquez asked you about is there a tangible 
that I can see and hold, plan in place, related to the upcoming 
hurricane season and the previous hurricane season in terms of 
getting people the housing that they need as a result of the 
damage and ensuring that we have fewer problems than we had in 
the previous hurricane season? And can I have it?
    Mr. Jackson. First of all, you would have to get that from 
FEMA, from Homeland Security. They're the first resort for 
this.
    Ms. Wasserman-Schultz. No, Mr. Secretary, they're 
responsible for short term. They're not responsible for long-
term housing issues.
    Mr. Jackson. They're responsible for all of the natural 
disaster that occurs in this country, not HUD.
    Ms. Wasserman-Schultz. When there are housing shortages--
    Mr. Jackson. That's not what you asked me. You asked me--
    Ms. Wasserman-Schultz.--accountability.
    Mr. Jackson. Well--
    Ms. Wasserman-Schultz. Are not working with FEMA?
    Mr. Jackson. Yes we are. But that is FEMA's responsibility 
and I'm not going to address this issue for another cabinet 
member. They're the first responders, not HUD.
    Ms. Wasserman-Schultz. So you don't have any plan? You have 
not been working with FEMA on--
    Mr. Jackson. We have been working with FEMA.
    Ms. Wasserman-Schultz. Is there a plan that I can see?
    Mr. Jackson. I say you have to talk to FEMA. I am not the 
Secretary of Homeland Security. I'm the Secretary of Housing 
and Urban Development. And that is within their purview. 
Secondly, I accommodated the committee. You rescheduled the 
meeting, not me. I was available.
    Ms. Wasserman-Schultz. I did nothing of the kind. As you 
can see, I'm--
    Mr. Miller of California. Your time has expired.
    Mr. Jackson. Then I would suggest that you understand--
    Mr. Miller of California. I'm going to recognize Mrs. 
Moore.
    Ms. Wasserman-Schultz. I don't have a lot of control over 
the meetings in this room.
    Mr. Miller of California. I'm going to turn the microphone 
over to Mrs. Pryce to continue the hearing.
    Ms. Moore of Wisconsin. Thank you, Madam Chairwoman, and 
good morning, Mr. Secretary.
    Mr. Jackson. Good morning.
    Ms. Moore of Wisconsin. My questions are very brief. I just 
want to explore for a second your notion that Section 8 really 
promotes a culture of dependency. And of course it's a $14.4 
billion program that serves about 3 million people, and of 
course the--you say that there are people who report zero 
income, and of course, the minimum wage has not been increased 
for 8 years, and it should be about $15.78. Now the home 
mortgage interest deduction that both you and I are going to 
claim on our April 15th tax return--
    Mr. Jackson. Right.
    Ms. Moore of Wisconsin.--serves about 35 million people, 
and $325 billion, which is 23 times the amount that is spent on 
the Section 8 program, I'm wondering, there's been some rumors 
floating around that perhaps the President is looking at 
cutting this program. Just yes or no? Do you support ending the 
$325 billion home mortgage interest deduction, which is not 
means tested, the richest people in America can claim it? 
You've talked about the 8 years dependency that people on 
Section 8 have, and so would that be a good way to sort of 
recoup some dollars for the treasury, and for core programs at 
HUD?
    Mr. Jackson. I'm not an economist, Congresswoman. And I 
don't see the comparison between the Section 8 program and--
    Ms. Moore of Wisconsin. The dependency on the housing 
subsidy for 3 million people. It's a housing subsidy just like 
the home mortgage interest deduction is. You don't see the 
comparison?
    Mr. Jackson. I'm sorry. I don't see the comparison.
    Ms. Moore of Wisconsin. Oh, I see. All right. Why don't we 
move on. I'm a new member, so you say that Section 8 eats at 
the core of HUD's programs, and of course people went on and on 
about the cuts in CDBG, Section 8. You've talked about your 
home ownership initiatives, but yet and still there are 
proposals to raise premiums dramatically.
    Ms. Pryce. [presiding] The gentlelady's time has expired, 
and there is a vote on, so if you could wrap up your question.
    Ms. Moore of Wisconsin. Thank you. Thank you, Ms. Chairman. 
I just want to know, what is HUD's mission?
    Mr. Jackson. HUD's mission is to provide decent, safe, and 
sanitary housing to low and moderate income people. And I'll be 
happy to get you the information on FHA raising of the limits 
so you can understand it better. I think it will not hurt us.
    Ms. Moore of Wisconsin. And Ginnie Mae, too.
    Mr. Jackson. Yes. I'll be happy to do that.
    Ms. Moore of Wisconsin. Thank you. Thank you, Madam 
Chairwoman.
    Ms. Pryce. Thank you. All right, Mr. Secretary, welcome, 
and I know you've had a long morning, and I want to personally 
thank you very much and your staff for working with me to find 
a solution to the new rule on Section 8 income eligibility for 
students that may adversely have been impacted by the low 
income disabled students ruling, or the legislation from the 
Senate. Your help is greatly appreciated. Your prompt response 
to my inquiry was terrific. We now have legislative language to 
fix this. All we need is a vehicle, but the rest of the work is 
ours to complete, so thank you.
    Mr. Jackson. Thank you.
    Ms. Pryce. I'd like to echo the concern of many of my 
colleagues regarding the proposed funding cuts to the Community 
Development Block Grant programs. CDBG is a proven program that 
delivers results everywhere, and in my home town of Columbus, 
Ohio.
    So, that noted, I also want to inquire about the Fiscal 
Year 2007 budget calls for formula changes to the program, and 
the creation of new bonus funds for communities expanding home 
ownership.
    Mr. Secretary, while I welcome the opportunity to discuss 
reform proposals that seek to improve the efficiency of the 
government programs, I just want to ask you when we might learn 
more about your proposed changes and so we can start 
determining how they'll affect our communities?
    Mr. Jackson. They should be--we finalized them. They should 
be to you all fairly soon, I would hope by the end of next 
week.
    Ms. Pryce. Great. That's wonderful. All right. Well, with 
that, Mr. Secretary, once again, my thanks.
    Mr. Jackson. Thank you.
    Ms. Pryce. The Chair notes that some members may have 
additional questions for this panel, and I'd submit those in 
writing. Without objection, the hearing record will remain open 
for 30 days to submit those written requests and to place their 
responses in the record.
    Mr. Jackson. Thank you very much, Madam Chairwoman.
    Ms. Pryce. Thank you, Mr. Secretary. This hearing is 
adjourned.
    [Whereupon, at 11:31 a.m., the committee was adjourned.]


                            A P P E N D I X



                             March 30, 2006


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