[Senate Hearing 110-]
[From the U.S. Government Publishing Office]
TRANSPORTATION AND HOUSING AND URBAN DEVELOPMENT, AND RELATED AGENCIES
APPROPRIATIONS FOR FISCAL YEAR 2008
----------
THURSDAY, MAY 3, 2007
U.S. Senate,
Subcommittee of the Committee on Appropriations,
Washington, DC.
The subcommittee met at 10 a.m., in room SD-138, Dirksen
Senate Office Building, Hon. Patty Murray (chairman) presiding.
Present: Senators Murray, Lautenberg, Bond, and Allard.
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Office of the Secretary
STATEMENT OF HON. ALPHONSO JACKSON, SECRETARY
ACCOMPANIED BY:
ORLANDO J. CABRERA, ASSISTANT SECRETARY, OFFICE OF PUBLIC AND
INDIAN HOUSING
KENNETH M. DONOHUE, INSPECTOR GENERAL
OPENING STATEMENT OF SENATOR PATTY MURRAY
Senator Murray. Good morning. This subcommittee will come
to order. I'm going to be joined by Senator Bond in just a
minute, but we have a vote in about 40 minutes, so we're going
to go ahead and get started with this hearing.
Housing is one of the most important, but least talked
about, challenges across our country today. People don't want
to talk about how close they are to losing their homes or not
being able to afford their rent. I think there's something in
our society that makes people feel like they've somehow failed
if they can't afford housing.
But with housing prices on the rise, it is a challenge
facing more and more American families. In fact, housing has
become the silent epidemic facing far too many communities
across our country.
The reach of this epidemic was reinforced, for me, last
month, when I convened a roundtable on affordable housing in
the Puget Sound region of my State. I brought together
realtors, bankers, along with representatives from public
housing agencies and transit agencies. Together, we discussed
the extraordinary financial pressures being placed on working
families in the Puget Sound, and how we might address them.
As families are forced to move away from their jobs in
order to obtain affordable housing, citizens in a great many
cities across the Nation are spending an inordinate number of
hours commuting from their neighborhood to their workplace and
back. These are hours that they can't spend with their children
and their families. These are hours when parents could be
supervising homework or watching a little league game. Instead,
they're spent crawling through punishing traffic jams.
Swedish Hospital is one of the premier medical centers in
downtown Seattle in my home State of Washington. The
recruitment director at Swedish Hospital recently told the
Seattle newspaper that more than one-half of the employees
don't actually live in Seattle proper, and it's typical for
their employees to commute for at least a full hour to a home
or a rental property they can afford.
It's not just young families seeking to own a home that
can't find affordable housing. HUD section 8 voucher recipients
struggle to find affordable rental units, and landlords that
will take vouchers. That means endless hours, often on public
transportation, just to get to and from work. As a result,
Seattle continues to rank as one of the most congested cities
in the country, and we have a great many cities facing the
identical mix of challenges across the country.
The congestion problem has gotten so troubling that our
Transportation Secretary, Mary Peters, has made funding for a
number of new congestion mitigation initiatives the cornerstone
of her 2008 budget. However, as I review Secretary Jackson's
2008 budget for the Department of Housing and Urban Development
(HUD), I do not see the same sense of urgency or importance
being devoted to the problem of affordable housing. Instead,
what I see is a budget that abdicates responsibility and
shortchanges programs that serve some of our most--neediest
citizens.
Despite the strong support by Republican and Democratic
mayors and Governors across the country, President Bush's
housing budget again proposes to slash the Community
Development Block Grant Program. This year, it's a cut of 20
percent, a reduction of almost three-quarters of $1 billion.
The President's budget fails to provide even an inflation
adjustment for the section 8 tenant-based housing assistance
program. That means that as rents rise, public housing agencies
will have to trim the ranks of their section 8 recipients,
potentially throwing some of them into homelessness.
HUD's program for housing the elderly is cut by 22 percent.
That is a reduction of $160 million, despite the fact that the
number of needy seniors continues to rise.
And HUD's program to house citizens with disabilities is
slashed by 47 percent, almost in half, a cut of almost $110
million.
Funds to ensure that public housing is maintained and
brought up to safety codes, slashed by 17 percent, $415
million.
Even programs designed to remove lead paint from low-income
housing units with children, cut by 23 percent.
And the HOPE VI program that has allowed us to tear down
some of the most dilapidated public housing and replace it with
modern mixed-income units is proposed for complete elimination.
In fact, the President wants this subcommittee to go a step
further when it comes to HOPE VI by reopening the
appropriations bill that he already signed for 2007, so we can
eliminate the funding we provided for HOPE VI for this current
fiscal year.
The President's budget for HUD is irresponsible and
unacceptable on its face, but it is all the more startling
considering his investment in housing infrastructure in Iraq.
Over the past 4 years, the President has asked American
taxpayers to spend almost $36 billion on building housing and
utilities and other necessary infrastructure in Iraq.
Unfortunately, the Special Inspector General for Iraq
Reconstruction has reported to us that a frightening percentage
of that $36 billion has been wasted or stolen. Despite these
reports, the President has sought, and received, an additional
$2 billion to rebuild Iraq in the supplemental appropriations
bill he vetoed 2 days ago.
The President sees no problem in investing up to $38
billion to rebuild the nation of Iraq, but when it comes to
rebuilding America's struggling communities through the
Community Development Block Grant Program, the President is
calling for a cut of three-quarters of $1 billion. In fact, the
President is unwilling to provide even 10 percent of what we've
invested in Iraq's reconstruction to rebuild and provide some
hope to the rundown neighborhoods right here at home.
The President's budget and supplemental request are a clear
statement of his priorities. Unfortunately, far too frequently
these priorities are out of step with the American people. As
chair of this subcommittee, I will work to put our budgets and
priorities back on track.
Earlier this year, we held a hearing with Secretary
Jackson's Federal Housing Commissioner, Brian Montgomery.
During that hearing, it became clear that at a time when we are
facing an historic level of foreclosure and a potential crisis
in the availability of loan capital for low- and middle-income
homebuyers, the Federal Housing Administration (FHA) has become
an increasingly irrelevant player in the market.
In my home State of Washington, while the FHA covered 80
percent of the home loan activity of the Washington State
Housing Finance Commission some 10 years ago, it covers only 20
percent today. Nationwide, it represents only 3 percent of
total mortgage volume.
I believe it's essential that we revive the FHA and make it
a relevant player in the market again, especially now, when we
have a great many families facing foreclosure because of the
upheaval in the subprime market. I look forward to discussing
with Secretary Jackson this morning how the FHA might develop
solutions to keep these families in their homes.
I also want to talk about how the FHA can get back to the
business of providing access to first-time homebuyers who want
to live near where they work, who want to spend time with their
families, rather than in ever-worsening traffic jams.
And, finally, I'd like to examine with the Secretary what
HUD is doing to address the housing crisis that faces the
communities that were devastated by Hurricanes Katrina and
Rita. For weeks, Americans across the country were glued to
their televisions, simply overwhelmed by the pictures of
tremendous devastation and unfathomable suffering of so many of
our fellow Americans. The images were too much to bear,
watching families without food and water, people trapped on
their roofs and searching for their loved ones. And although
the TV cameras have left the gulf coast, for far too many the
suffering continues still.
Damage estimates indicate that over 300,000 homes were
damaged or destroyed by those hurricanes, at a cost of over $67
billion. Mr. Secretary, this is arguably the biggest housing
crisis of the modern era. This subcommittee invested an
unprecedented level of resources to rebuild the housing stock
and assist in that region in their recovery. I want to hear
from you how the resources and legal authorities that we
granted HUD are being used now to improve the lives and
communities of our gulf coast residents.
With that, I will turn it over to Senator Bond for his
opening statement.
OPENING STATEMENT OF SENATOR CHRISTOPHER S. BOND
Senator Bond. Thank you very much, Madam Chair, for calling
this important hearing on the budget for fiscal year 2008 of
the Department of Housing and Urban Development.
And I welcome my old friend, Secretary Jackson, back to
this----
Secretary Jackson. Thank you.
Senator Bond. [continuing]. Subcommittee. You're playing a
very difficult hand, and this budget that the Office of
Management and Budget (OMB) has given us is not adequate in
many areas. I share the concerns raised by the chair of this
subcommittee. But since this is the Senate, and even though
it's already been said, I'm going to say, essentially, many of
the same things as she has said.
The subcommittee's already held an in-depth hearing on the
state of HUD's FHA mortgage insurance programs, where serious
concerns were raised about the FHA's challenges in meeting the
needs of new homeowners, and the implication of certain reforms
to address the FHA mortgage insurance problems.
Today's hearing should provide us insights into the
remainder of HUD's programs, including the reforms in funding
needed to ensure that our Nation's affordable housing and
community development needs are being adequately met.
Secretary Jackson has been a good friend and a strong and
committed advocate of housing. He served this administration
first as Deputy Secretary and now as HUD Secretary. Prior to
that, Secretary Jackson served as president and chief executive
officer (CEO) of the housing authority of the city of Dallas,
Texas, and as executive director of the St. Louis Housing
Authority, where I came to know and respect his good work. And
I think his past experience has contributed significantly to
his work in the very challenging structure, both legally and
bureaucratic, of HUD.
Before I discuss this budget and other matters, I would
like to express my strong appreciation for Mr. Robert Kenison,
who recently retired from HUD after 40 years of dedicated
public service as the dean of HUD lawyers. Mr. Kenison
contributed positively to almost every housing and community
development legal issue. He's known for a bright, inquisitive,
and creative mind. To say that he will be sorely missed is a
major understatement, due, not only to his legal insights, but
his contributions to the always growing body of housing and
community development law, but also for the many friends he
leaves behind at HUD, and I personally wish Bob and his family
all the best in his retirement.
Secretary Jackson. Thank you.
Senator Bond. Now, in terms of this budget, we begin the
appropriations process being hamstrung by OMB's apparent
mission to underfund most HUD programs. This is not new,
unfortunately. We have seen this in administration after
administration, and this budget request is simply a rerun of a
bad budget movie that I'm tired of watching. Frankly, it has
become predictable and frustrating because of its potential
negative impact on our most needy Americans in communities
across the Nation.
Unfortunately, nondefense discretionary shortfalls are more
problematic than in just Transportation/HUD appropriations.
This is a challenge I think Congress is recognizing, as evident
in the budget resolutions recently passed by the House and
Senate. Nevertheless, I know that Chair Murray shares these
concerns, as she's already outlined. I look forward to working
with her, the chairman--and the chairman and the ranking member
of the House Appropriations Subcommittee to fund, adequately,
the needs of HUD.
Let me highlight a few areas of concern. My first area of
concern is the HOPE VI program, which the administration,
again, proposes to zero out. The administration didn't propose
it. The past administration didn't propose it. And nobody in
the administration seems to support it. But I strongly support
HOPE VI, which Senator Mikulski, a previous partner on the VA/
HUD Appropriations Subcommittee, and I helped initiate. As the
HOPE VI program demonstrates, it has helped to rebuild and
transform blighted communities by leveraging other funding and
program commitments. This has resulted in stable and safe
communities and new homes, increased tax bases for these
communities and new job opportunities.
A second area of concern is the proposed elimination of the
Bond-Mikulski Lead Hazard Reduction Demonstration Program. It
is absolutely unforgivable that we have a significant health
threat to a whole generation of young people because of lead
based paint hazards that can be resolved fully, in particular,
this program has made substantial inroads against the hazards
of lead-based paint, which has placed many children in
situations constituting unacceptable health risks, including
diminished IQs, brain damage, and sometimes health impacts that
are even worse.
My most significant concern, however, is the Section 8
Project-based Rental Assistance Program. Frankly, I am
extremely troubled. Based on a reasonable assumption, my staff
has calculated that the budget request underfunds section 8
project renewals by almost $1.2 billion. We're not talking
about a simple rounding error here. We're talking about a major
funding gap which could impact some 176,000 affordable housing
units. I'm not here to point fingers, but I emphasize the
shortfall is unacceptable, and I expect resolution.
I recall an incident several years ago, when the HUD
Secretary at that time contacted the then-chair of the VA/HUD
Appropriations Subcommittee on the eve of the bill's markup to
inform us that HUD had underestimated section 8 funding by over
$1 billion. Let's just say that that HUD Secretary did not get
a very pleasant reception. I hope history is not repeating
itself, and that the administration plans to address this
matter in the very near future.
I'm equally troubled by the administration's proposal for
tenant-based section 8 programs. Under this proposal, the
administration proposed to lift the cap on the number of
section 8 vouchers that can be utilized by public housing
authorities.
The budget request for fiscal year 2008 for the tenant-
based section 8 program appears to rely on the fact that a
number of public housing authorities (PHA) are sitting on some
$1.3 billion in section 8 reserves. Under HUD's proposal, PHAs
with reserves would be permitted to use these funds for
vouchers in excess of their authorized level. Unfortunately,
PHAs without reserves would not appear to receive funding for
additional vouchers, regardless of need or the effectiveness of
their section 8 program. This seems both inequitable and
counter-intuitive; PHAs which have done a good job should not
be penalized but should be rewarded, assuming there is adequate
funding. This is a complex and sensitive issue, and any
decision on the use of the excess reserves will have a
significant impact on PHAs throughout the Nation.
I'll not get into questions I have about this proposal
right now. But I emphasize the fact that PHAs must be treated
fairly, and that any new vouchers, or use of vouchers, must be
implemented with criteria that is objective, balanced, and
equitable in the allocation of any new vouchers.
Other areas of concern of mine include the section 202
Elderly Housing Program, and the section 811 Housing for the
Disabled Program, which are both severely underfunded. This is
not the time to cut the development of housing for seniors and
those with disabilities. Their needs are significant, and
cutting programs for these vulnerable citizens is simply harsh.
Finally, I emphasize my strong objection to the proposed
cuts to the Community Development Block Grant Program, or CDBG,
and the elimination of the Rural Housing and Economic
Development Program. Despite criticism of the effectiveness of
CDBG, it remains a critical resource for leveraging other
public and private dollars for local affordable housing and
economic development process.
In addition to my concerns about HUD funding, I highlight
HUD's efforts in the rebuilding of the gulf coast region that
were devastated by Hurricanes Katrina, Rita, and Wilma. Despite
the negative press and criticism from some on Capitol Hill, it
appears that real progress is being made, and much of the
success is the result of funding made available under the
emergency CDBG Program, the Public Housing Program, and section
8. It's important that we understand how these funds are being
used, any mistakes that have been made, and the success
stories. This is important, because any misuse or fraud in the
use of Federal funding undermines the credibility of any future
request for Federal funds.
While I acknowledge that full recovery will take several
years and significant challenges remain, I still have optimism
that we are beginning to make some real progress in these
areas.
I'll not belabor my concerns about FHA today, which I laid
out in detail at a FHA hearing in March. I support reforming
FHA if the reforms are tied to benchmarks that measure the
success of the reforms while preventing fraud and abuse.
However, I consider proposals like zero downpayment to be a
nonstarter, because these types of products are marked by
historically high rates of default, substantial losses to FHA,
damage to creditworthiness of families in default, and a
negative impact on the community where there are large numbers
of defaults, leading to severe community problems, not just for
the families affected. FHA reform must balance the risk and
benefits of homeownership so that the interests of the
borrower, the American taxpayer, and the communities affected
are adequately protected.
Before I close, however, I want to make sure there's no
confusion by the media, by saying that I do not blame you, Mr.
Secretary, for the funding gaps in the budget request. I am
assuming that you fought hard on behalf of many of these
programs, and I will expect you to work with Senator Murray and
I throughout the appropriations process to assure that HUD
programs are adequately funded and implemented.
Further, you've not gotten the credit you deserve in some
areas of housing. I believe your most notable achievement in
housing has been in the area of homelessness. I'm proud of the
efforts to end chronic homelessness and the results we are
beginning to see across the Nation, including in my own home
State of Missouri, in St. Louis, where homelessness has
decreased by 34 percent over the past 2 years. These results
demonstrate that homelessness can be solved if properly
addressed.
Last, I credit you, Mr. Secretary, and your senior
management team, led by your Deputy Secretary, CFO, and CIO,
for the management reforms and improvements over the past
several months. For years, I and others on Capitol Hill have
railed mercilessly on the longstanding and seemingly
intractable management problems at the Department. But I give
credit where credit is due, and I believe you and your team
have made some significant progress and deserve credit for that
progress.
Despite this progress, I still believe the Department has
many challenges to overcome. Unfortunately, many of HUD's
challenges are tied to inadequate budget funding. This is a
failure that is largely the responsibility of the
administration and its fiscal year 2008 budget. And without
adequate funding of HUD programs, there cannot be true success.
Thank you very much, Senator Murray.
Senator Murray. Senator Lautenberg, do you have a
statement?
STATEMENT OF SENATOR FRANK R. LAUTENBERG
Senator Lautenberg. Thank you very much, Madam Chairman.
This subject is such an important one, Mr. Secretary. And
you have an enormous responsibility. But we're concerned about
the availability of affordable housing. When you see the
definition of what constitutes affordable housing in our State,
and with a 30-percent maximum cost for housing, the income of a
family's got to be $44,000. Well, $44,000 is in the middle-
class category. And it's very hard to be spending $3,600 a year
on rent. And, you know, I don't understand where the numbers
have come from that deal with inflation, cost of living, et
cetera, these very modest gains in the index for inflation.
They don't seem to stand up in the real world. If you look at
gasoline, if you look at other things, things that are included
in the calculations belie the fact that inflation has been so
modest, except, frankly, in wages for working people across the
country.
And, above all, we have to be certain, Mr. Secretary, that
when we award contracts for Government work, that they're done
without any bias at all, that they're done--contracts given to
the most efficient, best price that we can find in the market,
and without any hint of any other suggestions involved that
say, ``Well, we'll give it to these guys because they smile
right,'' or, ``give it to these people for other reasons.''
One of the things, in particular, that came up in your
remarks in April of last year, when you posed the question,
``Why should I reward someone who doesn't like the President,
so they can use funds to try to campaign against the President?
Logic says they don't get the contract. That's what I
believe.'' Your statement. Do you still believe that contract
awards should be--contain a political calculation when awarding
that contract?
Secretary Jackson. Are you asking me to answer that now?
Senator Murray. Senator Lautenberg, we're going to let the
Secretary make his opening statement----
Senator Lautenberg. Oh, I'm sorry.
Senator Murray [continuing]. And then we'll move to----
Senator Lautenberg. Forgive me. Okay.
Senator Murray. We'll let you ask your questions----
Senator Lautenberg. Forget I asked the question----
Senator Murray. Yes, well, we'll----
Senator Lautenberg [continuing]. Mr. Secretary.
Senator Murray [continuing]. We'll come back to our----
Senator Lautenberg. I'm sorry.
Senator Bond. He got the first question in.
Senator Lautenberg. I didn't mean to do that.
Senator Murray. All right. No problem.
We're going to go ahead and let the Secretary give his
opening statement. And, again, we have a vote very shortly, so
we would like you to----
Secretary Jackson. All right.
Senator Murray [continuing]. Keep it to 5 minutes. We do
have your written statement, so we'll make sure that all
members of the subcommittee have that. So, if you can keep it
to 5 minutes, I'd appreciate it.
Secretary Jackson. First of all, thank you very much,
chairlady, Ranking Member Bond, and other members of the
subcommittee.
PREPARED STATEMENT
What I would like to do so that we can get right to the
point is to submit my oral statement also and give you all the
opportunity, since you will have a vote, to ask questions of
me.
Senator Murray. Thank you, we will put that in the record.
[The statement follows:]
Prepared Statement of Hon. Alphonso Jackson
Chairwoman Murray, Ranking Member Bond, distinguished members of
the committee: The President's proposed fiscal year 2008 budget will
address our Nation's housing, economic, and community development
needs. HUD's $35.2 billion fiscal year 2008 budget request--an increase
of $1.6 billion more than last year's request--ensures that our
Department can build on our success in helping low-income and minority
families achieve the dream of homeownership, ensure equal opportunity
in housing, and lend a compassionate hand to Americans in need, while
using taxpayer money more wisely and reforming programs in need of
improvements. The President's fiscal year 2008 budget request will
allow the Department to build upon those successes by advancing the
core mission given to HUD by Congress.
In formulating HUD's fiscal year 2008 budget, HUD examined its
funding priorities to ensure that the resources were used for those
most in need. The fiscal year 2008 HUD budget also requests needed
reforms in multiple program areas, notably FHA, CDBG, and Public
Housing.
PROMOTING ECONOMIC AND COMMUNITY DEVELOPMENT THROUGH HOMEOWNERSHIP
The President's vision of an ownership society has been a central
theme of his administration, and correctly focuses on the reality that
ownership--and homeownership in particular--is the key to financial
independence, wealth building, and stronger, healthier communities.
Under President Bush's leadership, this administration has achieved
new records in the rate of homeownership. Today, more than 75 million
families, or nearly 70 percent of all Americans, are homeowners--the
largest number of Americans to ever own their own homes. Despite having
achieved record-level homeownership rates, minorities in America remain
less likely than non-Hispanic whites to own their homes. To close this
gap, President Bush challenged the Nation to create 5.5 million new
minority homeowners by the end of the decade, and to date 3.5 million
minority families have joined those ranks. President Bush and I are
pleased that we are making progress ahead of schedule. But we will not
rest until the goal has been fully met, and we are asking Congress to
help us do more to close the minority gap.
The President's proposed budget will help HUD to further that
mission by transforming the Federal Housing Administration (FHA) so
that it can expand homeownership opportunities for low- and moderate-
income families; spur Fannie Mae and Freddie Mac to lead the market to
create more affordable homeownership opportunities; help more of the
lowest-income Americans make downpayment and closing costs through the
HOME Investment Partnerships program (HOME) and American Dream
Downpayment Initiative (ADDI) and increase the level of housing
counseling that has been so useful in helping families prepare for
homeownership, avoid predatory lending practices, and avoid default on
their homes. Let me explain each of these areas further.
FHA MODERNIZATION
Since its inception in 1934, FHA has helped more than 34 million
Americans become homeowners. In recent years, however, FHA's outdated
statutory authority has made it difficult to keep pace with the
changing financial needs of those families who traditionally
participated in the programs. Through the Expanding American
Homeownership Act of 2006, HUD sought to provide workable solutions for
borrowers, including homebuyers who do not qualify for prime financing.
This will give borrowers more affordable and safer ways to achieve the
American Dream and reward them for having good household financial
management. The key components of the legislative proposal, which has
been reintroduced in this Congress, will: provide greater flexibility
to the current statutory 3 percent minimum downpayment, reducing a
significant barrier to homeownership; create a new, risk-based
insurance premium structure for FHA that would match the premium amount
with the credit profile of the borrower; and increase and simplify
FHA's loan limits.
Modernizing FHA will give it the tools it needs to again meet its
legislative mandate: offering hard-working, credit-worthy borrowers,
including those who cannot qualify for prime financing, the opportunity
to obtain financing on reasonable terms at a cost they can afford.
USING HOME TO HELP MORE LOW-INCOME FAMILIES OWN THEIR OWN HOMES
The HOME Investment Partnerships program is the largest Federal
block grant program specifically focused on creating affordable
housing. Since 1992, more than 600 communities have completed building
almost 762,000 affordable housing units, including more than 319,000
for new homebuyers. In addition, more than 160,000 tenants have
received direct rental assistance. The administration proposes to
increase the HOME program to $1.97 billion in 2008, $50 million over
the fiscal year 2007 request and $210 million above 2007 enacted.
For many low-income Americans, the single greatest obstacle to
homeownership is the cash requirement for downpayment and closing
costs. Within the HOME allocation, American Dream Downpayment
Initiative or ADDI funds have assisted 21,000 families to purchase
their first home--of which approximately 50 percent were minorities.
The fiscal year 2008 budget requests $50 million to continue funding
the ADDI--double the fiscal year 2007 enacted--to help provide grants
to low-income families to help purchase their first homes. Further, the
administration plans to submit re-authorization for ADDI in the coming
months to continue this effort.
SELF-HELP HOMEOWNERSHIP OPPORTUNITY PROGRAM
SHOP grants are another important program to boost homeownership
among low-to-moderate income Americans. These grants are provided to
national and regional non-profit organizations, like Habitat for
Humanity, that are experienced in providing self-help housing. The
fiscal year 2008 budget seeks $40 million for the SHOP Program. An
additional $30 million under this account is also proposed for the
National Community Development Initiative (NCDI). This funding will be
used by intermediaries--Enterprise Community Partners, Inc., and Local
Initiatives Support Corporation (LISC)--to develop the capacity and
ability of nonprofit community development corporations to undertake
community development and affordable housing projects.
COUNSELING OUR WAY TO GREATER HOMEOWNERSHIP
Housing counseling is an extremely important tool to help Americans
purchase and keep their homes. The fiscal year 2008 budget proposes $50
million for housing counseling, $5 million over the fiscal year 2007
request, in order to prepare families for homeownership, help them
avoid predatory lending practices, and help current homeowners avoid
default. In partnership with faith-based and community organizations,
HUD will assist approximately 600,000 families to become homeowners or
avoid foreclosure in fiscal year 2008. More than ever, potential
homebuyers need assistance to make smart homeownership choices. Housing
counseling is the most cost-effective way to educate individuals and
arm them with the knowledge to make informed financial choices and
avoid high risk, high cost loans, and possible default and foreclosure.
COMBATING HOMELESSNESS
While helping homeowners and renters to a better way of life, HUD
remains committed to the goal of ending chronic homelessness, and has
aggressively pursued policies to move more homeless families and
individuals into permanent housing. While persons experiencing periods
of long-term homelessness frequently get temporary help, they often
return to a life on the streets. New data from the Annual Homeless
Assessment Report indicates that 20 percent of the homeless experience
chronic homelessness. Persons with disabilities who are homeless for
extended periods of time, often referred to as the chronically
homeless, consume a disproportionate share of available resources
(psychiatric facilities, jails, detox centers, hospitals, emergency
shelters, etc.) without having their basic needs appropriately
addressed. Housing this population will free up Federal, State, and
local emergency resources for families and individuals who need
shorter-term assistance.
In July 2002, the President reactivated the Interagency Council on
Homelessness (ICH) for the first time in 6 years, bringing together 20
Federal entities involved in combating homelessness. Since its
inception, the ICH has helped State and local leaders across America
draft plans to move chronically homeless individuals into permanent
supportive housing, and to prevent individuals from becoming
chronically homeless. As HUD Secretary, I currently chair the ICH.
In 2003, the Federal Collaborative Initiative to End Chronic
Homelessness, through HUD, Health and Human Services, and Veterans
Affairs, funded 11 grantees across the country.
The fiscal year 2008 Budget provides a record level of resources to
address the housing needs of homeless persons living on the streets of
this Nation. The fiscal year 2008 Budget provides $1.586 billion for
Homeless Assistance Grants. In addition to requesting a record level of
funding, the administration also proposes to consolidate the various
competitive homeless programs into a single Continuum of Care grant
program that would greatly simplify the local administration of HUD's
homeless resources which benefit over 3,800 cities and counties.
INCREASING ACCESS TO AFFORDABLE HOUSING
While homeownership is one of President Bush's top priorities, the
President and I realize that it is not a viable option for everyone.
The largest component of HUD's budget promotes decent, safe, and
affordable housing for families and individuals who may not want to
become homeowners or who may not yet be ready to purchase a home.
ASSISTING THE MOST FAMILIES--SECTION 8
HUD's Housing Choice Voucher Program provides approximately 2
million low-income families with subsidies that help them obtain
decent, safe, sanitary, and affordable homes. In the fiscal year 2008
budget request, the President is asking for $16 billion, nearly $100
million over the fiscal year 2007 request. The administration is also
proposing several changes to the Housing Choice Voucher Program that
would allow the 2,400 Public Housing Authorities (PHAs) that administer
the program to assist even more families. The administration is
proposing that Congress eliminate current appropriations language that
imposes a cap on the number of families each PHA is allowed to assist.
Many PHAs that have reached their caps have additional funds that they
are unable to use to assist additional households. In addition,
administrative fees would again be tied to the number of households
assisted, encouraging PHAs to assist more families. By better utilizing
all appropriated funds, the Housing Choice Voucher Program would assist
thousands of additional families.
MAKING IMPROVEMENTS TO PUBLIC HOUSING
For fiscal year 2008, the Department will continue its efforts to
transition Public Housing Agencies to asset management, which will
result in improvements in public housing management and financial
accountability.
PUBLIC HOUSING FUNDING
The fiscal year 2008 budget for the Public Housing Operating Fund
provides $4 billion, which is the highest funding level ever in the
history of the program, up from $3.6 billion in the fiscal year 2007
request. This funding will assist PHAs in the second year of transition
to the new operating formula and will help pay for utility/energy and
other cost increases. Additionally, HUD will continue its successful
implementation of the Public Housing Capital Fund Financing Program.
This program allows PHAs to borrow from banks or issue bonds using
future Capital Fund grants as collateral or debt service, subject to
annual appropriations. In this way, PHAs can leverage their Capital
Funds to make improvements. The President's fiscal year 2008 budget
request maintains the overall Capital Fund Account funding at the $2
billion level.
MANAGEMENT ACCOUNTABILITY OF PUBLIC HOUSING
The Department continues to place great emphasis on the physical
condition of public housing properties, and the financial status and
management capabilities of PHAs. The Department will continue providing
technical assistance to PHAs and rating the effectiveness of PHAs
through the Public Housing Assessment System (PHAS). PHAs with
consistently failing scores may be subject to an administrative or
judicial receivership. The Department will continue to utilize other
tools such as Cooperative Endeavor Agreements with local officials,
Memoranda of Agreements, and increased oversight, in order to correct
long-standing deficiencies with PHAs.
INDIAN HOUSING LOAN GUARANTEE FUND
HUD is also working to improve housing for Native Americans. The
U.S. Government holds much of the land in Indian country in trust. Land
held in trust for a tribe cannot be mortgaged, and land held in trust
for an individual must receive Federal approval before a lien is placed
on the property. As a result, Native Americans historically have had
limited access to private mortgage capital. The section 184 program
addresses this lack of mortgage capital in Indian country by
authorizing HUD to guarantee loans made by private lenders to Native
Americans. The President's budget proposes $367 million in section 184
loan guarantees under the Indian Housing Loan Guarantee Program for
homeownership in tribal areas, which represents a more than $251
million increase over the enacted fiscal year 2006 budget and $116
million over the fiscal year 2007 request.
ELDERLY AND PERSONS WITH DISABILITIES
The fiscal year 2008 budget will provide $575 million in funding
for the Supportive Housing for the Elderly (section 202) Program--a net
increase of $30 million over the fiscal year 2007 request. This funding
level covers all operating costs for existing section 202 housing and
supports construction of about 3,000 new units. In the section 202
program, funding for housing for the elderly is awarded competitively
to non-profit organizations that develop these facilities. The
facilities are also provided with rental assistance subsidies, enabling
them to accept very low-income residents. Many residents live in the
facilities for years, and over time, they often become frail and less
able to live without some additional services. Therefore, the budget
allocates up to $25 million of the grants to fund the conversion of all
or part of existing properties to assisted-living facilities, enabling
these elderly residents to remain in their units. In addition, up to
$71 million--an increase of $11 million over the fiscal year 2007
request--of the grant funds will be targeted to funding the service
coordinators who help elderly residents obtain supportive services from
the community.
The fiscal year 2008 budget proposes $125 million for Supportive
Housing for Persons with Disabilities (section 811), a $6 million
increase over the 2007 budget request. The section 811 program will
also continue to set aside funds to enable persons with disabilities to
enjoy independent lifestyles. In fiscal year 2008, up to $75 million of
the grant funds will be used to renew Mainstream section 8-type
vouchers so that individuals can continue to use their vouchers to
obtain rental housing.
The Department is proposing financing demonstration projects in
both section 202 and section 811: $25 million is requested for section
202 and $15 million is requested for section 811. A key priority is to
increase the production of units serving these special needs
populations by removing the barriers that discourage tax credit
applicants from utilizing sections 202 and 811. In developing the
program, the Department will consider mixed-finance arrangements
including low-income housing tax credits and other creative financing
options for development of additional housing units and/or rental
operating assistance.
HOUSING OPPORTUNITIES FOR PERSONS WITH AIDS (HOPWA)
The HOPWA program provides formula grants to states and localities
for housing assistance for low-income persons living with HIV/AIDS. The
program helps maintain stable housing arrangements that improve access
to health care and other needed support. The program also provides
competitive grants to government agencies and nonprofit organizations
that serve as Special Projects of National Significance due to their
model or innovative qualities. HOPWA also provides grants to
governmental agencies in areas that do not qualify for formula funds.
In fiscal year 2008, HOPWA will fund an estimated 26 competitive
grants to renew expiring permanent housing projects and use the
remaining funds to select new model projects. HUD will also provide
HOPWA formula funding to an estimated 122 jurisdictions. Grant
recipients will collaborate with over 700 non-profit and local agencies
to subsidize housing for an estimated 67,000 households. In fiscal year
2008, HUD will proposes to provide $300 million in new grant funds for
housing assistance and related supportive services for low-income
persons with HIV/AIDS and their families.
The administration is proposing legislation to update the HOPWA
allocation formula. The revised formula will more accurately reflect
the current housing needs of persons living with AIDS in this country.
REFORMING THE COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM
It has been more than 30 years since President Gerald Ford and
Congress created the Community Development Block Grant (CDBG) Program
to address the community needs. Since 1974, CDBG has been an important
tool for cities, counties and States, allocating more than $116 billion
to help them to target their own community development priorities. The
fiscal year 2008 budget proposes funding CDBG's formula program at
$2.775 billion.
CDBG's underlying formulas have remained essentially the same since
1978 while the Nation's demographics have changed significantly. It has
becoming increasingly clear that an outdated formula that once measured
the needs of urban America no longer reflects the modern needs of
today's cities, larger urban counties and States. Some high-need areas
receive smaller grants than they should, some low-need areas receive
larger grants than they should; and some communities with similar needs
receive different per capita grant amounts.
The Department will continue to pursue ``formula fairness'' by
appealing to Congress to authorize a new formula that will more
effectively target CDBG funding to areas of greatest need in 21st
Century America. A second key part of the President's proposal is the
$200 million Competitive Challenge Grant. The Challenge Fund will award
``bonus grants'' to distressed communities that target and leverage
funds to the most distressed areas within the community. In addition,
HUD will work to boost performance measurements within CDBG to ensure
these critically needed dollars produce the results the program was
designed to achieve.
HEALTHY HOMES AND LEAD HAZARD CONTROL
HUD's Lead Hazard Control program is the central element of the
President's effort to eradicate childhood lead-based paint poisoning.
In fiscal year 2008, proposed funding for the Lead Hazard Control
Program will be $116 million, continuing the substantial progress to
date in eliminating lead hazards to all children. Grant funds are
targeted to low-income, privately owned homes that are most likely to
have children exposed to lead-based paint hazards.
The program conducts public education, compliance assistance, and
regulatory enforcement to prevent childhood lead poisoning. New
estimates from the Centers for Disease Control and Prevention (CDC)
show that the program has helped to reduce the number of children at
risk by 65 percent, but more than 250,000 children still have dangerous
levels of lead in their bodies.
CONTINUING THE FIGHT AGAINST HOUSING DISCRIMINATION
The Bush Administration is committed to the vigorous enforcement of
fair housing laws in order to ensure that equal access to housing is
available to every American. Fair housing enforcement and education
activities are pivotal in achieving the administration's goal to
increase minority homeownership by 5.5 million by 2010.
The intent of HUD's fair housing programs is to bring about equal
opportunities in housing by protecting the right of families and
individuals to live where they choose, free from discrimination. HUD
accomplishes this goal by aggressively enforcing the Nation's fair
housing laws and by educating the public and the housing industry about
their fair housing rights and responsibilities. HUD also furthers fair
housing by funding housing activities through two programs: the Fair
Housing Assistance Program (FHAP) and the Fair Housing Initiatives
Program (FHIP).
The fiscal year 2008 budget will provide $25 million through FHAP
for State and local jurisdictions that administer laws substantially
equivalent to the Federal Fair Housing Act. The Department supports
FHAP agencies by providing funds for capacity building, complaint
processing, administration, training, and the enhancement of data and
information systems.
The fiscal year 2008 budget will also provide $20 million to help
private, non-profit FHIP agencies across the Nation combat
discrimination through an array of targeted education and outreach and
enforcement activities.
Additionally, the requested amount would support the Department's
ongoing efforts to address fair housing concerns in areas affected by
Hurricanes Katrina and Rita. The efforts would include support for fair
housing enforcement efforts in the gulf coast, bilingual public service
announcements, printed advertisements, and training events. Protecting
the fair housing rights of persons with disabilities is a Departmental
priority. As such, the Department would continue to provide technical
assistance to builders, architects, and housing providers on
disability-accessibility requirements through its Accessibility FIRST
program to ensure that newly constructed housing units are accessible
to persons with disabilities.
INCREASING OPERATIONAL EFFICIENCY
Over the past several years, HUD has taken many notable steps to
improve its management and performance, and the President's new budget
request strengthens these efforts.
In fiscal year 2006, HUD received a clean financial audit for the
seventh consecutive fiscal year, and for the first time ever had no
auditor-reported material internal control weakness issues.
In January 2007, the Government Accountability Office (GAO) removed
HUD from its watch list of high-risk government programs. It marked the
first time since 1994 that no HUD programs were on the list,
demonstrating HUD's effective implementation of the President's
Management Agenda to improve our fiscal house and program results.
Improved information technology systems are enabling HUD and its
program partners to more efficiently and effectively deliver HUD's
program resources, and more can be accomplished with the funding
increases proposed for the Working Capital Fund that supports the
Department's information technology infrastructure and systems
applications.
In Conclusion, Madam Chairwoman, the President's proposed fiscal
year 2008 budget makes good progress toward successfully realigning
Federal Government priorities according to our Nation's current needs.
The HUD portion of that budget will help promote economic and community
development through increased opportunities for homeownership and
affordable rental housing, free from discrimination; it will also lay
the groundwork for reform by focusing community development funding
more carefully toward those most in need; and it will enable HUD to
continue along the path to greater Departmental efficiency and
effectiveness.
This is a good budget, Madam Chairwoman, and I respectfully urge
the Congress to adopt it. I am now available to answer any questions
that you, or other members of the committee, may have.
Senator Murray. So, you're ready for a question?
Secretary Jackson. We're ready.
Senator Murray. Okay. Well, very good, we'll do that, then.
I will ask a couple of questions. I'll turn it over to Senator
Bond. He's going to ask his questions and then go to the floor
and vote and come back. So--all right.
Mr. Secretary, let me just ask you, really quickly, before
I turn to Senator Bond, for the cost to renew the 2 million
section 8 vouchers that are currently in use, your 2008 budget
request asks for an increase of only $9 million above the level
that we provided for the current year. That is an increase of
less than six one-hundredths of 1 percent. And, at the same
time, as we all know, rents across this country are growing by
4.6 percent.
Where I live, in Puget Sound, it's even more than that,
it's 7 percent. What--how is your requested funding increase of
just six one-hundredths of 1 percent supposed to be sufficient
to ensure that our public housing authorities across the
country are able to even keep all the current tenants that they
do have?
Secretary Jackson. Chairlady, I would say this, that if we
would carry out the reforms and deal with section 8 on a budget
base rather than a unit base, we have ample monies. And I
thought that I had an agreement 2 years ago, when I went and
got a little over $1 billion for the industry in section 8 that
we would go toward budget-base allotment. They have not carried
out their part of the agreement. So, if you're saying, If we're
still using unit-base, will that cover the process? Probably
not. But we would like to see the reforms enacted, and I
thought I had an agreement to enact those reforms.
Senator Murray. Your agreement with who?
Secretary Jackson. With the industry, whether it be CLPHA,
PHADA, NAHRO.
Senator Murray. Well, so knowing that that's not happening,
isn't it your responsibility to ensure that the section 8
housing authorities are able to keep their current tenants?
Secretary Jackson. Well, we believe that by lifting the
cap, they will be able to keep that commitment. That will be
some $600 million more to meet the process. So, yes, I think
the budget is--for the section 8 tenant base is fair. We've
lifted the cap so they can utilize their monies to help house
probably about 170,000 more people.
Senator Murray. Yes, I know that you believe that some of
them have reserves, but even your own data says that about one-
third of all the public housing authorities have no reserves,
or a reserve that's lower than inflation costs for a full year.
So, how are all of they--how are all of them going to be able
to provide additional--or to even keep their own section 8?
Secretary Jackson. From our perspective, we believe that
each housing authority will be able to address their section 8
needs. And we think the budget clearly amplifies that.
Senator Murray. So, you don't think there's any out there
without reserves that would be put in jeopardy?
Secretary Jackson. Well, there are some without reserves,
but I don't think that many of those that are without reserves
will be hit the hardest. It's those large housing authorities
in many of the major cities that, really, the $600 million will
address the issues of the shortfall.
Senator Murray. Well, if they don't have the reserves, then
they're going to have to put people out on the street.
Secretary Jackson. No, that's not necessarily true.
Senator Murray. How do you see that----
Secretary Jackson. I just--I don't see the same thing you
see. I think we do have enough within our budget to address the
needs of those tenant-based vouchers, clearly.
Senator Murray. Where I live, we saw, on average, rent
increase by 6.4 percent in Seattle, at an average unit cost of
$900 a month. And, like I said, the Bureau of Labor Statistics
(BLS) is reporting that for the 1-year period that ended in
March, rents across the country are being increased by 4.6
percent. So, knowing that that rent increase is out there, how
can you make that----
Secretary Jackson. I still believe that the budget that we
submitted for the tenant-based section 8 program is absolutely
well enough to make sure that those persons who today have
vouchers will keep those vouchers.
Senator Murray. I find that hard to believe, with what we
have, and it's certainly not what we're hearing from on the
ground.
But, with that, I will turn it over to Senator Bond to ask
his questions, and head over to the floor.
Senator Bond. Thank you very much, Mr. Secretary.
Continuing on the section 8 tenant-based ones, I understand
we do have a budget-based approach for section 8 vouchers,
subject to the authorized level. But, as the chair mentioned,
there are some PHAs who have no reserves, and may have greater
needs. You talked about the amount of excess reserves in
certain PHAs. How will you ensure that those reserve funds and
any other funds are adequately and equitably allocated to PHAs
which may have done a very good job----
Secretary Jackson. Right.
Senator Bond [continuing]. In spending, but do not have
sufficient funds in the budget proposal to meet section 8
housing needs.
Secretary Jackson. Ranking member, as I said to the
chairlady, I think there are a number of things that can be
done, and I do think that the budget is still ample for this
process. Housing authorities have the ability to modify the
payment standards. They can aggressively negotiate with
landlords on rent. And they can charge a minimum rent.
Now, in many cases, I think you know, as I know, since we
have that 75 percent of those vouchers must be for persons 30
percent less than median, we're ending up, in many cases, not
serving more people, serving the same people over and over.
Pre-1998, the average stay of a voucher was about 3\1/2\ years.
Today, it's about 8, because of the standards that we've
set up. So, my position is, clearly--or, you know, 2 years ago,
when I went and got the extra--a little over $1 billion, that
we would go to basically a leave unit base and go to a project-
based budget. If we go to that immediately, yes, I think we
have more than ample money. And even now, with the three
standards that I just gave you, I still think it's ample money
to carry out the program.
Senator Bond. Turning now to the project-based section 8,
my staff analysis suggests that the current budget is about
$1.2 billion short. Have you and the Department done a thorough
examination of the needs for project-based section 8? And have
you done that? Can you give me a figure on what the shortfall
is?
Secretary Jackson. What we are doing now is going contract
by contract. We expect to have that finished by the end of the
summer to make sure that we have the ample resources. We will
be able to submit that to you in--probably by September, the
raw data; and probably sometime in November, we will have it
all calculated. But we truly believe that the project-based
contracts will be fine. But we have to make an evaluation. And
we've never had an evaluation of these contracts. Each year, we
have been piecemealing, and now I think it's important to have
an evaluation of them.
Senator Bond. Mr. Secretary, I couldn't agree with you
more. Now, I'm not one who believes in artificial timelines in
certain other areas, but we have a legislative timetable, and
we hope to be passing this bill in the latter part of July. So,
if you could move up that analysis----
Secretary Jackson. Okay
Senator Bond [continuing]. And give us some idea----
Secretary Jackson. I will----
Senator Bond [continuing]. Before we get this bill done,
and I also would like your assurance that if you see a
shortfall, you will go back to OMB and suggest that they are
not to throw people out of project-based section 8, that a
budget amendment is needed. And I hope that you will consider
that, and help us, because right now it looks like a
significant shortfall to us that is unacceptable.
Secretary Jackson. Okay. I will do my very best, I can
assure both of you--all three of you all, to make sure that we
can get you an answer as--before July.
Senator Bond. Thank you, Mr. Secretary.
Madam Chair, we are hoping that we are going to have a vote
here very shortly, so I will go over and get aligned and ready
to vote as soon as it occurs, and look forward to a significant
number of questions when I get back.
Senator Murray. Very good. All right.
Senator Lautenberg.
Senator Lautenberg. Thank you. Once again, I apologize for
my jumpstart.
But, Mr. Secretary, you heard where my inquiry was going.
And I'll repeat it, just to make sure that I'm not missing
anything or that I'm not misquoting you. And you say, ``Why
should I reward someone who doesn't like the President, so they
can use funds to try to campaign against the President? Logic
says they don't get the contract. That's what I believe.''
Now, the question, Mr. Secretary--and I commend you for the
work that you do, but I think that what took place there needs
explanation. So, do you still view that position, that contract
awards should be based on political favoritism?
Secretary Jackson. First of all, let me say this to you,
Senator. The inspector general did a thorough investigation and
found that I had not tampered, nor touched any contract. In
fact, because of what the Government Accountability Office
(GAO) said, and the inspector general said, I set up a Contract
Review Board. I do not interfere with any contract that is
given in HUD, period. That's a fact. And the inspector general
looked at every contract that had been given out at HUD, and I
didn't touch it.
Now, if you're asking me about my personal opinion, the
President is my friend, and I care a great deal about him. But
it doesn't mean that I'm going to interfere with contracts
because I think that people might not like him. What I said,
when this guy approached me in the hallway, is that, ``He must
be out of his mind if he's going to attack me and attack the
President, and think I'm going to help him.'' I'm not going out
of my way to help him, but I didn't go out of my way to hurt
him, either.
Senator Lautenberg. Well--so, was the quote accurate?
Secretary Jackson. Which quote?
Senator Lautenberg. The one I gave you, ``Why should I
reward someone who doesn't like the President,'' et cetera,
``so they can use funds to campaign against him? Logic says
they don't''----
Secretary Jackson. Well, first of all----
Senator Lautenberg [continuing]. ``That's what I believe.''
Did you say that?
Secretary Jackson. First of all--yes--first of all, I don't
touch contracts.
Senator Lautenberg. But you said it, Mr.----
Secretary Jackson. Yes, I said it, but I don't touch
contracts. I set up a Contract Review Board.
Senator Lautenberg. But you're stating a view that I think
poisoned the--poisons the atmosphere. You----
Secretary Jackson. I disagree with you. I don't think I----
Senator Lautenberg. You disagree----
Secretary Jackson [continuing]. Poison the atmosphere.
Senator Lautenberg [continuing]. With me?
Secretary Jackson. Yes.
Senator Lautenberg. So, you think, then, that it's
appropriate----
Secretary Jackson. No, I don't think it's appropriate. I
said----
Senator Lautenberg [continuing]. If I said----
Secretary Jackson [continuing]. I said what I said.
Senator Lautenberg. Why did you say it, if you don't----
Secretary Jackson. Because----
Senator Lautenberg [continuing]. Think it's appropriate?
Secretary Jackson [continuing]. I was speaking----
Senator Lautenberg. Why are you defending it now? That, I
don't understand, altogether. I mean, you're saying, ``Well,
yeah''----
Secretary Jackson. I have not touched----
Senator Lautenberg [continuing]. ``It's true, but I''----
Secretary Jackson. Senator, I have not touched one
contract. Not one. Now, if you can prove that I have interfered
with a contract, then you should do that.
Senator Lautenberg. Mr. Secretary, we're spinning words
here.
Secretary Jackson. No, I'm not spinning words, Senator. I
have not touched a contract.
Senator Lautenberg. But if you said it, then we shouldn't
believe what you said is what you're----
Secretary Jackson. It----
Senator Lautenberg [continuing]. What you're saying.
Secretary Jackson. Absolutely, then, if that's----
Senator Lautenberg. We should not----
Secretary Jackson [continuing]. That's right.
Senator Lautenberg [continuing]. Believe what you said.
Secretary Jackson. Because I have not touched a contract.
Senator Lautenberg. Too bad.
In New Jersey, the HOPE VI program successfully generated
over $1 billion to revitalize distressed public housing, yet
the President's 2008 proposes to totally eliminate the program.
Wouldn't funding programs like this pay big dividends on our
communities, helping poor and middle-class families to----
Secretary Jackson. I will----
Senator Lautenberg [continuing]. Obtain----
Secretary Jackson. Sorry. I would agree with you. I sat on
the National Commission for Severely Distressed Housing, which
the HOPE VI came out of--I agree that HOPE VI, when it's
performed well, it's a great program. I've never said that it
wasn't. Of the 237 awards, Senator, that we have made, only 65
have been completed. If we look from 1994 to 2000, we still
have over $500 million outstanding, where nothing has been done
on those HOPE VI funds. And of all the money that's
outstanding, about a million--$1.8 billion is still
outstanding.
So, I don't believe that we should continue to fund a
program, when you have less than 30 percent of the projects
completed since the beginning of the program. Sixty-five of 237
projects, that's all we've completed since HOPE VI started in
1992. And this is 2007.
Senator Lautenberg. Why is that? Why haven't we done better
in completion?
Secretary Jackson. I really think that one of the things we
have done lately with the HOPE VI program is required that the
housing authorities come in with a developer who can leverage
the money. And in the process of leveraging the money, we're
able to develop much better. The initial HOPE VI were not that
way. Many of the housing authorities took those HOPE VI
themselves, and they used the administrative authority that
they had, and used it up with architectural engineering
drawings and pulled down the money.
So, they still have money to develop, but they don't have
the necessary plans to move forward. So, we have suggested that
we look at those housing authorities, Senator, who have not
performed, and try to recapture some of that money to send it
to housing authorities that are performing. It's not that I
believe the program is bad. That's not the issue. The issue is,
we have so much money outstanding.
Senator Lautenberg. Yes. I assume that the red light
indicates that my time is used, Madam Chairman.
I would close, and ask that the questions that I'll submit
after the hearing be promptly responded to.
But I would say that if you believe in the program, and you
don't--and you're looking for contractors who can leverage the
money, there's a mix in language there that I, frankly, don't
get, because housing doesn't take overnight to build.
But, thank you, Mr. Secretary. Thank you----
Secretary Jackson. Thank you, Senator.
Senator Murray. Thank you, Senator Lautenberg. And your
questions will be submitted to the Secretary for responses for
the record. So, thank you.
Mr. Secretary, this is the third year in a row that your
budget is proposing to slash funding for the CDBG program while
arguing that the program needs to be reformed. You are, again,
arguing that this program needs to be better targeted to
eliminate funding from thousands of communities you consider to
be too affluent. Over the last 3 years, has any subcommittee
ever scheduled a markup to consider that proposal?
Secretary Jackson. Not--I don't think so, Senator--I mean--
--
Senator Murray. Has any----
Secretary Jackson [continuing]. Chairlady.
Senator Murray. Yes. Has any member of the House or the
Senate ever introduced your legislative proposal?
Secretary Jackson. No, they have not.
Senator Murray. Well, there are sections of King County,
Washington that are affluent, and that is partly why working
families have such a hard time finding affordable housing
there. Let me tell you where King County spent the vast
majority of their CDBG funds last year. They developed 637 new
affordable units, they rehabilitated another 150 affordable
units, they provided 442 households with homeless prevention
service, they created 487 permanent supportive housing units,
they constructed 33 new affordable homes, and they repaired
another 500 homes occupied by low- and moderate-income
residents--that were repaired. Those funds weren't spent for
amenities on the wealthy. And under your budget proposal, King
County would see its CDBG funds slashed by 20 percent.
So, can you tell me how your budget proposal reforms would
alleviate the shortage of affordable housing in places like
King County?
Secretary Jackson. I think it's going to be very difficult
in places, in my estimate, west of Utah, east of Virginia.
These are very, very high-price areas. And it's going to be
very difficult, even when we target the money to certain
cities, counties, or areas, to address affordable housing in
many places. So, I can't tell you that we're going to be able
to address affordable housing all over this country because I
don't think that is the case. We will do everything in our
power within the budget construct and within the way we put our
formula in place, to address those cities that are most in
need. And if we can address those cities that are most in need,
I think we can make a substantial impact.
Senator Murray. Well, when you announced your reform, you
published the formula that you'd use for distributing those
funds, on your web site. I'm told that when you use your own
formula at the reduced funding level, it really doesn't help
the poorest communities across the Nation, because the funding
is slashed so severely. So, I wanted to ask you, does your
proposal provide any additional help to the poorest
communities?
Secretary Jackson. Yes. I think that what we have
calculated is, at the--the lowest-income cities, counties, will
be addressed. Second----
Senator Murray. How is that?
Secretary Jackson. Because we think we have enough money
within our budget to address them, if the formula is approved.
Senator Murray. Well, I don't see how that's going to
happen, when you're cutting funding for everybody. And, you
know, the other thing, I heard you last year when you were
here, you talked about the affluent companies that shouldn't
receive any funding, and you're trying to devise this formula
that somehow does that. And one of the cities you talked about
last year was in my home State of Bellevue, Washington, that
you defined as affluent. Yet, even in these so-called affluent
communities, funding under the current formula is targeted by
law--by law--on assisting low- and moderate-income individuals.
So, I went back and looked at you--at how Bellevue used
their funding, and they used it to rehabilitate owner-occupied
units, to upgrade a center for the disabled and the
handicapped, they built a facility for the homeless, and they
built a facility for abused and neglected children. Wouldn't
you agree that those uses of funding are within the goals of
CDBG?
Secretary Jackson. Yes, I would.
Senator Murray. Well--so, when you define Bellevue as
affluent, which many would disagree with you, because of the
price of living there, you take away funding to do that. So, I
don't understand how your funding formula helps communities----
Secretary Jackson. Well, I----
Senator Murray [continuing]. Deal with these issues.
Secretary Jackson. I'm sorry. Well, I think that Bellevue
is an affluent community. And I think that in many of those--in
many of those--the problems that you have just----
Senator Murray. Have you--I'm sorry----
Secretary Jackson [continuing]. You've just talked about--
--
Senator Murray [continuing]. When was the last time you
were in Bellevue?
Secretary Jackson. Probably a couple of years ago.
Senator Murray. Where did you go?
Secretary Jackson. I can't remember where I went. I was
in--I was in the city.
Senator Murray. I mean, this--somehow, just to describe
Bellevue as affluent is to not know the community that has
changed dramatically in the past 5 years. And, again, what your
formula does is, says to Bellevue, ``You're going to have to
raise your own taxes to pay for the cost of providing the
services that are dramatically needed.'' And I would urge you
to go back and take a look at the demographics of that city
again, and you might----
Secretary Jackson. I'll be happy to do that for you.
Senator Murray [continuing]. Be surprised. But your funding
formula impacts a community that is really a diverse community
that is trying desperately to deal with some really difficult
challenges that they're facing today.
I believe Senator Bond's going to be back in just a minute,
but let me go to another topic----
Secretary Jackson. Surely.
Senator Murray [continuing]. Before he returns.
This subcommittee held a hearing earlier this year, that
you may have been aware of, with your FHA Commissioner, Brian
Montgomery. We talked at length of what role, if any, the FHA
can play in helping families that are facing foreclosure
because of the crisis in the subprime lending market. Have you
already seen FHA activity increase as a result of the shakeup
in the subprime lending market?
Secretary Jackson. We really have not, at this point. What
I have said to you and to Senator Bond is that I believe that
if we can get the FHA modernization legislation passed, that we
can make a great impact. We cannot help everyone that's in the
foreclosure area--there's no question we can't--because some of
the people are--income is really out of reach. But there are a
number of people that we can help. And I know a lot of times
we've had studies that say, ``Well, HUD has got a 12, 13
percent foreclosure rate.'' We don't go by 30 days, we usually
go by 90 days, and we do everything in our power for those
persons to make sure they keep their homes. And I will continue
to do that.
And one of the criteria that I talked with Senator Bond
about was that--the zero downpayment. I agreed with him that a
cash installment by everybody should be made, because they have
an investment, to make sure that they've invested in their own
home. So, I don't disagree with him. But we will do everything
in our power, if the modernization legislation is passed, to
try to prevent foreclosure and to try to address low- and
moderate-income people who are right now in the process of
being foreclosed on.
Senator Murray. Do you believe that many of the borrowers
that were enticed into that subprime loan are now facing--and
are now facing high interest rates and penalties would be
eligible to refinance with FHA?
Secretary Jackson. Some of them--some of them would. Some
of the exotic loans that were made to--to even some members of
our staff at the housing authority, their income would probably
be out of reach. But for low- and moderate-income people, yes,
I think we would--we would make every effort to work with them.
Senator Murray. Okay. And I believe Senator Bond will have
more questions on that as well.
So, before he returns--and I'm going to have to leave in
just a minute to vote--I did want to ask you about the gulf
region, as I mentioned----
Secretary Jackson. Sure.
Senator Murray [continuing]. In my opening statement.
Payments to homeowners have been very, very slow to arrive.
It's been very painful. And there's little to no evidence that
public housing units are being rebuilt. Of the $16.7 billion
which this subcommittee provided to help rebuild the gulf, only
12 percent, or about $2 billion, has been sent. Can you tell us
why, 2 years after this disaster, that this activity's been so
slow?
Secretary Jackson. When we allocated the money to the gulf
coast--specifically, Mississippi and Louisiana--they submitted
a plan to us of how the money was going to be spent. Each plan
was basically a compensation plan that they would allocate
monies to a certain level to persons, based on the damage of
their homes. About 1 month ago, we had a hearing with Chairman
Frank and Chairlady Waters. An issue was brought up, Are they
spending the monies the way that they should be spending the
monies? And I asked our staff, at the request of Chairman--
Chairlady Waters, I asked our staff to go back to make sure
that Louisiana was complying with the compensation program. We
realized----
Senator Murray. Mr. Secretary, I'm going to miss the vote
if I don't go.
Secretary Jackson. Okay.
Senator Murray. So, I'm--I want to get back to this
question----
Secretary Jackson. I'll----
Senator Murray [continuing]. And--I'm going----
Secretary Jackson. I'll wait for you.
Senator Murray [continuing]. To go vote, and return. We
will recess, shortly. And when Senator Bond returns, he is
going to call the meeting back to order, and return with his
questions.
Secretary Jackson. Thank you.
Senator Murray. I will be right back.
Senator Bond. [presiding] Gentlemen, ladies, recess is
over.
My apologies. The Secretary is sufficiently familiar with
how this place works, or doesn't work, to know what's
happening. But, again, we appreciate your indulgence.
And I want to go back, Mr. Secretary, to the discussion of
section 8 vouchers, which----
Secretary Jackson. Right.
Senator Bond [continuing]. Appears to go back to the
administration's Section 8 Block Grant Program, whereby PHAs
would adjust rents down to meet their budget. Now, this appears
to be a reversal of some 20-plus years of housing policy, where
the Federal Government has sought to reduce the concentration
of low-income families in the worst neighborhoods. However,
with the lower rents, HUD and the PHAs will be pushing a policy
whose necessary result would be to move the poorest into the
worst neighborhoods, neighborhoods without jobs, good schools,
and amenities. And this almost is a return to redlining. So,
when we talk about budget-based vouchers for PHAs, I think we
lose sight of the fact that the objective should be, as you
indicated, to get people in homes where they move from publicly
assisted housing into market-based housing, because of having
access to jobs. And I thought you might want to comment on that
and in light of my further questions about what we see to be
the $1.2 billion shortfall.
Secretary Jackson. Senator, I agree with you, in the sense
that we do not want to redline or re-segregate. And I do
believe that if the housing authorities in this country--and I
did it with three housing authorities--if they negotiate with
landlords, if they charge a minimum rent, if they even put a
timetable on the time that a person can keep a voucher, I do
believe that we can move people into very, very good areas. And
in Dallas, that's what we did.
In St. Louis, that's what we did. It's whether you really
want to take the time to negotiate and to make sure that there
is fair treatment of the residents. And I did it, and I think
it should be done. And I do think that if we can go to project
base, it gives the housing authorities incentives to negotiate,
and to get the best deal that they can. But as long as we're
unit base, they have no incentives, period. Persons can stay on
the voucher as long as they want.
I'm just one that believes that there should be a timetable
for these vouchers. I don't think people should be on these
vouchers, Senator, in perpetuity.
Section 8, from its inception, was to transition from
public housing to market-rate housing. That was the intent of
it. But it has become a secondary system for public housing
today. And I think that the 1998 legislation was a mistake,
when we said that 75 percent of those vouchers should be for 30
percent of less than medium. I think we should all go up to 60
percent of medium and help people transition. That's my belief.
But I do not want people--any person to be re-segregated.
And I think we did a very excellent job in Dallas making sure
that we disbursed those vouchers into middle- and upper-middle
class areas.
Senator Bond. But, still, wouldn't that require additional
resources, if you're going up to a larger population?
Secretary Jackson. I think that, Senator, when--I entered
into an agreement with the industry 2 years ago, that I went
and made a major case to OMB to increase the section 8 tenant-
based budget by $1.1 billion, I think, that in the final
analysis we would go to project base. Have we done that? Yes,
clearly. And I still think, if we go to it today, that we can
cover the cost of the vouchers. But--and that's why we removed
the cap, so that they would have additional money to carry it
out.
Senator Bond. Well, if you have further legislative
proposals, obviously you should take that to the Banking
Committee first, but share a copy with us, because we may get
it--we may help them on that issue, if there is a good
rationale for it.
Secretary Jackson. I do think--let me say this--I do think
there is a good rationale for it, Senator. Pre-1998, we were on
the budget base budget. We got a budget. That's what I did. I
got a budget. And I stretched that budget as far as I could to
make sure that as many people were served as could be served.
Now, in--after 1998, we went to unit base, and, in that
process, we have--we have not served more people. That's what
most of us don't understand. The price has increased
significantly for the program, but we're not serving a greater
group of people, because the housing authorities basically have
no incentives to make sure they stretch the dollar as far as it
can go. And as long as they don't have those incentives,
they're not going to do what they should be doing.
Now, some housing authorities are doing better than others.
Senator Bond. Well, I was going to say, couldn't they do
that now, with----
Secretary Jackson. Yes.
Senator Bond. They could do that now, and they're not doing
it.
Secretary Jackson. They're not doing it. It's unit base.
And they're--they get the administrative fee, whether they
house or don't house. I think we should give them some
incentive to work hard. I had no problem housing people when I
was at the Dallas Housing Authority or when I was at St. Louis
or when I was in Washington. And they were all based on budget
base. That's what it was before 1998.
Senator Bond. Well, that's something we need to discuss
with you further.
Let me talk about--for a minute about----
Secretary Jackson. I appreciate that.
Senator Bond [continuing]. The FHA modernization. It
appears that FHA's business is already doing better than last
year, with tens of thousands of homeowners with conventional
loans coming in to FHA through refinancing, which is up 94
percent this year. Do you think that some of this growth is
attributed to the problems with subprime borrowers?
Secretary Jackson. I really do think that it is. And we are
up. But I also think that's what's important is that if we can
get this modernization legislation done, we can make
significant strides and changes low- and moderate-income
persons. And you and I both agree to--some months ago, when we
were in Kansas City, one of your major concerns--I agree with
you that there must be a cash investment. We cannot go zero
downpayment.
So, I believe that if we can get this legislation done, we
can. And I can tell you, the refinancing in FHA has been at 94
percent since last year. And we're doing everything in our
power, as I just was going to address to the chairlady, to help
those low- and moderate-income people who are facing
foreclosure. We can't help certain groups, because their income
is too high. But for those that we can help, we will do
everything in our power to make sure that they keep their
homes. Because, in my mind, this was not a case where you had
bad borrowers.
People were trying to get into a home. But what I saw was,
you had--people got into really bad products, and there were
people who were pushing these products, and the people did not
really read the fine print. And we just had a case that we
resolved for them--Congressman Scott, in Georgia--where these
people really didn't understand what they were getting into.
But we got it resolved. And so, I think that--I don't want
anyone to leave here saying that, ``Well, these people who
borrowed was bad.'' It's not that. They wanted a home, like
everybody else in this room, but they got into a bad product.
And if we can help some of them get out of that bad product,
we'll do it.
Senator Bond. With respect to the modernization, the
Congressional Budget Office (CBO), the GAO, and the HUD
Inspector General have all expressed concerns about the
proposal. And the CBO expects that developing and maintaining
the appropriate systems for managing a risk-based pricing
system would take FHA several years to implement. In other
words, there would be, potentially, a chaotic situation. How do
you respond to these concerns?
Secretary Jackson. First of all, I guess, Senator, I don't
want to get into a debate with GAO or the inspector general. I
believe in this product. I believe that, yes, we're going to
have a transition period.
I believe that clearly we can make this transition period--
we can do it very quickly--much quicker than 7 years. I think
we're going to have to look at the risk-based factor in this
process, and we will look at that risk-based factor. But I
don't want us to connect subprime lending with FHA. There are
so many more steps in FHA that will stop the subprime area. And
we will do everything in our power to do that.
So, I believe that the GAO, the inspector general, have
their opinions. And I'm not here to debate their opinions. I'm
here to tell you that I believe that this product can work. I'm
convinced that if we get to modernization, we can save a lot of
foreclosures and we can help a lot of low- and moderate-income
people.
Will we put the checks and balance in place? Yes. In fact,
I met with the--I guess it was last week or week before last--
with our inspector general, and I said that I wanted him to
meet with our FHA Commissioner, and I said, ``Put all your
concerns on the table so we can address your concerns, because
if you have concerns, I want to address them. I don't want to
leave them out there, where he'll come before--and said, `I
gave them suggestions, but nothing was done.' '' So, if GAO has
it, we're taking those concerns into study, too.
Senator Bond. Well, we'd like to be either part of those
discussions or kept advised of those discussions, because when
these are credible--creditable entities, and if they've got
concerns, we want to see how those concerns are addressed. So,
we're--we'll be very interested to see how that works.
Secretary Jackson. And I will.
Senator Bond. Now let's turn to another area of interest
and excitement for the--for HUD. And that's the Housing
Authority of New Orleans (HANO) after Hurricane Katrina. How
many units are habitable now, and how many tenants have
returned to the HANO?
Secretary Jackson. We have, habitable units, almost 2,000.
We've had about 1,600 families to return. We are still trying
to get families to return. We have done surveys. We've been to
Houston, to Atlanta, to other places. In fact, what has
occurred is--Senator Bond, is, I've gotten a number of letters
from public housing directors telling us to stop scaring the
people. Many of the people don't want to return. People don't
like for me to say that, but that's a fact. And so, I have to
take in consideration, when I get these letters from these
directors, they're saying, ``You're really scaring many of
these people, because they're satisfied, they're living better,
they have a better job,'' and I have to take that in
consideration, too. So, those persons who are saying, ``Oh, he
does not want people to return to New Orleans,'' that's not
true.
We're doing everything in our power. But, at the same time,
I think I must in consideration--because I once ran a housing
authority, the concerns of those people who are running housing
authorities, who have provided decent, safe, and sanitary
housing for people--if the persons want to stay, let them stay.
Senator Bond. Well, I think--I think you make a good point,
if somebody doesn't want to go back. But, then again, I think
we all recognize that the more tenants a PHA director has, the
more administrative fees they receive. So, I----
Secretary Jackson. Sure.
Senator Bond [continuing]. Think that needs to be weighed
in with the--in the considerations.
Secretary Jackson. I agree.
Senator Bond. I know there's been a lawsuit delaying the
development of HANO. And I'd like to know what efforts you're
making to resolve it, when are you expected to have that
lawsuit resolved. And will resolving that lawsuit clear the way
for any additional residents who wish to return?
Secretary Jackson. Yes. Let me say this. The lawsuit is an
impediment. We have gotten significant low-income tax credits
from the State of Louisiana. We've got funds allocated, of $500
million, to totally redo most of the public housing in New
Orleans. It's baffling to me for people to say, ``It's okay for
low-income people to live in the squalor that they were living
in.'' I find that very abhorring.
Senator Bond. I agree.
Secretary Jackson. If we can change the quality of life,
and make it better, we should do it. We didn't have the
resources, before, to do it. We have the resources now. But
that lawsuit is standing in the way. I was very pleased with
the ruling of the judge, but we're still going to have to have
a hearing when--on this process. We have people like the
Enterprise Foundation, Catholic Charity, ready to go to work to
redevelop housing in this country--I mean, in New Orleans. But
we have a lawsuit pending, with----
Senator Bond. What does that lawsuit--how are you trying to
resolve that lawsuit? That was my question.
Secretary Jackson. Well, we're trying to work it out. I've
been working with Chairlady Waters to try to get them to come
to some agreement. One of the agreements that we came to is to
have 2,000 units--2,500 units by September. Well, we have
2,000, but we still have not got any actions from the
plaintiffs. I mean, they're continuing to talk about, ``People
should go back into the present situation that exists.''
Senator Bond. Well, I would--I would think that those--I
don't know if any of those housing units were in the very
lowest areas, the low-lying areas, which are most flood-prone,
and I certainly think it serves anybody's interest to put them
more at risk.
Secretary Jackson. I agree.
Senator Bond. And I will--I'm now going to defer to my
colleague from Colorado, but, afterwards, I'd like to call on
the inspector general to provide any insights he has. So, if he
would be ready to step up.
But, Senator Allard, we'll now turn to you.
PREPARED STATEMENT
Senator Allard. Well, thank you very much.
And, first of all, I have a full statement I'd like to make
a part of the record.
Senator Bond. We would be delighted to make it part of the
record.
[The statement follows:]
Prepared Statement of Senator Wayne Allard
I would like to thank Chairman Murray and Ranking Member Bond for
holding this hearing to review the fiscal year 2008 budget of the
Department of Housing and Urban Development. I would also like to
welcome Secretary Jackson to the subcommittee. Secretary Jackson, we
appreciate you making time in your busy schedule to be here.
HUD has a long history of problems; for years it was the only
cabinet level agency on GAO's high risk list. However, I want to take
this opportunity to publicly commend Secretary Jackson for his progress
on this point; earlier this year the remaining HUD programs were
removed from GAO's high risk list. This is a tremendous accomplishment
and represents a great deal of work. I would encourage Secretary
Jackson and all the dedicated staff at HUD to remain focused on
maintaining this direction.
Certainly one of the biggest challenges HUD faces is the tight
fiscal scenario. This is a constraint shared by nearly all agencies. No
one denies that the budget for HUD, or any other agency for that
matter, is insufficient to meet every single perceived need in this
country; increasingly, the definition of need seems to be a bottomless
well.
I believe, though, that this budget strikes a reasonable balance at
meeting the most pressing needs, while still being responsible. I
support the administration's decision to pursue fiscal responsibility
in these times. It would be irresponsible to continue to overspend and
leave a mounting debt for future generations.
It is easy to look at the proposed HUD budget and complain that it
lacks money. Certainly, needs are great, and in a perfect world we
would have the money to meet all needs. However, the administration has
had to make some very difficult choices, and the choices at HUD were,
I'm sure, no exception in their difficulty. This budget is evidence of
those difficult choices, and I commend the administration for facing
reality and not simply taking the easy way out.
I want to reiterate a position that I have put forward at previous
hearings: HUD's success as an agency is not defined by a budget number.
More money does not necessarily mean more people are served or that
people are served any better. This would seem to be especially true
when reviewing the effectiveness of HUD's programs as determined under
the PART analysis. In 40 percent of the programs we either know that
they are failing to produce results or we have no way to tell whether
they are producing any results. Why do we talk at such length about the
dollars going to HUD, but fail to look at what is coming out on the
other side? I, for one, intend to keep looking at BOTH sides of the
equation.
I appreciate the opportunity to do so at this hearing. Mr.
Secretary, your testimony will helpful as this subcommittee begins to
write the appropriations bill for fiscal year 2008. Thank you.
Senator Allard. And I also just would like to congratulate
Secretary Jackson. When his confirmation came before me on the
Banking Committee and whatnot, GAO had HUD on the risk list,
and now you're off of that.
Secretary Jackson. Yes.
Senator Allard. And I'm very pleased to see that happening,
because that brings accountability, as you know, to the
process. I know how difficult it is to get the Government
Performance and Results Act, you know, implemented, and then
each year you get more comfortable with it and----
Secretary Jackson. Right.
Senator Allard [continuing]. Things keep moving along. And
so, I want to compliment you for that effort.
I think HUD's success as an agency isn't going to be
defined by the budget number. More money doesn't necessarily
mean more people are served, and the people are served any
better. I think, with what you've put in, then I think we can
feel much more comfortable about what's happening there at HUD.
The first question I'd have, Secretary Jackson is--it's an
issue that you and I have explored at past--previous hearings.
According to a recent article, Deputy Secretary Bernardi had
indicated that you plan to issue a RESPA rule proposal by
September 30, and possibly as early as this summer. Will you
please comment on your intentions? And what is your timeframe
for action on RESPA?
Secretary Jackson. The Deputy Secretary is correct.
Hopefully, by September. But it's going to be clearly
transparent. We learned our lesson last time around about not
being transparent with this rule. We will continue--we will not
put the rule into effect until we have discussed it with--for
the final time with the industry groups, with the subcommittee
here, with the subcommittee in the House. We realize that, in
the final analysis, that we really need a consensus. You know,
I like to use the analogy, Senator Allard, like last time,
it's--I was a sprinter, an all-American, and I ran on the 400-
by-100 relay. And if you don't have anybody to hand----
Senator Bond. Good training for your current position, I
would say.
Secretary Jackson [continuing]. If you don't have anybody
to hand the baton off to, you're not going to be four other
people running by yourself. That's the situation we were in.
And I think you made it clear. I think Senator--Congressman
Manzullo made it clear. And so, we don't want to do anything
haphazardly this time. We want the rule to be acceptable to a
consensus of the people. So, we will not be moving the rule.
And I have not moved it very quickly. There are some people who
say we should get it out quickly. No, we're still discussing
it, and we hope to have a consensus.
Senator Allard. So, what we're going to be seeing in
September is a proposed rule, it's not going to be a final rule
by----
Secretary Jackson. That's correct.
Senator Allard [continuing]. And so, we're just getting the
process started.
Secretary Jackson. That's correct.
Senator Allard. Okay. And are you going to--what role do
you see Congress playing in this process? Any at all? Or are
you just going to expect Members of Congress to drop in on
public comment?
Secretary Jackson. No, I think that when you see the
proposed rule, I would think that you would give us suggestions
as to how you think the final rule should be made.
Senator Allard. Well, you know, I think that's nice, but I
also do think we need to work with the affected parties, you
know----
Secretary Jackson. Right.
Senator Allard [continuing]. And so, like I say, I
appreciate the way you've been doing business, and--but I felt
like I needed to ask that question, because it does tend to be
controversial.
Secretary Jackson. Surely.
Senator Allard. Now, your 2008 budget assumes enactment of
a number of legislative proposals. How would funding and staff
needs change should those proposals, particularly the FHA
reform package, not be enacted?
Secretary Jackson. Well, we believe that if we can enact
the FHA modernization legislation, we would probably need
additional staff, but that's because, I think, that we have
lost a significant number of persons who want to deal with FHA.
If--you know, if I were a low- or moderate-income person with
all of the paperwork that they have to go through, I wouldn't
deal with FHA.
I think the key to it is to modernize it, but, at the same
time, not lower our standards, and make sure that, in the final
analysis, that we can document everything that we're doing, and
that we, even in the risk-based premium part, make sure that
we're doing everything we should be doing.
Senator Bond asked a question a few minutes ago and I
agreed with him, it's going to take a transition, it's not
going to be done overnight. I don't think that it will take
several years. I really don't think that. I think we've got
competent staff. So, I think that if we can get this
legislation passed by this summer, we can help a lot of low-
and moderate-income people, and we can help a number of people
who are facing foreclosure today.
Senator Allard. Mr. Chairman, may I--or you're--I guess
you're the acting chairman--I'll keep going, if that's okay.
Senator Bond. That's fine.
Senator Allard. Okay.
Also, Secretary Jackson, you've been dealing with some
issues, as far as waste and--wasteful spending. And I want to
commend you, again, for correcting some of the practices that
we have there. Can you describe your efforts to end improper
payments, and update us on your progress?
Secretary Jackson. Yes. We have done extremely well with
the improper payments. I would let Assistant Secretary Cabrera
answer that question, because he's dealt with it firsthand.
Senator Allard. Mr. Cabrera?
Mr. Cabrera. For the record, Senator Allard, Orlando
Cabrera, Assistant Secretary for Public and Indian Housing at
the Department of Housing and Urban Development.
We've had enormous success, due to the Secretary's efforts
and our staff's effort. And what we have done is essentially
work with other agencies in order to acquire data. That has
minimized, to a great extent, improper payments. They are down
to, as I recall, about $1.2 billion, from $3.1 billion, through
the end of the--through the end of the last fiscal. And I don't
have the most current data, but my expectation would be that it
would be even less than that now. And that's in a 2-year
period, I believe.
Senator Allard. Thank you for your response.
Mr. Cabrera. You're welcome.
Senator Allard. Now, one of the--go ahead.
Secretary Jackson. Senator, what I was going to say is that
when I became Secretary, one of the things that I committed to
the President and to the people is that we would correct a
number of the problems, the improper payments, and we would get
off of the high-risk list. And I'm glad that we've done both of
those. And--but I could not have done it--it was a great team
effort, not only from the Deputy Secretary and all the
Assistant Secretaries, but, also, OMB helped us tremendously.
So, I am very proud that we did that.
One of the major issues was FHA. I would not be here asking
for FHA modernization if we were still on the high-risk list.
It would be very difficult to ask, until we got ourselves in
order. And the single-family and others have been very positive
to date.
Senator Allard. Good.
Now, you--a lot of businesses and whatnot are experiencing
an aging workforce. In your agency, I think yours might be as
acute as any, as I understand it.
Secretary Jackson. I'm sorry, I didn't hear you.
Senator Allard. Businesses all over the country are facing
some problems with an aging workforce.
Secretary Jackson. Yes.
Senator Allard. The agencies in the Government are no
exception. Your agency, HUD, has the highest risk on an aging
workforce, in that many of them are coming up for retirement in
2006 and 2008. That is something you can plan for and look
into. Could you give us some--what you're doing about
addressing that potential problem, where you're going to have
your forces coming up for a mass retirement, so to speak, in a
couple of years?
Secretary Jackson. In all honesty, it's very scary. It's
very scary, because unlike when I was running American Electric
Power--we had a succession program, where, if we knew that an
engineer was leaving, we could bring one on for the next 90
days so this--and, you know, you could train--there is
basically no succession policy in Government. I mean, until the
person leaves, we can't hire, because we have 9,000 full-time
equivalents (FTEs), and we can't bring somebody in to a slot
based on the person leaving in 60 days or 90 days. So, it's
very difficult. And about 67 percent, I think--Dave can help
me; he's sitting behind you. I think about 67 percent of our
population that's at HUD can leave right now. It's very
devastating. And I can tell you, on a number of occasions I've
asked at least 30 people to stay, because we didn't know--in
fact, Ranking Member Bond, I asked Attorney Kenison to stay,
but he said he had 40 years, and he was ready to go. But that's
a huge void that we have right now, because he was really a
senior attorney and knew a lot.
So, I will tell you, my best answer is I'm afraid that if
we have a mass exodus, we're going to have a serious problem.
Senator Allard. Madam Chairman, I've finished--well, I have
some more questions, but----
Senator Murray [presiding]. Thank you very much.
And, Mr. Secretary, thank you for your patience as we've
bopped in and out, here.
When I had to leave, I was asking you about the money to
the gulf region, and wanted to ask you, in particular, about
the $2 billion, the vast majority of which has been spent on--
focused on homeowner assistance, not on rental housing. This
subcommittee included statutory mandate in June, 1 year ago
that required at least $1 billion of the $5.5 billion we
provided at that time to be used for repair, rehabilitation,
and reconstruction of affordable rental housing stock in the
impacted areas. How many projects, can you tell us, have been
rebuilt or repaired as a result of that funding? And how many
tenants have now been able to reoccupy those facilities?
Secretary Jackson. Yes, I will. Let me say this, that in
Mississippi they've moved expeditiously to do exactly what you
said. In Louisiana, I must tell you, we have been disappointed.
In fact, I can't pinpoint exactly what has occurred to rehab
units for rental, at this point, in Louisiana, because most of
the monies that have been spent, it's been spent basically on
paying a vendor, which was--who headed the program, ICF.
We have been very slow in awarding the compensation grants
to the people who lost their home. We met with the Governor--I
shouldn't say the Governor--the Governor's staff, about 1 month
ago, and told her that it was totally unacceptable at the rate
that they were spending to--spending the money, and the rate
that they were giving people compensation or rehabbing housing.
Now, I think if you look at the legislation, chairlady, the
first $6.5 billion to Louisiana, we have very little control
over. The second part, we have a lot of control over. And so,
with that, we can either say, ``You're not doing an acceptable
job''--but the leverage is not there.
So, I will tell you that I'm not pleased with the progress
that's been made. I'm just not----
Senator Murray. So, you can't give me the number that have
been repaired or rebuilt?
Secretary Jackson. I will look and find out, but I don't
think it's very many. So, I don't want to give you a faulty
number today, but I will get it to you immediately after this.
Senator Murray. Okay. I would appreciate that.
[The information follows:]
Public Law 109-234--Requirement for Affordable Rental Housing
Public Law 109-234 appropriated a total of $5.173 billion in
supplemental CDBG disaster recovery grant funds to the five gulf States
affected by Hurricanes Katrina and Rita.
The fifth proviso stated:
``Provided further, That not less than $1 billion from funds made
available on a pro-rata basis according to the allocation made to each
State under this heading shall be used for repair, rehabilitation, and
reconstruction (including demolition, site clearance and remediation)
of the affordable rental housing stock (including public and other HUD-
assisted housing) in the impacted areas:''
On October 30, 2006, HUD published in the Federal Register the
five-State allocations, waivers and requirements. In particular, HUD
published the following provision to implement the statutory
requirement for the $1 billion to be spent for affordable rental
housing stock:
``Also as required by the law, not less than $1 billion of the $5.2
billion appropriation less $27 million in administrative set-asides
(which computes to 19.3311 percent of any State's allocation) shall be
used for repair, rehabilitation, and reconstruction (including
demolition, site clearance and remediation) of the affordable rental
housing stock (including public and other HUD assisted housing) in the
impacted areas. Therefore, HUD is requiring that not less than 19.3311
percent of each State's grant be used for these activities.''
------------------------------------------------------------------------
Minimum amount for
State affordable rental
housing
------------------------------------------------------------------------
Alabama........................................ $4,103,146
Florida........................................ 19,344,001
Louisiana...................................... 811,907,984
Mississippi.................................... 81,777,703
Texas.......................................... 82,867,166
------------------------
Total...................................... 1,000,000,000
------------------------------------------------------------------------
The five States have submitted Action Plans for the required
housing that HUD has accepted.
The amounts budgeted for affordable rental housing is as follows:
------------------------------------------------------------------------
Amount
------------------------------------------------------------------------
Alabama: Unspecified projects for affordable rental $4,103,146
housing................................................
Florida: Multifamily Housing Repair and Mitigation...... 20,013,304
===============
Louisiana:
Piggyback/LIHTC Affordable Multifamily Rental 593,970,000
Development, 18,000 units proposed.................
Small Rental Development--10,000 units proposed..... 492,700,000
---------------
Subtotal.......................................... 1,086,670,000
===============
Mississippi; Small Rental (1-4 units) Assistance Program 262,000,000
===============
Texas:
Assistance to Multifamily properties (16+ units) in 82,866,984
areas damaged by Hurricane Rita....................
Rehabilitation of Multifamily Apartments in Houston/ 20,000,000
Harris County where large numbers of evacuees live.
---------------
Subtotal........................................ 102,866,984
===============
Grand Total..................................... 1,475,653,434
------------------------------------------------------------------------
The above programs are in various stages of program design and
implementation. The States are at the forefront of implementing their
program designs which took time to develop and institute. We anticipate
future progress reports will capture the activity and commitment of
each State. Louisiana has been accepting applications from prospective
apartment owners as well as projects for the Affordable Multifamily
Rental Development program. Mississippi has rolled out its program and
applications are available on-line.
The CDBG disaster grant funds currently budgeted for affordable
housing exceeds the statutory minimum by over 47 percent. Not counted
in these amounts are funds the States have budgeted from the CDBG
disaster supplemental appropriated under Public Law 109-148. Funds
budgeted by the States from this appropriations exceeds an additional
$500 million. In all, total resources committed to affordable housing,
public housing and supportive and housing for the homeless is
approximately $2 billion. At the moment there is limited progress as
the States are in the initial stages of operationalizing their programs
or undergoing the application phase.
Senator Murray. And the administration asked us, and we
approved, a provision that allows the PHAs in the most heavily
impacted areas in Mississippi and Louisiana flexibility to
combine their funding streams from all the Federal resources to
assist tenants in a lot of ways in reconstructing damaged or
destroyed housing. You kind of alluded to this, but the Housing
Authority of New Orleans, which is under your exclusive
control, is now sitting on over $95 million in Federal funds,
and doesn't have a lot of activity to show for it. Can you tell
us why--this is under your control--can you tell us why those
Federal dollars are not being spent?
Secretary Jackson. You mean in Louisiana?
Senator Murray. It's the Housing Authority of New Orleans.
Secretary Jackson. The dollars are being spent. We are
moving expeditiously. As the ranking member asked, we have
completely rehabbed 2,000 units. We have committed to rehab
2,500 units. We--to date, we've housed 1,600 people. And I will
give you the same answer that I gave the Senator, we're trying
to entice people to come back and occupy those units, but we
have not been very successful, because many of the people are
pleased with where they are. But the units are online, and we
committed to the court and to Chairlady Waters on the House
side, that we would have 2,500 units for occupancy by
September, and we will keep that commitment.
Senator Murray. We're seeing $95 million sitting on the
books. Is that inaccurate?
Secretary Jackson. I will find out. I don't think there's
$95 million sitting on the books that's not being spent. If it
is, I will get back to you.
[The information follows:]
On December 7, 2006 HANO, in accordance with Federal Register
Notice No. 145 Vol. 71, submitted a fungibility plan to the Department
of Housing and Urban Development (HUD). Under this plan, HANO was
allowed to combine its Operating Fund, section 8, and Capital Fund/RHF
funds under one plan to provide for the development and revitalization
of its public housing stock. The following summarizes HANO's financial
position at September 21, 2007 in relation to its 2006 fungibility
plan:
Summary of HANO 2006 fungibility dollars, amounts expended and/or
committed, and remaining 901 funds:
------------------------------------------------------------------------
Amount
------------------------------------------------------------------------
2006 Fungible Dollars (Operating Fund, Capital Fund, $121,586,296
and section 8)......................................
==================
Expended on rehab of reoccupancy units at (1,468,875)
Iberville.......................................
Expended on security for vacant sites............ (2,666,354)
Expended on Lafitte Pre Development Costs........ (3,226,893)
------------------
Total 2006 Fungible Dollars Expended........... (7,362,122)
==================
Obligated for the demolition and infrastructure of (33,527,103)
properties slated for redevelopment.................
Obligated for pre construction loans on mixed finance (18,688,000)
projects............................................
------------------
Total 2006 Fungible Dollars Obligated.......... (52,215,103)
==================
Total 2006 Fungible Dollars Expended and (59,577,225)
Obligated.....................................
2006 Fungible Dollars net of expended and 62,009,071
obligated balances........................
------------------
Interest earned on 901 funds held in 1,087,654
depository accounts.......................
==================
Net Currently Available.................. 63,096,725
------------------------------------------------------------------------
Although HANO has not expended a majority of the 2006 funds
available, nearly 50 percent has been obligated. This delay between
obligation and expenditure is typical of redevelopment projects. In the
case of HANO, delays in redevelopment have been caused by external
factors such as environmental reviews, including protracted historic
negotiations with the State Historic Preservation Office (SHPO) and the
Advisory Council on Historic Preservation (ACHP) requiring the
finalization of Memoranda of Understanding (MOA) with multiple
consulting partners. Additional delays resulted from litigation and
time required to select developer partners. Recently, several approvals
have been obtained. HUD has approved the demolition and disposition of
four major public housing sites and predevelopment agreements have been
signed with the developers of the four sites. HANO intends to obligate
the remaining funds for redevelopment of public housing within 6
months.
Secretary Jackson. I--in fact, one of the issues that we
are facing is that we have been told by the accountant that's
in the housing authority, that we have a shortage of funds. And
I've asked Scott Keller, who's the Deputy Chief of Staff, to
make sure that we have ample funds to carry out the
responsibilities.
So, if we have $95 million, I will surely get back to you,
because I really don't--I really don't know, at this point.
Senator Murray. Okay. I have one other area that I wanted
to just quickly ask you about, and that is the issue of the men
and women coming home from serving us in the armed services. We
are hearing a lot about the homelessness issue that is facing
these veterans when they return, their ability to get in, and
stay in, housing. And I wanted to ask you what HUD is doing
specifically to meet some of the challenges of our returning
veterans.
Secretary Jackson. We have been working with Secretary
Nicholson, because he has the same concern. And we're doing
everything in our power with our vouchers with public housing
to house many of these people. I'm totally in agreement with
you, they should not come back and not be housed. And I will do
everything--I won't say ``I'll do''--I'll continue to do
everything in my power to make sure that they're housed.
Senator Murray. Well, I'm familiar with the HUD-VASH
program----
Secretary Jackson. Right.
Senator Murray [continuing]. May have been what you're
referring to--that combines HUD section 8 with some supportive
services. We know that, since 1992, only 1,780 of those
vouchers have been issued. Is this a program that HUD still
supports?
Secretary Jackson. Yes, we do. And what we--we're doing--
whenever vouchers are available--and I promised Secretary
Nicholson this--we will allocate it to the program up to the
number that we should require. Back in 1996 or 1997, they
stopped allocating the vouchers and began to allocate them
outwardly. We should have never allocated those vouchers that
were set out for veterans. And we're trying to recapture them.
We have--I think we--to date, we've gotten about 200 back. It's
very difficult to get the vouchers back once they're out there.
Senator Murray. Have you had a personal discussion with
Secretary Nicholson about this program?
Secretary Jackson. Yes, I have.
Senator Murray. Okay. Well, I would like to find some
answers back, and I'd hope that you can really focus on this.
It is a growing concern out there, and, I think, one that we
all need to----
Secretary Jackson. And I agree with you, wholeheartedly.
Senator Murray. Okay, thank you very much.
Senator Bond.
Senator Bond. Thank you very much, Madam Chair.
And I said I'd like to call up Mr. Donohue. While he's
taking his seat, I want to call to your attention, Mr.
Secretary, a problem that was highlighted in the May 2 Post-
Dispatch. And I know you're familiar with that paper, having
lived and worked in St. Louis.
There is a tragic situation at Centenary Housing, a company
of Portland, Maine, that acquired property and--it's a public/
private venture that, according to this paper, and from our
information, allowed the housing to lapse into a state of
disrepair and chaos. The elderly and disabled residents are
being forced out of their homes, and it is another serious
situation. And I'd ask that you make a personal commitment to
have somebody look into it to ensure that these residents are
not harmed and their needs are addressed. Apparently, there has
been a tremendous number of police calls over the last 2
months, some 1,151 calls for police support. So, something is
going drastically wrong there. So, I would like----
Secretary Jackson. Well, I'll say this. I think, as of last
evening, we had found vouchers and housed about 60 of the 97
people. I will be making a trip out to St. Louis early next
week to make sure that many of the elderly and the disabled
issues related to housing is addressed, because I'm very, very
concerned when they're elderly and disabled.
Senator Bond. Well, thank you. We are, too. And I
appreciate your personal attention.
Now, turning to Mr. Donohue, I would like to get your views
and assessment on the HUD funding, addressing the devastation
caused by Katrina. And I would like your assessment of what the
key concerns are and how well Mississippi and Louisiana are
implementing the use of emergency CDBG funds. Are they being
allocated quickly and effectively? Has--have you seen any
evidence of fraud and abuse in these programs?
Mr. Donohue. Yes--Kenneth M. Donohue, D-o-n-o-h-u-e,
Inspector General, Housing and Urban Development. Thank you,
Senator.
We--as far as the disbursement of funds, I have some notes
here--Louisiana, 129,260 applications; grants paid out is
$12,681.
Senator Bond. So, that's 10 percent?
Mr. Donohue. That's about right, sir.
Mississippi is 18,753; grants paid is $12,413.
Senator Bond. So, that's about 67 percent.
Mr. Donohue. Yes, sir.
Senator Bond. My math is a little--my horseback math is a
little shaky, but, I think, just for the sake of comparison,
it's--it would be helpful to know.
Mr. Donohue. I think--as far as our patterns are concerned
with regard to Louisiana, I think what we're seeing is that the
applications are slow in the process. And the fact is, I think
what we're finding is a lot of homeowners are trying to make a
determination as to whether they want to return or rebuild. And
I think part of that reason is the fact--is whether the
infrastructure--education programs and hospitals and so on--are
enough there to support the efforts that they want to return
to. But it has been quite slow, and we continue to watch it
closely.
Senator Bond. Are you seeing--are the funds--the funds that
are being allocated, are they being effectively allocated? Have
you come across any fraud and abuse in either of these two
States?
Mr. Donohue. We certainly do, sir. We--as I told you that
we've tried to take a very proactive approach to our efforts.
We have several ongoing audits. I've expanded my offices to
include several locations in Mississippi--Hattiesburg and
Jackson, Mississippi, increased my staff in New Orleans. We
have, at this point, about--in the criminal side, about 123
cases, fraudulent applications.
Senator Bond. Where are those cases, mostly?
Mr. Donohue. They were both in Mississippi and Louisiana.
We had a recent announcement, on April 16, where we indicted
ten people in Mississippi, primarily with grand fraud. What
we're seeing, Senator, is, we're seeing a movement from grand
fraud now to move contract or public corruption cases. And we
think that will continue on as more contracts are awarded.
Senator Bond. That's an unfortunate--that's an unfortunate
result of it, and we appreciate very much you staying on top of
it. Any other problems on how HUD's dealing with the
rebuilding, or any major problems facing HUD in rebuilding the
low-income housing stock?
Mr. Donohue. Well, just a few things are--I think that one
of the things we've found is that the Privacy Act issues with
regard to transferring--doing data matching between Government
agencies--we'd like to see--and I believe--I would suggest that
when we have disaster of this type, there are issues that have
to be addressed in the privacy issues so Government agencies
can share information with each other more easily.
The other thing I've seen is--with the Department, is
communications. And I think--what I mean, between the program
areas themselves, and also communications with the local
offices and headquarters. I'm pleased to have learned that the
Deputy Secretary has--and the Secretary--have announced naming
a person in charge of the department that'll oversee the entire
efforts in the gulf States area, and I applaud that effort.
Senator Bond. Thank you very much, Mr. Donohue.
Thank you, Madam Chair.
Senator Murray. Do you have any other questions?
Senator Bond. Well, I'll--I have just two more, but I'll
let you and Senator Allard go forward.
Senator Murray. Senator Allard.
Senator Allard. Thank you, Madam Chairman.
Mr. Secretary, as you may well be aware of, I pay close
attention to the President's PART program. This is made
possible through legislation we passed over a decade ago, where
the Congress asked for the agencies to establish a Government
Procedures and Results Act--I guess it's Performance and
Results Act.
Secretary Jackson. Right.
Senator Allard. And I watch that fairly closely. And I
notice that you have some agencies there--four, I believe--that
are rated as ineffective. They have eight or so that are rated
as ``no results demonstrated.'' And rating on that is: no
results demonstrated, ineffective, moderately effective, or
effective.
And what is it that you're doing to address these agencies
that refuse to try and do anything, or, for some reason or
other, are unable to, and then those that are also rated
ineffective? In my way of thinking, the most egregious one are
those that absolutely aren't trying. And then, those that are
ineffective would be next to the bottom. So, I just wondered
what you're doing, when you look at the results of that, to
correct those problems.
Secretary Jackson. Two things. First of all, as I said, we
are making every effort to do what we did with FHA in the
public integrity issue with undercounting. I believe that,
clearly, getting off the high-risk list was extremely important
to us. One of the things that we have stressed--and, I mean,
when--I said ``we,'' because I don't like the term ``I''--we
have stressed--that means the Deputy Secretary and the
Assistant Secretaries--is performance. And I must tell you,
working with Clay Johnson, over at OMB, who is a performance
expert, we have begun to move quickly, programs that were
ineffective to effective programs.
Second, when we hired our Chief Information Officer, we had
so many computer systems, Senator Allard, that did not talk to
each other, it was unbelievable. She has done--we've gone from
an F to an A, because we have integrated those systems and cut
out a lot of those systems. So, we're making tremendous
strides, because I think that if we don't make those strides,
then clearly we will find ourselves back on the GAO list again,
and I don't want to be back on that list.
Senator Allard. Well, good for you. What are your--getting
to your budget--I think, 6 years ago, you were carrying--the
HUD was carrying somewhere--about $12 billion unallocated and
unspent balances. Are you carrying any unallocated--I assume
you're carrying some unspent balances and some unallocated--do
you have any idea what that figure is?
Secretary Jackson. I will get it for you. I don't, today.
Senator Allard. Okay.
Secretary Jackson. If we have it, I will get it.
Senator Allard. I would like to--I'd like to have that
information----
Secretary Jackson. Sure.
Senator Allard [continuing]. If you would, please.
[The information follows:]
Unobligated and Unexpended Balances
At the end of fiscal year 2001, The Department carried over $10.99
billion in unobligated balances into fiscal year 2002. At the same
time, the unexpended balances for the Department were $103.26 billion.
At the end of fiscal year 2006, the most recently completed fiscal
year, the Department carried over $13.69 billion into fiscal year 2007,
while the unexpended balances were $85.35 billion. Although the amount
of unobligated balances increased by $2.7 billion, this is largely
attributable to the emergency supplemental funds appropriated in
response to Hurricanes Katrina, Wilma, and Rita. During this same
timeframe, the Department was continuing the successful efforts to
expend funds more efficiently and expeditiously as demonstrated by the
$17.9 billion reduction in unexpended balances.
Senator Allard. And then, finally, as far as I'm concerned,
on the multifamily mortgage insurance premium, I see that--in
the budget there, that you're asking for an increase in that.
The past years, that's been highly controversial. What--are
there other ways? I mean, why are--why do you include that in
your budget when it's--in your appropriation--when it's so
controversial?
Secretary Jackson. Well, let me have--I can give you an
answer, a generic answer, but let me have Brian Montgomery--
Brian is not here? Oh.
Senator Allard. Well, he can give me a written response.
Secretary Jackson. I will give you a written response, very
quickly.
Senator Allard. Okay.
Thank you, Madam Chairman.
Senator Murray. Thank you.
[The information follows:]
Multifamily Mortgage Insurance Premium Increase
The proposal to raise the annual insurance premiums on multifamily
housing projects was prompted by the outcome of an evaluation of the
program using OMB's Program Assessment Rating Tool (PART). That
evaluation raised questions concerning program targeting and its
overall efficiency. While we intend to review the program to determine
whether or not changes need to be made, let me assure you that no
actions--including raising the premiums--will be taken until they are
fully discussed with all interested stakeholders, especially Congress.
The annual premium increases impact only the following multifamily
products. Projects that use Low-Income Housing Tax Credits are exempt
from this increase:
--------------------------------------------------------------------------------------------------------------------------------------------------------
Description Fiscal year 2007 Fiscal year 2008
--------------------------------------------------------------------------------------------------------------------------------------------------------
221d4................................. FHA New Construction/Substantial Rehab Apartments........... 45 basis points......... 61 basis points.
223a7................................. Refinancing of Apartments................................... 45 basis points......... 61 basis points.
223f.................................. Refinancing/Purchasing of Apartments........................ 45 basis points......... 61 basis points.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Senator Murray. Mr. Secretary, I do have some questions
that I'm going to submit for the record that I hope that you
will respond with, and I will leave the record open for any
other members who have questions, as well.
Senator Bond, did you have anything else you wanted to ask
now?
Senator Bond. Thank you, Madam Chair.
Yes, I'll have a few, just to make sure that we keep the
Secretary busy. But I do want to ask a question about housing
for the disabled. The 811 budget request assumes a new $15
million demonstration program, and I'm curious what the logic
is behind requesting funds for the demonstration, while
drastically cutting the overall program. I'm especially
troubled that HUD recommends that $75 million, of the $125
million requested, be targeted solely to tenant-based vouchers.
This continues a trend against, apparently, new housing for
persons with disabilities. And what's the definition for going
tenant-based without providing some incentive for construction
or rehab for--of facilities for persons with disabilities?
Secretary Jackson. Senator, we believe that, as we do with
HOME dollars, that we should begin to leverage the dollars,
find developers to develop housing for disabled, for the
elderly, and do all--and do as much as we can to create more
housing. We have strictly been building housing with 202 and
811, but we have not been building it in a quick or judicious
fashion. We really haven't. And I think that if we can find an
interim area where we can do it--and that's for the
demonstration program--then I clearly believe that I will come
back and ask for more monies. But we've got to build the
house--housing quickly.
Now, I know the question becomes, ``Well, if you will ask
if it's done, what happens to the--to many of the people who
are disabled?'' That's why we've increased the vouchers,
because we find that much quicker to be used. They can get an
apartment much quicker, or get a home much quicker than we can
build it. So, we're trying to accommodate as many disabled and
elderly as we can, and that's the reason why we went to the
demonstration program.
Senator Bond. Well, it would seem to me that, rather than
cutting the overall 811 program, that perhaps project-based,
along with the demonstration program, would begin to provide
the facilities that we need that are in--truly wanting in many
areas. So, I question--have you worked with the disabled
community? And do you expect any legislative proposals to be
submitted to Congress?
Secretary Jackson. Yes, I just met with ADAPT--today is
Thursday--on Monday, when there were about 500 disabled persons
in town. I went to see them. And clearly their concern is the
concern that you've raised, not only for veterans, but for
disabled--not only for disabled veterans, but disabled people,
period, and especially those persons in nursing homes. And I
agreed with them that we would work with them to try to create
legislation that could be presented to you all. And I have my
staff working with their executive board or committee, whatever
they're called, to see exactly what it is that they want, and
to have us introduce legislation.
Senator Bond. We'll look forward to that proposal.
Finally, saving some of the best for submission for the
record, on the question of homeless, as I said in my opening
statement, I think you've made great progress, and I support
your--the administration's focus on the chronic homelessness
and the goal to provide 150,000 units. How close are we to
meeting this goal? And, after that goal is met, what are your--
what are the next steps to addressing other types of
homelessness, especially family homelessness? Do you have a
long-term strategy?
Secretary Jackson. Yes. You know, I visited a number of
homeless organizations, and I think the model that I've seen
that works best is the model out in Los Angeles called PATH.
And I don't know exactly what the acronym--what they do--and
that's one of the reasons we increased the budget by $1.6
billion--they first take the person off the street, then they
clean up the person, then they have the person go through both
physical and psychological evaluation, then they begin to train
the persons in job classifications, and then they monitor the
person for the next 18 months after they leave. To me, that is
the way we should be addressing the homeless, not putting a
person in a shelter because it's cold that one night. And
that's traditionally what we have been doing. So, what we're
trying to do is replicate PATH around this country, because if
they can do it, other cities can do it.
I think you have made great strides in St. Louis, too,
addressing the homeless.
Senator Bond. I'm proud of what's going on there.
Secretary Jackson. Very much so. But there are other
cities--and I like to use the city that I'm from--like Dallas,
that has not made great strides. They still think that the most
important thing is to house a person for a night. And I don't
think that's the approach that the President wants to take, or
I want to take. Once a person is on the streets for 90 days or
more, they're going to need tremendous help not to go back to
the street. And I would prefer see them--seeing them not go
back to the street. I look out, every day, at my window at HUD,
and there are people sleeping under the freeway. And that is
unacceptable. And they've been there for 3 or 4 weeks. So,
clearly, we should be addressing their needs to get them off
the streets.
Senator Bond. Well, thank you very much. Mr. Secretary, the
only thing I'd disagree with, I still think you ought to claim
St. Louis as your roots, but----
Secretary Jackson. Well, St. Louis is--let me say this to
you, Senator. I was born in Dallas, Texas, but I lived most of
my----
Senator Bond. You didn't have a choice about that.
Secretary Jackson. That's right. But I lived most of my
adult life in St. Louis, and St. Louis is like my home.
Senator Murray. Okay.
Senator Bond. Keep the faith in the Cardinals.
Thank you very much.
Secretary Jackson. And they are my team, too----
Senator Murray. But we're not----
Secretary Jackson [continuing]. The St. Louis Cardinals.
Senator Murray [continuing]. Going to go there.
Well, thank you very much, Senator Bond.
And, Mr. Secretary, I want you to get back to us on a
number of questions that were raised here today. I especially
want to find out about the $95 million that the Housing
Authority of New Orleans--your Assistant Secretary is the one
who gave us the number----
Secretary Jackson. Okay.
Senator Murray [continuing]. That it is sitting there, it
is available for reconstruction now. So, we want to find out--
--
Mr. Cabrera. Who is it? I can talk--I can speak----
Secretary Jackson. He can speak to it, if you want him----
Senator Murray. I would like a question back in----
Secretary Jackson. Okay.
Senator Murray [continuing]. Response.
Secretary Jackson. I didn't know he had given you the
number.
Senator Murray. Actually, we'll get a response back from
you in writing, if--and not in testimony today, because we do
need to move on. But I appreciate your being here today. But I
want to----
Mr. Cabrera. Can we give a quick----
Senator Murray. If you can give a 30-second response, we
have a vote we have to get back----
Mr. Cabrera. Absolutely, Madam Chair. Orlando Cabrera, for
the record, once again.
The $95 million is a reserve number that allows for the
fungibility that Congress provided in section 901 of the
supplemental. And so, the reason that it's not--the reason it's
there is because currently HANO, HUD, and others are being
sued, and that's impeding development. The purpose of that
money is to redevelop. And so--but there is--that's composed of
section 8, operating fund----
Senator Murray. Right.
Mr. Cabrera [continuing]. And it includes capital fund,
even though that determination is a little bit unclear. It's
actually $81 million plus $14 million----
Senator Murray. Right.
Mr. Cabrera [continuing]. But there's an interpretive issue
as to whether that $14 million is inclusive. And so, that's
what--that's what the $95 million is.
Secretary Jackson. And we will still get you a written
response.
ADDITIONAL COMMITTEE QUESTIONS
Senator Murray. I--and I very much appreciate that, thank
you.
Secretary Jackson. Okay.
[The following questions were not asked at the hearing, but
were submitted to the Department for response subsequent to the
hearing:]
Questions Submitted by Senator Herb Kohl
CUTS IN THE OPERATING FUND
Question. The Milwaukee Public Housing authority recently told me
that they are being restricted from using a portion of their capital
fund to off set some of their operating costs. Specifically, they use
capital fund money to pay for their Public Safety program, which
provides security and intervention services for seniors, disabled
individuals, families and veterans in public housing. They are very
concerned because current law allows them to use up to 20 percent of
their capital fund to cover certain operational costs, however, HUD
issued guidance that would eliminate this flexibility. This rule would
force the Milwaukee PHA to lay off 35 employees who administer evening
and weekend security. It is unclear why HUD would eliminate PHAs
flexible use of the Capital fund given the constraints on the operating
fund. Why would HUD issue this guidance and will you withdraw the
provision?
Answer. The Department has not implemented any restriction on the
ability of a PHA to use 20 percent of its Capital Fund Program to
support the ``operations'' of a project. In the case of the Milwaukee
Housing Authority, security expenses are an ``operating'' cost of each
project. Hence, the PHA can continue to use the Capital Fund (up to the
20 percent permitted by statute) to fund its security program.
SEC. 202/811 FUNDING
Question. The section 202 program provides capital to non-profits
to develop and maintain housing for low-income seniors and section 811
helps develop housing for disabled individuals. Both programs couple
housing with supportive services to allow these individuals to live
independently and participate in the surrounding community. The
administration has proposed deep cuts to both programs. In 2005, in
Wisconsin, there were only three new housing developments, totaling 41
units, to serve these populations. If the administration's proposed
cuts were accepted, it would result in approximately only 150 new units
across the country. For every section 202 housing unit, there are
around 10 seniors on the waiting list and the number of disabled adults
living with their aging parents is close to 700,000. With these two
populations growing and housing resources becoming more scarce, how can
you justify cutting these very valuable programs?
Answer. The Department's first priority is to provide for the
increased costs associated with serving the roughly 3.4 million
families currently receiving section 8 rental assistance. This required
that the Department make some very difficult funding decisions.
However, despite the fact that section 8 renewal funding absorbed a
major part of the Department's budget, we are able to direct
significant funding in the budget to the section 202 program to provide
for: (1) funding to convert projects to assisted living; $390.5 million
for the construction of new units; (2) funds to renew and amend
existing contracts (Our estimate is that the requested budget funding
will produce several thousand units nationwide); (3) congregate
services; and (4) service coordinators.
In addition, we proposed sufficient funding for the section 811
program providing for: (1) funds to renew and amend existing contracts;
(2) $14.5 million for the construction of additional new units; and (3)
continued financial support for projects under payment and in the
construction pipeline.
______
Questions Submitted by Senator Frank R. Lautenberg
FUNDING FOR PUBLIC HOUSING
Question. Many housing authorities in New Jersey have told me that
public housing is in crisis. Yet, President Bush's proposed budget for
fiscal year 2008 falls $700 million short of what is needed to fully
fund the HUD operating fund. How are public housing authorities
supposed to provide the affordable housing thousands of people need
without full funding?
Answer. At the end of fiscal year 2006, nationwide, PHAs had
approximately $2.7 billion in reserves that can be used to support the
operation and maintenance of low-income housing. Additionally, PHAs are
allowed to retain all of the income they receive from investments and
other non-dwelling rental income, such as income from rooftop antennas,
laundry receipts, etc. In 2006, this other income accounted for $349
million. Further, for the purposes of subsidy calculation, rental
income is frozen at 2005 levels, which means that any increase in
rental income does not decrease the amount of subsidy that the PHA will
receive in 2007 and 2008.
Through a variety of initiatives, the Department has encouraged
PHAs to look at their inventory and make informed management decisions
about the housing stock. Steps that PHAs have taken include demolishing
the worst, and often most expensive, housing stock, entering into
energy performance contracts to reduce the cost of utilities, and
switching to tenant-paid utilities.
AT-RISK REPUBLICANS
Question. Last month, the Bush Administration admitted conducting
political briefings with your agency on Republican candidates that were
at risk of not being re-elected. Was such a briefing given to your
agency? If so, did your agency award any contracts or take any specific
action to assist vulnerable Republicans gain re-election?
Answer. White House personnel conducted briefings for various HUD
employees to provide overviews of the national electoral landscape. At
those briefings, there were no discussions of HUD assisting any
individual candidates, and HUD did not award any contracts or take any
specific action to assist vulnerable Republicans gain re-election as a
result of any of those briefings.
______
Questions Submitted by Senator Arlen Specter
ASSET MANAGEMENT
Question. The fiscal year 2008 budget requests funding at $4.0
billion for the Public Housing Operating Fund. According to your
agency, this level of funding would represent only 85 percent of actual
operating subsidy needed for fiscal year 2008 as housing authorities
convert to asset-based management.
Given the anticipated shortfall, how will housing authorities be
able to meet their operating needs, without cutting vital services and
security, and covert to asset management?
Answer. At the end of fiscal year 2006, nationwide, PHAs had
approximately $2.7 billion in reserves that can be used to support the
operation and maintenance of low-income housing. Additionally, PHAs are
allowed to retain all of the income they receive from investments and
other non-dwelling rental income, such as income from rooftop antennas,
laundry receipts, etc. In 2006, this other income accounted for $349
million. Further, for the purposes of subsidy calculation, rental
income is frozen at 2005 levels, which means that any increase in
rental income does not decrease the amount of subsidy that the PHA will
receive in 2007 and 2008.
Through a variety of initiatives, the Department has encouraged
PHAs to look at their inventory and make informed management decisions
about the housing stock. Steps that PHAs have taken include demolishing
the worst, and often most expensive, housing stock, entering into
energy performance contracts to reduce the cost of utilities, and
switching to tenant-paid utilities.
HOPE VI
Question. HOPE VI enhances communities by decentralizing poverty
and giving families an opportunity to live in mixed-income
neighborhoods with better educational and employment opportunities. I
have visited HOPE VI sites throughout Pennsylvania and have discovered
the critical impact that reconstruction in these public housing
developments has on revitalizing neighborhoods.
As HOPE VI has accomplished one of its goals of demolishing 100,000
severely distressed units--which suggests to me that the program has
been effective--how does HUD propose to accomplish the necessary level
of reconstruction in the future if HOPE VI is eliminated?
Answer. The Department recognizes the importance of addressing the
current capital backlog within the public housing inventory. In most
cases, this need can be more appropriately met through other
modernization and development programs operated by the Department,
e.g., the Capital Fund, the Capital Fund Financing Program, non-HOPE VI
mixed-finance development including leveraging private capital
investment, required and voluntary conversion, section 30, and use of
tax credits. The Department will encourage housing authorities in need
of this assistance to submit proposals under these programs.
______
Questions Submitted by Senator Pete V. Domenici
CUTS IN SECTION 811 FUNDING
Question. Secretary Jackson, I was disappointed to see that for the
third year in a row, the Department of Housing and Urban Development is
seeking a huge cut in funding for the section 811 Supportive Housing
for Persons with Disabilities programs. This year you requested only
$125 million for a program that is currently funded at $237 million. In
each of the last 2 years, Congress--including this subcommittee with
bipartisan support--has restored these funds. Why does HUD continue to
seek cuts to this program?
Answer. The fiscal year 2008 budget request of $125 million is $6.2
million greater than the $118.8 million requested in fiscal year 2007.
Despite the fact that we are required to provide funding for renewals
and amendments, we were able to provide additional funding for new
production in the fiscal year 2008 request. This includes $14.5 million
for new capital grants and associated Project Rental Assistance
Contracts (PRAC). The Department has proposed $15 million for a
Leverage Financing Demonstration. The Department is committed to fully
funding all the projects in the construction pipeline.
Question. All of the cuts you have proposed in the section 811
programs would come from the capital advance-project-based side of the
program that helps produce new units. These units help individuals with
more severe disabilities that have higher support needs and face an
enormous struggle in trying to find housing. These units also help
provide a direct link to supportive services such as medical care,
transportation, and employment. Why is HUD requesting a cut of $112
million (70 percent) for these programs which fall under your own
budget title of ``Serving Those Most In Need?''
Answer. The Department remains committed to serving this vulnerable
population. There are approximately 250 projects in the development
pipeline that the Department will continue to work with sponsors to
develop. The Department will provide additional funding for new capital
grants and PRAC in fiscal year 2008. HUD also proposed the new Leverage
Financing Demonstration to investigate more efficient means of bringing
additional resources to support the program and its participants.
Question. The administration's request for fiscal year 2008 for
section 811 includes a proposed $15 million demonstration program that
would allow funding from the Low-Income Housing Tax Credit (LIHTC)
program. When do you anticipate having this demonstration proposal
ready for Congress?
Answer. Neither the House nor the Senate included the Demonstration
in their fiscal year 2008 appropriations bills. We estimate that we
would have a proposal for Congressional consideration 90 days after
approval.
Question. How many permanent supportive housing units do you
anticipate this demonstration proposal to produce in fiscal year 2008?
Answer. It is unlikely that funding will be available in time to
produce any units in 2008.
Question. Do you anticipate this demonstration proposal requiring
any waivers or exceptions to current statutory or regulatory standards
in the current 811 program?
Answer. We are in the process of developing the detailed features
of this demonstration and have not yet identified any specific
statutory or regulatory impediments.
Question. If any such waivers or exceptions are needed, would this
require a change to the current 811 statute?
Answer. This will be determined after the completion and evaluation
of the Demonstration program.
Question. In March, HUD issued the fiscal year 2007 Super Notice of
Funding Availability (SuperNOFA) for a range of programs. For section
811, the SuperNOFA makes available only $88.3 million for the new
capital advance-PRAC grant competition. This is substantially below
what was assumed in the fiscal year 2007 ``continuing resolution'' that
was enacted by Congress back in February (H.J. Res 20). H.J. Res 20
assumed a freeze at the fiscal year 2006 level of $145.87 million. In
order for this reduction to be explained by increased demand for 811
tenant-based renewals, the percentage of renewals would have to have
increased by 120 percent. What happened to this funding for section
811?
Answer. The total new appropriation in fiscal year 2007 was $236.6
million and the total amount allotted in fiscal year 2007 amounted to
$158,697,000 exclusive of $77.5 million for Mainstream Vouchers and
$396,000 for the Working Capital Fund. The table below reflects the
fiscal year 2007 allotment by funding category including the new
capital advance funding of $113.6 million and PRAC renewals of $16.9
million.
------------------------------------------------------------------------
Allotment
------------------------------------------------------------------------
Capital Advance Inspection Fees....................... $1,000,000.00
PRAC Renewals......................................... 16,943,000.00
Initial PRAC Awards................................... 11,436,600.00
Capital Advance Amendments............................ 11,590,759.00
PRAC Amendments....................................... 3,542,623.00
Initial Capital Advance Awards........................ 113,575,425.00
Technical Assistance.................................. 608,593.00
-----------------
Total........................................... 158,697,000.00
------------------------------------------------------------------------
Question. Between fiscal year 1997 and fiscal year 2002, Congress
annually appropriated funding for tenant-based rental assistance for
non-elderly people with disabilities adversely impacted by the
designation of public and assisted housing as ``elderly only.'' There
are approximately 62,000 of these non-elderly disabled vouchers--also
known as Frelinghuysen vouchers--in use. Unfortunately, HUD was slow to
develop a tracking system to ensure that these vouchers continue to be
targeted to the population for which Congress intended. In February
2005, the Office of Public and Indian Housing (PIH) issued Notice 2005-
5 relating to issuance and preservation of these vouchers. This PIH
Guidance also covers ``mainstream'' tenant-based rental assistance for
non-elderly people with disabilities funded under the section 811
program.
However, due to the lack of guidance until 2005, there is
considerable uncertainty as to how many of these vouchers remain
targeted to non-elderly people with disabilities as Congress originally
intended.
Can you please provide the subcommittee with estimates of how both
the Frelinghuysen vouchers and 811 ``mainstream'' tenant-based
assistance has been targeted--and is remaining targeted to--the
intended population?
Answer. PIH Notice 2005-5 issued implementation guidance to enable
PHAs and HUD field staff on initiatives to assist non-elderly people
with disabilities in their search for housing under the Housing Choice
Voucher Program. In addition, this notice clarifies issues related to
issuance and preservation of certain types of special purpose vouchers,
i.e. Frelinghuysen and 811 Mainstream Vouchers. By requiring PHAs to
electronically report using the Form HUD-50058, HUD monitors these
vouchers to ensure they are targeted to the intended population. The
Department continues to work with these agencies to ensure that all
special purpose vouchers are used for their intended purpose. In fiscal
year 2007, the Department had 50,533 Housing Choice vouchers, and
14,836 section 811 vouchers reserved for individuals with disabilities.
Question. Can you please update the subcommittee on steps that PIH
has taken to ensure housing agencies that have these non-elderly
disabled vouchers are meeting their obligations under PIH Notice 2005-
5?
Answer. To ensure that non-elderly vouchers are meeting their
obligations under PIE Notice 2005-5, HUD is tracking monthly the usage
of these non-elderly vouchers through its Voucher Management System
(VMS). The Department is also working with the PHAs to ensure that all
special purpose vouchers are used for their intended purpose. Failure
to serve disabled families as required will result in forfeiture of the
vouchers.
______
Question Submitted by Senator Wayne Allard
HUMAN CAPITAL
Question. The Government cannot function without human capital, yet
human capital has been a challenge for most agencies. This is
particularly true at HUD, which has on average the oldest workforce. In
fact, HUD is at risk of losing half its employees to retirement between
fiscal years 2006 and 2008. What are you doing to address this
challenge?
Answer. HUD has taken significant steps to better utilize existing
staff capacity, and to obtain, develop, and maintain the capacity
necessary to adequately support HUD's future mission-critical program
delivery. The Department's 5-year Human Capital Management Strategy
seeks to ensure that: (1) HUD's organizational structure is optimized;
(2) succession strategies are in place to provide a continuously
updated talent pool; (3) performance appraisal plans for all managers
and staff ensure accountability for results and a link to the goals and
objectives of HUD's mission; (4) diversity hiring strategies are in
place to address under-representation; (5) skills gaps are assessed and
corrected; and (6) human capital management accountability systems are
in place to support effective management of HUD's human capital.
Further, in fiscal year 2006, HUD developed and officials approved the
Human Capital Vision Plan, and developed a Leadership Succession Plan
and set targets for leadership bench strength through 2009. This
document is currently being updated. Collectively, these actions are
better enabling HUD to recruit, develop, manage, and retain a high-
performing workforce that is capable of effectively supporting HUD's
program delivery and mission.'' Following this, each program office
within the Department was asked to develop a succession plan for their
organization that identifies succession targets and strategies to
ensure that HUD's talent pool is secure.
Additionally, HUD is making great use of intern recruitment
opportunities to support succession planning. In fiscal year 2004, the
Department launched and enhanced the HUD Intern Program with several
hires of Federal Career Interns (FCIs) and Presidential Management
Fellows (PMFs). In fiscal year 2006, this program was renamed the ``HUD
Fellows Program'' and a new Masters of Business Administration Fellows
(MBAFs) was added in fiscal year 2007. In fiscal year 2007, there were
a total of 58 PMFs and FCIs on board. By the end of fiscal year 2007,
HUD recruited and hired 50 additional PMFs, MBAs, and FCIs; and for
fiscal year 2008, an additional 100 Interns will be hired. The
Department also developed a Recruitment and Retention Plan of Action
for PMFs, MBAFs, and FCIs in accordance with succession planning
recommendations made by the Workforce Planning Task Force that were
approved by the Deputy Secretary on October 12, 2006. The Assistant
Secretary for administration was authorized to establish a formal 2-
year program for all Fellows, with consultation and input from the
major program offices.
In addition to the recruitment efforts, HUD is also using retention
strategies to support succession planning. In fiscal year 2005, HUD
developed and launched the Student Loan Repayment Program (SLRP) to
strengthen and support recruitment and retention efforts. Since
launching of this program, the Department has reimbursed the following
amounts to employees participating in the SLR program: fiscal year 2007
($604,343); fiscal year 2006 ($410,868); fiscal year 2005 ($399,993);
and fiscal year 2004 ($275,701). The number of HUD employees who have
received reimbursements under this program is as follows: fiscal year
2007 (179); fiscal year 2006 (253); fiscal year 2005 (178); and fiscal
year 2004 (69). We expect to have more than $600,000 available for this
program for fiscal year 2008. In addition to increasing the amount
available for the program each year, the SLRP program has been
automated. Employees can now submit their applications electronically
to their supervisor and continue the approval process on-line through
HR staff, the Office of the Chief Financial Officer, and ultimately the
Employee Service Center for processing. This program is an attractive
retention tool for new intern hires and top employees throughout the
Department. In appropriate situations, HUD has also utilized retention
and relocation incentives to help retain top employees.
SUBCOMMITTEE RECESS
Senator Murray. This subcommittee now stands in recess
until Thursday, May 10, when we will take testimony from the
FAA Administrator and the DOT Inspector General.
[Whereupon, at 11:40 a.m., Thursday, May 3, the
subcommittee was recessed, to reconvene subject to the call of
the Chair.]