[Senate Hearing 111-234]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 111-234
 
   NOMINATIONS OF: PETER M. ROGOFF, FRANCISCO J. SANCHEZ, RAPHAEL W. 
            BOSTIC, SANDRA HENRIQUEZ, MERCEDES MARQUEZ, AND
                            MICHAEL S. BARR

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



                                HEARING

                               before the

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

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                                   ON

                            nominations of:

  Peter M. Rogoff, of Virginia, to be Federal Transit Administrator, 
                      Department of Transportation

                               __________

      Francisco J. Sanchez, of Florida, to be Under Secretary for 
              International Trade, Department of Commerce

                               __________

Raphael W. Bostic, of California, to be Assistant Secretary for Policy 
 Development and Research, Department of Housing and Urban Development

                               __________

   Sandra Henriquez, of Massachusetts, to be Assistant Secretary for 
 Public and Indian Housing, Department of Housing and Urban Development

                               __________

    Mercedes Marquez, of California, to be Assistant Secretary for 
  Community Planning and Development, Department of Housing and Urban 
                              Development

                               __________

 Michael S. Barr, of Michigan, to be Assistant Secretary for Financial 
                Institutions, Department of the Treasury

                               __________

                        WEDNESDAY, MAY 13, 2009

                               __________

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


      Available at: http: //www.access.gpo.gov /congress /senate/
                            senate05sh.html



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            COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

               CHRISTOPHER J. DODD, Connecticut, Chairman

TIM JOHNSON, South Dakota            RICHARD C. SHELBY, Alabama
JACK REED, Rhode Island              ROBERT F. BENNETT, Utah
CHARLES E. SCHUMER, New York         JIM BUNNING, Kentucky
EVAN BAYH, Indiana                   MIKE CRAPO, Idaho
ROBERT MENENDEZ, New Jersey          MEL MARTINEZ, Florida
DANIEL K. AKAKA, Hawaii              BOB CORKER, Tennessee
SHERROD BROWN, Ohio                  JIM DeMINT, South Carolina
JON TESTER, Montana                  DAVID VITTER, Louisiana
HERB KOHL, Wisconsin                 MIKE JOHANNS, Nebraska
MARK R. WARNER, Virginia             KAY BAILEY HUTCHISON, Texas
JEFF MERKLEY, Oregon
MICHAEL F. BENNET, Colorado

                    Edward Silverman, Staff Director

              William D. Duhnke, Republican Staff Director

                  Mitch Warren, Senior Policy Advisor

               Jonathan Miller, Professional Staff Member

                  Joe Hepp, Professional Staff Member

                Neal Orringer, Professional Staff Member

                 Beth Cooper, Professional Staff Member

                       Bonnie Graves, FTA Fellow

                       Amy Widestrom, APSA Fellow

                Mark Oesterle, Republican Chief Counsel

                   Hester Peirce, Republican Counsel

          Shannon Hines, Republican Professional Staff Member

                       Dawn Ratliff, Chief Clerk

                      Devin Hartley, Hearing Clerk

                      Shelvin Simmons, IT Director

                          Jim Crowell, Editor

                                  (ii)


                            C O N T E N T S

                              ----------                              

                        WEDNESDAY, MAY 13, 2009

                                                                   Page

Opening statement of Senator Reed................................     1

Opening statements, comments, or prepared statements of:
    Senator Shelby...............................................     7
    Senator Bennett..............................................     8
    Senator Akaka................................................     9
    Senator Martinez.............................................    11

                               WITNESSES

Bill Nelson, U.S. Senator from the State of Florida..............     2
Barney Frank, U.S. Representative from the State of Massachusetts     2
Adam B. Schiff, U.S. Representative fom the State of California..     3
Patty Murray, U.S. Senator from the State of Washington..........     4

                                NOMINEES

Peter M. Rogoff, of Virginia, to be Federal Transit 
  Administrator, Department of Transportation....................     9
    Prepared statement...........................................    31
    Biographical sketch of nominee...............................    33
    Response to written questions of:
        Senator Dodd.............................................    96
        Senator Shelby...........................................    96
        Senator Bayh.............................................    99
        Senator Warner...........................................   100
Francisco J. Sanchez, of Florida, to be Under Secretary for 
  International Trade, Department of Commerce....................    12
    Prepared statement...........................................    40
    Biographical sketch of nominee...............................    41
    Response to written questions of:
        Senator Dodd.............................................   101
        Senator Shelby...........................................   101
        Senator Brown............................................   103
        Senator Crapo............................................   104
Raphael W. Bostic, of California, to be Assistant Secretary for 
  Policy Development and Research, Department of Housing and 
  Urban Development..............................................    13
    Prepared statement...........................................    49
    Biographical sketch of nominee...............................    51
    Response to written questions of:
        Senator Shelby...........................................   105
Sandra Henriquez, of Massachusetts, to be Assistant Secretary for 
  Public and Indian Housing, Department of Housing and Urban 
  Development....................................................    15
    Prepared statement...........................................    62
    Biographical sketch of nominee...............................    63
    Response to written questions of:
        Senator Dodd.............................................   106
        Senator Shelby...........................................   107
Mercedes Marquez, of California, to be Assistant Secretary for 
  Community Planning and Development, Department of Housing and 
  Urban Development..............................................    16
    Prepared statement...........................................    71
    Biographical sketch of nominee...............................    73
    Response to written questions of:
        Senator Dodd.............................................   108
        Senator Shelby...........................................   109
Michael S. Barr, of Michigan, to be Assistant Secretary for 
  Financial Institutions, Department of the Treasury.............    18
    Prepared statement...........................................    83
    Biographical sketch of nominee...............................    85
    Response to written questions of:
        Senator Shelby...........................................   112
        Senator Kohl.............................................   114

              Additional Material Supplied for the Record

Letter submitted by the Congressional Hispanic Caucus............   116
Letter submitted by the Local Initiaives Support Corporation.....   117
Letter submitted by the Watt Companies...........................   118
Letter submitted by the Enterprise Community Partners, Inc.......   119
Letter submitted by the Los Angeles Business Council.............   120
Letter submitted by MacFarlane Partners..........................   122
Letter submitted by the U.S. Conference of Mayors................   124
Letter submitted by the California Community Foundaion...........   126
Letter submitted by McCormack Baron Salazar......................   128


                            NOMINATIONS OF:

                     PETER M. ROGOFF, OF VIRGINIA,

                  TO BE FEDERAL TRANSIT ADMINISTRATOR,

                     DEPARTMENT OF TRANSPORTATION;

                   FRANCISCO J. SANCHEZ, OF FLORIDA,

             TO BE UNDER SECRETARY FOR INTERNATIONAL TRADE,

                        DEPARTMENT OF COMMERCE;

                   RAPHAEL W. BOSTIC, OF CALIFORNIA,

     TO BE ASSISTANT SECRETARY FOR POLICY DEVELOPMENT AND RESEARCH,

              DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT;

                  SANDRA HENRIQUEZ, OF MASSACHUSETTS,

        TO BE ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING,

              DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT;

                    MERCEDES MARQUEZ, OF CALIFORNIA,

   TO BE ASSISTANT SECRETARY FOR COMMUNITY PLANNING AND DEVELOPMENT,

              DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT;

                     MICHAEL S. BARR, OF MICHIGAN,

         TO BE ASSISTANT SECRETARY FOR FINANCIAL INSTITUTIONS,

                       DEPARTMENT OF THE TREASURY

                              ----------                              


                        WEDNESDAY, MAY 13, 2009

                                       U.S. Senate,
          Committee on Banking, Housing, and Urban Affairs,
                                                    Washington, DC.
    The Committee met at 2:06 p.m., in room SD-538, Dirksen 
Senate Office Building, Senator Jack Reed, presiding.

             OPENING STATEMENT OF SENATOR JACK REED

    Senator Reed. The Committee will come to order.
    We are meeting today in open session to consider the 
nomination of six key nominees for the Obama administration. On 
behalf of the Chairman, who is currently engaged on the Senate 
floor working on the credit card legislation, I would like to 
welcome my colleagues, distinguished guests, our nominees, and 
their families and friends to this important hearing.
    At this time I would like to recognize my colleague Senator 
Bill Nelson, who wants to introduce Mr. Francisco Sanchez. 
Senator Nelson.

   STATEMENT OF BILL NELSON, U.S. SENATOR FROM THE STATE OF 
                            FLORIDA

    Senator Nelson. Thank you, Mr. Chairman.
    Frank Sanchez has been a personal friend of mine for a 
number of years, and he is up for something that he is uniquely 
qualified, which is the Under Secretary of Commerce for 
International Trade. He has had all kinds of experience in the 
International Trade Administration as well as the Tourism 
Policy Council, the National Intellectual Property Council. He 
has been the Chief of Staff in the White House to the Special 
Envoy to Latin America. He is a Florida native. He is an 
accomplished negotiator. He has authored a book. He served our 
former colleague Senator Bob Graham, when he was Governor, in 
his administration as the first Director of the State's 
Caribbean Basin Initiative, and he has been involved in 
consulting companies on projects involving complex 
transactions, labor-management negotiations, litigation 
settlement, and negotiation strategy. And so this brings a 
unique set of qualifications. He has even split the difference 
in Florida. He attended the University of Florida, but he 
graduated from Florida State. He does--for us Yale guys, we 
will not hold it against him. He has a Master's degree from 
Harvard from the Kennedy School, and he has worked with the 
National Security Council, the State Department, the U.S. Trade 
Representative.
    You could not have a better candidate for this very 
important job of Under Secretary of Commerce, and on top of 
that, he is a good guy, and he is a personal friend of mine. 
Thank you for letting me make these comments about him.
    Senator Reed. Thank you, Senator Nelson.
    Now let me recognize Congressman Barney Frank to introduce 
Sandra Henriquez. And, by the way, Senator Kerry has a 
something for the record, Ms. Henriquez.

 STATEMENT OF BARNEY FRANK, U.S. REPRESENTATIVE FROM THE STATE 
                        OF MASSACHUSETTS

    Mr. Frank. Thank you, Mr. Chairman. I am very pleased to be 
able to introduce Sandra Henriquez on her behalf, but more on 
behalf of some of the most, I think, unfairly treated people in 
this country, and those are the residents of public housing. 
This country created public housing. You know, sometimes the 
residents are criticized because of decisions that were made 
not with their participation about what kind of housing they 
should live in. And we know now, better than we used to, how to 
build decent, livable, affordable housing, but we are still in 
some cases, frankly, stuck with stuff that was not built well 
in terms of social concerns.
    Sandra Henriquez has run one of the largest housing 
authorities in the country in the city of Boston. It is a 
housing authority population that is diverse in terms of age, 
in terms of ethnicity, and in terms of race. It has been a very 
significant part of Boston for some time. It has been 
historically a troubled institution. She has done an excellent 
job, and I am very pleased that the President has selected 
someone to run the Department of Public and Indian Housing who 
has a demonstrated record of dealing with sensibly, 
compassionately, and efficiently with the residents of public 
housing.
    I should note that part of her title is ``Indian Housing,'' 
and there were probably no people in America as a whole with 
greater housing problems than the Native American population. 
People who have been out, for instance, to the Navajo 
reservation have seen a very serious problem.
    I am very proud that in recent years on the Committee on 
Financial Services, which is the corresponding Committee for 
this Committee, we have worked hard and you, Mr. Chairman, 
Senator Reed, have been a leader in this. We have been paying 
attention to the needs of the Native American population in 
housing, which has long been neglected.
    So Sandra Henriquez is very well qualified. She is a 
thoughtful, intelligent, compassionate, and successful 
administrator. And I am very hopeful that she will be promptly 
confirmed.
    Now, I do understand there are different rules in the House 
and the Senate, and I am prepared to learn that she was 
confirmed on the proviso that she carry a concealed weapon. I 
understand that the Senate might decide to add that, as they 
have from time to time. That is not my decision to make. I can 
only urge that this very, very able woman who has done such a 
good job in administering public housing of Boston be 
confirmed.
    Senator Reed. Thank you, Chairman Frank.
    Now I would like to recognize Congressman Schiff to make an 
introduction of Raphael Bostic. Congressman.

STATEMENT OF ADAM B. SCHIFF, U.S. REPRESENTATIVE FROM THE STATE 
                         OF CALIFORNIA

    Mr. Schiff. Thank you, Mr. Chairman, Senator Reed, and 
Ranking Member Shelby. I very much appreciate the opportunity 
to appear before your Committee again, and thank you for 
allowing me to introduce the President's nominee for Assistant 
Secretary of the Office of Policy Development and Research of 
the Department of Housing and Urban Development, Raphael 
Bostic.
    Dr. Bostic is a proud resident of Pasadena, and we share a 
common bond as graduates of the same alma maters, Stanford and 
Harvard, although Dr. Bostic unfortunately did it in the wrong 
order, but he can be forgiven for that. He has dedicated his 
career to understanding housing markets and the issue of 
homeowner. He has extensively studied the sectors that will be 
critical to our economic recovery, credit markets, and home 
financing, and understands well how they affect the American 
household.
    His expertise in these most pressing and complex issues of 
our time make Dr. Bostic an ideal candidate for this position. 
As Assistant Secretary, he will be the principal adviser to the 
Secretary on overall departmental policy and will be 
responsible for maintaining current information on housing 
needs, market conditions, and existing programs.
    Dr. Bostic is currently a professor in USC's School of 
Policy, Planning, and Development, and teaches courses in 
affordable housing development, urban economics, real estate 
finance, policy and planning analysis, and public finance. He 
led a distinguished career prior to his years at USC, spending 
6 years on the staff at the Federal Reserve Board of Governors 
where he was awarded a Special Achievement Award for his work. 
He also served as a Special Assistant to the Assistant 
Secretary of Policy Development and Research at HUD, providing 
him with crucial experience in the executive branch which will 
no doubt serve him well in his new post.
    His most recent research examines how mortgage finance 
institutions such as Fannie Mae and Freddie Mac have influenced 
the flow of mortgage credit through lenders that originate 
high-cost or subprime loans through the Federal Housing 
Administration Insurance Program. He has also studied the role 
of the private label secondary market in facilitating the flow 
of capital to subprime and possibly predatory loans.
    His work has been published in a number of top peer-
reviewed journals, including Real Estate Economics, Housing 
Policy Debate, and the Journal of Banking and Finance. Dr. 
Bostic is an active contributor to numerous professional and 
industry organizations and holds leadership positions in the 
American Real Estate and Urban Economics Association, the 
Association of Public Policy and Management, and recently 
served on a National Academies Committee charged with 
evaluating the research plan of the Department of Housing and 
Urban Development.
    Given his background, he was an ideal panelist for an 
economic roundtable that I held in Pasadena nearly a year ago 
after the collapse of IndyMac, which was headquartered in my 
district. With a tightening credit market and increasing 
foreclosures, residents in my district, as well as around the 
country, were looking for answers and advice about how they 
could stay afloat, and Dr. Bostic was and has been a clear and 
well-informed voice during these difficult times.
    Many Americans are still struggling with these questions 
today, and I am confident that with Dr. Bostic advising the 
Secretary on housing policy, the Department will make the right 
policy decisions to help families around the country.
    I urge the Committee to approve his nomination, and I thank 
you again, Senator, for allowing me to appear today.
    Senator Reed. Thank you very much, Congressman.
    And now let me recognize Senator Patty Murray of Washington 
State. Senator Murray.

   STATEMENT OF PATTY MURRAY, U.S. SENATOR FROM THE STATE OF 
                           WASHINGTON

    Senator Murray. Well, thank you very much, Mr. Chairman and 
Senator Shelby. I am very pleased to be here today to have the 
opportunity to introduce Peter Rogoff as the President's 
nominee to be the next Administrator of the Federal Transit 
Administration. I do want to welcome Peter's wife, Dena Morris, 
who is here with us, as well as their two children, Lucy and 
Niles, who are behaving very well behind you, Peter. Don't 
worry.
    Peter and his wife are no strangers to public service, and 
I really want to thank them personally for both of their 
commitment and congratulate them on all they have accomplished. 
And I would just tell Lucy and Niles that I understand that 
confirmation hearings actually get you extra credit in school, 
so thank you for being here.
    For members of the Senate Appropriations Committee, Peter 
is a very familiar face. He has served on the Appropriations 
Committee staff now for the last 22 years, and he has been the 
Committee's senior transportation adviser for the majority of 
those years. For the past 9 years, as I have served as either 
Chairman or Ranking Member of the Transportation Appropriations 
Subcommittee, I have had the opportunity to work very closely 
with Peter. He has been a trust adviser to me and a dedicated 
public servant to the constituents of both my home State of 
Washington and those of every member of the Subcommittee. I 
know that Peter's drive and knowledge and experience will be an 
outstanding asset to President Obama and Secretary LaHood's 
team.
    Peter and I have worked together through many challenges 
over the years, none greater than the events of September 11th 
and the transportation security issues that we were confronted 
with after that. As members of this Committee know well, those 
efforts were not just limited to aviation security, but they 
also included initiatives to strengthen security in passenger 
rail transit systems and our ports and all the systems that 
connect them.
    During those very difficult times, Peter's understanding of 
our transportation safety systems was fully evident. It is a 
knowledge that comes with experience, and not just the kind of 
experience you get from studying policy at your desk, although 
Peter does do a lot of that, but it is the kind of experience 
you get from traveling out to accident sites, talking with 
inspectors, meeting with families, and working hands-on to 
ensure that we are taking steps to ensure that accidents are 
not repeated.
    In the time that I have worked with Peter, he has regularly 
traveled across the country to participate in aviation, rail, 
and ship inspections, and he has voluntarily gone to many 
accident sites. The expertise gained from those experiences has 
served this Congress and this country well in some very 
critical situations. In fact, I still remember--and I know 
Peter does as well--an evening just about 2 years ago when we 
all watched in horror as the I-35 bridge collapsed in 
Minneapolis. Immediately after that tragedy, I dispatched Peter 
to accompany Senator Klobuchar to the scene because I knew that 
he could help her identify the core issues and how the Federal 
Government could help.
    Now, I know that as FTA Administrator, people would face a 
set of wide-ranging challenges, but I also know that he has the 
transit know-how to hit the ground running. From my work with 
Peter, I know that he believes in the larger agenda to expand 
transit ridership and reduce greenhouse gas emissions. I know 
that he understands how important it is to move projects 
forward rapidly in a manner that is efficient and productive. 
And I know that he has the experience to address our biggest 
challenge--transportation finance.
    As all of you know, the outlook for the Highway Trust Fund 
and its mass transit account is truly dismal. These financing 
challenges threaten to undermine all that Congress and the 
President hope to accomplish for our State and our communities. 
To this central problem, Peter Rogoff will bring over two 
decades of working knowledge on financing transit and 
transportation projects of all kinds.
    So, Mr. Chairman, while his nomination represents a very 
big loss for our Appropriations Committee and my Appropriations 
Subcommittee, I respect and I commend President Obama's 
decision to put Peter's expertise to work on addressing our 
country's transit future. It is without any reservation that I 
commend to you the nomination of Peter Rogoff to be our next 
Federal Transit Administrator.
    All of us that care about public transportation, a clean 
environment, and the mobility needs of our neediest citizens 
are going to be very proud to have Peter Rogoff in this 
position.
    Thank you very much, Mr. Chairman.
    Senator Reed. Thank you very much, Senator Murray.
    Let me make brief comments about the nominee before I 
recognize Senator Shelby for his opening comments, and there 
may be other colleagues that will join us for introductions, 
and I will try to work them in as rapidly as possible.
    First, beginning with Peter Rogoff, the President's nominee 
to lead the Federal Transit Administration, we all recognize 
that strong Federal leadership in transportation is one of the 
keys to getting our economy back on track. Now, a bold, new 
commitment to public transportation is needed to reduce 
congestion on our roads, to address climate change, and to 
reduce our dependence on foreign oil. And let me say I second 
with enthusiasm all of the commendations that Senator Murray 
made, and thank you, as a member of the Appropriations 
Committee, for your assistance and help, Peter, and we look 
forward to your service on the Federal Transit Administration.
    Our next nominee is Mr. Francisco ``Frank'' Sanchez. 
Senator Nelson described your stellar career, Mr. Sanchez. You 
have been nominated for Under Secretary of Commerce for 
International Trade. As Under Secretary, the role will play a 
particularly critical aspect in reviving America's struggling 
economy. One out of every 10 American jobs depends on exports, 
which in 2008 generated $1.8 trillion in U.S. business revenue. 
So this is an extremely important job to match your public 
service and your talents.
    We also have three nominees for the Department of Housing 
and Urban Development who are before us today. Like never 
before, we need an engaged, aggressive, and well-run Department 
of Housing and Urban Development with leadership that is 
confident in its mission and unafraid to act. As President 
Obama has himself said, ``HUD's role has never been more 
important.''
    Our first HUD nominee is Mr. Raphael Bostic, who was 
introduced by Congressman Schiff. He has been nominated to be 
the Assistant Secretary for the Office of Policy Development 
and Research. Mr. Bostic in such a role would be responsible 
for maintaining current information on housing needs, market 
conditions, and existing programs, as well as conducting 
research on priority housing and community development issues.
    Our next nominee is Ms. Sandra Henriquez, who was 
introduced by Congressman Frank. She has been nominated to be 
the Assistant Secretary for Public and Indian Housing. In 
fiscal year 2009, this office will be expected to administer 
nearly $24 billion in targeted housing assistance programs 
serving low, very low, and extremely low income families and 
individuals. These include public housing and Section 8 tenant-
based rental assistance programs, which serve over 3 million 
families, seniors, and persons with disabilities. These housing 
programs are carried out by approximately 1,600 staff in 
headquarters and field positions throughout the country. This 
is an extraordinarily important and influential post.
    Our final HUD nominee is Ms. Mercedes Marquez, who has been 
nominated to be Assistant Secretary for Community Planning and 
Development. This division administers nearly $8 billion in 
community, economic, and affordable housing development 
programs in the fiscal year 2009 budget. In addition, it 
currently administers $6 billion in neighborhood stabilization 
program funding, helping communities buy and rehabilitate 
abandoned and foreclosed properties. These programs are carried 
out by approximately 800 staff in headquarters and field 
positions.
    Our final nominee today will be Michael Barr, who has been 
nominated to be the Assistant Secretary for financial 
Institutions at the Department of Treasury. In this position, 
Mr. Barr will be responsible for working on administration 
policy regarding the regulation of banks, credit unions, 
Government-sponsored enterprises, consumer protection, 
community reinvestment, Federal deposit insurance, and 
terrorism risk insurance. Quite a portfolio. He will be 
uniquely situated to work with this Committee to achieve its 
goals of modernizing the United States financial institutions, 
a task that I know the Chairman and Senator Shelby are 
undertaking at this moment.
    Mr. Barr is highly qualified for this position. He 
currently is teaching at the University of Michigan. Previously 
he served as Treasury Secretary Robert Rubin's Special 
Assistant as well as Special Adviser to President Clinton. Mr. 
Barr also served as a law clerk to U.S. Supreme Court Justice 
David H. Souter and then-District Court Judge Pierre N. Leval 
of the Southern District of New York. Mr. Barr received his 
J.D. from Yale Law School; a Master of Philosophy in 
International Relations from Magdalen College, Oxford 
University; as a Rhodes Scholar; and his B.A. summa curriculum 
laude with honors in history from Yale University.
    Again, let me welcome all the nominees, and you will have 
an opportunity when you are recognized to also introduce your 
families.
    Now let me turn to the Ranking Member, Senator Shelby, for 
his statement. Senator Shelby.

             STATEMENT OF SENATOR RICHARD C. SHELBY

    Senator Shelby. Thank you, Mr. Chairman.
    First of all, I want to welcome all of the nominees. I am 
sure you have been well vetted and are eminently qualified and 
ready to go to work. And I hope that Senator Dodd, our 
Chairman, will move these nominees as soon as possible.
    I want to say a special word here about Peter Rogoff. A lot 
has been said about him, but I had the opportunity to work with 
him for a long time on the Appropriations Committee. As we used 
to say, we worked for Peter.
    [Laughter.]
    Senator Shelby. And we did not mind that because he had 
great work skills, great leadership skills, and, Peter, we are 
happy that the President has seen fit to nominate you to this 
very important position at the Department of Transportation.
    We look forward to this year working on the Banking 
Committee. As you well know, we have a piece of the surface 
transportation, transit, and other things, and you will bring a 
lot of knowledge to this position, and I believe you will bring 
a lot of integrity, too. So I look forward to supporting you 
especially and supporting all of you as soon as we can.
    If you will forgive me, Senator Dodd and I are holding--we 
are trying to move a credit card bill on the floor, and so I 
will leave it up to you, but I will support your nomination.
    Senator Reed. Thank you very much.
    We have been informed that Senator Martinez would very much 
like to be here, Mr. Sanchez, and when he arrives, we will 
recognize him to say a few words. I think also Congressman 
Becerra would like to say a few words, Ms. Marquez, and when he 
arrives, we will also recognize him.
    But, first, I have an obligation to perform. If you would 
please stand, and I will administer and oath, and simply 
respond, ``I do,'' after each phrase. Please raise your right 
hands. Do you swear or affirm that the testimony you are about 
to give is the truth, the whole truth, and nothing but the 
truth, so help you God?
    Mr. Rogoff. I do.
    Mr. Sanchez. I do.
    Mr. Bostic. I do.
    Ms. Henriquez. I do.
    Ms. Marquez. I do.
    Mr. Barr. I do.
    Senator Reed. Do you agree to appear and testify before any 
duly constituted Committee of the Senate?
    Mr. Rogoff. I do.
    Mr. Sanchez. I do.
    Mr. Bostic. I do.
    Ms. Henriquez. I do.
    Ms. Marquez. I do.
    Mr. Barr. I do.
    Senator Reed. Thank you very much. Please be seated.
    Now let me recognize--do you have any comments? Yes, let me 
recognize Senator Bennett. Please.

             STATEMENT OF SENATOR ROBERT F. BENNETT

    Senator Bennett. Thank you, Mr. Chairman. I do not want to 
prolong this, and I would love to say something good about all 
the rest of you, but I do not know any of you yet.
    [Laughter.]
    Senator Bennett. That does not usually stop Senators, but I 
think under these circumstances it will. But I want to again 
add to the chorus of comment and praise for Peter Rogoff and 
the work that he has done as a member of the Appropriations 
Committee.
    Peter, I know you have been to Utah. You understand the 
transit issues in Utah, and we look forward to working with 
you. But I did not want to let this occasion go by without 
adding my voice to those that are saying we are sorry to lose 
you, but good luck and all the best in your new assignment.
    Thank you.
    Senator Reed. Thank you, Senator Bennett.
    Senator Akaka, would you like to say something at this 
time?

              STATEMENT OF SENATOR DANIEL K. AKAKA

    Senator Akaka. Mr. Chairman, thank you for having this 
hearing. As you said, we are trying to move as quickly as we 
can to confirm people so that we can all get back to work and 
begin to do some things for our country. And so I look forward 
to this hearing, Mr. Chairman, and I am glad to participate 
with you.
    Thank you.
    Senator Reed. Thank you very much, Senator Akaka.
    Let me now review Mr. Rogoff. Again, Mr. Rogoff, if you 
would like to introduce your family or friends that are here, 
please take this opportunity, and then your statement. Could 
you please turn on your microphone, Peter?
    Mr. Rogoff. I would like to introduce them, and thank you, 
Senator Bennett and Senator Reed, for your kind comments.
    I would like to introduce my wife, Dena Morris; my son, 
Niles Rogoff; and my daughter, Lucille Rogoff. And I especially 
want to recognize the person who really makes everything that 
the four of us do possible--our outstanding nanny and great 
friend, Murlene Dowling.

   STATEMENT OF PETER M. ROGOFF, OF VIRGINIA, TO BE FEDERAL 
      TRANSIT ADMINISTRATOR, DEPARTMENT OF TRANSPORTATION

    Mr. Rogoff. Senator Reed, Ranking Member Shelby, Senator 
Bennett, and members of the Committee, I want to thank you for 
allowing me this opportunity to present myself as President 
Obama's nominee to head the Federal Transit Administration. 
Having served on the staff of a Senate Committee for 22 years, 
I know that the confirmation process is one of the most 
critically important constitutional responsibilities of the 
Senate, so I come to this hearing with humility and a great 
respect for the process.
    As I appear before you today, I believe public 
transportation faces both remarkable opportunities and serious 
challenges. The opportunities begin with the fact that we have 
a President who recognizes the central importance of our 
transit systems to our quality of life and to the quality of 
our environment. He has spoken of the need to invest adequately 
and invest efficiently, and he has stressed repeatedly the role 
that public transportation must play in reducing pollution, 
including greenhouse gas emissions, and moving toward energy 
independence by diminishing our reliance on foreign oil.
    In addition, the American people are creating opportunities 
by utilizing transit services in record numbers and by 
demanding more. Transit ridership rose to a modern record in 
2008, more than 10 billion trips. What may be more remarkable 
is that ridership has remained high even as record gas prices 
have dropped back down.
    Many families have sold their second car, or their only 
car, either as a matter of convenience or to cope with the 
economic downturn. Many other Americans, weary of sitting in 
traffic jams, have just boarded the train or boarded buses 
using designated bus lanes.
    Finally, there are great opportunities because the 
administration and Congress are about to rewrite all our 
surface transportation programs, as Senator Shelby pointed out. 
In fact, the upcoming authorization process presents an 
opportunity like no other to retool our public transportation 
programs and refocus them on our most critical national goals.
    But as this Committee is well aware, we also face 
extraordinary challenges. First and foremost is the task of 
financing our efforts to achieve these goals. The mass transit 
account of the Federal Highway Trust Fund is on a path to 
insolvency. While the transit account is in less immediate 
danger than the larger highway account, the balances in both 
are falling at a rate that will undermine their ability to 
support current obligations.
    The financing challenge calls for tough choices, so it is 
all the more important that we fulfill President Obama's 
commitment to spend every transit dollar efficiently and on the 
worthiest projects.
    Against this backdrop of both challenges and opportunities, 
I am especially honored that President Obama has nominated me 
to serve as his Federal Transit Administrator. I very much look 
forward to working with this Committee, with Secretary LaHood 
and his outstanding team, to both tackle the pressing 
challenges and capitalize on the extraordinary opportunities.
    As I mentioned, the financing dilemma is difficult, but 
with more than two decades of experience on the Appropriations 
Committee staff specializing in transportation finance, I feel 
confident that I could help the Secretary and this Committee 
identify a more stable and sustainable funding regime.
    Secretary LaHood has made clear his intention to eliminate 
the stovepipes within DOT. I think that is something that 
people have been trying to do since Senator Bennett served in 
the DOT. He will be asking his agency leaders to work toward a 
seamless system that moves people and freight efficiently 
between modes of transportation, and I believe I can help.
    My experience in infrastructure investment programs goes 
well beyond mass transit. It includes highway, aviation, inner-
city rail, and maritime programs. If we are going to succeed in 
developing truly seamless networks, then expanded cooperation 
and joint investments are going to be key.
    Secretary LaHood and HUD Secretary Donovan are committed to 
fostering livable and sustainable communities through the 
coordinated efforts of their Departments, and let me just point 
out how apt I think it is that I am testifying with a number of 
HUD nominees, because there really is quite a lot of overlap in 
the challenges we are trying to address.
    For the last 4 years, I have had the joint responsibility 
overseeing both the Transportation and HUD budgets for the 
Appropriations Committee. Knowing the HUD budget as I do, and 
witnessing Secretary Donovan's impressive efforts to transform 
HUD, I am particularly enthusiastic about working with him and 
Secretary LaHood to promote sustainability.
    Finally, I want to welcome the opportunity to be this 
administration's advocate for mass transit. I plan to be a very 
public advocate in my visits with policymakers in communities 
across the Nation. But just as importantly, I plan to be a 
forceful advocate in the less public debates that go on within 
the administration. We must create new and better transit 
options in both urban and rural America, but especially during 
a period of economic uncertainty and recovery, a pro-transit 
agenda must include protecting and improving transit services 
for those for whom mass transit is the only option.
    If confirmed, this Committee can count on me to be a strong 
and vocal partner in advancing this agenda. I thank you again 
for this opportunity and the kind words of the members of the 
Committee. I look forward to answering any questions you may 
have.
    Senator Reed. Thank you, Mr. Rogoff.
    Senator Martinez has arrived, with perfect timing, to say a 
few introductory words about Mr. Sanchez. Senator Martinez.

               STATEMENT OF SENATOR MEL MARTINEZ

    Senator Martinez. Thank you, Senator Reed. I appreciate 
that very, very much.
    I want to take a moment--and I know Senator Nelson was here 
earlier--to introduce to the Committee Frank Sanchez, a 
wonderful Floridian, a man who has exercised a great deal of 
leadership in the area of trade, not only nationally but also 
in the State of Florida, and also a proud alumni of Florida 
State University, for which I am very proud to share that with 
him.
    But in addition to his fine academic record, which I know 
Senator Nelson probably described, I find Mr. Sanchez to be 
someone who is going to make an excellent trade person for our 
country because of his past work not only in the private sector 
but also in Government. He had a great deal to do with 
negotiated the Open Skies Agreement, which was approved during 
the Clinton administration, which is so important to our 
Nation's airlines and to others around the world. And it is 
about trading with others. At the end of the day, that can 
create so much prosperity for our country.
    So I have had the opportunity to talk with Frank about his 
commitment and his understanding of the importance of trade as 
we go forward in so many of these areas that are today 
pending--Colombia, Panama, and other issues that you know so 
well.
    So, Mr. Chairman, I just wanted to add my endorsement and 
my introduction, and I look forward to a swift confirmation of 
Mr. Sanchez, a great Floridian.
    Senator Reed. Thank you very much, Senator Martinez--
another great Floridian, truly. Thank you.
    Mr. Sanchez, if you would like to introduce family and 
friends, please do so, and then we would be eager to hear your 
statement.
    Mr. Sanchez. Thank you, Senator Reed. I wish to introduce 
my cousin, Kim Sanchez, who has the awesome responsibility of 
representing the entire Sanchez clan today.
    [Laughter.]

  STATEMENT OF FRANCISCO J. SANCHEZ, OF FLORIDA, TO BE UNDER 
   SECRETARY FOR INTERNATIONAL TRADE, DEPARTMENT OF COMMERCE

    Mr. Sanchez. It truly is an honor to be before you today 
with this distinguished panel, and I should say I hope that 
some of the good feelings that Mr. Rogoff has engendered with 
this Committee will be able to rub off on me.
    I want to thank Senator Martinez and Senator Nelson both 
for making a special effort to be here and to introduce me. 
Thank you very, very much.
    I would respectfully ask the Committee that my full 
statement be submitted for the record.
    There is no greater call than that of service to one's 
country, and I am truly honored by President Obama's nomination 
of me to serve as Under Secretary of Commerce for International 
Trade. I am humbled by the trust that President Obama and 
Secretary Locke are placing in me, and I am cognizant of the 
serious responsibilities that accompany this confidence.
    If confirmed, I look forward to working for them and with 
you in advancing our Nation's economic well-being and ensuring 
that all Americans benefit from fair and free trade.
    I would like to take just one moment to take someone who is 
not here--actually, two--my mother and my late father for their 
support and encouragement. I would not be here if it were not 
for their consistent and constant love and commitment to my 
success, so I want to thank them.
    As Secretary Locke has said, the role of the Department of 
Commerce is to be the engine of innovation, of job growth, and 
of economic renewal. The International Trade Administration 
supports these efforts by strengthening the competitiveness of 
U.S. industry, promoting trade and investment, and ensuring 
fair trade in compliance with our trade laws and agreements. 
This mission is critical to enhancing America's global 
competitiveness and expanding commercial opportunities for 
American manufacturers and service workers throughout the 
world.
    When U.S. business seeks to promote their goods and 
services in overseas markets, it is the International Trade 
Administration's programs that lead the way. In short, the 
agency helps America's firms and workers navigate through the 
often complicated and unpredictable waters of foreign trade.
    If confirmed, I look forward to working closely with this 
Committee to support American innovation and entrepreneurship 
and open global markets for American-made goods and services. 
In so doing, we can play a vital role in creating new jobs and 
economic growth here at home.
    I thank you for your consideration.
    Senator Reed. Thank you very much, Mr. Sanchez.
    Mr. Bostic, again, if you have family or friends, feel free 
to introduce them, and then your statement.
    Mr. Bostic. Sure. I would like to introduce my parents, my 
mother and father, Viola and Raphael, who are here; as well as 
my sister, Ebony, who is making her own sacrifice as she is 
letting me use one of her rooms as my base as I am here in 
Washington. So thank you, Ebony.
    I would also like to acknowledge two people who were unable 
to be here: my partner, Jeff Taylor, who is back in California; 
and my aunt, Patricia Williams, who is in New York.

STATEMENT OF RAPHAEL W. BOSTIC, OF CALIFORNIA, TO BE ASSISTANT 
 SECRETARY FOR POLICY DEVELOPMENT AND RESEARCH, DEPARTMENT OF 
                 HOUSING AND URBAN DEVELOPMENT

    Mr. Bostic. Chairman Reed and members of the Committee, I 
am honored and humbled to appear before you today as you 
consider my nomination to serve as the Assistant Secretary for 
Policy Development and Research at the U.S. Department of 
Housing and Urban Development. Before going further, in 
addition to my family, I would like to acknowledge a few others 
who have been instrumental in my life, particularly mentors 
Glenn Canner, John Shoven, Roger Noll, Susan Wachter, and 
Stuart Gabriel.
    The time we find ourselves in is remarkable, both because 
of its gravity and its origins. By many measures the economy 
has not performed so poorly since the Great Depression of the 
1930s, and for perhaps the first time in the Nation's history, 
housing has been at the root of this macroeconomic trouble. 
This reality means that a deep understanding of housing markets 
is critical, and evidence on what does and does not work in 
these markets will be essential for creating a new market 
structure that endures and correct the weaknesses that help to 
create the current troubles.
    Secretary Donovan recognizes this and, in his public and 
private statements, has already placed a considerable emphasis 
on the importance of collecting and using data to make informed 
decisions. If confirmed to my position, I will work hard to see 
the Secretary's vision is pursued and achieved. In this way, I 
hope to contribute to a transformation of the Department into 
an efficient, informed leader of policy on issues associated 
with housing and urban development.
    My background, including significant work in academics, 
Government, and community development, provides me with assets 
that will allow me to help the Office of Policy Development and 
Research increase its efficacy and effectiveness. A key goal is 
for PD&R efforts to contribute to a deeper and more meaningful 
understanding of the issues facing our housing and urban 
markets and communities.
    From an academic perspective, my research has given me 
knowledge and insights about both housing and urban 
development, and this, coupled with my continued and intensive 
interaction with other academics scholars will allow me to 
promote the implementation of evidence-based policy with the 
Secretary and the Department's program offices. In addition, my 
training and perspectives gained as an academic researcher have 
given me skills that will help ensure that research and program 
evaluations produced or funded by PD&R are relevant, timely, 
and of the highest quality.
    Through my career to date, I have interacted extensively 
with all the key HUD constituencies, and so I am able to add 
value and perspective to HUD's research efforts, as well as its 
policymaking and oversight. I understand housing and housing 
finance through my research and my work at the Federal Reserve 
Board. I know the nuts and bolts of affordable housing 
development as well as the difficulties and opportunities it 
affords for lower-income and minority households through my 
teaching them at USC, service as a board member of a local 
nonprofit housing developer, and my research.
    My work with a local community development organization in 
East Palo Alto and other research I have done have provided 
insights as to the challenges of broad-based urban and 
community development. My role as Director of a real estate 
development program required my engagement of all aspects of 
the development process and forced me to engage and understand 
how design, law, economics, finance and construction all 
interact. Of particular significance, the exposure to 
construction highlighted the key role that engineering that 
technology can play in helping to make housing affordable and 
high quality.
    One of Secretary Donovan's top priorities is to improve the 
culture of the Department as an institution, and I pledge to 
further this goal for PD&R. This transformation will require 
significant organizational management, and my experiences at 
USC over the past several years have prepared me for this 
challenge. I aim to provide an environment that allows PD&R to 
perform and produce at high levels as I believe the office has 
tremendous potential that has lagged in terms of its 
productivity and prominence.
    Finally, I come to you today with a clear understanding of 
the opportunities and obstacles that this position presents. 
Through my work at the Federal Reserve Board and HUD, I have 
seen how policy is created at the Federal level and am familiar 
with the dynamics associated with operating at PD&R. This 
knowledge base will facilitate my navigation of the 
policymaking milieu and should lead to effective decisionmaking 
and promotion of ideas that will benefit the American people.
    In conclusion, I am very excited to serve the country at 
this pivotal moment in its history. I am eager to support the 
Secretary's efforts and work with the members of the Committee 
to help heal the Nation's housing markets and promote the 
flourishing of its urban areas.
    Thank you for giving me the opportunity to speak with you 
today, and I welcome any questions you might have.
    Senator Reed. Thank you, Mr. Bostic.
    And now Ms. Henriquez.
    Ms. Henriquez. Thank you, Senator Reed. I would like to 
introduce--with me today are my father, Howard Brooks; my 
brother, Bruce; my daughter, Sandra Elena; my son, Carlos; and 
a colleague from the Housing Authority, DaVonne Bolton. My 
other son remains in Boston, but I am certain that he is 
watching this proceeding, as are my colleagues at the Housing 
Authority.

    STATEMENT OF SANDRA HENRIQUEZ, OF MASSACHUSETTS, TO BE 
 ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING, DEPARTMENT 
                OF HOUSING AND URBAN DEVELOPMENT

    Ms. Henriquez. Thank you, Mr. Chairman and Senator Shelby 
and distinguished members of the Committee, for considering my 
nomination and the opportunity to appear before you this 
afternoon. I am truly honored and humbled to have had Secretary 
Donovan recommend that President Obama nominate me as the 
Assistant Secretary for Public and Indian Housing. I want to 
thank Congressman Frank for introducing me here today and for 
Senator Kerry's written statement for the record.
    The most significant portion of my more than 30-year career 
has been in real estate property management of affordable 
housing, both the private and the public sectors of the 
industry. I quickly turned to residential real estate because I 
was more interested in the people who lived there than the 
commercial side. I believe that housing is a right and that the 
provision of safe, decent, well-cared-for housing for low and 
very low income families and individuals lays the foundation to 
change lives. If a family's shelter is secure, then that 
household can begin to work on other aspects of their lives 
that many of us take for granted, such as child care, getting a 
job, finding a better one, education for themselves or for 
their children.
    For the past 13 years, I have been the Administrator and 
the Chief Executive Officer of the Boston Housing Authority. As 
the largest single landlord in the city of Boston and one of 
the largest public housing authorities in the Nation, the BHA 
provides 11,500 public housing units and 13,000 rental 
assistance subsidies together housing 10 percent of the city's 
population. With an 850-person workforce and program budgets 
exceeding $280 million annually, I have led an outstanding team 
to reform the housing authority from mere troubled status to 
that of high performer in its public housing and in its Section 
8 portfolio.
    Following real estate industry practices and policies, the 
BHA moved to asset management models before Congress and HUD 
required it. We embraced the basics, and vacancy rates dropped 
from 15 percent to 2 to 3 percent across the portfolio. Non-
emergency work order completion times dropped from 120 days to 
15, and they continue to fall, and rent collections are up.
    At the same time, we moved from being labeled by HUD as 
``systemically discriminatory'' to a national model of fair 
housing. We partnered with sister city agencies, local 
community development corporations, and other nonprofit housing 
providers. To increase the production of affordable rental 
housing, we created housing strategies and programs to house 
the homeless, and we introduced green principles into our 
business practices and into our building maintenance and 
construction operations.
    The Boston Housing Authority has used the HOPE VI program 
to redevelop three properties, with a fourth just beginning. In 
addition, we created 62 new first-time homebuyers, none of whom 
are in default or foreclosure. We have used mixed financing to 
develop two other properties, and when redevelopment is taken 
all together, they total almost $1 billion. For every Federal 
or State dollar, we leveraged $8 more.
    We have used Energy Performance Contracting to retrofit 
many of our outdated heating plants, making them state-of-the-
art, more efficient, less costly to operate, and creating 
better living environments for our residents. In addition, we 
have used available HUD programs to use a portion of our 
ongoing capital allocation to leverage bond financing, to 
expand ongoing improvements to the physical plant. Coupled with 
the recent American Recovery and Reinvestment Act funding, this 
totals more than $110 million.
    My housing experience has taught me that, regardless of the 
price point, maintaining and improving properties is essential 
to those who live there. Preservation and improvement of the 
1.2 million units of public housing stock, the creation of more 
affordable rental housing, as well as the continued ability to 
support families and individuals through rental assistance is 
essential to realizing the dream of millions of our citizens.
    Secretary Shaun Donovan's commitment to accountability and 
transparency and his leadership at HUD provides us with the 
opportunity to do our best work on behalf of those who benefit 
from HUD's programs. If I am confirmed, I will be focused on 
and committed to learning more about Native American housing as 
well as public housing. I am grateful that President Obama has 
nominated me, and I want to thank each of you this afternoon 
for your consideration of my nomination. If confirmed, I look 
forward to serving the Nation, especially those who live and 
work in public and Native American housing.
    Thank you.
    Senator Reed. Thank you very much.
    Ms. Marquez. Good afternoon. There are many friends here 
today, and I thank them for traveling so very far, including 
from as far away as Hawaii today. But I also want to take the 
opportunity to introduce my partner of 21 years, Mirta Ocana.
    Senator Reed. Hello.

 STATEMENT OF MERCEDES MARQUEZ, OF CALIFORNIA, TO BE ASSISTANT 
SECRETARY FOR COMMUNITY PLANNING AND DEVELOPMENT, DEPARTMENT OF 
                 HOUSING AND URBAN DEVELOPMENT

    Ms. Marquez. It is my pleasure to be here before you today, 
Mr. Chairman, members of the Committee. I am honored to have 
been nominated by President Obama to be the Assistant Secretary 
for Community Planning and Development. I also want to thank 
Secretary Donovan for giving me the opportunity to join an 
excellent team of professionals dedicated to ensure quality 
housing for every American.
    I started my career as a civil rights litigator. I have 
represented folks in matters involving substandard housing 
conditions, classic fair housing cases, and Federal class 
actions relating to community gentrification and discrimination 
in public housing. Through this work, I learned the value of 
decent, safe, and affordable housing within the context of a 
healthy neighborhood.
    After a dozen years of litigation, I was appointed by 
President Clinton to the U.S. Department of Housing and Urban 
Development, first as the Deputy General Counsel for Civil 
Rights and Fair Housing, and later as Senior Counsel to 
Secretary Andrew Cuomo.
    At HUD, I helped craft what the Secretary referred to as 
HUD's ``justice agenda.'' This required us to reach across 
divisions, to assemble and lead cross-departmental teams. For 
example, to examine the possible discriminatory use of CDBG 
dollars, we put together a team from Community Planning and 
Development, Fair Housing, and the Office of General Counsel. 
Through this work, I learned the intricacies of the funding 
programs which fall within the purview of Community Planning 
and Development. While most of my work centered on urban 
communities, I also was privileged to work in rural areas. My 
work included the design of HUD's first Rural Housing and 
Economic Development NOFAs, work in the ``colonias,'' and the 
launch of the Self-Help Housing Program on the Pine Ridge 
Reservation in South Dakota.
    This work touched me personally. I am the granddaughter of 
farm workers, and I have spent a considerable amount of my time 
visiting family in the San Joaquin Valley of California. It was 
my honor to give something back.
    After my experience at HUD, I went back home to Los Angeles 
to practice housing and community development. As Vice 
President of McCormack Baron Salazar, one of the country's most 
successful private affordable housing developers, I spent 3 
years taking affordable housing deals from concept to the final 
securing of financing. I have spent the last 5 years as the 
general manager of the Los Angeles Housing Development. The 
agent had a longstanding reputation for antiquated thinking, 
inadequate infrastructure, and the lack of transparency. Within 
my first year, we achieved a top-to-bottom assessment and 
called in all of the stakeholders, always seeking to become 
public sector entrepreneurs, building momentum while working 
with the market instead of lagging behind it.
    We also initiated Project Clean House, an effort that 
identified the 50 most underperforming deals and brought the 
developers in to meet with us. We were able to get the majority 
of the deals back on track and completed. As for the rest, over 
a 2-year period we recaptured or de-obligated, either 
voluntarily or through judicial proceedings, over $50 million 
and put every penny back into the financing of affordable 
housing. And we were able through that effort to launch the 
city's Permanent Supportive Housing Program.
    In partnership with lenders, philanthropy, and the 
Enterprise Community Partners, we successfully implemented the 
New Generation Fund, a $100 million acquisition capital fund. 
This fund works to provide acquisition pre-development and get 
financing to affordable housing developers in a transparent and 
competitive system.
    Now our biggest challenge is the current economic and 
housing crisis. Los Angeles has experienced over 24,000 
foreclosures in the last nine quarters. We addressed the 
foreclosure crisis in thoughtful and innovative ways. Early on, 
we invested in data. Los Angeles is 469 square miles in size, 
and our investment in and development of GIS maps gave us the 
information we needed to understand the true nature of our 
problem and where to expend the $32.8 million Los Angeles 
received from NSP 1. We identified distinct neighborhoods where 
we could also achieve other goals, like transit-oriented 
development and the preservation of affordable housing in 
multi-family units. Restore Neighborhoods LA, a nonprofit we 
set up to acquire and dispose of vacant properties, is already 
up and running and making purchases.
    As a practitioner, I have learned and worked with HUD's 
rules, and I know that they do not often take into account that 
one size does not fit all. If confirmed, I commit to bring a 
disciplined focus to CPD and will work to ensure 
accountability, transparency, expertise, and flexibility that 
support the efforts of local government to achieve meaningful 
community development.
    It would be an honor to serve.
    Thank you for your attention, and I look forward to any 
questions you may have.
    Senator Reed. Thank you very much.
    Mr. Barr, please.

  STATEMENT OF MICHAEL S. BARR, OF MICHIGAN, TO BE ASSISTANT 
    SECRETARY FOR FINANCIAL INSTITUTIONS, DEPARTMENT OF THE 
                            TREASURY

    Mr. Barr. Thank you very much, Senator Reed and 
distinguished members of the Committee. It is my honor to 
appear before you today as the nominee for the position of 
Assistant Secretary of the Treasury for Financial Institutions. 
With me today are my wife, Hannah Smotrich; behind me, my 
children Avital, Dani, and Etai; my Mom, Deborah Barr; my 
sisters, Karen and Lisa; my uncle Gabe and my cousin Jake.
    [Laughter.]
    Mr. Barr. My wife's parents, David and Bunny Smotrich; and 
family and friends who have known me my whole life. I am just--
--
    Senator Martinez. Are you Cuban, by any chance?
    [Laughter.]
    Mr. Barr. They are all representing the rest of the Sanchez 
family.
    Mr. Barr. I am sure my Dad, David Barr, is here with us in 
spirit as well, and I would not be here today before you 
without their love and their support. I am enormously indebted 
to them for the sacrifices they are making on behalf of me, and 
I hope the country.
    My parents taught me the centrality of public service. My 
Mom is still a high school English teacher here in Washington, 
DC, gives her all to her students every day. My Dad was a labor 
lawyer who represented hard-working Americans for his whole 
life. And I am humbled by their experiences and by the faith 
that President Obama and Secretary Geithner have placed in me 
during these extraordinary times.
    The President and the Secretary have moved aggressively to 
stabilize our economy and our financial markets, to provide 
relief to struggling homeowners and strength to our mortgage 
finance system. The administration has put in place initiatives 
to help small business, consumers, and students and to restore 
the healthy functioning of financial markets.
    While we address the current crisis, the President and the 
Secretary are committed to fundamental reform to reduce the 
likelihood of crises in the future and to contain such crises 
if they occur. The current financial crisis has revealed 
significant weaknesses and glaring inconsistencies in our 
system of financial regulation.
    If confirmed, I look forward to working closely with you to 
take the necessary steps to reform our financial system and to 
restore honesty and integrity to our financial system. We need 
a comprehensive and effective system of prudential supervision 
and effective measures to reduce systemic risk. We need clear 
accountability and full transparency. We must ensure that we 
put in place robust protections for consumers and investors 
with strong and uniform enforcement. We must ensure that our 
financial system is inclusive, and fair. And we must have a 
system that evolves over time to keep up with the pace of 
financial innovation domestically and globally. With the right 
changes in place, we can expect our financial system once again 
to be vibrant and strong.
    I come before you having had the privilege of working on 
financial issues for a long number of years. Currently, as a 
professor of law at the University of Michigan Law School, 
where I teach financial institution Republican and 
international financial regulation, my research involved 
research on financial policy and financial regulation, and most 
recently involves extensive empirical research on the needs and 
behaviors of consumers in our financial services system. My 
work focuses on ways in which a deeper understanding of how 
people think and behave based on real-world research can better 
inform public policy rather than relying solely on abstract 
models of interaction.
    Prior to joining academics, I served in senior positions in 
the Government--at the Treasury Department for 6 years, at OMB, 
at the State Department, and as a judicial clerk. And I would 
say that these positions gave me the opportunity to work with 
many of you and your staffs, to contribute to the work 
involving changing our financial system, and to gain the 
experience to know that an open mind and honest dialog lead to 
better policy judgments.
    I am hopeful that my experiences to date will serve the 
Department well if I am confirmed, and I am even more hopeful 
about the future of our Nation. If confirmed, I look forward to 
working together with you to lay the foundation for a sound 
recovery and a strong economic future.
    Thank you very much.
    Senator Reed. Well, thank you very much, Mr. Barr.
    What I would like to do is take 7-minute rounds and make 
allowances for a second round if there are additional 
questions, and I presume there will be.
    Let me begin by asking Mr. Rogoff, the New Starts process, 
there has been criticism about it, the fact that it takes a 
very long time to get the process off the ground. There are 
many desirable projects that just do not seem to be able to 
make it into the mix. That is one dimension. And the other 
dimension I would like you to comment on is the tension between 
funding New Starts projects and continued improvement and 
expansion of existing projects. And if you could just generally 
comment, I would appreciate it.
    Mr. Rogoff. Well, I would certainly agree with some of the 
criticism that has been leveled against the extraordinary time 
delays that have encumbered a number of the new New Start 
projects. It is a situation that I do not really know anyone 
either in industry or who works around this process that is at 
all content with it.
    I have strong views that I think there are ways to 
streamline it. I think it is one of the first and most 
important exercises that I would like to go through, if 
confirmed, and if I do not launch such an initiative myself, I 
am kind of hoping that Secretary LaHood will order me to do it 
just to bring it the high-level visibility that I think it 
needs.
    The reality is the longer these approval processes take, 
the more expensive these projects get. And inevitably that 
means within a fixed-dollar amount of limited funds that we are 
going to be able to put into these projects over the next 
several years, that means we are buying fewer projects. We are 
buying fewer, more expensive projects, having taken a year, 2 
years, 3 years longer than we perhaps should have to approve 
them. Now, no one wants to bypass any of the laws and 
regulations that apply to these approvals, but there has got to 
be a faster way to get them through the process.
    As it relates to funding, New Start projects, as compared 
to--I think what you are asking is sort of keeping up the 
maintenance on existing infrastructure.
    Senator Reed. And expanding.
    Mr. Rogoff. Yes. It is difficult in that we have just had, 
as a result of a report actually that Senator Durbin ordered 
through the appropriations process, really quite a wake-up call 
in a report that showed that we are looking at something along 
the lines of a $50 billion backlog in deferred maintenance, 
really necessary maintenance on a number of our major rail 
systems across the country, including the MBTA up in your 
region of the country. And some of these deferred maintenance 
issues really quickly become safety issues if you do not attend 
to them. And I think this Committee as well as the FTA and the 
administration really need to carefully balance how much they 
want to commit to building new projects versus seeing to it 
that the existing systems are actually adequately attaining--
you know, adequately attending to their core maintenance needs.
    It is hard when you think about the local political 
situation. It is a lot easier to kind of generation enthusiasm, 
perhaps generate an incremental tax, generate money out of the 
legislature when you have got a lot of people excited about a 
new service. It is a lot harder to cobble together the money to 
actually do adequate maintenance, so I think that is a careful 
balance we need to look at.
    Senator Reed. Thank you, Mr. Rogoff. I have a question of 
everybody, but let me move to Mr. Bostic.
    Mr. Bostic, I note that in your resume you were an 
independent director for IndyMac MBS, Inc., and IndyMac ABS, 
Inc. And as we all well know, the failure of an affiliated 
company, IndyMac Bank, caused severe repercussions; in fact, it 
was alluded to by Congressman Schiff.
    If you could explain exactly what your role was with these 
entities, whether you were engaged in any of the activities of 
the bank, with their underwriting or their marketing, et 
cetera. What precisely were you doing as an independent 
director for these affiliated entities?
    Mr. Bostic. To answer that question, I should start by just 
describing the relationship between IndyMac, the Bank, and its 
affiliates that I was on the board of.
    IndyMac Bank was a bank, they took deposits, they made 
loans. And one of their strategies was to fund those loans by 
accessing the liquidity from the secondary market. As you may 
be aware, there are a bunch of processes that you have to go 
through to get to actually get a pool to the secondary market 
and the affiliates, MBS and ABS, were charged with working 
through that process to get those pools to be made available on 
the secondary market.
    My role as an independent contractor was to oversee the 
activities of those affiliates and make sure that the processes 
were done appropriately, in conformity with SEC rules and 
regulations and those sorts of aspects of the infrastructure.
    At no time was I charged or did I have the authority or the 
responsibility to do underwriting, to review the decisions of 
how to pool these securities, the deal structure. I was largely 
a board member just overseeing this process. So it was 
relatively detached from the actual underwriting 
decisionmaking.
    Senator Reed. Thank you very much.
    Mr. Sanchez, let me ask you a question. Basically, you will 
be the chief officer in our Government that is policing the 
anti-dumping and the dumping issues that face us, and I wonder 
if you could give us sort of a sense of how you might approach 
that, a very important challenge.
    Mr. Sanchez. Thank you, Senator Reed.
    In my role as Under Secretary of Commerce, I have two 
important responsibilities, promoting exports and, second, 
ensuring that we have created a level playing field for 
American business as it seeks to do business around the world.
    I consider it one of the most important tools that we have, 
to vigorously enforce our trade laws as well as our trade 
agreements. And it will be my intention to do that, to enforce 
them to our utmost ability, to work with USTR to make sure that 
we are doing everything to make sure that American business can 
remain competitive.
    If confirmed, I look forward to working with you and this 
Committee to make sure we are doing just that.
    Senator Reed. Well, thank you very much. I will reserve my 
questions for the second round and recognize Senator Martinez.
    Senator Martinez. Thank you, Senator Reed.
    I wanted just to make a general comment. All of you are 
coming to do things for this Nation that you love, and I want 
to just commend all of you for doing so. And I want to also 
express a word of families and friends and supporters and 
partners and others that are behind you and support you in your 
efforts. I think it is terribly important.
    I can just think back 8 years ago when I was sitting at the 
same table where you sit today, before I had the honor to be 
Secretary of HUD. So I want to just make that general comment.
    I have a couple of questions to each of you and I will try 
to go quickly about that.
    Mr. Rogoff, I wanted to ask you about the transit issue in 
terms of financing and funding. I come from a State where we 
have little to none and are having a very difficult time 
getting projects off the ground. We just had a tremendous 
failure in Central Florida you may be aware of.
    What do you think are the answers? And how do you feel 
about private financing of major projects that might use a 
different model than what we traditionally have used? You know, 
I have been involved in a project for a light rail program in 
Orange County, Florida. It failed because we could not really 
come up with a local match. This one failed because the State 
of Florida could not do its part.
    This model is broken. How do you think we can get it done? 
Because mass transit is something that has to be part of the 
future of Florida.
    Mr. Rogoff. Well, that is correct, and especially in 
growing States like Florida that continue to grow and continue 
to have a density of elderly. It becomes all the more important 
with the aging of the population.
    As I said in my opening statement, our core mechanism for 
financing these programs, the Transit Account of the Highway 
Trust Fund, is on its way toward bankruptcy. There are some 
measures taken in the President's budget for 2010 to try to 
forestall that, but the bottom line is we need to develop some 
new financing mechanisms.
    We have had two commissions that have looked at this, both 
authorized in the SAFETEA-LU bill. I think what is most notable 
about them is that both commissions, while coming up with 
different recommendations, all agreed that we need a mix of 
solutions, that we are not going to have a single silver bullet 
mechanism, if you will, to revolutionize transportation 
finance.
    And private-public partnerships needs to be part of that. 
The challenge in doing private financing for certain transit 
projects is we need to get--what often interests the private 
sector in being a participant is being able to capture some 
kind of revenue stream for payback. Transit projects generally 
need an operating subsidy to continue to operate and therefore 
there is not sort of a natural mechanism, a natural funding 
stream to capture.
    But there have been some innovative mechanisms used out 
there. I think the one thing that really all of the committees 
that are going to participate in the authorization process--
this committee, the Public Works Committee, the Commerce 
Committee--need to focus on is some of the most innovative 
ideas are coming from the States and localities themselves. 
That we need to open our ears to some of the things that are 
being successful out there, and try to give State and local 
decisionmakers maximum options.
    My only concern about the private-public partnership model 
is when you get into some pure privatizations where transit 
assets, if you will, are sold. And some of the funding from 
those assets do not necessarily redound to transportation 
benefits. And I think that is a point where we need to draw a 
line.
    But clearly, we have had some successful projects out there 
and we need to foster them.
    Senator Martinez. Well, keep an open mind on Florida. We 
desperately need transit and I hope we can find a way to make 
it happen.
    Mr. Rogoff. Absolutely. The recent activities in 
Tallahassee were unfortunate, I agree, and Orlando.
    Senator Martinez. It was, very unfortunate.
    Mr. Sanchez, I just wanted to make sure that I get on the 
record I know what your thoughts are on trade. I am very keen 
on the Colombia Free Trade Agreement. I think it is terribly 
important for our exports. This is a market where we will gain 
jobs by trading with Colombia on a free trade basis, and I 
wanted to know your thoughts on that agreement and the 
Panamanian one, as well.
    Mr. Sanchez. Well, I know that President Obama recently 
said that we have to be very careful that we do not send 
signals of protectionism, particularly during these economic 
times.
    I know that the U.S. Trade Representative, Ron Kirk, is 
working with our good partner and ally, Colombia, as well as 
Panama to work out any concerns or issues that may still exist.
    As you know, I am not yet working for the Administration, 
so I have not been involved in those discussions. But I am 
confident that the U.S. Trade Representative, with support from 
the Department of Commerce, will be able to work through issues 
with Colombia and Panama. And I am hopeful that some time in 
the future we will be bringing those agreements to Congress.
    Senator Martinez. Well, Secretary Gutierrez, who I happen 
to have seen today and whom I know you know, was a huge 
advocate for the trade agenda. I hope you will pick up that 
mantle, along with Representative Kirk, who is I know going to 
do a great job as USTR. But I hope you will join with him.
    I know the Secretary is also a very committed pro-trade 
person, has a great record in his State when he was Governor, 
along those lines. I think it is terribly important that we 
move the agenda forward. I think it is very important for our 
political relationship with Latin America, as you well know, 
that we address that issue as soon as possible.
    Mr. Sanchez. I agree, Senator. As Senator Reed said, one in 
10 jobs in the United States come from our exports. And in 
Secretary Locke's home State, by some estimates, it is one in 
three. So you are absolutely right, that it is an important 
engine of job creation in our country.
    Senator Martinez. I want to just congratulate all of you 
HUD people, and welcome you to the HUD family, if I may be so 
presumptuous. I know, Ms. Henriquez, I think our paths crossed 
when you were in Boston and I was in HUD, and I know what a 
great job you are doing there.
    I also have to tell you that the whole public housing arena 
is challenged. Not all of them work as smoothly as yours. There 
are some terrific examples around the country of well run--
Atlanta comes to mind, many others. But then there are also 
some really, really disastrous situations. And I hope that you 
will use your firm but gentle hand to make sure that we move 
that situation to a better place.
    As you said, every American ought to have a decent place to 
live, and not every American in public housing does. So I 
really hope you will take seriously that challenge.
    Ms. Henriquez. I will, and I do. Thank you.
    Senator Martinez. Ms. Marquez, I also commend you for your 
passion about housing for all and equality. I did a lot in the 
``colonias.'' Maybe not enough, because I do not know how much 
would ever be done to be enough. But I promise you, it was an 
area that I took a great deal of interest in.
    There is so much of the agenda that I could discuss with 
each of you, but I just--in the interest of time--I hope that 
you will look at some of the things we did in the ``colonias.'' 
I hope that they are still there to be followed up on and 
pursued and advanced.
    There is no constituency, I used to say, for the 
``colonias.'' You do not get any votes. You do not win any 
medals. Nobody really knows or cares what you are doing. But 
you have to only visit it once to realize that no Americans 
should live in the conditions that some of the people in the 
``colonias'' are living. And so I hope you will continue to see 
if there is a way, through CPD dollars, that you can address 
some of those issues.
    You know, they do not qualify exactly as such. We were 
creative in ways of finding ways to help. And I hope you will 
be equally creative with them.
    That is not a question really, but if you have a comment I 
would love to hear from you.
    Ms. Marquez. It is difficult when you approach the 
``colonias'' and you find that HUD has one standard for a sewer 
hookup and USDA's Rural Housing has another, and they are about 
six feet apart from another.
    Senator Martinez. And there is not enough money for either 
one.
    [Laughter.]
    Ms. Marquez. That is right. I promise you I will do my very 
best.
    Senator Martinez. Thank you. There is so much--CPD, you 
know, it is the lifeblood of so many cities. And today, in 
these difficult times that we are facing, municipalities all 
over the country are looking to you for the leadership that has 
to come out of HUD for so many community projects that are 
vital, particularly now that we are trying to put people to 
work and everything else.
    Mr. Bostic, I am not sure I ever understood fully what all 
of you people do over there in the research area.
    [Laughter.]
    Senator Martinez. So I will just wish you well and do good 
things.
    [Laughter.]
    Senator Martinez. I mean no disrespect there.
    Thank you, gentleman. Mr. Barr, also, congratulations to 
you. I wish you well in your job. You have a huge challenge 
ahead of you and I look forward to working with you through the 
work of this Committee.
    Thank you.
    Senator Reed. Thank you, Senator. Now we know and can see 
why you were such a successful secretary.
    [Laughter.]
    Senator Reed. Your insight and
    Senator Martinez. Good people.
    Senator Reed. ----good people, and inspiring leadership.
    Senator Martinez. That is right.
    Senator Reed. Thank you.
    Senator Akaka.
    Senator Akaka. Thank you very much, Mr. Chairman.
    Mr. Rogoff, due to your work on the Senate Transportation 
Appropriations Committee, you are probably aware of many things 
throughout the country, including Hawaii.
    Mr. Rogoff. Yes, sir.
    Senator Akaka. And in particular, the city and county of 
Honolulu and its efforts to construct a rail transit system. It 
was good for us to hear that you will be the man in transit for 
this Administration. We certainly look to you for improving the 
system and looking forward to working with you.
    The local contributions toward the project in Honolulu will 
likely be 70 percent of the project costs. But it will still 
need significant Federal support. This project is coming to a 
very critical phase of development in Hawaii, in Honolulu, and 
will require the regular attention of the FTA. Can you offer 
some assurance that the FTA will devote the appropriate time 
and attention to the rail transit project in Honolulu?
    Mr. Rogoff. I certainly could, Senator. I have toured the 
corridor of this project. I have met with Mayor Hannemann on 
more than two occasions to discuss it. And I agree with you 
that we are now reaching a make or break point on the Honolulu 
project.
    I, unfortunately, along with a former colleague of mine, 
Pat McCann, were serving at the Subcommittee when the city 
council reversed itself and undid the project in the 1990's and 
we went through the very unfortunately exercise of reallocating 
funds already appropriated to Honolulu to other cities.
    We must not let that happen again. And you have my 
assurance, both in working with the people in Region 9 as well 
as within headquarters to make sure that everyone is talking to 
each other clearly in terms of what needs to be done to move 
this project forward.
    Senator Akaka. Thank you very much for your response.
    Mr. Barr, among those families who make up the bottom 20 
percent of earners, one in four does not have a transaction 
account, according to the Federal Reserve's survey of consumer 
finances. These families are those who can least afford to pay 
the high cost of fringe financial services and I know we share 
an interest in helping to increase access to mainstream 
financial institutions. I have valued your scholarship on the 
unbanked and look forward to working with you to help increase 
access to mainstream financial institutions.
    My simple question to you is what must be done to bank the 
unbanked?
    Mr. Barr. Thank you very much, Senator Akaka, for your kind 
words. As you know, I have been working on issues facing low-
income households in the financial system for a long time. It 
is an area of deep concern for me in my scholarship, in my 
policy work. And it is an area that I would look forward to 
continuing to work with you on if confirmed for this position.
    I think there are a large number of efforts we can make to 
help bring more people into the financial services system if we 
focus on their actual needs and start with what people need 
from their banks, what they need from their financial 
institutions, rather than determining from the top down, the 
current structure of the financial system.
    So I would very much look forward to working with you on 
this important issue.
    Senator Akaka. I look forward to that, too.
    Ms. Henriquez, as you know, in Native American communities, 
affordable housing development on Trust lands requires unique 
and innovative approaches. Programs authorized by the Native 
American Housing Assistance and Self Determination Act, what we 
call NAHASDA, have been vital to increasing access to 
affordable housing.
    Hawaii's Department of Hawaiian Home Lands is the largest 
affordable housing developer in our State and has effectively 
utilized and leveraged Federal resources. Hawaii's housing 
costs are the highest, as you know, in the country and 
homelessness is too prevalent.
    I encourage you to come to Hawaii and see the work being 
done by DHHL and meet with DHHL's leadership and homestead 
residents, who would welcome you.
    My question to you is will you work with me in an attempt 
to meet the specific housing needs of Native Hawaiians?
    Ms. Henriquez. First of all, thank you very much for your 
kind offer and I would look forward to visiting you in Hawaii.
    [Laughter.]
    Ms. Henriquez. Let the record show.
    But quite seriously, I would look forward to working with 
you, Senator. I think that we have got to figure out what is 
working and what is not working and then how to leverage as 
much as possible the tools that we have got in front of us.
    I understand that there are high costs of living in Hawaii. 
I just recently met with the Director of the Hawaii Housing 
Authority and learned a lot from him and understand the 
disparity between what is seen by the tourists and the actual 
living conditions for a number of people who live on the 
Island.
    So I look forward to working with you and members of your 
staff to try and figure out ways to leverage as many dollars as 
possible.
    Senator Akaka. Thank you very much for your response.
    Ms. Marquez, in addition to serving on this Committee, I am 
Chairman of the Veterans' Affairs Committee and we have been 
working to improve VA services for homeless veterans. Since 
veterans are approximately one-third of the homeless 
population, what must be done to ensure that veterans are 
provided access to assistance and support services to help them 
find and retain housing?
    Ms. Marquez. Thank you for the question, Senator. It is, 
indeed, a tragedy, the statistics that you cite.
    My sense of that, in Los Angeles we have begun to work on 
that through our permanent supportive housing program. We 
actually give an incentive for developers to come and build for 
veterans, for homeless veterans.
    I think what we have to do is put together a leverage, a 
matrix so to speak, between our CDBG dollars, the new dollars 
from Homeless Prevention and Rapid Re-Housing, and even layer 
them on top of NSP dollars. It is very expensive to build 
permanent supportive housing for anyone that has a great need 
and ultimately we have to leverage both the capital and the 
operating dollars.
    And so I actually look forward to working with my 
colleague, Sandy, here because it is going to be together that 
we work out the final financing to allow permanent supportive 
housing to go forward. It has always been a problem. The two 
systems do not speak together well about capital and operating. 
And that is what I would intend to do.
    Senator Akaka. Thank you very much. My time has expired but 
I want to wish all of you well and the team that you will be 
part of will certainly help our country, without question. So I 
wish you well and welcome to your families and friends, and 
also your supporters out there.
    Thank you.
    Senator Reed. Thank you very much, Senator Akaka.
    Let me direct the same question really to Ms. Henriquez and 
Ms. Marquez. I am just pleased you have emphasized already 
teamwork, but you have unique perspectives. You have worked 
within the Agency and you have worked outside of it. As you go 
in, what do you think your most significant challenges are, the 
top three let's say, from your perspective looking at what HUD 
has done and can do better and having been there, in some 
cases, and tried your best.
    Ms. Henriquez.
    Ms. Henriquez. Thank you, Senator.
    From my perspective, I think the top three challenges would 
be one, to make sure that we are communicating, the issue about 
accountability, transparency, top down, bottom up, so that we 
can make sure that our programs are effective, we are 
communicating effectively both to folks who we regulate, 
housing authorities and our other partners, but also make sure 
that we hear from those partners about how to be as effective 
as possible.
    I think getting real-time data and using that data to drive 
decisions is really important so that we are not always 
wondering what should be included, what is not in the number, 
how the number works, and how indeed those resources are 
applied across the Nation.
    I do think, as well, getting our arms around the capital 
needs study to inform decisions, particularly around the public 
housing portfolio, is essential. I know that that work is going 
on now and I look forward to learning more about how we can use 
tried and true programs that make some sense and that have been 
productive and helpful and how we can either replicate those or 
expand upon those to be more efficient and to produce greater 
affordable housing across the country.
    Senator Reed. Thank you.
    Ms. Marquez.
    Ms. Marquez. Thank you, sir.
    I think going in the top three things to look at within CPD 
are clearly the distribution of stimulus dollars, how they are 
being spent, making sure that that is effective, efficient, and 
creating jobs.
    Second, it would be the distribution of NSP 2, the 
competition, which now will focus on need in a different way. 
And having the technical assistance competition done so that we 
have the expertise around the country to ensure that 
communities of all sizes and of all types of economies are 
using these dollars and leveraging as much as possible.
    I would say, third, those are immediate. But the things 
that absolutely have to be looked at now are some integration 
of disaster relief work and funding. I am looking forward to 
digging in.
    In Los Angeles we have disasters. They are called 
earthquakes. In my city, when we had the Northridge earthquake, 
it was my agency that was responsible for the long-term 
financing of over 20,000 houses and bringing them back on line. 
So I have spent a lot of time thinking about it, worried that 
the big one is coming, and planning for that.
    So those would be the top three things that I would worry 
about. And then the difficulty always is we are going to have 
to work across lines. There can be no division. The problems 
are too deep.
    Senator Reed. I noticed Dr. Bostic was making lots of 
notes, which is a good sign because you are already working 
across divisions.
    [Laughter.]
    Senator Reed. But if you have a comment, Dr. Bostic, about 
how you can help them.
    [Laughter.]
    Mr. Bostic. It is very unusual to hear program people talk 
about doing studies and taking data and all that stuff. I get 
excited so I start writing things down.
    [Laughter.]
    Mr. Bostic. I guess one of my real objectives of PD&R is to 
improve the data interface and the availability of data from 
the Department to serve our external constituency. So there are 
a lot of local community groups who do not really have the 
capacity to do their own data collection, data analysis. And I 
am hopeful that, in working with my two colleagues, we can 
really change and transform their ability to understand what is 
going on in their own communities so that we collectively can 
build programs that really do improve people's quality of life.
    The Secretary, I should say, has lifted up data as one of 
his priorities. So this is really a good opportunity. I think 
we are all very much aligned and it is really an opportunity to 
get some really good collaboration and hopefully good output.
    Senator Reed. Thank you very much.
    Mr. Barr, you are going to a position of great 
responsibility at a critical moment. We are working to prepare 
major reform legislation for financial supervision.
    Just to get a sense of what do you feel the key issues are 
from your perspective?
    Mr. Barr. Thank you very much, Senator Reed.
    Again, if confirmed, I would look forward to working 
closely with you and the Committee on this issue.
    I think President Obama and Secretary Geithner have made 
clear the importance of fundamental reform to our system of 
financial regulation. It is a reform that needs to be based on 
several key principles. We need to be sure that the system does 
not permit the growth of systemic risk, that we have 
appropriate systems in place to address systemic risk and 
prudential supervision.
    Second, we need a system that is protective of consumers 
and investors, a strong and uniform protection across our 
financial sector.
    Third, we need to take the steps necessary to reform our 
regulatory structure so that it is gap-free and comprehensive 
and so that we do not permit the kind of regulatory competition 
and arbitrage that has occurred in the past.
    And fourth, we need a system that enables us to compete 
internationally and to level the playing field and regulation 
for both U.S. and foreign firms.
    Senator Reed. Thank you. I have had the privilege of 
working with you and I have been terribly impressed with your 
scholarship and your commitment to dealing very aggressively 
and appropriately with some of these very difficult issues.
    One area that we have spoken about is the whole issue of 
foreclosure and foreclosure mitigation. We have attempted 
several times, going back to the previous administration, on a 
voluntary basis. We had a first iteration of foreclosure 
mitigation legislation. Just last week we passed another 
version. Included in that, by the way, is a reform of McKinney-
Vento Homeless Assistance Act, which we look forward to getting 
passed. I checked with Chairman Frank and he is all for it, 
too. So we think the signs are looking good.
    But one of the issues we dealt with was just the 
securitization issues, and in particular the tax issues of 
REMICs, et cetera. Any thoughts about whether the time has come 
to be more forceful in that area? Or any other thoughts you 
might have on this sort of securitization problem?
    Mr. Barr. Thank you, Senator Reed.
    As you know, when we have talked before, I have long been 
an advocate of forceful measures to ensure that we have strong 
methods for accelerating loan modifications and reducing 
foreclosures. When President Obama came into office, he made 
that a top priority, and soon after coming into office in 
February, announced a loan modification and stabilization plan 
with three key elements.
    First, additional funding to ensure the capital structure 
of Fannie Mae and Freddie Mac are strong so those institutions 
could continue to play an important role in stabilizing prices 
in the market.
    Second, a refinance program authorized by the Federal 
Housing Finance Agency to permit more households to refinance, 
even though they are under water.
    And third, a clear commitment to an aggressive loan 
modification plan with a commitment of $75 billion in resources 
and strong Treasury guidelines for servicers. And so those two 
key elements, real dollars on the table to change behavior and 
clear legal guidance to perform loan modifications, I believe 
are starting to show significant promise.
    There have been now thousands of trial modifications that 
have begun. There are 14 servicers who have signed contracts to 
implement the loan modification protocols that have been 
specified. Those contracting firms cover a little bit more than 
75 percent of all mortgage loans in the United States.
    So I think we are off to a strong start. I think it is 
early to tell whether it is strong enough. I think we are going 
to see over time whether the program ramps up in the 
appropriate way. And the Administration is committed to 
ensuring that the program is successful.
    As part of that initiative, the Department of Treasury 
released some guidance on the issue that you and I had spoken 
about before, the Real Estate Mortgage Investment Conduit 
statute, making clear that participation in the Obama 
modification plan would not disturb that status for existing 
trusts, which is one of the measures that you and I have talked 
about in the past.
    Again, we are committed to continuing to make sure the 
program works and to examining it going forward in the ways 
that you have indicated.
    Senator Reed. Well, it is an arrow that is still in the 
quiver, a much more explicit response to REMICs. But you are 
going to be--I presume and I am confident you are going to be 
carefully monitoring the progress of the existing measures. And 
if they are doing the job, then the arrow stays in the quiver. 
And if not, we have it.
    Mr. Barr. Thank you, Senator.
    Senator Reed. Thank you.
    I want to thank all of you, not only for your testimony 
today but for your commitment to public service.
    I would ask if my colleagues, some who have not been 
present, may have questions, those questions will be forwarded 
to you within 7 days from the Committee. There may be some, 
there may be none. But you might get them and your expeditious 
answer is in your own self-interest, so I can stop right there.
    I wish you all very, very well in serving the people of 
this country.
    The hearing is adjourned.
    [Whereupon, at 3:34 p.m., the hearing was adjourned.]
    [Prepared statements, biographical sketches of nominees, 
responses to written questions, and additional material 
supplied for the record follow:]

                 PREPARED STATEMENT OF PETER M. ROGOFF
                  To Be Federal Transit Administrator,
                      Department of Transportation
                              May 13, 2009
    Mr. Chairman, Ranking Member Shelby, and Members of the Committee, 
I want to thank you for allowing me this opportunity to present myself 
as President Obama's nominee to head the Federal Transit 
Administration.
    Before delivering my formal remarks, I want to acknowledge the 
presence of my many friends that are here and, most especially, my 
family. My wife, Dena Morris. Our children, Niles and Lucy Rogoff. I 
also want to recognize the individual that makes it possible for the 
four of us to do all that we do--our phenomenal nanny and friend, Ms. 
Murlene Dowling.
    Mr. Chairman, having served on the staff of a Senate Committee for 
22 years, I know that the confirmation process is one of the most 
critically important constitutional responsibilities of the Senate. So 
I come to this hearing with humility and great respect for the process.
    As I appear before you today, I believe public transportation faces 
both remarkable opportunities and serious challenges.
    The opportunities begin with the fact that we have a President who 
recognizes the central importance of our transit systems to our quality 
of life and the quality of our environment. He has spoken of the need 
to invest adequately and to invest efficiently. And he has stressed 
repeatedly the role that public transportation must play in reducing 
pollution, including greenhouse gas emissions, and moving towards 
energy independence by diminishing our reliance on foreign oil.
    In addition, the American people are creating opportunities by 
utilizing transit services in record numbers--and by demanding more. 
Transit ridership rose to a modern record in 2008--10.3 billion trips. 
What may be more remarkable is that ridership has remained high even as 
record gas prices have dropped back down. Many families have sold their 
second car--or their only car--either as a matter of convenience or to 
cope with the economic downturn. Many other Americans, weary of sitting 
in traffic jams, have boarded the train or boarded buses utilizing 
designated bus lanes.
    Finally, there are great opportunities because the Administration 
and Congress are about to rewrite all our surface transportation 
programs. In fact, the upcoming authorization process presents an 
opportunity like no other to retool our public transportation programs 
and refocus them on our most critical national goals.
    But as this Committee is well aware, we also face extraordinary 
challenges. First and foremost, is the task of financing our efforts to 
achieve these goals. The mass transit account of our Federal Highway 
Trust Fund is on a path to insolvency. While the transit account is in 
less immediate danger than the larger highway account, the balances in 
both are falling at a rate that will undermine their ability to support 
current obligation levels.
    The financing challenge calls for tough choices. So it's all the 
more important that we fulfill President Obama's commitment to spend 
every transit dollar efficiently and on the worthiest projects.
    Against this backdrop, I am especially honored that President Obama 
has nominated me to serve as his Federal Transit Administrator. I very 
much look forward to working with this Committee, with Secretary LaHood 
and with his outstanding team to both tackle the pressing challenges 
and capitalize on the extraordinary opportunities.
    As I mentioned, the financing dilemma is difficult. But with more 
than two decades of experience on the Appropriations Committee staff 
specializing in transportation finance, I feel confident that I can 
help the Secretary and this Committee identify a more stable and 
sustainable funding regime.
    Secretary LaHood has made clear his intention to eliminate the 
stovepipes within the DOT. He will be asking his agency leaders to work 
toward a seamless system that moves people and freight efficiently 
between modes of transportation. I believe I can help. My experience in 
infrastructure investment programs goes well beyond mass transit. It 
includes highway, aviation, intercity rail, and maritime programs. If 
we are going to succeed in developing truly seamless networks, then 
expanded cooperation and joint investments are going to be the key.
    Secretary LaHood and HUD Secretary Donovan are committed to 
fostering livable and sustainable communities through the coordinated 
efforts of their departments. For the last 4 years, I have had the 
joint responsibility of overseeing both the Transportation and HUD 
budgets for the Appropriations Committee. Knowing the HUD budget as I 
do, and witnessing Secretary Donovan's impressive efforts to transform 
HUD, I am particularly enthusiastic about working with him and 
Secretary LaHood to promote sustainability.
    Finally, I welcome the opportunity to be this Administration's 
advocate for mass transit. I plan to be a very public advocate in my 
visits with policy makers in communities across the Nation. But just as 
importantly, I plan to be a forceful advocate in the less public 
debates that go on within the Administration.
    We must create new and better transit options in both urban and 
rural America. But especially during a period of economic uncertainty 
and recovery, a pro-transit agenda must include protecting and 
improving transit services for those for whom mass transit is the only 
option. If confirmed, this Committee can count on me to be a strong and 
vocal partner in advancing that agenda.
    Thank you again for this opportunity. I look forward answering any 
questions you may have.















               PREPARED STATEMENT OF FRANCISCO J. SANCHEZ
             To Be Under Secretary for International Trade,
                         Department of Commerce
                              May 13, 2009
    Thank you Chairman Dodd, Senator Shelby, and Members of the 
Committee.
    There is no greater call than that of service to one's country and 
I am truly honored by President Obama's nomination to serve as Under 
Secretary of Commerce for International Trade. I am humbled by the 
trust that President Obama and Secretary Locke are placing in me, and I 
am cognizant of the serious responsibilities that accompany this 
confidence. If confirmed, I look forward to working for them, and with 
you, in advancing our Nation's economic well-being and ensuring that 
all Americans benefit from free and fair trade.
    I want to thank my Mother and my late father for their support and 
encouragement. I would not be here if it weren't for their constant 
love and commitment to my success.
    As Secretary Locke has said, the role of the Department of Commerce 
is to be an engine of innovation, job growth, and economic renewal. The 
International Trade Administration supports these efforts by 
strengthening the competitiveness of U.S. industry, promoting trade and 
investment, and ensuring fair trade and compliance with trade laws and 
agreements. This mission is critical to enhancing America's global 
competitiveness and expanding commercial opportunities for American 
manufacturers and service workers throughout the world.
    When U.S. businesses seek to promote their goods and services in 
overseas markets, the International Trade Administration's programs 
lead the way. In short, the agency helps America's firms and workers 
navigate through the often complicated and unpredictable waters of 
foreign trade--so that U.S. firms' sales abroad help to ensure their 
growth in the United States. In particular, ITA focuses on assisting 
small and medium-sized businesses to succeed in the international 
economy. Small and medium-sized businesses are critical to America's 
long-term prosperity and global competitiveness, and ITA programs are 
designed to help these companies export to the millions of consumers 
that live beyond our borders.
    Early in my career, I had the honor of serving former Senator Bob 
Graham, while he was governor of Florida, as the first director of my 
State's Caribbean Basin Initiative program. I then served in the 
Clinton administration in the Office of the Special Envoy for the 
Americas, a role that required carefully balancing foreign policy goals 
with advancing U.S. economic interests. Subsequently I served as 
Assistant Secretary of Transportation, where I oversaw the Department's 
international negotiations.
    In my current position with Cambridge Negotiation Strategies, I 
have had the opportunity to work with American companies, other 
multinational companies and international organizations in more than 30 
countries around the world. I have also consulted with heads of 
government and community leaders in Latin America to help resolve a 
range of complex issues. In Medellin, Colombia I lead a team as part of 
a ``Teaching Tolerance'' program, an initiative to break the cycle of 
violence plaguing the country. My work has included projects with the 
World Bank and the Inter American Development Bank. I also advised the 
president of Ecuador in negotiations to settle the 56-year-old border 
dispute with Peru.
    If confirmed, I look forward to working closely with this committee 
to support American innovation and entrepreneurship and open global 
markets for American-made goods and services, while creating new jobs 
and economic growth at home.

















                PREPARED STATEMENT OF RAPHAEL W. BOSTIC
     To Be Assistant Secretary for Policy Development and Research,
              Department of Housing and Urban Development
                              May 13, 2009
    Chairman Dodd, Ranking Member Shelby, and Members of the Committee, 
I am honored and humbled to appear before you today as you consider my 
nomination to serve as the Assistant Secretary for Policy Development 
and Research at the U.S. Department of Housing and Urban Development. 
Before going further, I must acknowledge those who have given 
unconditional love and support through my life, most significantly my 
partner Jeffrey Taylor, my parents Viola and Raphael T. Bostic, my 
sister Ebony, my aunt Patricia Williams, and mentors Glenn Canner, John 
Shoven, Roger Noll, Susan Wachter, and Stuart Gabriel.
    The time we find ourselves in is remarkable, both because of its 
gravity and its origins. By many measures, the economy has not 
performed so poorly since the Great Depression of the 1930s. And for 
perhaps the first time in this Nation's history, housing has been at 
the root of the macroeconomic troubles. This reality means that a deep 
understanding of housing markets is critical, and evidence on what does 
and does not work in these markets will be essential for creating a new 
market structure that endures and corrects the weaknesses that helped 
to create the current troubles.
    Secretary Donovan recognizes this, and in his public and private 
statements has already placed a considerable emphasis on the importance 
of collecting and using data to make informed decisions. If confirmed 
to my position, I will work hard to see that the Secretary's vision is 
pursued and achieved. In this way, I hope to contribute to a 
transformation of the Department into an efficient, informed leader of 
policy on issues associated with housing and urban development.
    My background, including significant work in academics, government 
and community development, provides me with assets that will allow me 
to help the Office of Policy Development and Research (PD&R) increase 
its efficacy and effectiveness. A key goal is for PD&R efforts to 
contribute to a deeper and more meaningful understanding of the issues 
facing our housing and urban markets and communities.
    From an academic perspective, my research has given me knowledge 
and insights about both housing and urban development, and this, 
combined with my continual and intensive interaction with other 
academic scholars, will allow me to promote the implementation of 
evidence-based policy with the Secretary and the Department's program 
offices. In addition, my training and perspectives gained as an 
academic researcher have given me skills that will help ensure that 
research and program evaluations produced or funded by PD&R are 
relevant, timely, and of the highest quality.
    Through my career to date, I have interacted extensively with all 
the key HUD constituencies and so am able to add value and perspective 
to HUD's research efforts, as well as its policy-making and oversight. 
I understand housing and housing finance through my research and my 
work at the Federal Reserve Board. I know the nuts and bolts of 
affordable housing development, as well as the difficulties and 
opportunities it affords for lower-income and minority households, 
through my teaching them at USC, service as a Board member of a local 
nonprofit housing developer, and research. My work with a local 
community development organization in East Palo Alto and other research 
I have done have provided insights as to the challenges of broad-based 
urban and community development. My role as director of a real estate 
development program required my engagement of all aspects of the 
development process, and forced me to engage and understand how design, 
law, economics, finance, and construction all interact. Of particular 
significance, the exposure to construction highlighted the key role 
that engineering and technology can play in helping to make housing 
affordable and high quality.
    One of Secretary Donovan's top priorities is to improve the culture 
of the Department as an institution, and I pledge to further this goal 
for PD&R. This transformation will require significant organizational 
management, and my experiences at USC over the past several years have 
prepared me for this challenge. I aim to provide an environment that 
allows PD&R to perform and produce at high levels, as I believe the 
Office has tremendous potential that has lagged in terms of its 
productivity, prominence and influence.
    Finally, I come to you today with a clear understanding of the 
opportunities and obstacles that this position presents. Through my 
work at the Federal Reserve Board and HUD, I have seen how policy is 
created at the Federal level, and am familiar with the dynamics 
associated with operating at PD&R. This knowledge base will facilitate 
my navigation of the policy-making milieu and should lead to effective 
decision-making and promotion of ideas that will benefit the American 
people.
    In conclusion, I am very excited to serve the country at this 
pivotal moment in its history. I am eager to support the Secretary's 
efforts and work with the members of this committee to help heal the 
Nation's housing markets and promote the flourishing of its urban 
areas.
    Thank you for giving me the opportunity to speak with you today and 
I welcome any questions you might have.























                 PREPARED STATEMENT OF SANDRA HENRIQUEZ
        To Be Assistant Secretary for Public and Indian Housing,
              Department of Housing and Urban Development
                              May 13, 2009
    Thank you Mr. Chairman, Senator Shelby and distinguished Members of 
the Committee, for considering my nomination and the opportunity to 
appear before you this morning. I am truly honored and humbled to have 
had Secretary Donovan recommend that President Obama nominate me as 
Assistant Secretary for Public and Indian Housing.
    Thank you, Congressman Frank for introducing me today. With me are 
my father, Howard Brooks, my brother, Bruce Brooks, my son, Carlos and 
colleague, DaVonne Bolton. My son and daughter remain in Boston, but I 
am certain they are watching this proceeding.
    The most significant portion of my career has been in real estate 
property management of affordable housing, both the private and public 
sectors of the industry. I quickly turned to residential real estate 
because I was more interested in the people who lived there than the 
commercial side. I believe that housing is a right and that the 
provision of safe, decent, well-cared for units for low and very low 
income families and individuals lays the foundation to change lives. If 
a family's shelter is secure, then that household can begin to work on 
other aspects of their lives that many of us take for granted, such as 
child care, getting a job, finding a better one, education for 
themselves and their children.
    For the past 13 years, I have been the Administrator and Chief 
Executive Officer of the Boston Housing Authority. As the largest 
single landlord in the City of Boston, and one of the largest public 
authorities in the Nation, the BHA provides 11,500 public housing units 
and 13,000 rental assistance subsidies, together housing 10 percent of 
the city's population. With an 850 person workforce, and program 
budgets exceeding $280 million annually, I have led an outstanding team 
to reform the housing authority from near troubled status to that of 
high performer in its public housing and Section 8 portfolio. Following 
real estate industry policies and practices, the BHA moved to asset 
management models before Congress and HUD required it. We embraced the 
basics and the vacancy rate dropped from 15 percent to 2-3 percent 
across the portfolio, nonemergency work order completion times dropped 
from 120 days to 15, and they continue to fall, and rent collections 
are up.
    At the same time, we moved from being labeled by HUD as 
``systemically discriminatory'' to ``a national fair housing model,'' 
partnered with sister city agencies, local community development 
corporations and other nonprofit housing providers to increase the 
production of affordable rental housing, created housing strategies and 
programs to house the homeless, and introduced ``green principles'' 
into our business practices and into our building maintenance and 
construction.
    The Boston Housing Authority has used the HOPE VI program to 
redevelop three properties, with a fourth just beginning. In addition, 
we created 62 new first-time homebuyers, none of whom are in default or 
foreclosure. We have used mixed financing to redevelop two other 
properties, and when all redevelopment is taken together, they total 
almost $1 billion over all. For every Federal or State dollar, we 
leveraged eight.
    We have used Energy Performance Contracting to retrofit many of our 
outdated heating plants, making them state-of-the-art, more efficient, 
less costly to operate and creating better living environments for 
residents.
    In addition, we have used available HUD programs to use a portion 
of our ongoing capital allocation to leverage bond financing to expand 
ongoing improvements to the physical plant. Coupled with recent ARRA 
funding, this totals more than $110 million.
    My housing experience has taught me that regardless of the price 
point, maintaining and improving properties is essential to those who 
live there. Preservation and improvement of the 1.2 million units of 
public housing stock, the creation of more affordable rental housing, 
as well as the continued ability to support families and individuals 
through rental assistance, is essential to realizing the dream of 
millions of our citizens.
    Secretary Shaun Donovan's commitment to accountability and 
transparency and his leadership of HUD provides us with the opportunity 
to do our best work on behalf of those who benefit from HUD's programs. 
If I am confirmed, I will be focused on and committed to learning more 
about Native American housing, as well as public housing. I am grateful 
that President Obama has nominated me and I want to thank each of you 
for your consideration of my nomination. If confirmed, I look forward 
to serving the Nation, especially those who live and work in public and 
Native American housing. Thank you.

















                 PREPARED STATEMENT OF MERCEDES MARQUEZ
   To Be Assistant Secretary for Community Planning and Development,
              Department of Housing and Urban Development
                              May 13, 2009
    Mr. Chairman, Ranking Member Shelby, and distinguished Members of 
the Committee, thank you for the opportunity to appear before you 
today. I would also like to thank Congressman Becerra for his kind 
introduction. Over the years, many friends have encouraged and 
supported me in my work. Some of them are here today. However, no one 
has been more steadfast or selfless than my partner of 21 years, Mirta 
Ocana. It is my pleasure to introduce her today.
    I am honored to have been nominated by President Obama to be 
Assistant Secretary for Community Planning & Development. I also want 
to thank Secretary Donovan for asking me to come and work with him--
giving me the opportunity to join an excellent team of professionals 
dedicated to insuring quality housing for every American.
    I have spent my career working on the full spectrum of housing and 
community development issues. I have grappled with these issues as a 
civil rights litigator, an affordable housing developer, a Federal 
Government official and for the last 5 years as the Director of Housing 
for Los Angeles, the department that crafted the city's response to the 
foreclosure crisis.
    I started my career as a civil rights litigator. I have represented 
folks in matters involving substandard housing conditions, classic fair 
housing discrimination cases, and Federal class actions relating to 
community gentrification and wide spread discrimination in public 
housing. Through this work I learned the value of decent, safe and 
affordable housing within the context of a healthy neighborhood.
    After a dozen years of litigation, I was appointed by President 
Clinton to the U.S. Department of Housing and Urban Development (HUD), 
first as Deputy General Counsel for Civil Rights and Fair Housing and 
later, as Senior Counsel to Secretary Andrew Cuomo. At HUD, I helped 
craft what the Secretary referred to as HUD's ``Justice Agenda.'' This 
required us to reach across departmental divisions to assemble and lead 
cross-departmental teams. For example, to examine the possible 
discriminatory use of CDBG dollars we put together a team from 
Community Planning & Development (CPD), Fair Housing and the Office of 
General Counsel (OGC). By working in a coordinated fashion meaningful 
results were achieved. Through this work I learned the intricacies of 
the funding programs which fall within the purview of the Assistant 
Secretary for Community Planning and Development.
    While most of my work centered on urban communities, I was also 
privileged to work in rural areas, including Native American 
reservations and ``Colonias'' along the U.S./ Mexico border. My work 
included the design of HUD's first Rural Housing and Economic 
Development NOFA's, and in partnership with HUD's Office of Native 
American Programs, the launch the Self Help Housing Program on the Pine 
Ridge Reservation in South Dakota. This work also brought the 
opportunity to collaborate with Rural Housing at USDA to make sense of 
conflicting policies affecting the development of rural housing. This 
work touched me personally. I am the granddaughter of farm workers--and 
while I grew up in San Francisco, California, I have spent a 
considerable amount of time visiting family in California's San Joaquin 
valley.
    After my experience at HUD, I went back home to Los Angeles to 
practice housing and community development. As Vice-President of 
McCormack Baron Salazar, one of the country's most successful private 
affordable housing developers, I spent 3 years working on classic ``tax 
credit'' affordable housing development as well as HOPE VI deals. In 
essence, I took deals from concept to the final securing of financing.
    I have spent the last 5 years as General Manager of the Los Angeles 
Housing Department (LAHD). The agency had a long-standing reputation 
for antiquated thinking, inadequate infrastructure and a lack of 
transparency.
    Within my first year we achieved a top to bottom assessment and 
called in all of the stakeholders--lenders, lawyers, developers, 
landlords, tenant advocates, and government partners--always seeking to 
become public sector entrepreneurs--building momentum working with the 
market instead of lagging behind it. We also launched ``Project Clean 
House''--an effort that identified the 50 most underperforming deals 
and brought the developers--for profit and nonprofit--in to meet with 
us. We were able to get the majority of the deals back on track and 
completed. As for the rest--over a 2 year period--we recaptured or de-
obligated, either voluntarily or through judicial proceedings--over $50 
million and put every penny back into the financing of affordable 
housing--and in 2006 launched the city's Permanent Supportive Housing 
Program.
    In partnership with national lenders, the philanthropic community 
and Enterprise Community Partners we successfully implemented the New 
Generation Fund--a $100 million Acquisition Capital fund. This fund 
works with the Affordable Housing Trust Fund to provide acquisition, 
predevelopment and gap financing to private and nonprofit affordable 
housing developers in a transparent and competitive system.
    Now, our biggest challenge is the current economic and housing 
crisis. Los Angeles has experienced over 24,000 foreclosures in the 
last nine quarters. We address the foreclosure crisis in thoughtful and 
innovative ways. Early on we invested in data. Los Angeles is 469 
square miles in size and our investment in and development of GIS maps 
gave us the information we needed to understand the true nature of our 
problem and where to expend the $32.8 million Los Angeles received from 
NSP 1. We identified distinctly impacted neighborhoods of the city, 
focusing on 10 by 10 block areas where we can also achieve other goals 
like transit oriented development, preservation of affordable 
multifamily housing, and green building standards. Restore 
Neighborhoods LA, the community based nonprofit we created to acquire 
and dispose of both multifamily and single family properties is up and 
running. We also designed a mapping function accessible through our Web 
site where any member of the public can log on and determine whether a 
foreclosed property they are interested in falls within our 
``impacted'' areas and, as such, is eligible for an acquisition/
rehabilitation loan.
    As a practitioner, I have experienced the constraints of HUD's 
regulatory structure, which often creates regulations that often do not 
take into account that one size does not fit all. If confirmed, I 
commit to bring a disciplined focus to CPD and will work to insure 
accountability, transparency, expertise and flexibility that support 
the efforts of local government to achieve meaningful community 
development.
    It would be an honor to serve as Assistant Secretary for Community 
Planning and Development. Mr. Chairman, Senator Shelby, I want to thank 
you and the others Members of the Committee for the opportunity to 
appear before you today and I am prepared to answer any questions you 
may have.





















                 PREPARED STATEMENT OF MICHAEL S. BARR
         To Be Assistant Secretary for Financial Institutions,
                       Department of the Treasury
                              May 13, 2009
    Chairman Dodd, Ranking Member Shelby, and distinguished Members of 
the Committee, it is my honor to appear before you today as the nominee 
for the position of Assistant Secretary of the Treasury for Financial 
Institutions.
    With me today are my wife, Hannah Smotrich; my children, Avital, 
Dani, and Etai; my mom, Deborah Barr; my sisters Karen and Lisa; my 
uncle Gabe Stern; and my wife's parents, David and Bunny Smotrich. I'm 
sure my dad, David Barr, is here with us in spirit. I would not be here 
before you today without their love and support and I am enormously 
indebted to them.
    My parents taught me the centrality of public service. My mom is a 
high school English teacher here in Washington, DC, and gives her all 
to her students. My dad was a labor lawyer who represented hard-working 
Americans. My grandmother, Phyllis Stern, who turned 98 earlier this 
year, only recently had to give up her volunteer activities, and her 
son, Gabe Stern, here today, is a local hero in Gales Ferry, 
Connecticut for his work helping to preserve jobs at the local 
submarine base.
    I am humbled by the faith that President Obama and Secretary 
Geithner have placed in me during these extraordinary times. The 
President and the Secretary have moved aggressively to stabilize our 
economy and our financial markets, and to provide relief to struggling 
homeowners and strength to our mortgage finance system. The 
Administration has put in place initiatives to help small businesses, 
consumers, and students and to restore the healthy functioning of our 
financial markets.
    While we address the current crisis, the President and the 
Secretary are committed to fundamental reform to reduce the likelihood 
of crises in the future and to contain such crises if they occur. The 
current financial crisis has revealed significant weaknesses and 
glaring inconsistencies in our system of financial regulation.
    If confirmed, I look forward to working closely with you to take 
the necessary steps to reform our financial regulation and to restore 
honesty and integrity to our financial system. We need a comprehensive 
and effective system of prudential supervision and effective measures 
to reduce systemic risk. We need clear accountability and full 
transparency. We must ensure that we put in place robust protections 
for consumers and investors with strong and uniform enforcement. We 
must ensure that our financial system is inclusive, and fair. And we 
must have a system that evolves over time to keep up with the pace of 
financial innovation domestically and globally.
    Innovation is a hallmark of America's financial system, and with 
the right changes in place, we can expect our financial system once 
again to be vibrant and strong.
    I come before you having had the privilege of working on financial 
issues for a number of years. As a professor of law at the University 
of Michigan Law School, where I have taught for the last 8 years, I 
teach courses on financial institutions policy and international 
financial regulation. I have published widely on financial policy and 
regulation and have conducted extensive empirical research on the needs 
and behaviors of consumers in the financial services system. My recent 
work has focused on ways in which a deeper understanding of how people 
think and behave based on real-world research can better inform public 
policy, rather than relying solely on abstract models.
    While a professor, I have served as the Chair of the Financial 
Institutions and Consumer Financial Services Section of the Association 
of American Law Schools; as a Research Affiliate at the National 
Poverty Center; and as a senior fellow at the Brookings Institution and 
at the Center for American Progress. In these capacities, I have often 
spoken out about the need for reform of our financial system, and in 
particular, about the ways in which our financial system has ill-served 
many Americans.
    Prior to entering academics, I served in senior positions in the 
U.S. government. From 1995 to 2001, I served in the Treasury 
Department, as Deputy Assistant Secretary for Community Development 
Policy (from 1997 to 2001), and prior to that, as Special Assistant to 
the Secretary (1995 to 1997). I also concurrently served from 1999 to 
2001 as Special Adviser to the President and Executive Director of the 
Federal District of Columbia Task Force at the Office of Management and 
Budget, where our work was largely focused on putting the District of 
Columbia's fiscal house in order. These positions gave me the 
opportunity to work with many of you and your staffs, to contribute to 
the work of the Administration in a wide range of areas, and to gain 
the experience to know that an open mind and honest dialogue lead to 
better policy judgments.
    Before joining Treasury, I served in the State Department, from 
1994 to 1995, as Special Adviser and Counselor to the Director of the 
Policy Planning Staff. Before entering the Executive Branch, I was a 
law clerk to Justice David Souter of the U.S. Supreme Court and to then 
District Judge Pierre Leval of the Southern District of New York.
    I am hopeful that my experience will serve the Department well if I 
am confirmed, and I am even more hopeful about the future of our great 
Nation. Working together, we can help to lay the foundation for a sound 
recovery and a bright economic future.
    Thank you.
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
         RESPONSE TO WRITTEN QUESTIONS OF CHAIRMAN DODD
                      FROM PETER M. ROGOFF

Q.1. As you know, I have spoken frequently about the need to 
better coordinate transportation policies with housing, energy, 
and environmental policies. If we are going to really reduce 
traffic congestion and address some of the biggest problems of 
the 21st Century, we need to end the current policy stove-
piping and think through these issues in a more comprehensive 
fashion. That is why I wrote President Obama earlier this year 
to urge him to establish a White House Office of Sustainable 
Development.
    Mr. Rogoff, what actions can you take as the leader of the 
Federal Transit Administration to encourage this kind of 
integrated approach to policy and to bring various agencies 
together to ensure that transportation policy is better 
coordinated with housing, community development, energy, 
environment, and climate change policies to promote sustainable 
growth and development?

A.1. For the last 4 years, I have had the joint responsibility 
of overseeing both the Transportation and HUD budgets for the 
Appropriations Committee. Knowing the HUD budget as I do, and 
witnessing Secretary Donovan's impressive efforts to transform 
HUD, I believe that Federal agencies can play a role in 
encouraging State, regional, and local agencies to make better 
decisions that promote sustainable development while supporting 
a variety of other public interest goals.
    To that end, if confirmed, I will support Secretary LaHood 
and Secretary Donovan's efforts to implement the President's 
national priorities for transportation, including his focus on 
transparency and accountability, community needs, and reduced 
oil consumption and GHG emissions. The Infrastructure Bank in 
the President's budget signals a new direction in 
transportation policy that evaluates projects based on national 
criteria like community development, congestion reduction, and 
environmental impact. I will work with the Secretaries in 
pursuing the President's commitment to work closely with 
Congress, other Federal departments and agencies, the Nation's 
Governors, and local elected officials to develop an integrated 
regional planning and development approach for all of our 
transit investment decision making.
                                ------                                


        RESPONSE TO WRITTEN QUESTIONS OF SENATOR SHELBY
                      FROM PETER M. ROGOFF

Q.1. Reforming the New Starts Process--In the last 
authorization bill we attempted to streamline the New Starts 
process and add additional categories for consideration during 
project evaluation. Nevertheless, the process continues to take 
an inordinate amount of time and many of the factors Congress 
added, including economic development, still have not been 
implemented.
    I am interested in your thoughts on the overall process and 
what changes can be made to ensure that it can move forward 
more expeditiously while still conducting a thorough 
evaluation?

A.1. As I mentioned in my testimony, I share your concerns and, 
if confirmed, I intend to focus on streamlining the project 
evaluation process as one of my first and highest priorities. 
Certainly, as stewards of Federal taxpayer dollars, and in a 
fiscal environment where resource demands far exceed available 
funding, it is important that FTA--and local project 
stakeholders--have good information of project costs and 
benefits on which to base resource allocation decisions. If 
confirmed I must also consider that unnecessary delays in the 
evaluation process can cause increases in project costs. 
Working as we are within a tight funding environment, costly 
delays will inevitably cause us to build fewer projects--an 
unacceptable result in my view given our need to expand transit 
options.
    I am aware that in 2006, FTA hired Deloitte Consulting to 
analyze the New Starts program to identify opportunities for 
streamlining. If confirmed, I will plan to review those 
recommendations and determine which ones should be implemented, 
if not already implemented by the agency. In addition, I will 
conduct my own ``bottom up'' streamlining review of the entire 
process in consultation with industry experts, project 
sponsors, and FTA staff.

Q.2. State of Good Repair--I remain concerned about continuing 
to make investments in infrastructure without any requirement 
for maintaining a state of good repair long-term. The recently 
released Rail Modernization Study points to a significant 
backlog in unmet recapitalization needs at the Nation's seven 
largest rail transit operators. However, these properties have 
received billions in Federal funding for new projects.
    What, in your view, can we do to make certain that we 
adequately monitor and ensure the long-term maintenance of 
these assets while ensuring appropriate growth to meet capacity 
demands?

A.2. As part of the new starts project evaluation process, FTA 
is currently required to evaluate data to confirm that a 
project sponsor will have the financial ability to operate the 
proposed new service as well as sustain current and planned 
service levels throughout the system. The Rail Modernization 
Study should serve as a ``wake up call'' for all concerned with 
the quality and safety of our major rail transit systems. It 
provides a stark picture that should inform the resource 
decisions of transit agencies as well as the resource decisions 
of policy makers who will craft the upcoming authorization 
bill. If confirmed, I will review the study to determine 
whether greater commitments to maintaining existing capital 
infrastructure should be considered as a condition for 
assistance under the new start program.
    A balance must be found that encourages the expansion of 
transit options while ensuring that transit agencies are not 
digging themselves into a ``deferred maintenance hole'' that 
could endanger the long-term viability of the transit agency 
and the safety of it passengers. I look forward to working with 
the Committee on this important issue.

Q.3. Highway Trust Fund--The Administration's budget proposes a 
greater reliance on the General Fund to finance Highway and 
Transit projects rather than the Highway Trust Fund. While we 
all recognize the fiscal difficulties the Highway Trust Fund is 
encountering, this Committee has heard testimony from various 
stakeholders, as well as the Secretary, that such a shift would 
create a significant amount of uncertainty in the program.
    Given your experience on the Appropriations Committee, how 
do you view the shift to general fund monies to finance Highway 
and Transit projects, how would it impact the goals of the 
programs and do you believe that it could result in 
difficulties conducting long-range planning and raising 
capital? If so, are there other ways, in your view, that 
Congress could address this uncertainty?

A.3. I am also concerned about the status of the mass transit 
account. If I am confirmed, I would welcome the opportunity to 
be the Administration's advocate for public transportation by 
exploring innovative ways to generate a steady revenue source 
for transit. As I testified, I believe State and local 
jurisdictions have had some success in innovative financing and 
we at the Federal level can learn from that experience. In 
addition, having participated in budget battles as a Senate 
staff person for the last 22 years, I still think that it is 
easier to advocate for necessary resources when you can point 
to available balances in a designated trust fund--resources 
that were collected for the purpose of being spent on a 
designated activity--like highways, transit systems, or the 
upkeep and modernization of the national aviation system. I 
hope to play a vital role in crafting these solutions under the 
leadership of Secretary LaHood.

Q.4. Innovative Financing--It is no secret that I am a 
proponent of pursuing innovative methods of financing to 
advance our infrastructure projects. However, I am disappointed 
that we have not made more progress, particularly as it relates 
to public transportation. The Secretary has stated that we must 
look to bold new approaches.
    I am interested in your views about how we can encourage 
greater utilization of innovative financing methods to advance 
public transportation projects.

A.4. I believe there are great opportunities for innovative 
financing methods for transit projects. Moreover, the financing 
challenges we face moving forward are going to require us to 
utilize them to a greater degree while ensuring that program 
integrity is maintained.
    I am aware that FTA has piloted public-private partnerships 
in transit using the new authority provided in SAFETEA. This 
new authority allows for up to three public-private 
partnerships and FTA has been working with three transit 
agencies to pilot-test how private sector innovation and know-
how can advance public transportation. I understand FTA has 
also conducted five workshops around the country to provide 
information about the benefits of public-private partnerships 
in transit. Public-private partnerships have shown promise as 
long as the interests of taxpayers and users are protected.
    Perhaps the greatest promise to expand innovative financing 
of transit projects is to be found in President Obama's 2010 
budget proposal to commit $5 billion to capitalize a National 
Infrastructure Bank. The bank would commit Federal funds to 
large capital projects through a wide variety of mechanisms 
including mechanisms that attract State, local, and private co-
investment. If confirmed, I would seek to work within the 
Administration to ensure that transit projects participate 
fully in the Bank's investment plans and that the Bank 
structures its assistance in a manner that will be workable for 
major transit projects.
                                ------                                


         RESPONSE TO WRITTEN QUESTIONS OF SENATOR BAYH
                      FROM PETER M. ROGOFF

Q.1. On April 30, 2008, the Federal Transit Administration 
(FTA) made final a new Charter Service Rule-604. In the final 
rule Section 604.11--Petitions to the Administrator--contains a 
process by which a recipient of Federal funding may petition 
for an exception from the private charter prohibitions for 
certain events.
    As FTA Administrator will you implement Section 604.11 to 
restrict the frequency with which a recipient may seek a 
petition?

A.1. While I am not familiar with this particular provision of 
the charter service regulation, I believe that fairness and 
flexibility are important to ensure access to transportation 
services. If I am confirmed as FTA Administrator, I would 
review the charter service regulation to determine whether a 
restriction on a recipient's ability to apply for an exception 
is helpful or acts as a hindrance in the provision of 
transportation to widely attended public events.

Q.2. As FTA Administrator will you implement Section 604.11 
(b)(4)(i) to require a recipients petition to provide for a 
plan to integrate registered charter operators into the service 
where no third party contract exists? If not, please explain 
how you will balance recipients of Federal-aid with registered 
providers where no third party contract exists for events of 
national or regional significance?

A.2. I believe that it is of critical importance to strike the 
right balance between access to transportation services and 
for-profit charter services. If I am confirmed as FTA 
Administrator, I pledge to examine the impact of FTA's charter 
service regulation on events of regional or national 
significance where there is no third party contract.

Q.3. As FTA Administrator will you implement Section 604.11 
(b)(4)(i) to include consideration of the national or regional 
events' number of registered service providers' buses engaged 
in private charter at the event compared to the number of 
recipient's buses for which the petition is sought?

A.3. As I testified, I plan to be a vocal advocate for public 
transportation. To that end, if I am confirmed, I would 
advocate for fairness in the application of the charter service 
regulation. If impediments exist to providing fair and 
efficient transportation to widely attended public events, I 
will analyze those challenges and work with interested parties 
to resolve them.

Q.4. As FTA Administrator will you establish minimum 
characteristics for events of regional or national significance 
under Section 604.11 (a)(1)?

A.4. If there are not minimum characteristics for events of 
regional or national significance in the charter service 
regulation, then if I am confirmed as FTA Administrator, I 
would be willing to consider the establishment of such 
characteristics if that would better enable FTA to determine 
whether an exception to the regulation for an event of regional 
or national significance is appropriate.

Q.5. As FTA Administrator would an event with attendance of 
more than 200,000 participants qualify as an event of regional 
or national significance under Section 604.11 (a)(1)? Does an 
event of that size provoke safety or homeland security issues 
worthy of inclusion in the 604 analysis?

A.5. If I am confirmed, I will look closely at the exception 
for events of regional or national significance to determine 
whether it is working as intended and whether minimum 
characteristics should be established such as the number of 
participants attending the event.
                                ------                                


        RESPONSE TO WRITTEN QUESTIONS OF SENATOR WARNER
                      FROM PETER M. ROGOFF

Q.1. As you are probably aware, the Washington Metropolitan 
Area Transit Authority was created primarily to serve the 
Federal Government. However, not only is WMATA the only major 
U.S. transit agency without a significant source of dedicated 
funding (such as a sales tax), the local jurisdictions in which 
it operates do not receive property taxes from much of the 
property adjacent to Metrorail stations and Metrobus stops 
because it is owned by the Federal Government. WMATA continues 
to be essential to the operation of the Federal Government 
(e.g., Federal employees comprise nearly 40 percent of WMATA's 
peak period ridership), as well as a component for ensuring 
continuity of Federal Government operations during an 
emergency. Do you believe that WMATA has a unique relationship 
with the Federal Government and that there is a need for the 
Federal Government to ensure that the system remains in a state 
of good repair?

A.1. I do believe that WMATA has a unique relationship with the 
Federal Government. As you note, WMATA provides many Federal 
workers, safe, reliable transportation to and from their jobs. 
Also, the general public relies heavily on WMATA to access 
government services and the Capital Region.
    As a recent report commissioned by the Appropriations 
Committee reveals, maintaining the Nation's bus and rail 
systems in a State of Good Repair is essential if public 
transportation systems are to provide safe and reliable service 
to millions of daily riders. That report studied the conditions 
and needs of the seven largest rail transit agencies, including 
WMATA. If I am confirmed as FTA Administrator, I will take an 
active interest in WMATA's new multiyear capital improvement 
program, which becomes effective in July 2010, and is designed 
to address upkeep and maintenance of the system. I also support 
FTA's decision to tie the Dulles Corridor Metrorail project's 
funding eligibility to the state of good repair for WMATA. As 
part of that effort, the Commonwealth of Virginia, the State of 
Maryland, and the District of Columbia agreed to commit to fund 
the significant capital rehabilitation necessary for the 
overall system to enter into and maintain a state of good 
repair. That arrangement may serve as the model for future 
Federal funding agreements so that the Federal Government can 
ensure that transit agencies seeking to expand their 
infrastructure are also taking adequate care of their existing 
infrastructure. Since WMATA service to the Capital region is so 
essential, I believe every effort needs to be made to keep the 
system up and running safely and efficiently.
                                ------                                


         RESPONSE TO WRITTEN QUESTIONS OF CHAIRMAN DODD
                   FROM FRANCISCO J. SANCHEZ

Q.1. What was the extent of your involvement in the business of 
the Florida-based company Renaissance Steel and its receipt of 
a grant from the Corporation to Develop Communities of Tampa 
Incorporated?

A.1. In the summer of 2003 I joined the Board of the Community 
Development Corporation of Tampa (``CDC of Tampa''). CDC of 
Tampa is a nonprofit 501(c)3 organization dedicated to 
alleviating poverty and physical deterioration in the East 
Tampa area.
    In the summer of 2005, CDC of Tampa staff engaged in 
discussions with Renaissance Steel, a start-up light-gauge 
steel manufacturing company located in East Tampa, about 
applying for a Department of Health and Human Services 
(``HHS'') grant to support Renaissance Steel's efforts to 
create manufacturing jobs in East Tampa. I did not participate 
in these discussions, and had no relationship with Renaissance 
Steel at the time. Following these discussions, the CDC of 
Tampa staff informed the Board of Directors that it had applied 
for a $700,000 grant from HHS, and planned to loan $500,000 in 
start-up capital to Renaissance Steel.
    In September 2005, HHS informed CDC of Tampa that its grant 
application was approved for funding.
    In April 2006, I was hired by Renaissance Steel as its 
Chief Executive Officer. At this time, Renaissance Steel was 
struggling to penetrate the market and make sales. In July 
2006, CDC of Tampa loaned Renaissance Steel $500,000 from its 
HHS grant for job training, hiring workers, equipment and 
working capital. The CDC of Tampa Board of Directors approved 
the loan to Renaissance Steel, but I recused myself from this 
process because of my new relationship with Renaissance Steel.
    In May 2007, I resigned from the CDC of Tampa Board of 
Directors. In July 2007, although Renaissance Steel's sales 
figures improved, the company experienced cash flow 
difficulties, and it did not have enough money to meet its 
payroll. I made an unsecured personal loan of $160,000 to 
Renaissance Steel, so it could pay its employees.
    In November 2007, Renaissance Steel ceased operations, and 
I resigned my position as CEO. Debts to some creditors, 
including CDC of Tampa, remained outstanding. I did not recoup 
$350,000 in personal loans and guarantees that I made to 
Renaissance Steel during my tenure.
                                ------                                


        RESPONSE TO WRITTEN QUESTIONS OF SENATOR SHELBY
                   FROM FRANCISCO J. SANCHEZ

Q.1. Please share with the Committee how you would use your 
office to promote U.S. exports?

A.1. ITA plays an important role in creating and sustaining 
high-paying jobs by helping U.S. businesses export, working for 
continued and greater access to foreign markets, and advocating 
for a fair trade environment. The Commerce Department, as the 
chair of the interagency Trade Promotion Coordinating Committee 
(TPCC), has the lead role in ensuring that all U.S. export 
promotion programs and resources are deployed in a strategic 
and effective manner. If confirmed, I will work to ensure that 
the Department's export promotion programs, and those of the 
TPCC member agencies, maximize the competitiveness of U.S. 
businesses in the global marketplace. I will look forward to 
supporting the Secretary in his consultations with other TPCC 
agencies to develop a strong set of national priorities for 
boosting U.S. exports.

Q.2. If confirmed, do you plan to focus on opening markets for 
any specific industries in any specific countries?

A.2. In spite of the global scope of the economic downturn, 
willing buyers still exist abroad and many markets continue to 
grow. Economies in developing countries in Asia, led by China 
and India, are expected to grow by almost 5 percent this year, 
and regional economies in the Middle East and Africa are 
expected to grow more than 2 percent this year. If confirmed, I 
will work to maintain and improve access to these and other 
important markets.
    Our trade promotion priorities should be closely aligned 
with the President's economic recovery and reinvestment goals. 
In the short term, if confirmed, I will look to create jobs by 
helping U.S. companies that currently export to continue doing 
so, and by encouraging more U.S. companies to export. Also, if 
confirmed, I would strive to ensure that, in the long term, new 
U.S. technologies in sectors like clean energy, smart grids, 
and healthcare lead to increased export opportunities around 
the world.
    ITA will play an important role in supporting 
Administration efforts to build on existing trade agreements 
and in negotiating new ones in consultation with Congress and 
key stakeholders. If confirmed, I will ensure that ITA's 
resources are used to their maximum in achieving trade 
agreements that create opportunities for all Americans.

Q.3. I would like you to discuss how, if confirmed, you would 
work to ensure that American firms are not victims of unfair 
trading practices and what you believe can be done to ensure 
countries live up to their WTO obligations?

A.3. I am committed to vigorous enforcement of our trade laws, 
and to ensuring that domestic industries obtain effective 
relief from unfair trade practices. The Department of Commerce 
offers a wide variety of assistance to U.S. producers in 
connection with U.S. laws regarding unfair trade and, if 
confirmed, I will see to the effective administration of those 
laws.
    It is important that the laws, practices and policies of 
other governments be consistent with their WTO obligations. If 
confirmed, I will make sure that vigilant monitoring of our 
trading partners is maintained, and that timely and effective 
advocacy on behalf of U.S. companies facing foreign market 
barriers and unfair trade practices continues.
    Furthermore, with respect to the Doha negotiations, I will, 
if confirmed, firmly press for an outcome that maintains the 
integrity of our trade remedy laws.

Q.4. Please discuss your past role as CEO of Renaissance Steel 
and the grant awarded to Renaissance Steel by the Corporation 
to Develop Communities of Tampa, Inc. (CDC).

A.4. In the summer of 2003 I joined the Board of the Community 
Development Corporation of Tampa (``CDC of Tampa''). CDC of 
Tampa is a nonprofit 501(c)3 organization dedicated to 
alleviating poverty and physical deterioration in the East 
Tampa area.
    In the summer of 2005, CDC of Tampa staff engaged in 
discussions with Renaissance Steel, a start-up light-gauge 
steel manufacturing company located in East Tampa, about 
applying for a Department of Health and Human Services 
(``HHS'') grant to support Renaissance Steel's efforts to 
create manufacturing jobs in East Tampa. I did not participate 
in these discussions, and had no relationship with Renaissance 
Steel at the time. Following these discussions, the CDC of 
Tampa staff informed the Board of Directors that it had applied 
for a $700,000 grant from HHS, and planned to loan $500,000 in 
start-up capital to Renaissance Steel.
    In September 2005, HHS informed CDC of Tampa that its grant 
application was approved for funding.
    In April 2006, I was hired by Renaissance Steel as its 
Chief Executive Officer. At this time, Renaissance Steel was 
struggling to penetrate the market and make sales. In July 
2006, CDC of Tampa loaned Renaissance Steel $500,000 from its 
HHS grant for job training, hiring workers, equipment and 
working capital. The CDC of Tampa Board of Directors approved 
the loan to Renaissance Steel, but I recused myself from this 
process because of my new relationship with Renaissance Steel.
    In May 2007, I resigned from the CDC of Tampa Board of 
Directors. In July 2007, although Renaissance Steel's sales 
figures improved, the company experienced cash flow 
difficulties, and it did not have enough money to meet its 
payroll. I made an unsecured personal loan of $160,000 to 
Renaissance Steel, so it could pay its employees.
    In November 2007, Renaissance Steel ceased operations, and 
I resigned my position as CEO. Debts to some creditors, 
including CDC of Tampa, remained outstanding. I did not recoup 
$350,000 in personal loans and guarantees that I made to 
Renaissance Steel during my tenure.
                                ------                                


         RESPONSE TO WRITTEN QUESTIONS OF SENATOR BROWN
                   FROM FRANCISCO J. SANCHEZ

Q.1. We have heard much concern from the district export 
councils in Ohio that the US Commercial Service is underfunded 
and has several officer positions overseas that are unfilled. 
What are your plans for the U.S. Commercial Service moving 
forward in order to assist American companies in beginning and 
expanding their export business?

A.1. The U.S. & Foreign Commercial Service (CS) is a critical 
part of the International Trade Administration. Under my 
leadership, if confirmed, CS will continue to ensure that U.S. 
companies, particularly small and medium-sized businesses, 
benefit from global trade. Through CS's global network of trade 
professionals in 109 U.S. cities, and in U.S. Embassies and 
Consulates in 77 countries, CS staff will continue to work with 
U.S. companies by providing counseling, advocacy and market 
research, hosting and participating in trade events, and 
identifying potential international buyers or partners. CS will 
maintain its program focus on three priorities: increasing the 
number of U.S. companies that export; helping smaller companies 
expand into new export markets; and assisting exporters 
overcome hurdles in foreign markets. In addition, if confirmed, 
I will undertake a full review of CS' budget with a view to 
ensuring that there is adequate funding for this critical 
activity.

Q.2. What are your thoughts on the Government of China's 
challenge at the WTO of eight U.S. antidumping and 
countervailing duty determinations? How would you, if 
confirmed, ensure adequate defense of these determinations and 
would you enlist the assistance of other like-minded Nations?

A.2. I am committed to strong enforcement of our trade laws, 
and to ensuring that domestic industries obtain effective 
relief from unfair trade practices. Therefore, if confirmed as 
Under Secretary, I will make sure that Commerce continues to 
defend our rights to address unfairly traded imports to the 
fullest extent, including with respect to these eight 
determinations.

Q.3. I believe it is difficult to address our manufacturing 
crisis without addressing our trade imbalance. In what ways do 
you think the International Trade Administration can address 
our trade deficit? What role do you envision for the position 
of Assistant Secretary for Manufacturing and Services?

A.3. Manufactured products account for some 80 percent of U.S. 
goods exports. It is critical that we expand export markets for 
our manufacturers as a means to enhance economic recovery and 
restore jobs. ITA brings a critical set of tools to this effort 
including programs that help U.S. manufacturers become more 
competitive, contribute to reduction of foreign barriers to 
U.S. exports, increase the number of export-ready firms and 
expand U.S. exports in key emerging market and sectors. If 
confirmed, I will rely on the Assistant Secretary for 
Manufacturing and Services to be the ``eyes and ears'' for ITA 
in identifying key competitiveness challenges facing U.S. 
manufacturing and to advise me on high impact programs and 
policies that can enhance competitiveness.
                                ------                                


         RESPONSE TO WRITTEN QUESTIONS OF SENATOR CRAPO
                   FROM FRANCISCO J. SANCHEZ

Q.1. Please explain your views on the Industry Trade Advisory 
Committees (ITACs) that currently assist the USTR and 
Department of Commerce in developing our Nation's Trade policy.

A.1. The ITACs provide the Department of Commerce and Office of 
the United States Trade Representative (USTR) critical 
information and perspectives, which are used to develop U.S. 
trade policy. Having an effective mechanism in place that 
allows for a candid exchange between the private sector and 
government is vital to formulating and implementing an 
effective trade policy. If confirmed, I look forward to working 
with Ambassador Kirk and the industry representatives who serve 
as advisors on these committees.

Q.2. I understand that these Committees have proved to be a 
valuable resource in securing trade agreements and policies 
that benefit our Nation's industries. With this in mind, do you 
have concern that opening these committees to additional and 
varied interest groups might dilute their importance or impede 
the free exchange of ideas within the committees?

A.2. The issue of where nongovernmental organizations (NGOs) 
and other nonindustry stakeholders belong in the trade advisory 
committee system needs to be resolved. However, I do not have 
any preconceptions on this issue. If confirmed, I will use the 
upcoming ITAC rechartering process as an opportunity to work 
closely with USTR in finding the appropriate mechanisms with 
which to reach out to and consult with NGOs and other 
nonindustry stakeholders, and to determine if there are 
opportunities to expand their participation in the trade 
advisory committee system.
                                ------                                


        RESPONSE TO WRITTEN QUESTIONS OF SENATOR SHELBY
                     FROM RAPHAEL W. BOSTIC

Q.1. Involvement with IndyMac--Mr. Bostic, you were an 
independent director of two subsidiaries of IndyMac bank from 
2005 to 2008. When IndyMac failed last year, it was at the time 
the 3rd largest bank failure in U.S. history. You have been 
named in a lawsuit against IndyMac, which alleges that the bank 
committed fraud in its underwriting of mortgage loans.
    Would you please explain what type of businesses the 
IndyMac subsidiaries on whose boards you served were engaged in 
and what role you had in overseeing those subsidiaries as a 
director?

A.1. I was an independent director of IndyMac ABS and IndyMac 
MBS, which were limited purpose finance subsidiaries that 
executed securitizations of loans made by IndyMac Bank FSB. The 
Bank originated loans based on its established guidelines, 
determined which loans to aggregate into pools, and designed 
the content of the specific securitizations. I never saw loan 
pools or individual loans and did not discuss underwriting 
standards, practices, or business strategies of the Bank. The 
MBS and ABS subsidiaries purchased the loan pools and followed 
SEC regulations to transform them into saleable securities 
offered for sale to the secondary market through investment 
banks. The chief responsibility of the ABS/MBS organizations 
was to ensure that the registration documents and prospectuses 
(certified by independent auditors) conformed to SEC rules, 
indentures, statutes, and regulations. ABS and MBS did not 
originate or underwrite loans, nor were they linked to IndyMac 
Bank's decisions regarding underwriting standards, practices, 
or business strategies. As an independent director, my job was 
focused on seeing that the securitization process as a whole 
conformed to SEC regulations. I relied on information provided 
to me by management and employee board members and similarly 
relied on management to oversee specific securitizations. The 
ABS/MBS boards met only a few times a year, often virtually, to 
deal with basic organizational issues.

Q.2. Federal Reserve's Regulation of Mortgage Lending--Mr. 
Bostic, the Federal Reserve has been widely criticizing for not 
exercising its authority under the Home Ownership and Equity 
Act, or HOEPA (``HOPE-AH'') to issue rules to address well-
known abusive mortgage lending and advertising techniques 
prevailing in the market place during the past decade. The Fed 
did not issue rules until last year, well after the housing 
bubble had burst.
    Since you studied housing issues while you were an 
economist with the Fed, could you give your view on why the Fed 
was so slow to issue HOEPA rules?

A.2. There was not consensus among Board governors as to the 
need to update HOEPA rules. As the late Governor Gramlich noted 
in his book, there were serious discussions on these and 
related issues, but he did not prevail in most instances. When 
Gramlich resigned from the Board, no voice with his strength or 
clarity emerged to carry that torch.

Q.3. Do you think the Fed's failure to issue new HOEPA rules in 
a timely manner contributed to the ongoing problems in our 
housing market?

A.3. Additional restrictions and limitations on the mortgage 
market would have helped mitigate the negative outcomes to some 
degree. However, the market has proven to be extremely nimble 
in responding to restrictions. Research that I and co-authors 
have recently [in the last few weeks] considered has shown that 
the market adapts to legal strictures and finds alternative 
products that achieve similar goals in terms of reducing 
monthly mortgage payments and generating transactions. That 
said, the research considers the entire market, and does not 
account for the fact that not every broker or lender would 
adapt. Thus, for some, there would have been benefits from more 
proactive Fed issuance of new HOEPA rules.
                                ------                                


         RESPONSE TO WRITTEN QUESTIONS OF CHAIRMAN DODD
                     FROM SANDRA HENRIQUEZ

Q.1. Replacement of Public Housing--An ongoing policy debate is 
the question of replacement of public housing units lost 
through demolition, disposition or other revitalization 
actions. When deciding how to replace these units, local 
agencies are often called upon to balance the needs of 
residents, unassisted eligible families, others in the 
community, housing market composition, and available funding. 
As Executive Director of the Boston Housing Authority, you have 
likely encountered this question in the administration of HOPE 
VI and other revitalization efforts.
    What insights into this important issue have your 
experiences at the BHA given you?
    What principles or objectives do you think should guide 
Federal and local policy in this arena?

A.1. Your question raises several important but competing 
policy concerns in affordable and public housing. In Boston, we 
have used successfully the HOPE VI funding to do mixed finance 
redevelopment of some of our most distressed public housing 
properties. Because we have no available additional land upon 
which to build, the BHA has redeveloped units within the 
existing footprint of the distressed property. Our policy has 
been to diversify incomes in the new property, creating some 
market rate units, while returning a significant portion of all 
units as public housing or otherwise deeply affordable. We do 
this to re-house as many residents of the distressed property 
as possible (generally 75 percent to 80 percent). With 
community support services, we work to grow the incomes of 
returning public housing residents, rebuilding the former 
community. In recent redevelopment efforts, whether with 
Federal or State funds, the BHA tries to create as many or more 
units than in the original development.
    In order to balance further the needs of Boston's 
unassisted eligible families, the BHA has partnered with its 
sister agencies to increase affordable rental production, we 
have converted tenant-based vouchers to project-based, to 
provide deeper affordability for families and individuals. When 
we do this, we require that for those project-based voucher 
units, the developer/owner use the housing authority's waiting 
lists to occupy them.
    Based on my experience in Boston, I think that 
redevelopment of public housing cannot be entirely 
prescriptive. Housing Authorities should be leading 
redevelopment efforts in their communities guided by (1) 
returning to the marketplace, as many public housing units as 
possible, in order to serve the same number of economically 
eligible families; (2) providing other affordable housing 
opportunities for those not returning to the redeveloped 
property; (3) conducting an intense and ongoing participatory 
process with residents, beginning with the decision to 
redevelop, its implications for residents and the surrounding 
neighborhood, design, relocation, supportive services delivery 
and management policies and practices; and, (4) ensuring the 
implementation of healthy homes and green building principles 
in the construction of the property.
                                ------                                


        RESPONSE TO WRITTEN QUESTIONS OF SENATOR SHELBY
                     FROM SANDRA HENRIQUEZ

Q.1. Public Housing Authorities--Ms. Henriquez, the Boston 
Housing Authority, where you have been for the past 13 years, 
is the largest public housing authority in New England. You 
also served as President of the Council of Large Public Housing 
Authorities.
    How will you ensure that your decisions at HUD take into 
account the effects on small housing authorities, which may be 
different than the effects on large housing authorities?

A.1. As a public housing executive director, my specific 
advocacy focused on HUD decisions as they affected large 
housing authorities. At the same time, I have participated in 
many forums that deal with all housing authorities--large, 
medium, and small, advocating on issues that affected every 
housing authority, regardless of size. If confirmed as HUD 
Assistant Secretary I will look forward to engaging in vigorous 
dialogue about the issues faced by our small housing 
authorities and the potential solutions. Such communication is 
essential since small housing authorities comprise a 
significant number of our PHA clients. I intend to work with 
them to ensure HUD's decisions take into account the 
differences among our various-sized housing authorities.

Q.2. Funding of Public Housing Authority Programs--Ms. 
Henriquez, in 2004 you co-authored an article criticizing HUD's 
funding decisions for Section 8 programs and in 2007, in 
testimony before this Committee's Housing Subcommittee, you 
criticized HUD's decision to cut Hope VI programs.
    Once you join HUD, how will you balance your concerns that 
public housing authorities get the money that they need with 
the reality that HUD's funds are limited?

A.2. If confirmed as a member of the Administration, I will 
advocate for a stable, transparent, and predictable funding 
environment for the Housing Choice Program. I intend fully to 
represent the administration in its budget deliberations and am 
prepared to make critical recommendations recognizing the 
myriad of priorities managed by HUD and other agencies covered 
by our Appropriations committee.
    With regard to HOPE VI, the President's 2010 budget 
requests $250 million for a new initiative called Choice 
Neighborhoods that builds on the successes of the HOPE VI 
program to transform neighborhoods of concentrated poverty into 
functioning, sustainable neighborhoods. Housing authorities 
will be eligible to apply for these grants, in the range of 
$25-$35 million, to address the same types of developments that 
were funded under the HOPE VI program. These funds will help 
supplement the money housing authorities have already received 
under the Recovery Act and the capital funding housing 
authorities will receive as part of the FY09 Capital Fund 
appropriation.
    If confirmed, I intend to represent well the 
Administration, and to work with Congress and HUD's various 
stakeholders to ensure a full participatory process.
                                ------                                


         RESPONSE TO WRITTEN QUESTIONS OF CHAIRMAN DODD
                     FROM MERCEDES MARQUEZ

Q.1. Findings: 2007 Audit of the Los Angeles Housing 
Department's (LAHD) Loan Portfolio Management--A 2007 City of 
Los Angeles audit of the Department you began managing in 2004 
found that the LAHD needed ``to significantly improve its 
management controls to better manage its loan portfolio.'' 
Issues cited included concentrated risk among a relatively few 
borrowers, lack of adequate information systems to track loan 
performance, and inability to pursue maximum revenues through 
collection procedures and timely review of certain borrowers' 
financial statements.
    The auditor also noted that LAHD's management concurred 
with the findings, recognized the need for improvement, had 
begun addressing some of the concerns, and had committed to 
addressing the recommendations. A contemporaneous press report 
quoted you as saying that ``The direction that the controller 
goes in, I would agree with because it's the same direction 
I've been going in for 3 years.''
    Please respond to these audit findings for the record, 
including: your view of these findings; what actions you took, 
if any, to address these concerns; and whether these actions 
provide you with experiences that will inform your work at HUD, 
if confirmed?

A.1. I welcomed the audit as an opportunity to continue to 
improve the department's performance and generally agreed with 
the findings. In fact, my own department-wide assessment in 
2004 found many of the same issues, and I initiated measures to 
address the problems independently and before the audit 
recommendations that were issued in the fall of 2007.
    For example, my assessment showed revenue collection 
through the timely review of borrower's financial statements 
could not be completed with the existing staffing levels.
    Therefore, in the fall of 2005 for the fiscal year 
beginning July 2006, I fought for additional staffing for this 
purpose. This staff has been on board since late 2006, but the 
benefits of their work did not begin within the timeframe 
audited. Moreover, one of the only audit recommendations I 
chose not to implement was to conduct the review of borrower 
statements biannually. Rather, we conduct them every year, and 
this has led to a 514 percent increase in revenue generation 
from this type of loan.
    Since the tax credit scoring system requires experience for 
an award, I addressed the issue of risk concentration from the 
front end by expanding the pool of developers who applied to 
the Department for funding. I worked to ensure that for-profit 
developers, who previously hesitated to partner with the 
Department, had confidence that an entrepreneurial approach now 
existed at the Department.
    Finally, with the exception of two items related to loan 
write offs that the City Attorney's Office advised the 
Department not to implement because that would have had the 
effect of reducing the revenue collected by the Department, all 
the audit recommendations have been implemented or in the case 
of long-term information technology solutions are in the 
process of being implemented.
    I believe strongly that had I not initiated a department-
wide assessment immediately upon my arrival, additional and 
significant findings would have been made. For example, Project 
Clean House restored over $50 million in Federal funds to the 
Department's loan accounts that had been sitting idle in 
inactive or poorly designed projects. Like many of the other 
issues at the Housing Department, this problem was rooted in an 
unwillingness to look at programs and processes with fresh 
eyes, and to then jettison moribund policies when necessary. I 
hope to bring the same vision to CPD.
                                ------                                


        RESPONSE TO WRITTEN QUESTIONS OF SENATOR SHELBY
                     FROM MERCEDES MARQUEZ

Q.1. A 2007 audit report from the Los Angeles Controller 
identified a number of problems in the way that the Department 
of Housing manages its $735 million loan portfolio, such as 
making new loans to borrowers who are in default on other 
loans, failing to take action on delinquent loans, failing to 
monitor compliance with loan covenants, failing to review 
financial statements from residual receipt borrowers, and 
failing to maintain an adequate loan tracking system. Although 
some of these problems began prior to your tenure as General 
Manager of the Department, the report included a number of 
recommendations that it deemed to be in urgent need of 
management attention. How did you address the Controller's 
recommendations? If there were any recommendations that you did 
not address, why did you decide not to address them? What steps 
do you plan to take to prevent similar problems in the Office 
of Community Planning and Development?

A.1. I welcomed the audit as an opportunity to continue to 
improve the department's performance and generally agreed with 
the findings. In fact, my own department-wide assessment in 
2004 found many of the same issues, and I initiated measures to 
address the problems independently and before the audit 
recommendations that were issued in the fall of 2007.
    For example, my assessment showed revenue collection 
through the timely review of borrower's financial statements 
could not be completed with the existing staffing levels. 
Therefore, in the fall of 2005 for the fiscal year beginning 
July 2006, I fought for additional staffing for this purpose. 
This staff has been on board since late 2006, but the benefits 
of their work did not begin within the timeframe audited. 
Moreover, one of the only audit recommendations I chose not to 
implement was to conduct the review of borrower statements 
biannually. Rather, we conduct them every year, and this has 
led to a 514 percent increase in revenue generation from this 
type of loan.
    Finally, with the exception of two items related to loan 
write offs that the City Attorney's Office advised the 
Department not to implement because that would have had the 
effect of reducing the revenue collected by the Department, all 
the audit recommendations have been implemented or in the case 
of long-term information technology solutions are in the 
process of being implemented.
    I believe strongly that had I not initiated a department-
wide assessment immediately upon my arrival, additional and 
significant findings would have been made. For example, Project 
Clean House restored over $50 million in Federal funds to the 
Department's loan accounts that had been sitting idle in 
inactive or poorly designed projects. Like many of the other 
issues at the Housing Department, this problem was rooted in an 
unwillingness to look at programs and processes with fresh 
eyes, and to then jettison moribund policies when necessary. I 
hope to bring the same vision to CPD.

Q.2. In 2007, the Department of Housing allowed employees to 
volunteer for Habitat for Humanity during work time. You 
reportedly explained that the volunteer project was ``well 
within [the Department's] mission.'' Do you consider 
participation in similar volunteer programs to be within the 
mission and job descriptions of HUD's Office of Community 
Planning and Development? If so, what types of volunteer 
programs are within the Office's mission and consistent with 
its responsibilities? If you plan to encourage employees to 
participate in similar volunteer programs at HUD during work 
hours, will it be your practice to require them to make up 
those work hours to fulfill the job responsibilities that they 
were unable to complete while volunteering?

A.2. The Habitat for Humanity project represented a unique 
opportunity for the department that is unlikely to be 
duplicated at HUD. First, the Department was the project 
sponsor and provided funding directly to the project, whereas 
HUD typically does its work through State and municipal bodies. 
This difference in mission and operational relationship to 
projects gives the Housing Department, I believe, a closer 
nexus to staff participation of this kind. In addition, 
approximately one-third of the Housing Department is composed 
of Code Enforcement staff, most of whom have a background in 
construction. This uniquely qualified staff expressed a strong 
interest in participating in the project and their work 
contributed in a significant way to its success.

Q.3. In May 2007, the Los Angeles Times reported that the Los 
Angeles Housing Department paid nearly $20,000 to bring in a 
trainer to help Department managers ``center'' themselves 
through breathing exercises and stick play. Did you find these 
management seminars useful and do you plan to use similar 
techniques at HUD? If so, please describe the types of seminars 
that you anticipate using and estimate how much you expect to 
include in your office's budget for programs of this nature.

A.3. Over a 2-year period LAHD managers participated in 
training sessions focused on change-management/strategic 
thinking. These sessions touched on strategic thinking, 
handling conflict and change, strategic positioning, moving and 
sustaining change within organizations, identifying 
opportunities and leveraging strengths, and strategic planning. 
The training focused in on the mission and actual work of LAHD 
to teach these concepts. For example, the team produced the 
first working outline of what would significantly contribute to 
LAHD's proposal for the Mayor's 5-year Housing Plan.
    The training also incorporated physical exercises that have 
come to typify a significant percentage of Team Development 
workshops (i.e., Outward Bound concepts) that use outdoor and 
physical activity to help people work as a team building trust, 
relationship, and learning to deal calmly with conflict without 
avoidance.
    This training was successful. However, I believe that it 
was successful because it was tailored to the specific issues 
faced by the Los Angeles Housing Department. 1 have no current 
plan for any leadership training at HUD.

Q.4. Enhanced Reliance on Data--Ms. Marquez, in your written 
statement, you described the initiative that Los Angeles 
undertook to map the city to identify areas of greatest need.
    Have you thought of similar ways in which HUD's Office of 
Community Planning and Development might use enhanced data 
analysis to determine where HUD assistance is needed most?

A.4. If confirmed, I will work in partnership with HUD's Office 
of Policy Development and Research and the Chief Information 
Officer to improve substantially the quality of HUD's mapping 
capabilities. I understand that the Department is already 
moving in this direction. HUD has made information available to 
grantees on what neighborhoods are most at risk of foreclosures 
and problems with vacancy in order to help jurisdictions plan 
the most effective use of their first round of Neighborhood 
Stabilization Program funds and to serve as a tool for 
selecting target neighborhoods in the application process for 
the second Neighborhood Stabilization Program funded under the 
American Recovery and Reinvestment Act of 2009. That mapping 
system can be linked from www.hud.gov/nsp. In addition, HUD is 
moving forward with getting special tabulation data from the 
U.S. Census Bureau showing housing needs with American 
Community Survey data. HUD's plan is to begin updating these 
data annually starting in 2010. If confirmed I will work to 
make as much data as possible available in easy-to-use formats 
so that grantees and the general public can quickly identify 
both problems and opportunities for addressing needs for both 
housing and community development.

Q.5. Avoiding Undue Interference with the Market--Ms. Marquez, 
an article in The Nation last year noted your concern that 
communities not be forced to rush into putting Federal aid 
dollars to work buying up foreclosed properties. You were 
quoted as saying, ``You don't want to get in the way of the 
market.''
    At HUD, what steps will you take to ensure that the local 
governments in the communities with which you are working are 
not displacing a functioning marketplace?

A.5. For Neighborhood Stabilization Program funds to have a 
positive impact, they need to be spent in neighborhoods where 
the housing market is not functioning. In those neighborhoods 
hardest hit, the market is not able to absorb the number of 
foreclosures and neighborhood stabilization activities have the 
potential to stem, halt, and hopefully reverse the downward 
spiral of foreclosure and abandonment that leads to crime, 
blight, continued decline in property values, leading to 
additional foreclosure and abandonment. In these neighborhoods, 
targeted intervention can make a difference.
    The competitive round of the Neighborhood Stabilization 
Program will target neighborhoods in need of intervention, by 
geographic targeting using HUD data a threshold requirement. 
HUD requires applicants to analyze market conditions and demand 
factors in the targeted neighborhoods that will consider the 
potential for market absorption of foreclosed and abandoned 
properties. As such, the competition is designed to ensure that 
selected recipients will run programs that do not displace a 
functioning marketplace. If confirmed, I will take steps to 
make sure that recipients of both the formula and competitive 
programs have the sufficient data tools, technical assistance, 
and oversight to ensure that Federal dollars have a positive 
impact.
                                ------                                


        RESPONSE TO WRITTEN QUESTIONS OF SENATOR SHELBY
                      FROM MICHAEL S. BARR

Q.1. Federal Reserve's Regulatory Role--Mr. Barr, one of the 
key questions this Committee and the Administration will have 
to answer as we consider regulatory reform this year is what 
should be the role of the Federal Reserve. Some have suggested 
that the Fed become a super-regulator, with broad authority to 
regulate systemic risk. Others, however, have expressed 
concerns that the Fed's ability to be an effective regulator is 
undermined by its already large portfolio of responsibilities.
    Do you have any concerns that the Federal Reserve presently 
has too many responsibilities?
    Do you think that it is appropriate to give the Federal 
Reserve such a key role in our economy without restructuring 
the Fed? For example, should the presidents of the Fed's 
regional banks continue to be selected by the same banks the 
Fed is supposed to regulate?

A.1. As the Secretary of the Treasury has laid out in his 
outlines for comprehensive regulatory reform, he has made it 
clear that one of the fundamental lessons of the current 
financial crisis is that an independent government agency needs 
to have responsibility to identify and reduce threats to the 
stability of the financial system and must have all the 
authority, focus, and discipline necessary and appropriate to 
fulfill that responsibility. My understanding is the Department 
of the Treasury will propose that this regulator needs to have 
authority to regulate and supervise all systemically important 
financial firms and payment and settlement systems and that 
this regulator also needs to have authority to collect 
information to detect emerging threats from systemically 
important financial markets. As the Treasury weighs competing 
proposals on how to structure comprehensive regulatory reform, 
my understanding is that substantial attention will be given to 
determining the right portfolio of responsibilities to accord 
the Federal Reserve. Preserving the independence of the Federal 
Reserve and ensuring the robustness of its supervisory function 
will be a critical priority.
    Problems of regulatory arbitrage, lax supervision, and gaps 
in the system for prudential supervision have contributed 
greatly to the current financial crisis. My understanding is 
that the Treasury is undergoing an examination of the broad 
regulatory architecture with a view to eliminating gaps and 
opportunities for arbitrage, to better align the structure so 
that accountability accompanies responsibility, and to promote 
better governance.

Q.2. TARP--Mr. Barr, in Congressional testimony you gave last 
year, you reflected on the nature of the Federal Government's 
recent bailout efforts by noting that ``Ad hoc intervention is 
no substitute for a system of financial regulation.'' The ad 
hoc bailouts Treasury and the Fed have engineered during the 
past year have not served our economy well.
    If we are to avoid ad hoc interventions in the future, 
however, we will need to address our ``Too Big To Fail'' 
Problem.
    How serious is our ``Too Big To Fail'' problem and what do 
you think is the best way to minimize it?
    Do you think that banks that are considered ``Too Big To 
Fail'' should be broken up?

A.2. As the Treasury Secretary has outlined in his proposals on 
systemic risk, this crisis has made clear that certain large, 
interconnected firms and markets need to be under a more 
consistent, and more conservative regulatory regime. The new 
regulatory regime cannot simply address the soundness of 
individual institutions, but must also ensure the stability of 
the system itself. We need to strengthen our system of 
prudential supervision across the financial sector. We must 
improve the quality of capital, ensure that we have better 
measures of risk, and require that all firms build up more 
capital during good economic times so that they have a more 
robust protection against losses in down times, and can 
continue to lend to America's households and businesses, big 
and small, throughout the economic cycle.
    In addition to imposing a more conservative regulatory 
regime on the largest, most interconnected firms, it is also 
important to have in place a resolution regime that permits the 
government to resolve in an orderly fashion any financial 
firm--no matter how large--whose disorderly failure threatens 
financial stability.
    While asset size is one characteristic of firms that could 
pose a risk to our financial system, other characteristics 
include the financial system's interdependence with the firm 
and its relative role in the provision of credit and liquidity 
to the economy. Strong steps must be taken to limit the risk 
posed by these firms. For example, requiring a systemically 
important firm to hold much higher levels of regulatory capital 
helps to level the playing field and at the same time bolsters 
the resources of the firm to support those risks.

Q.3. Fannie and Freddie have been held in government 
conservatorship since September 2008 and billions of taxpayer 
dollars have been needed to keep them in operation. The details 
of the President's budget were released this week, including a 
discussion on the future of GSEs, with options ranging from a 
gradual wind down of their operations and liquidation of their 
assets to returning Fannie and Freddie to their previous status 
as GSEs that are shareholder owned organizations with a public 
purpose. What are your views as to the future of Fannie and 
Freddie? How will you advise the Treasury Secretary to proceed 
as the December 31, 2009, deadline for Treasury's GSE MBS 
Purchase Program and GSE Lending Facility looms closer?

A.3. The future of Fannie Mae and Freddie Mac will require 
careful consideration of the appropriate role of the Federal 
Government in the mortgage market. There are a number of 
options to consider, and if confirmed I look forward to working 
with Congress on evaluating those options.
    The Treasury's GSE MBS Purchase Program was designed to 
provide added confidence to the mortgage market, and Treasury's 
GSE Lending Facility was designed to provide an ultimate 
liquidity backstop. Since these programs were established, the 
Federal Reserve has also established programs much larger in 
size and scope to purchase GSE (and Ginnie Mae), MBS, and GSE 
debt. As we move closer to the December 31,2009, expiration of 
the Treasury programs, I look forward to evaluating the 
continued need for the Treasury's program in light of current 
market conditions, the program announced by the Federal 
Reserve, and other ongoing or potential efforts in this area.
                                ------                                


         RESPONSE TO WRITTEN QUESTIONS OF SENATOR KOHL
                      FROM MICHAEL S. BARR

Q.1. The illegal Freezing and garnishment of federally exempt 
funds from the bank accounts of recipients of Social Security, 
SSI, and Veterans Benefits is a serious problem across 
America--leaving many of our elderly and disabled citizens 
temporarily destitute for weeks at a time. Treasury has been 
working with the payor agencies, including the SSA and the VA, 
Federal banking regulators, and representatives of recipients, 
to develop a proposed Federal regulation that would resolve the 
problem. However, despite our repeated requests, this 
development process has not been completed. Can you commit to 
getting this process completed in your first month as Assistant 
Secretary for Financial Institutions?

A.1. I am fully committed to ensuring that Federal 
antigarnishment statutes are given full force and effect, and 
as one of my first priorities will work with colleagues in the 
Fiscal Service at the Treasury, as well as with Federal benefit 
agencies across the government, to complete the issuance of a 
joint regulation to solve the problem of account freezes and 
garnishment of protected funds. In addition, working with both 
consumer advocates and Federal bank regulators, I am confident 
that such a regulation will embody strong protections for 
Federal beneficiaries without imposing burdens or shifting 
liabilities to financial/institutions, which need better 
Federal guidance on how to respond to garnishment and 
attachment orders from State courts. Federal regulations and 
consumer protections must evolve in response to new debt 
collection tactics to protect the lifeline benefits of our most 
vulnerable citizens.

Q.2. In addition to the illegal garnishment of exempt funds, 
there are numerous other ways that both banks and other 
financial service providers are depleting the benefits of our 
workers and our veterans. High cost loans, payday loans, and 
high bank fees, such as overdraft fees, are all currently 
permitted to be taken directly from Social Security and other 
benefit payments, which should be protected by law. We 
understand that this has been a problem since Treasury first 
wrote regulations under EFT 99 (the law passed in 1996 
requiring Federal funds to be electronically deposited). 
Although the Treasury initiated an inquiry about these issues 
in 1998, nothing was done to ensure that these problems were 
resolved. Can you commit to addressing this serious problem in 
your first 6 months as Assistant Secretary for Financial 
Institutions?

A.2. I believe that, as with account freezes and garnishment of 
protected benefits, this problem can be addressed through the 
joint efforts of the Treasury, Federal benefit agencies, and 
Federal bank regulators. The Treasury can enhance its 
regulations governing the routing of electronic Federal 
payments to help ensure that benefits are not deposited with 
third parties that deduct fees or loan repayments prior to 
allowing beneficiaries access to their funds. The Federal 
benefit agencies, in turn, must improve their policies and 
practices designed to prevent the assignment of Federal 
benefits to third party creditors and debt collectors.
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