[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]







                   THE FUTURE OF HOUSING IN AMERICA: 
                     OVERSIGHT OF THE DEPARTMENT OF 
                     HOUSING AND URBAN DEVELOPMENT 

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

                                HEARING

                               BEFORE THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 12, 2017

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 115-47 
                           
                           
                           
                           
                           
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                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                    JEB HENSARLING, Texas, Chairman

PATRICK T. McHENRY, North Carolina,  MAXINE WATERS, California, Ranking 
    Vice Chairman                        Member
PETER T. KING, New York              CAROLYN B. MALONEY, New York
EDWARD R. ROYCE, California          NYDIA M. VELAZQUEZ, New York
FRANK D. LUCAS, Oklahoma             BRAD SHERMAN, California
STEVAN PEARCE, New Mexico            GREGORY W. MEEKS, New York
BILL POSEY, Florida                  MICHAEL E. CAPUANO, Massachusetts
BLAINE LUETKEMEYER, Missouri         WM. LACY CLAY, Missouri
BILL HUIZENGA, Michigan              STEPHEN F. LYNCH, Massachusetts
SEAN P. DUFFY, Wisconsin             DAVID SCOTT, Georgia
STEVE STIVERS, Ohio                  AL GREEN, Texas
RANDY HULTGREN, Illinois             EMANUEL CLEAVER, Missouri
DENNIS A. ROSS, Florida              GWEN MOORE, Wisconsin
ROBERT PITTENGER, North Carolina     KEITH ELLISON, Minnesota
ANN WAGNER, Missouri                 ED PERLMUTTER, Colorado
ANDY BARR, Kentucky                  JAMES A. HIMES, Connecticut
KEITH J. ROTHFUS, Pennsylvania       BILL FOSTER, Illinois
LUKE MESSER, Indiana                 DANIEL T. KILDEE, Michigan
SCOTT TIPTON, Colorado               JOHN K. DELANEY, Maryland
ROGER WILLIAMS, Texas                KYRSTEN SINEMA, Arizona
BRUCE POLIQUIN, Maine                JOYCE BEATTY, Ohio
MIA LOVE, Utah                       DENNY HECK, Washington
FRENCH HILL, Arkansas                JUAN VARGAS, California
TOM EMMER, Minnesota                 JOSH GOTTHEIMER, New Jersey
LEE M. ZELDIN, New York              VICENTE GONZALEZ, Texas
DAVID A. TROTT, Michigan             CHARLIE CRIST, Florida
BARRY LOUDERMILK, Georgia            RUBEN KIHUEN, Nevada
ALEXANDER X. MOONEY, West Virginia
THOMAS MacARTHUR, New Jersey
WARREN DAVIDSON, Ohio
TED BUDD, North Carolina
DAVID KUSTOFF, Tennessee
CLAUDIA TENNEY, New York
TREY HOLLINGSWORTH, Indiana

                  Kirsten Sutton Mork, Staff Director
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    October 12, 2017.............................................     1
Appendix:
    October 12, 2017.............................................    58

                               WITNESSES
                       Thursday, October 12, 2017

Carson, Hon. Ben, Secretary, U.S. Department of Housing and Urban 
  Development....................................................     5

                                APPENDIX

Prepared statements:
    Carson, Hon. Ben.............................................    58

              Additional Material Submitted for the Record

Beatty, Hon. Joyce:
    Letter to Hon. Ben Carson....................................    63
    Response letter from Seth Appleton on behalf of Hon. Ben 
      Carson.....................................................    66
Duffy, Hon. Sean:
    Work Requirements Study from the Center for Urban and 
      Regional Studies at UNC Chapel Hill, dated September 2015..    67
Waters, Hon. Maxine:
    Written Statement of the National Housing Law Project........    94
Carson, Hon. Ben:
    Written responses to questions for the record submitted by 
      Representative Hultgren....................................   103
    Written responses to questions for the record submitted by 
      Representative Sherman.....................................   106
    Written responses to questions for the record submitted by 
      Representative Stivers.....................................   108
    Written responses to questions for the record submitted by 
      Representative Waters......................................   111

 
   THE FUTURE OF HOUSING IN AMERICA: OVERSIGHT OF THE DEPARTMENT OF 
                     HOUSING AND URBAN DEVELOPMENT

                              ----------                              


                       Thursday, October 12, 2017

                     U.S. House of Representatives,
                           Committee on Financial Services,
                                                   Washington, D.C.

    The committee met, pursuant to notice, at 9:33 a.m., in 
room 2128, Rayburn House Office Building, Hon. Jeb Hensarling 
[chairman of the committee] presiding.
    Present: Representatives Hensarling, Royce, Pearce, Posey, 
Luetkemeyer, Huizenga, Duffy, Stivers, Hultgren, Ross, 
Pittenger, Wagner, Barr, Rothfus, Tipton, Williams, Poliquin, 
Love, Hill, Emmer, Zeldin, Trott, Loudermilk, Mooney, 
MacArthur, Davidson, Budd, Kustoff, Tenney, Hollingsworth, 
Waters, Maloney, Velazquez, Sherman, Meeks, Capuano, Clay, 
Scott, Green, Cleaver, Perlmutter, Himes, Foster, Kildee, 
Sinema, Beatty, Heck, Vargas, Gottheimer, Gonzalez, Crist, and 
Kihuen.
    Chairman Hensarling. The committee will come to order. 
Without objection, the chair is authorized to declare a recess 
of the committee at any time, and all members will have 5 
legislative days within which to submit extraneous materials to 
the chair for inclusion in the record.
    This hearing is entitled ``The Future of Housing in 
America: Oversight of the Department of Housing and Urban 
Development.''
    I now recognize myself for 3-1/2 minutes to give an opening 
statement.
    Today, we welcome the 17th secretary of the Department of 
Housing and Urban Development, Dr. Ben Carson, for his first 
appearance before our committee. Welcome, sir.
    At least in one respect, he may be among the most qualified 
individuals to ever serve as HUD secretary. Why? Because 
Secretary Carson was raised by a single mother who had a third-
grade education. He grew up in poor communities in Detroit and 
Boston, lived in multi-family housing with boarded up windows 
and doors, surrounded by sirens, gangs, and murders.
    Not only does he understand poverty personally and 
viscerally, he understands what it takes to escape it, and he 
is passionate about helping others escape, as well. He also 
understands that HUD's approach to eliminating poverty and 
urban decay too often fails, and thankfully, he is committed to 
changing it.
    When it was created 52 years ago, HUD was intended to be 
the main weapon in the war on poverty. Now, 52 years later and 
$1.6 trillion later, the poverty rate remains basically 
unchanged. Sadly, despite all this spending, HUD has failed to 
live up to the noble aspirations of its birth.
    I do not wish to diminish the valuable work that HUD does. 
It is an invaluable part of our Nation's social safety net, 
especially tenant-based Section 8 housing for the elderly and 
disabled. But I remind all that, for the able-bodied, there is 
no better affordable housing program than a growing economy 
that creates better jobs, bigger paychecks and brighter 
tomorrows.
    After suffering from 8 years of bad public policy, leading 
to a sluggish economy that has been growing at barely half of 
the historic norm, working Americans deserve better. They 
deserve fundamental tax reform as proposed by the President and 
Republicans, a fairer, flatter, simpler, more competitive tax 
system.
    There hasn't been any significant tax reform in a century 
that hasn't grown the economy and grown tax revenues. I remind 
all, in the first 5 years after the Kennedy tax relief plan was 
passed, the economy grew by 48 percent and Federal revenues 
increased by 66 percent. This growth erased a $5 billion point 
deficit and turned it into a $3.2 billion surplus.
    When Congress enacted the Reagan tax relief package, the 
economy grew by 42 percent over the next 5 years, and Federal 
revenues surged by 28 percent. Even going back to the Coolidge 
era, a series of tax relief measures passed during that 
administration resulted in annual average economic growth of 
4.7 percent.
    So we have it time and time again: When we remove the 
burdens of excessive taxation and allow the American people to 
keep more of what they earn, we unleash the potential to create 
prosperity and opportunity for everyone. That is not economic 
theory; it is economic history, and it is the very embodiment 
of affordable housing.
    I also wonder, how can we be for affordable housing, yet 
oppose allowing working Americans to keep more of their 
paychecks? And that is exactly what the Republican tax reform 
framework does: allows working Americans to keep more of their 
paychecks.
    So I look forward to hearing more of the secretary's new 
vision for HUD and the programs that he and his team are 
beginning to reform. I now yield to the ranking member for an 
opening statement.
    Ms. Waters. Thank you, Mr. Chairman.
    America is currently in the midst of the worst rental 
housing crisis that we have ever experienced. It is hitting our 
lowest income families the hardest. According to the National 
Low Income Coalition, the United States has a shortage of 7.2 
million affordable rental units for extremely low-income 
households.
    Our country is also at a virtual standstill when it comes 
to reducing homelessness, and in some parts of the country, 
homelessness has reached crisis proportions. We also face 
homeownership challenges, with minority homeownership rates 
continuing to lag, even as the housing market recovers.
    In the face of the immense housing needs in our country, 
President Trump chose Dr. Ben Carson to serve as the head of 
the Department of Housing and Urban Development. The secretary 
of HUD is supposed to be at the forefront of our efforts to 
create strong communities; expand access to safe, decent and 
affordable housing; and enforce fair housing rights.
    Housing is the foundation on which our entire society is 
built. It is a platform for economic mobility and well-being. 
It is a crucial part of our national economy. It is a necessary 
human right. We need strong leadership and a bold vision for 
HUD in order to expand access to affordable housing in this 
country.
    Unfortunately, I have seen nothing to indicate that 
Secretary Carson is up to the challenge. Secretary Carson has 
expressed views that are deeply alarming and antithetical to 
his role as HUD secretary, such as describing poverty as, quote 
``more of a choice than anything else''. And saying he doesn't 
think public housing should be too, quote ``comfortable''.
    His few actions so far as HUD secretary are deeply 
troubling, as well. Secretary Carson has supported a budget 
that slashes funding for critical housing programs and proposes 
humble rent increases on some of the most vulnerable American 
families. He has also moved to roll back important Obama 
Administration policies and initiatives with little or no 
explanation.
    So I am very much looking forward to hearing from Secretary 
Carson today about his actions so far and his plans for serving 
our Nation's most vulnerable families.
    I thank you, Mr. Chairman, and I yield back the balance of 
my time.
    Chairman Hensarling. The chair now recognizes the gentleman 
from Wisconsin, Mr. Duffy, the chairman of the Housing and 
Insurance Subcommittee, for 1-1/2 minutes.
    Mr. Duffy. Thank you, Mr. Chairman.
    Welcome--I don't know if it is Secretary or Doctor or Dr. 
Secretary. Welcome either way, whatever the proper title is.
    I think you can tell you are going to be in for an 
interesting hearing today based on the opening statement of the 
ranking member.
    I would note that poor people have been worse off over the 
last 8 years, and minorities have fared worse than the rest of 
the population. And I would argue that, with a growing 
bureaucracy, a bigger government, a collectivist mentality, you 
gut the middle class. Poor people get poorer, rich people get 
richer. It happens whenever you implement these policies.
    And to go back to a system that gives people a hand up, 
that helps move them from poverty--like yourself--into the 
middle class, one of the greatest brain surgeons the country 
has seen, is the American dream, is the American story. So I am 
looking forward to your testimony today.
    I know you have a lot of reforms that you want to discuss 
with us. I am looking forward to hearing that. I would also 
like to hear your vision on--because the prior secretary--when 
they would look at success of HUD, success was viewed in the 
realm of ``How many people do we get into the system, how many 
people do we help through HUD,'' versus the mentality of ``How 
many people not just do I get in, but how many people can I 
move out of the system? How many people can I get to stand on 
their own two feet?''
    What is the measure of success in HUD? Look forward to your 
views on housing finance reform, on rural poverty. And my time 
is up, so I yield back.
    Chairman Hensarling. Time of the gentleman has expired. The 
chair now recognizes the gentleman from Missouri, Mr. Cleaver, 
the ranking member of the Housing and Insurance Subcommittee, 
for 1 minute.
    Mr. Cleaver. Thank you, Mr. Chairman.
    The future of housing in America--it strikes me as 
significant. Thank you for being here, Mr. Secretary.
    I have all the comments, but I may be of greater value if I 
just tell you that I sat down with Shaq, Shaquille O'Neal, to 
tell him how his father-in-law and I grew up. We grew up two 
blocks apart. I lived at 405B Bailey, he lived at 512, in the 
projects. I ended up getting the opportunity to move out faster 
than they did.
    We--my father saved money, bought a lot, bought a house, 
moved the house to the lot--I mentioned to you. And I always 
think, ``Well, what would have happened if nobody had helped my 
mother and father as they were struggling to make a living for 
four children?''
    I will end the story, because I--my time is out--just to 
say that I have three sisters, all with degrees, one with a 
Ph.D. What would have happened if they had ignored us? Housing 
is important to me.
    I yield back, Mr. Chairman.
    Chairman Hensarling. Time of the gentleman has expired. The 
chair now recognizes the gentleman from Michigan, Mr. Kildee, 
the vice ranking member, for 1 minute.
    Mr. Kildee. Thank you, Mr. Chairman. Thank you, Ranking 
Member Waters. And I am glad we are having this hearing, Mr. 
Secretary. I am glad you are here. The condition of America's 
cities and towns is a subject that is the jurisdiction of this 
committee and your department. And I think, in neither case--
for some time, to be fair to you, preceding your entry into 
this position--that subject has not had nearly the attention 
that it should.
    Unfortunately, for decades, important investment in cities 
and towns--CDBG, the HOME program--have faced really deep cuts. 
I grew up in Flint just around the same time you were growing 
up in Detroit. We had a similar childhood experience. And a lot 
of people know Flint now because of this terrible crisis that 
it is facing, coming out of this poisoning of its water.
    But the truth behind Flint's story is that it was on the 
brink of insolvency, largely because the State of Michigan and 
the Federal Government had eliminated essential support for the 
development and redevelopment of those places.
    I am anxious to hear how you can square your suggestions to 
cut further those programs with the sworn oath you took to 
uphold the mission of the department. Thank you.
    Chairman Hensarling. Time of the gentleman has expired.
    Today, we welcome the testimony of the Honorable Ben 
Carson. This is the first time Secretary Carson has appeared 
before this committee. Dr. Ben Carson, M.D., was sworn in as 
the 17th secretary of the U.S. Department of Housing and Urban 
Development on March 2nd, 2017.
    Secretary Carson earned a Bachelor's degree from Yale 
University, and received his M.D. from the University of 
Michigan Medical School. Previously, Secretary Carson served as 
Director of Pediatric Neurosurgery at the Johns Hopkins 
Children's Center.
    Without objection, the witness's written statement will be 
made part of the record.
    Secretary Carson, you are now recognized to give an oral 
presentation of your testimony. Welcome.

  STATEMENT OF HON. BEN CARSON, SECRETARY, U.S. DEPARTMENT OF 
                 HOUSING AND URBAN DEVELOPMENT

    Secretary Carson. Chairman Hensarling, Ranking Member 
Waters, members of the committee, thank you for inviting me to 
discuss the work that we do at the Department of Housing and 
Urban Development and my plans for fulfilling our mission with 
fidelity to our congressional mandate and the best interest of 
the American people.
    First, please know that, right now, HUD is involved in the 
Federal response to multiple hurricanes that devastated areas 
of Texas, Florida, Georgia, Puerto Rico, and the U.S. Virgin 
Islands.
    HUD's team is coordinating with our Federal, State, 
territorial, and local agency partners in the field, providing 
housing solutions for survivors, and helping HUD-assisted 
clients and FHA-insured borrowers. In the long term, HUD will 
play a key role in recovery efforts in these disaster-impacted 
regions as they rebuild. Helping these communities is and will 
remain a priority for me and this administration.
    America has changed greatly since HUD was established as 
part of Lyndon Johnson's Great Society programs half a century 
ago. And we must learn to evolve with the country. Many 
Americans still struggle to find affordable housing. Chronic 
homelessness continues to plague tens of thousands of our 
countrymen. And many millions remain mired in poverty, rather 
than being guided on a path out of it.
    History has made clear that spending more taxpayer dollars 
does not necessarily create better outcomes. We must constantly 
evaluate our programs to ensure that we are delivering services 
effectively and efficiently to HUD's constituents and 
responding to today's challenges with the best practices and 
technologies.
    Since I arrived at HUD in March, it has been my mission to 
employ the wealth of knowledge held by career staff to improve 
our services, reform our programs and remain careful stewards 
of taxpayer dollars.
    After several months of hard work, our team has outlined a 
bold plan for institutional reform and improvement that will 
better serve all Americans. It is called the Forward 
Initiative. The policy elements of the Forward Initiative each 
fall under what we have named the 3 Rs: reimagine how HUD 
works, restore the American dream and rethink American 
communities.
    First, reimagining how HUD works refers to our internal 
processes, working conditions and training. The goal of every 
improvement made at HUD is to provide better service to those 
in need.
    Second, our job is to restore the American dream, getting 
Americans back on their feet and permanently improving their 
lives. Of course, HUD is committed to continuing to serve those 
families that might always need someone to lean on.
    Additionally, we have an opportunity to eliminate veterans' 
homelessness in America. They sacrificed for our country and 
deserve all the support we can give.
    And finally, we need to rethink American communities and 
how we can make them thrive. Expanding community investment 
through public-private partnerships produces better results 
than heavy-handed government intervention.
    It is also our special priority to help more American 
families live in healthy homes, free of lead hazards and other 
poisonous substances. As a doctor, I have seen firsthand the 
tragic consequences of childhood exposure to dangerous building 
materials. Ridding our homes of these hazards is a worthy cause 
with great benefits to future generations.
    While pursuing its mission to provide safe, decent, and 
affordable housing for the American people, the HUD team is 
also cognizant of its vital duty to be a good steward of 
taxpayer dollars.
    The President has directed Federal agencies to take special 
care against burdening American families and their businesses 
with unnecessary and expensive regulations. HUD is reviewing 
its existing regulations to assess their compliance costs, 
reduce regulatory burden and build a more efficient and 
effective agency.
    Let me close by reiterating the interest of our 
administration and my personal interest in working with this 
committee on housing finance reform. HUD will be an active 
participant in this critical dialog because of our fundamental 
housing mission, and because our FHA mortgage insurance program 
and our Ginnie Mae mortgage-backed security guarantee are large 
and vital components of the Nation's housing finance system.
    Housing finance reform should be built on shared goals of 
ensuring a well-functioning housing finance system that 
provides access for credit-worthy borrowers that are ready to 
own a home, expands the role of the private sector and reduces 
overall taxpayer exposure.
    Thank you again for inviting me to testify today, and I 
welcome any questions.
    [The prepared statement of Secretary Carson can be found on 
page 58 of the appendix.]
    Chairman Hensarling. The chair now recognizes himself for 5 
minutes for questions.
    Secretary Carson, my colleague, the gentleman from 
Wisconsin, Mr. Duffy, alluded in his opening statement to, 
really, kind of metrics of success. And there are some who view 
the success of HUD to be tied to the size of its budget or the 
number of people who have Section 8 vouchers.
    But I am curious--does HUD have, or is HUD developing any 
different metric? How many people actually get to escape 
poverty? How many able-bodied individuals are able to escape 
poverty, to move beyond Section 8 housing, and maybe at one 
point enjoy the dream of homeownership?
    Does HUD have any way to measure this? Are we looking at 
this wrong? Should there be a different metric of success for 
what you are doing?
    Secretary Carson. There have been a number of studies over 
the course of decades, and, as was mentioned in your opening 
statement, there hasn't been a tremendous amount of progress 
there.
    Now, this is not because the people who have been there 
have had bad intentions. I think they had very good intentions. 
But we do have to look at the fact that we are not making a 
great deal of progress with poverty.
    And that is why we looking to reform this whole thing and--
really looking more at the person than at the housing complex. 
Housing is a component of developing people, and we have to 
recognize that we only have 330 million people in this country.
    We have to compete, in the future, with China and India, 
who have four times that many people. That means, if we don't 
develop all of our people, we are not going to be able to keep 
up in the future. It is as simple as that.
    So we have to start thinking in terms of holistic 
development of people, holistic development of communities. How 
do we enable people to climb that ladder of opportunity? How do 
we incentivize them to climb that ladder of opportunity so that 
they become part of the strength of this country?
    Chairman Hensarling. Part of affordable housing is 
obviously tied to our housing finance system. Recently, Federal 
Reserve Governor Jerome Powell said, quote ``If Congress does 
not enact reforms over the next few years, we are at risk of 
settling for the status quo: a government-dominated mortgage 
market with insufficient private capital to protect taxpayers 
and insufficient competition to drive innovation.'' Do you 
agree or disagree with Governor Powell's assessment?
    Secretary Carson. There is no question that we need to 
engage in a serious discussion about finance reform. There--a 
lot of progress has been made, by the way. 10 years ago--we 
were talking about how important it was to get everybody into 
homeownership.
    And, again, I am not criticizing the people who did that. 
But I don't think they realize that to put somebody in a home 
that they can't afford is not really doing them a favor. They 
lose the home. They lose their credit. They lose their future 
opportunities.
    We have to learn from those kinds of situations. And 
innovation is the hallmark of America.
    Chairman Hensarling. Mr. Secretary, can we reform our 
housing finance system without reforming FHA, which is 
obviously under HUD?
    Secretary Carson. FHA, as you probably know, is the largest 
guarantor of mortgages in the world. So it is a central part of 
it and needs to be reformed as well.
    Chairman Hensarling. Historically, the mission of FHA was 
to support first-time and low-income--low to moderate-income 
families, and it had a small footprint in the market. Now, it 
has a very large footprint in the market and, in many areas of 
the U.S., the FHA loan limits are the same as the conventional 
market--$636,150 in so-called high-cost areas.
    At least where I come from, only the top wage earners can 
afford a mortgage of $636,000. Do you agree that establishing a 
home price or loan limit more in line, say, with the median 
home price in the area will better serve the target customer 
for FHA and get it refocused on low to moderate-income and 
first-time home buyers?
    Secretary Carson. Thank you for that question. If one looks 
at the actual statistics and looks at the bell curve 95 percent 
of the mortgages fall in the $200,000 range.
    On the very tips, there are going to be very low ones and 
very high ones. So I tend to want to focus on the large group, 
and not on the outliers. It is very, very rare that we deal 
with a $636,000 mortgage.
    Chairman Hensarling. Thank you, Mr. Secretary.
    I now recognize the ranking member for 5 minutes.
    Ms. Waters. Thank you very much.
    I had intended to start to talk about the housing crisis 
that we have. But, since the President was busy tweeting this 
morning and you referred to HUD's role in dealing with the 
hurricane disasters and what you and the administration are 
doing, this morning, Trump threatened to abandon Puerto Rico 
recovery efforts.
    President Trump served notice Thursday that he may pull 
back Federal relief workers from Puerto Rico, effectively 
threatening to abandon the U.S. territory amid a staggering 
humanitarian crisis in the aftermath of Hurricane Maria.
    In a trio of tweets, he wrote, ``We cannot keep FEMA, the 
military and the first responders, who have been amazing, in 
Puerto Rico forever.'' On Thursday, he sought to shame the 
territory for its own plight. He tweeted, ``Electric and all 
infrastructure was a disaster before hurricanes.''
    So you talked about what you, HUD, is doing in cooperation 
with, I guess, the administration. Do you agree with the 
President?
    Secretary Carson. I certainly agree that Puerto Rico is a 
very important territory. The people from Puerto Rico have 
contributed greatly to the culture of America.
    Ms. Waters. I am not talking about that. What I am talking 
about is these tweets where the President threatened to abandon 
Puerto Rico recovery efforts. Do you agree that they should be 
abandoned, that Puerto Rico should be abandoned?
    Secretary Carson. First of all, as I was saying, Puerto 
Rico is a very important--
    Ms. Waters. No, I know it is important. But I want to 
know--
    Secretary Carson. --Part of our culture, and as a result of 
that, we are not going to abandon them.
    Ms. Waters. --Whether or not you agree with the President, 
who is threatening to abandon Puerto Rico recovery efforts.
    Secretary Carson. I think I just said I have no intention 
of abandoning Puerto Rico. They are a very important part of 
who we are.
    Ms. Waters. So, you don't agree with the President. He 
tweeted, ``Electric and all infrastructure was a disaster 
before the hurricanes,'' and sought to shame the territory for 
its own plight. Do you share that opinion?
    Secretary Carson. I think that our job is to make sure that 
we take care of the disaster that has occurred.
    Ms. Waters. So you don't agree that it should be abandoned. 
Is that right?
    Secretary Carson. Of course it should not be abandoned.
    Ms. Waters. And you don't think that they should be shamed 
for its own plight, is that right?
    Secretary Carson. There is no question that there have been 
a lot of difficulties in Puerto Rico. They ended up $80 
billion--
    Ms. Waters. Should they be shamed for its own plight?
    Secretary Carson. --In debt.
    Ms. Waters. Talked about--
    Secretary Carson. I don't think--I don't think it is 
beneficial to go around shaming people in general.
    Ms. Waters. OK. So I am glad to hear you don't agree with 
the President.
    Let me go on with my housing question. I want to talk about 
someone who I recently met by the name of Larry, who resides in 
a Section 202 housing for the elderly property in south Los 
Angeles.
    Larry shared with me the meticulous monthly budget he 
manages for himself. I have the budget right here. He lives on 
a fixed income of $1,015 per month. After paying for rent, 
utilities, groceries, medical expenses, personal hygiene, he 
has exactly $110 left at the end of the month. He told me he 
looks forward to using some of that $110 to take his 
granddaughter out for ice cream.
    The rent increases proposed in your recent HUD budget would 
mean an $80 monthly increase for Larry. Larry said to me in my 
office, ``Congresswoman, I don't know which other corner I 
could cut if I had to pay an additional $80 per month in 
rent.''
    In fact, I have data that shows that seniors would have to 
pay an additional $83 a month, on average, in rent under your 
rent reform proposal, which is a whopping 28 percent increase 
over what they are currently paying.
    There are low-income seniors in HUD assisted housing all 
over this country, like Larry, with average incomes just over 
$13,000 a year. Do you mean to tell me it is the vision of this 
administration to raise rents on low-income seniors like Larry? 
Tell me, what do you expect Larry to do if your proposal to 
raise rent is enacted?
    Secretary Carson. If Larry does not see a way out, he can 
apply for an exemption, which will be available to him.
    Having said that, we are changing programs in such a way as 
to create sustainability. We don't want to reach a point 5 
years down the road, where we have no ability to take care of 
anyone.
    Ms. Waters. Let me just say that I have heard you mention 
before that hardship exemptions will be available, but I do not 
accept that as an adequate solution, because hardship 
exemptions have historically failed to actually help people who 
are eligible for an exemption, and you have never even 
acknowledged this.
    So I ask you again, what do you expect Larry and the tens 
of thousands of other seniors like Larry to do in the face of 
such a dramatic rent increase?
    Secretary Carson. First of all, I think the situation that 
you just described is not a typical situation. I don't believe 
that elderly and disabled people will see that large of an 
increase. Those are not the numbers that I have received.
    Ms. Waters. Based on your cuts, they will.
    Secretary Carson. We will be--
    Chairman Hensarling. Time.
    Secretary Carson. --We will be very happy to have our 
people go over the numbers with you.
    Chairman Hensarling. Time of the gentlelady has expired.
    The chair now recognizes the gentleman from Wisconsin, Mr. 
Duffy, chairman of our Housing and Insurance Subcommittee.
    Mr. Duffy. Thank you, Mr. Chairman.
    I want to just deviate from my original questions and note 
that the President was somewhat accurate, in that the 
electrical grid in Puerto Rico was not up to what it should 
have been. They are highly in debt. There are a lot of problems 
in Puerto Rico that they were dealing with before Maria hit 
them.
    And I love the island. I am part of the Puerto Rican 
caucus, was part of PROMESA. But to now try to say that 
President Trump is shaming people on the island--if I am not 
mistaken, it was President Trump who sent over a request for 
supplemental package to the tune of $36 billion. That came from 
the White House.
    Secretary Carson. Yes. And I can tell you from being in 
many conversations with the President and other members of the 
Cabinet, he is in no way thinking about abandoning them. He has 
put a lot of effort into that.
    Mr. Duffy. And, speaking to that point, I think it was 
President Obama who did just a fly by stop in, in Puerto Rico, 
but then went and spent days in Cuba, hanging out with a 
ruthless dictator, going to see baseball games, hands in the 
air.
    Open up--open up tourism in Cuba, to the exclusion of 
tourism in Puerto Rico. We should first go--let's promote 
American citizens in Puerto Rico and dollars flowing there, 
instead of to the dictatorship of Cuba.
    I am off my questions, but I had to respond to the ranking 
member's, I think, inaccurate characterization of what 
President Trump has done on behalf of the good people of Puerto 
Rico.
    I want to pivot, and I don't have a lot of time. Can you 
talk about--when you look at HUD, when you look at the tax 
dollars that flow through your agency, what are you doing to be 
more efficient, to stretch those dollars further and help more 
people, but also be responsive to the taxpayers who send you 
money? What are you doing on those ends?
    Secretary Carson. I take responsibility to taxpayers very 
seriously, and we have put in place a team that understands 
that seriousness. We are--we have hired a COO, a CIO and a 
CFO--hopefully we will get through very soon, it has been 
named--so that we can begin to look at things from the 30,000 
point of view--30,000-foot point of view, rather than just 
patching little things that don't seem to work, which has sort 
of been the way that things have been done in the past; running 
it, really, more like a business; assigning responsibilities to 
people in all of the different areas so that you don't pass the 
buck to someone else.
    Mr. Duffy. Refreshing. I think I heard the ranking member 
mention this--that people shouldn't be too comfortable in 
public housing--I think she was quoting you.
    Secretary Carson. Yes.
    Mr. Duffy. What did you mean by that?
    Secretary Carson. I thank you for giving me an opportunity 
to clarify that. We were in a transitional housing setting, and 
they were getting people out three times to four times faster 
than other transitional housing. And I wanted to know how they 
were doing that. It was because they were concentrating their 
efforts and their resources on getting people into permanent 
housing, and I said, ``That is a very good idea.''
    There was a New York Times reporter there who sort of 
misinterpreted that--or, actually, she did a better job, but 
her editors reinterpreted that--to say that Carson thinks that 
they shouldn't be comfortable. What a bunch of crap that is.
    Mr. Duffy. Thank you for that. Listen, I don't--I know that 
poverty is not comfortable. I know that you know that, as well, 
as someone who lived that firsthand, especially growing up.
    But when we talk about being--trying to make people 
comfortable in poverty, as opposed to trying to incent people 
to get out of poverty and get into the middle class--if you 
look at your life experience, would you be better off if you 
and your mother and your family had been made comfortable to 
stay where you were in public housing and in poverty, or to 
incentivize you to become the great doctor and now secretary 
that you are?
    Secretary Carson. I can tell you that, at the time when my 
mother was pushing us, I would have preferred to--somebody, 
make me comfortable there. I didn't want her to make me read 
these reports and give her all these reports.
    But in retrospect by reading, particularly about successful 
people in all endeavors, I began to realize what is necessary, 
and to realize the person who has the most to do with what 
happens to you is you.
    And what we have to do is help more people to not only 
recognize that, but to give them the means whereby they can 
take advantage of the opportunities that exist in our society.
    Mr. Duffy. I don't have much time, and I--we talked about 
this in the past, but I just want to make this note: I am 
concerned in rural America--how programs impact low-income, 
homeless people in rural America, as opposed to urban America, 
whether it is better structures, and I think more money flows.
    But poverty in rural America is just as dangerous and 
treacherous and sad as in urban America, and making sure there 
is some equity between the two--I look forward to continuing to 
work with you on how we can address these issues in rural 
America and thank you for your--
    Chairman Hensarling. Time.
    Mr. Duffy. --Service. I yield back.
    Chairman Hensarling. Time of the gentleman has expired.
    The chair now recognizes the gentleman from New York, Mr. 
Meeks.
    Mr. Meeks. Thank you, Mr. Chairman.
    Secretary, good to see you.
    Secretary Carson. You too.
    Mr. Meeks. Let me first just say that Puerto Rico needs all 
the help that it can get, and we need to make sure that we are 
doing what we need to do. And I would also say that the U.S. 
Virgin Islands, because I didn't hear you mention--but the U.S. 
Virgin Islands cannot be forgotten about.
    Puerto Rico, the U.S. Virgin Islands are American citizens, 
and we need to do all that we can to make sure that the 
conditions that they are in, due to no fault of their own, but 
this national disaster--that HUD does what it can to make sure 
that these individuals get back on their feet.
    Secretary Carson. Agreed.
    Mr. Meeks. Now, our life story is somewhat similar. I grew 
up in public housing, which is very important to me. And the 
opportunity to move on there was great, in the sense that there 
was--looking for homeownership.
    And I know--and I think that you said during your testimony 
that there has not been a tremendous amount of progress at 
relieving poverty with housing programs. I could tell you that, 
if it wasn't for housing programs, I probably would still be in 
poverty.
    And I could name friend after friend after friend who grew 
up in the same public housing development that I did, who no 
longer lives there, who would be in poverty if it wasn't for a 
housing program, a decent place to live over their heads, et 
cetera, which is HUD's mission.
    And when you look at the fact that individuals that were 
preyed upon--because I know that you also believe, as I do, 
that the goal is homeownership, but those individuals, many of 
them, who lived in public housing, who thrive to live--aspire 
to live in a home and own a home--they were the ones that were 
victimized by exotic mortgages, and they were the targets, et 
cetera.
    And now, they are forced back into rent--to renting their 
apartments and homes, and need housing programs so that they 
can continue to have a roof over their head, so that they can 
get out of poverty.
    And one of the pieces that I am concerned about that we 
have at HUD now is the DASP program, Distressed Asset 
Stabilization Program, which seems as though we are selling 
homes to private equity firms, who has no interest in making 
sure that we stress homeownership and make sure that 
individuals stay in their homes.
    There, it is just about the dollar. And so I was wondering, 
what is your vision for the DASP program going forward? And do 
you--or do you expect the program to continue?
    Secretary Carson. OK. First of all, public housing is 
important, and assisted housing is important. The point was 
that, even though it is important, we need to be looking at 
ways that we can reform it, so that we can make more progress 
in terms of getting people out of poverty. But definitely, I 
don't want to get rid of it.
    As far as the DASP program is concerned we have to, again, 
be cognizant of our responsibility to taxpayers. And that means 
not taking on and keeping a lot of properties that require a 
lot of taxpayer money. If we can find ways to dispose of those 
properties, absolutely, we want to do it.
    But we have written into the regulations a requirement that 
people who are in those houses cannot be expelled from them for 
several months. So we try to give people appropriate time to be 
able to get out.
    Mr. Meeks. So let me just ask, could--in the DASP program 
then target local municipalities and non-profits in buying 
these bulk homes? Because I know that they have the interests 
of putting people--and keeping people in those homes.
    If that program was designed so that local municipalities, 
who have a vested interest in this, and not-for-profits--then 
it would be something that would encourage, I think, the same 
thing that you are talking about--
    Secretary Carson. Yes.
    Mr. Meeks. --Getting people into home ownership.
    Secretary Carson. I agree with you. And I know that the 
former mayor here in D.C. has been working on that kind of 
issue, and we would be happy to work with you. The--I think our 
goal is obviously to get that property into the hands of 
private citizens, if we can do that. I am--
    Mr. Meeks. Let me just--because I only have 11 seconds, I 
just want to get this in, because I think it is tremendously 
difficult--also, if you look at the public housing stock in my 
district, for example, with 1.1 million families living in 
public housing--but if you cut all the money that goes into 
repairing those homes--any roofs that leak, to get rid of the 
walls that have mildew--then there is no way that you can 
repair them if you don't have the money to reinvest in them, 
just as in a home.
    Chairman Hensarling. Time of the gentleman has expired. The 
chair now recognizes the gentleman from New Mexico, Mr. Pearce, 
chairman of our Terrorism and Illicit Finance Subcommittee.
    Mr. Pearce. Thank you. Appreciate you being here today, 
sir. We appreciate the work that you are doing.
    Secretary Carson. Thank you.
    Mr. Pearce. Now, recently, the New Mexico delegation sent 
you a letter about the vacancy in the Albuquerque HUD office. 
Are you making any progress on finding someone to fill that 
position?
    Secretary Carson. Yes, we are making very good progress on 
that, and you should be hearing something soon.
    Mr. Pearce. OK. Appreciate that.
    Now, I visited with you before about Native American 
housing. It is--Native Americans are sometimes located in some 
of the deepest poverty areas in the country. I watched my 
families--maybe not the same circumstances as yours--work our 
way up through, out of poverty, one small house at a time.
    And so, I am pretty passionate about NAHASDA, Native 
American housing. Just this last week, I visited two of the 
really good examples of what tribes can do to provide housing.
    And so, again, I have invited you in the past. I would like 
to re-extend that invitation to come and visit, to see what 
tribes are doing to build houses for their own citizens and 
extending their mortgage rules to where banks, at--in some 
cases, are financing the houses on Indian reservation, which 
has not happened much in the past.
    And so I think it is very innovative. When you talk in the 
broader case about your forward initiatives and the restore, 
these are things that I can identify as having worked in our 
life. I hear your story about how they have worked in your 
life.
    And so I really appreciate your bringing your world 
experience in, and implementing it into a format that hopefully 
others can reach. Tell me a little bit about the public-private 
partnerships that you visualize, and some of the community 
initiatives.
    Secretary Carson. OK. First of all, thank you for the work 
that you have done with the Native American community. I had an 
opportunity recently to go out to Montana and visit with some 
of the tribes there, as well as a multi-tribal council, and 
visit with some of the young people there and look at some 
ideas for really moving that along. And NAHASDA, with the help 
of Congress, will get re-vamped very soon.
    As far as a public-private partnerships around the country, 
they have been amazing, and it is really the new way that we do 
things at HUD, rather than riding in with a big bucket of money 
and saying, ``Build this place for these people,'' getting the 
local private sector involved in a way that they actually have 
significant investment, so that the success and maintenance of 
the neighborhood is incumbent on them, to maintain their 
financial benefit.
    And that is the way should be, win-win situations all 
along. The other thing about that--some of these public-private 
partnerships--instead of just building a house or putting a 
roof on they are trying to build communities, because you need 
a variety of different things in order to create a healthy 
community in any part of the country.
    And hopefully, later on, I will have an opportunity to talk 
a little bit about the Envision centers that we are working 
on--hopefully opening the first one in a couple of months--that 
will really add a lot to complete communities.
    Mr. Pearce. Thank you, sir.
    Being a veteran myself, I noted that you said that you are 
concentrating on eliminating veteran homelessness. Can you give 
me a little bit more specifics on what is going on in that 
program?
    Secretary Carson. Yes. Over the last relatively short 
period, homelessness for veterans has been decreased by 47 
percent, and is still going down.
    We are working with the Veterans Administration, as well as 
across multiple agencies, because I believe that that is 
something that we can completely eliminate. The HUD-VASH 
program has been very successful. In fact, we had extra 
vouchers left over last year.
    One of the things that I think would be very helpful to us, 
working with your committee, is having less restrictions on how 
we can distribute those vouchers, because there are some places 
where there is absolutely no one who needs them, and other 
places where they do need them. We need the flexibility to be 
able to transfer them to the appropriate places.
    Mr. Pearce. Thank you, sir.
    Mr. Chairman, I see my time is expired. I yield back.
    Chairman Hensarling. Gentleman yields back.
    Chair will now recognize the gentleman from Massachusetts, 
Mr. Capuano, for 5 minutes.
    Mr. Capuano. Mr. Chairman. Thank you, Mr. Secretary, for 
being here. I would like to yield my time to the ranking 
member, Ms. Waters.
    Ms. Waters. Thank you very much, Mr. Capuano.
    I have serious concerns about the potential conflicts of 
interest with regard to HUD funds that are contributing to the 
profits of multifamily developments owned in part by the 
President and his son-in-law, Jared Kushner.
    Do you think it is appropriate that the President and his 
family are profiting from Federal Government funding intended 
to support low-income families?
    Secretary Carson. If you can give me a specific example, I 
can address that question.
    Ms. Waters. I want to know if you think it is appropriate 
that the President and his family are profiting from any 
Federal Government funding intended to support low-income 
families.
    Secretary Carson. I don't think it is appropriate for 
public officials in general to do that.
    Ms. Waters. OK. Do you stand by the President's decision 
not to divest himself of his interest in properties that 
receive HUD funding?
    Secretary Carson. I think the best thing to do is tell me 
specifically what you are talking about, and then I can address 
it.
    Ms. Waters. What have you done to ensure that HUD is 
properly handling these unprecedented conflicts of interest?
    Secretary Carson. Again, if you can tell me what the 
specific thing is, I can address it.
    Ms. Waters. These properties that are owned in part by the 
President or Mr. Kushner are also reportedly in very bad 
condition. You know Starrett City, don't you?
    Secretary Carson. Yes, I know of it.
    Ms. Waters. For example, which is part owned by the 
President--you know that, don't you?
    Secretary Carson. I do know that he has--
    Ms. Waters. And you know it has received increasingly--
    Secretary Carson. --A small part ownership of that.
    Ms. Waters. --Declining HUD inspection scores. You know 
that, too, don't you?
    Secretary Carson. Do I know what, now?
    Ms. Waters. That it has increasingly declining HUD 
inspection scores.
    Secretary Carson. I know that there are problems there, 
yes.
    Ms. Waters. But, specifically, do you know that Starrett is 
a problem, that they have received increasingly declining HUD 
inspection scores? Do you know that?
    Secretary Carson. I know what is necessary to know as the 
secretary of HUD, regarding that. Do I know all the numbers 
about Starrett--
    Ms. Waters. No, I don't want you to know all of the 
numbers. All I want you to know is about Starrett. Starrett--
everybody kind of knows a lot about Starrett, and it is 
partially owned by the President.
    You are the HUD secretary, and you are in a conflict of 
interest situation. And I just want to make sure you understand 
what you are overseeing. Do you know that they have declining 
HUD inspection scores?
    Secretary Carson. I know that they have been having 
difficulty.
    Ms. Waters. OK, so you know that they have not passed 
inspection. What are you doing to ensure that these HUD 
residents are not suffering as a result of poor management and 
lack of investment by its profit-motivated owners?
    Secretary Carson. Of course, we oversee the PHAs that are 
involved with that, and work with them, as we do with the ones 
all around the country.
    Ms. Waters. We have learned that the owners of Starrett 
City--the biggest project-based Section 8 contract in the 
country, of which Trump is part owner, are planning to sell the 
property. This sale is already rife with controversy, as 
infighting between the ownership is playing out in public.
    To date, we have no knowledge of how HUD approves the 
transfer of Section 8 contracts when a property is not FHA 
insured or HUD-held, as Starrett City is, because HUD has not 
published its process.
    HUD has the ability here to insist upon things like robust 
tenant protections and longer affordability requirements, but 
the process is frankly unknown. Have you gotten involved with 
this? It is a big issue.
    Secretary Carson. We have a very well-formulated group that 
deals with these kinds of issues, and they will deal with this 
one in the same way that they deal with all such issues. There 
won't--
    Ms. Waters. So they have not--
    Secretary Carson. --Be anything that is done differently 
here than has been done.
    Ms. Waters. --They have not kept you apprised of what they 
are doing?
    Secretary Carson. Excuse me?
    Ms. Waters. Are you satisfied with the progress that they 
are making?
    Secretary Carson. They will handle this as they have 
handled all things, and it has--
    Ms. Waters. So you don't know? They have not kept you 
apprised; you don't know whether or not the process is working.
    So I would like a full accounting of the process that your 
department is planning to employ, including all decision points 
and who will make them, should this process move forward. And 
so I want you to commit to that because, again, this is a big 
project that is owned partially by the President of the United 
States.
    And I want to know how this sale is going to work, what 
kind of protection these tenants are going to have. And you 
should keep yourself apprised of it, because I am going to want 
to know, as others will want to know, how it is progressing.
    Secretary Carson. We will be happy to work with you and 
your staff to disseminate that information.
    Chairman Hensarling. Time of the gentlelady has expired.
    The chair now recognizes the gentlelady from Missouri, Mrs. 
Wagner, chairman of our Oversight Investigation Subcommittee.
    Mrs. Wagner. Thank you, Chairman Hensarling, and thank you, 
Secretary Carson, for your testimony this morning, for being 
here. Welcome; we know that you have been on the job for a 
brief for 5 or 6 months. We are glad to have you in front of 
the committee for the first time.
    Secretary Carson. Thank you.
    Mrs. Wagner. As you know, the Committee Development Block 
Grant program, CDBG, is HUD's third-largest program. But what 
is often forgotten is that the CDBG disaster relief program, 
which is designed to help communities and neighborhoods recover 
from costly disasters--while the committee has long been 
concerned by the previous administration's misuse of Community 
Development Block Grant disaster relief funds, it is important 
to note that Congress recently provided the program with $7.4 
billion in funding.
    Understanding again, that you have only been with HUD since 
March and this is the first disaster relief effort you have 
been involved in, are you aware, Mr. Secretary, of some of the 
problems--some of the concerns of the program, especially 
regarding prior misuse of funds? And what importance do you 
place on making sure these programs go to the Americans who 
need them most?
    Secretary Carson. First, I will thank you for that 
question. It is very important to point out that CDBG and CDBG-
DR are different programs--
    Mrs. Wagner. Correct.
    Secretary Carson. And CDBG-DR has been, obviously very, 
very important in disaster situations like the ones that we 
have recently seen. There are very good things that have been 
done through the program. And there are some things that 
perhaps are quite questionable that have been done.
    It doesn't mean that we are not recognizing the things that 
are good that have been done, and the things that need to be 
done in terms of infrastructure and redevelopment and 
development of communities. And those things will continue to 
be done, without question.
    So, I am not questioning the things that have been 
effective and that have worked. We are questioning the things 
that have wasted taxpayers' money. And we have a way of 
reforming those things.
    Mrs. Wagner. Wonderful. I am glad to hear that, Mr. 
Secretary.
    As the chairman of the Oversight and Investigations 
Committee here on Financial Services, we are going to be 
looking into the program, and--in even a potential upcoming 
hearing.
    And I just ask for your commitment and cooperation to work 
with this committee on finding those very solutions that will 
improve effectiveness, efficiency, and probably most 
importantly, taxpayer accountability regarding the Community 
Development Block Grant disaster relief program.
    There are ways, I think, for rules--putting rules for the 
program in statute, limiting--putting limits on money, 
deadlines, perhaps recapturing of funds, even just better 
tracking of funds. So I hope that you will be willing to work 
with us.
    Secretary Carson. And all of those things will be done. And 
that is why we have--we put together a more businesslike 
approach. And we will be looking forward to working with you on 
that.
    Mrs. Wagner. I appreciate it.
    Staying with that theme, I wanted to go back to something 
you said in your testimony. And I quote ``While pursuing his 
mission to provide safe, decent and affordable housing for the 
American people, the HUD team is also cognizant of its vital 
duty to be good stewards of taxpayer dollars and, like the 
medical dictum''--I love this the best--``to first do no 
harm.''
    Having spent $1.6 trillion in taxpayer funds since its 
creation in 1965, is HUD--just a broad question--is HUD making 
life better for American cities and other communities?
    Secretary Carson. A lot of good things have been done. 
There is no--I don't--I don't want to disparage the efforts 
that people have put into this. But I see all the things that 
have been done before as stepping stones to help us to get to 
where we want to be. And, I have a tendency--not to spend a lot 
of time disparaging people.
    Mrs. Wagner. I appreciate that. I am interested to know how 
HUD--how you--what your perspective is on measuring success, 
beyond the number of programs it serves or creates, or the 
amount of money spent.
    Secretary Carson. I think success for us will be, not the 
number of people we get into these programs, but how many 
people we get out of it, how many people actually climb that 
ladder of success and become self-sufficient. And that is what 
our programs are all going to be aimed at.
    Mrs. Wagner. Mr. Secretary, I find your approach refreshing 
and uplifting. I thank you for your testimony here today. And, 
Mr. Chairman, I yield back.
    Chairman Hensarling. Time of the gentlelady has expired.
    The chair now recognizes the gentleman from Georgia, Mr. 
Scott.
    Mr. Scott. Yes, Mr.--Secretary Carson. Tell me, why do you 
think President Trump asked you to be secretary of HUD?
    Secretary Carson. Probably because, before I endorsed him, 
we spent a lot of time talking about what was happening 
particularly in some of our disadvantaged communities, and how 
we really needed to recognize that, if we are going to succeed 
as a Nation, all those people have to succeed as well.
    Mr. Scott. Let me ask you this. It just seems to me that--I 
believe that the President put you there to give cover to 
cutting and eliminating the CBDG program. Let me tell you why.
    First of all, this is--this is the crucible of the whole 
argument. You should be at the forefront of telling the great 
story of success of the CBDG program, the fact that it has 
created and retained 386,000 jobs for low and moderate-income 
people.
    The CBDG program has benefited 42 million low and moderate-
income persons through public improvements, including senior 
citizens, child care centers, centers for people with 
disabilities, veterans, veterans with disabilities. It has 
benefited 133 million low, moderate-income persons through 
public service, like employment training. The funds have been 
used to assist credit-worthy working families with down 
payments and closing cost assistance on their homes.
    You should be out here shouting the success of this 
program, but rather, I believe that the President has you there 
to give cover to cutting this program and eliminating it. Here 
is what you told the New York Times, Mr. Carson, when this 
issue was brought up.
    In July of this year, you said, ``I know that the CBDG has 
been called out for elimination.'' You said that. ``I know that 
the CDBG program has been called out for elimination.'' Was it 
President Trump that called that out? Who else could?
    My impression is that what the President is really saying 
is that there are problems. And you said this: ``I think it was 
someone on his staff who kind of said, well, maybe we should 
just get rid of the whole CBDG program.''
    I am here to tell you, Mr. Secretary, I am not going to let 
you do that, and I believe we have enough Democrats and 
Republicans, because this is a bipartisan program that is doing 
well.
    And you would do well, Mr. Secretary, to stand up and fight 
back in this administration. It needs help, when it comes down 
to dealing with hurting Americans. And you are in this 
position, being Secretary, not just because of what you said. 
``Well, even if we cut these funds, I believe that the American 
people are a compassionate people.''
    Mr. Secretary, you should know better than anyone that 
compassion alone won't do it. It wasn't compassion alone that 
got you sitting where you are right now. Somebody had to give 
you and your family and others a financial helping hand.
    We need you to speak up and fight back in this 
administration. Talk that talk.
    Chairman Hensarling. The time of the gentleman has expired.
    The chair now recognizes the gentleman from Missouri, Mr. 
Luetkemeyer, chairman of our Financial Institutions 
Subcommittee.
    Mr. Luetkemeyer. Thank you, Secretary Carson. I am over 
here.
    Secretary Carson. OK.
    Mr. Luetkemeyer. Welcome.
    Last year, President Obama signed into law the Housing 
Opportunity Through Modernization Act of 2016, legislation I 
introduced with my friend and colleague from Missouri, Mr. 
Cleaver. He is here this morning.
    Part of the legislation required the FHA to streamline 
rules that apply to condominiums. Last September, the 
department published a proposed rule, and just for timing's 
sense, can you give us a sense of timing on the final rule, 
when you anticipate it being--coming out and being finalized?
    Secretary Carson. Yes. There were like 28 different 
sections that had to be satisfied, three-quarters of which have 
been satisfied. So we are coming down the home stretch on that. 
And it is really very important because condominium purchase is 
frequently the first step into homeownership.
    And homeownership is a vitally important part of the 
economy of our Nation. And wealth accumulation--it is the 
primary source of wealth accumulation. The average homeowner 
has an accumulated wealth of $200,000; the average renter, 
accumulated wealth of $5,000.
    So it is a big issue and one of the reasons that I am 
looking for ways to get a lot of people who are relatively 
complacent with renting to be homeowners. But we have to do it 
in a responsible way.
    Mr. Luetkemeyer. Appreciate the comment.
    Last month, the Congressional Budget Office released a 
report entitled ``Options to Manage FHA's Exposure to Risk from 
Guaranteeing Single-Family Mortgages.'' The purpose of the 
report was to provide policy options that are designed to 
further the true mission of FHA, while also improving the 
agency's financial position. I assume your staff has read that 
report.
    Secretary Carson. Yes, they have.
    Mr. Luetkemeyer. And are you aware of it?
    Secretary Carson. I have--we have had some discussions.
    Mr. Luetkemeyer. OK. What--of the provisions that are in 
there, are you looking at implementing some of those? Or are 
you able to talk about some of it yet that you have some plans 
on? Or are you just still reviewing the report?
    Secretary Carson. Those are things that obviously we would 
be very happy to work with you on. I am looking forward to 
having an FHA commissioner involved in those discussions, as 
well.
    Mr. Luetkemeyer. You have an idea of when that individual 
will be appointed?
    Secretary Carson. I am hoping, very shortly. It has been 
quite an ordeal getting people in place.
    Mr. Luetkemeyer. I understand.
    As housing costs continue to grow and demand for rental 
housing continues to escalate, but incomes for many low-income 
families remain stagnant--given these realities, demand for 
affordable housing has increased dramatically since the 
economic crisis. What innovative programs are the 
administration considering to provide access to housing?
    Secretary Carson. As you probably know, right now, we are 
only able to provide about one in four or one in three people 
with affordable housing who are looking for it. We have an 
extensive waiting list.
    And one of the things that is really helping to cut down on 
the backlog of people are some of these public-private 
partnerships, particularly through the RAD programs, that have 
that taken these places that have the big backlogs of capital 
improvements that need to be made and, by partnering with the 
private sector and through LIHTC and things of that nature--
creating vast numbers of affordable units.
    I was in Florida and Miami recently, Liberty Square, where 
they are demolishing 700 units and replacing them with 1,600 
units, which are very nice and are complete neighborhoods. 
Those are the kinds of things that will help us to make 
progress, and will make progress a lot faster than we did with 
the old model.
    Mr. Luetkemeyer. I have only a minute left, but I was just 
kind of curious--you talked about the hurricane relief that you 
are working, improvising--providing some housing solutions. Can 
you elaborate a little bit more on and explain?
    We have had three major storms here, and had another storm 
hit last week. How is your agency providing relief and help for 
those folks?
    Secretary Carson. This is an unprecedented situation that 
has occurred with this level of hurricane activity so close, 
one after another. We have been involved with each thing. Even 
before it hit, we had people on the ground--volunteers on the 
ground, assessing what the needs are.
    How many people do we have who have been displaced? How 
many units are there. In Puerto Rico, for instance there are 
203 multifamily units with over 2,100 units, and the vast 
majority of those are assisted housing.
    Finding out what happened to those people, where are they 
located and how can we get them most quickly back into things--
the initial response is through FEMA, and we work very, very 
closely with them. We rely upon their numbers to help with the 
long-term recovery aspects of what we do.
    Mr. Luetkemeyer. Thank you very much. My time is expired.
    Chairman Hensarling. Time of the gentleman has expired.
    The chair now recognizes the gentleman from California, Mr. 
Sherman.
    Mr. Sherman. Thank you. Lot of focus on the FHA program--
the prior administration was in the process of implementing a 
25-basis-point reduction of the premium that would have saved 
the average borrower $500 in the first year, and more in high-
cost areas like mine. A million homeowners would have 
benefited, and they would have saved over $27 billion.
    In your confirmation--of course the--before you were 
nominated, the administration halted that plan to reduce the 
premium by 25 basis points. During your confirmation, you 
agreed to look at that policy with the possibility of 
reinstituting that 25 basis points of decline.
    We also see that, back in--until 2013, you stopped making 
premiums when you reached a loan-to-value ratio of 78 percent. 
You had 22 percent equity in the property, and at that point, 
it was thought you did not need insurance to make insurance 
premium payments. That was reversed in 2013.
    Are you moving toward, perhaps, reducing the insurance 
premium by 25 basis points? And are you examining going back to 
the policy of saying, ``Once you have 22 percent equity, you 
don't have to make premium payments''?
    Secretary Carson. Certainly both of those things are under 
study, being looked at very carefully. I personally don't want 
to make the commitment in terms of either one of them right 
now, because we are so close to having an FHA commissioner. But 
do bear in mind that we want the prices of homeownership to be 
as low as possible, while still protecting the taxpayers.
    Mr. Sherman. And how will the recent reverse-mortgage 
changes impact the Mutual Mortgage Insurance Fund, the FHA 
Insurance Fund? And do you expect additional changes to the 
reverse-mortgage program?
    Secretary Carson. When the reverse-mortgage program was 
initiated, I think it was done with very good intentions, but 
without really looking down the pike. And people were taking 
out much larger amounts of their equity, in the beginning, than 
was sustainable. And this was leading to a lot more problems 
than it was helping.
    It has also resulted in a much higher default rate, and 
that has been a big drain on the MMIF. So the changes that we 
have made will sort of stop the bleeding, in terms of new 
mortgages--or reverse-mortgages.
    And the forward mortgage program is doing extremely well. 
So we are doing some draining from the reverse-mortgage, but we 
are doing a lot of putting into the fund from the other. So we 
are very close to the 2 percent right now.
    Mr. Sherman. Thank you.
    Secretary Carson. We obviously need to watch further before 
we do--
    Mr. Sherman. I want to get into--to one other issue. Beyond 
your responsibilities for Housing and Urban Development, you 
have other responsibilities under the Constitution, along with 
other Cabinet secretaries, particularly Section 4 of the 25th 
Amendment. And we all live by this Constitution.
    Section 4 deals with the possibility that a President is 
unable to discharge the powers and duties of his office. Have 
you taken the time to get legal counsel to brief you on what 
your responsibility is, as a Cabinet secretary, under the 25th 
Amendment?
    Secretary Carson. I have not had any in-depth discussions 
of that.
    Mr. Sherman. I would urge you to do so. This amendment was 
written in the early 1960's as a result of what we--life that 
happens, whether it is the dangers that a President faces, 
whether it is the health problems a President can face.
    I would urge you first to get legal counsel, to know what 
your responsibilities are, and second, to discuss with other 
Cabinet officers how you would implement Section 4 of the 25th 
Amendment.
    I yield back.
    Chairman Hensarling. Gentleman yields back.
    The chair now recognizes the gentleman from Kentucky, Mr. 
Barr, committee chair of our Monetary Policy and Trade 
Subcommittee.
    Mr. Barr. Thank you, Mr. Chairman. And, Secretary, welcome 
to the committee and--
    Secretary Carson. Thank you.
    Mr. Barr. --Thank you for your service, not just as a 
public servant, as secretary of the department, but also as a 
physician in private life, and for helping so many children, 
and most of all, for the example that you have set that hard 
work, integrity, persistence--that those are values that are 
critical to escaping poverty. And thank you for expressing the 
viewpoint that many of us have, that government dependency 
often undermines those values.
    As we have talked many times, my district in Kentucky 
unfortunately has one of the highest opioid addiction rates in 
the country. Unfortunately, the Commonwealth of Kentucky 
suffers from the third highest drug overdose mortality rate in 
America.
    But the good news is that I have seen success of evidence-
based transitional housing programs, including St. James Place, 
Recovery Kentucky, Revive, Shepherd's House. These are 
organizations that help individuals coming out of recovery 
and--transition back into the work force through job training, 
financial literacy and counseling services.
    Unfortunately, HUD's Housing First program has not been 
helpful; individuals who come out of addiction rehabilitation 
are placed in housing situations where their neighbors are 
abusing the very substances that they once abused themselves. 
This contributes to a cycle of addiction that tears apart our 
communities and also is very costly to the American taxpayer.
    Does HUD have any plans to address this issue, in light of 
the opioid epidemic? Have you considered the need for support 
of transitional housing programs as an alternative to the very 
counterproductive Housing First program?
    Secretary Carson. The homelessness is a big issue, and I 
think one that we as a Nation actually have the opportunity to 
resolve. Housing First, I think, gets a bad name because people 
think we are just getting people off the street, and then we 
are forgetting about them. And maybe some people have done it 
that way. We are not doing it that way now.
    We believe in Housing First, housing second and housing 
third. Housing First--you get them off the street because you 
leave them under that bridge for a year, they are going to end 
up in an emergency room, frequently end up getting admitted.
    A week's admission costs as much as a year or more of 
housing, so that really doesn't help us very much. There are a 
lot of statistics I can give you in terms of how much they cost 
when you don't house them, versus when you do.
    But--so you get them housed first. Second, you diagnose why 
they were in that condition. That is critical. And, in housing 
third, you fix it. So, I don't think it is appropriate just to 
get them off the street and forget about them and move on to 
the next project.
    Mr. Barr. Thank you, Secretary, for that answer. And I also 
appreciate your desire to see greater flexibility in HUD-VASH, 
and seeing the success in HUD-VASH. St. James Place, my 
district--I have invited you to come see what they are doing 
with HUD-VASH.
    The flexibility that you are requesting--we want to help 
you with that, because organizations like St. James Place are 
using the HUD-VASH program to great success, requiring work, 
requiring sobriety, helping these people, not just measuring 
success by how many veterans they are housing, but how many 
veterans are leaving and graduating that program.
    And again, I want to invite you to come--
    Secretary Carson. OK.
    Mr. Barr. --See the good folks at St. James Place in 
Lexington, Kentucky.
    Dr. Carson, I introduced an amendment on the House floor 
last month to stop overreach by your department. And that 
amendment prohibited HUD from using funds to implement, 
administer or enforce three HUD actions inconsistent with 
statute and negatively impacting manufactured housing.
    As you can imagine, in rural Kentucky, manufactured housing 
is a terrific affordable housing opportunity for many of my 
constituents. As the leader of HUD that regulates manufactured 
housing, can you undertake an effort to comprehensively review 
all of these regulations impacting manufactured housing, and 
direct your team to utilize this information so that any new 
regulations do not have unintended cost consequences?
    Secretary Carson. Yes, we have a regulatory reform 
committee that has been formed at HUD for purposes just like 
that.
    Mr. Barr. Thanks for that.
    And finally, while we all abhor discrimination, the prior 
administration enacted regulations that you described in a 2015 
Washington Times op-ed as government-engineered attempts to 
legislate racial equality, that create consequences that can 
make matters worse.
    This is, of course, the disparate impact regulation. Is HUD 
actively working to ensure--to revise that 2013 rule, to avoid 
the problems you outlined in your article?
    Secretary Carson. We are making things logical, making 
things make sense. So, the Fair Housing Act of 1968 was one of 
the greatest pieces of legislation ever. I am a big fan of it, 
and certainly don't want any discrimination of any type going 
on under my watch.
    But we also don't want regulatory burdens to impede our 
ability to get things done, and we don't want to penalize small 
municipalities that don't have the ability to hire consultants 
and do all kinds of things to comply with those issues--
    Chairman Hensarling. Time--
    Secretary Carson. So logic takes--
    Chairman Hensarling. --Time of the gentleman has expired.
    The chair now recognizes the gentleman from Missouri, Mr. 
Cleaver.
    Mr. Cleaver. Thank you, Mr. Chairman.
    Again, thank you, Mr. Secretary, for being here. And I 
don't want to be melodramatic, but, when I was elected, I 
didn't--you know the press said, ``What do you want to do?'' 
And I don't want to be speaker, I don't want to be assistant 
speaker, I don't want to be the person in charge of trash, 
whatever.
    All I wanted was to be on the subcommittee on housing--only 
thing I ever--that was my biggest aspiration, coming to 
Congress. And it was because of my background, and what I had 
seen, and what I--what has hurt me personally, and many other 
people over the years, which is when people make disparaging 
comments about people living in public housing.
    You and I grew up very similarly, so, you know--you know 
that that is not something that can give you great joy. My 
father, living in his home today, I--my goal is to never let 
him know ahead of time that he can watch us on C-SPAN, because 
I don't want him, having done all the work he did to get four 
kids out, to hear some of the things that people 
unintentionally say, because this is the house I lived in for 7 
years.
    Six people--my mother, my father and my three sisters--7 
years. My father worked three jobs, like a lot of the other 
people in our community--three jobs. Willie Taylor, Nelson, 
Katie Boston, Percy Cleveland, Troy Criner--classmates of 
mine--their parents were doing the same thing.
    I have never heard a person, as of today, say, ``Boy, I can 
hardly wait to get my own public housing unit.'' This is a 
serious thing to me, my family and a lot of other people.
    My goal is to do something, before I leave here, more than 
I have done, and hopefully, can inspire others to want to do 
something--to do some major overhauls of some of our policies. 
And Mr. Luetkemeyer and I were able to do 3700 together, and I 
want to ask you a question about that.
    But I want it to be known that helping one family will not 
change the world, but it will change the world for that one 
family. And people want help, and they need it from time to 
time.
    If you look at 17 in Genesis, when Abram left Ur to the 
land--going toward the land of promise, he stopped at a place 
called Haran. Many theologians call that the halfway house. He 
stayed there until he could find a better route to get to the 
Promised Land.
    Public housing is Haran. A lot of people stay there until 
they can get someplace else. My father--my father sent my 
mother to college from when I was almost in the seventh grade.
    I yield back the balance of my time.
    Chairman Hensarling. Gentleman yields back.
    Chair now recognizes the gentleman from Michigan, Mr. 
Huizenga, chairman of our Capital Markets Subcommittee.
    Mr. Huizenga. Dr. Carson, up over in this corner, over here 
to your right. A little further to your right, here.
    Secretary Carson. That right.
    Mr. Huizenga. Yes. I know, with the configuration, it is 
sometimes difficult. And I see my colleague has just left, and 
I know it was very emotional for him. I think this is a very 
emotional issue for a lot of us.
    I, in my family, have--I have a father who was born in 
1921. He passed--passed away a year-and-a-half ago. My mother 
was born in 1931. They lived through the Depression. My mother 
lived in Flint--that is where she was born and raised.
    Recently, with the Flint water crisis that was going on, I 
went and visited. I asked my mom for a couple of the addresses 
where her family had moved around to. And I had--I am getting 
choked up, myself. I had my fourth son with me, who was 13. And 
I stopped. I stopped the car in front of the houses, and the 
house--the main house that my mother grew up in.
    And I had cousins and uncles and aunts that all lived 
there. In fact, I had one of my cousins, frankly, reprimand me 
and ask me, ``What in the world were you doing in that 
neighborhood?'' I know how hard people have worked to get out 
of those situations. I saw it. I witnessed it. I have seen it 
with my own mom, as well.
    And it pains me that my colleague, my friend, has felt that 
he has heard disparaging remarks about those who live in public 
housing. That was his quote. I wrote it down. And he said, and 
this is--this is the inspirational part, ``A lot of people stay 
until they can get somewhere else.''
    And I know that is my goal. I believe that is his goal. I 
trust that that is your goal as well. And I think the question 
and the debate that we have is, how do we get that to happen? 
How do we allow that? Because, as I have seen some of your 
discussions and we have had a chance to talk in the past, not 
everybody takes advantage of those opportunities to move ahead, 
or to get out of a particular situation.
    And I believe what you are doing with moving to work to 
allow flexibility for these public housing authorities, to 
attract private-sector folks in there, attract these outside 
opportunities, is commendable. And it is my understanding that 
about 55 percent of able-bodied adults receiving housing 
assistance are working. And that, to me, is a key.
    How do we--how do we make sure that we are giving those 
folks who are working hard--non-senior citizens, non-disabled, 
the able-bodied, working--or able-bodied individuals, you 
know--do you support these work requirements and those things 
that are being tried to sometimes nudge people out of a comfort 
zone?
    Secretary Carson. Thank you for asking that question. We 
all come at this from different angles and different life 
experiences. But, when you really sit down and talk to people 
from all these different places, we all really have similar 
wants and desires, and we allow ourselves sometimes to be 
manipulated into thinking that we are enemies.
    We are not enemies. And, this issue of getting people to 
excel and realize the talent that God has given them--it is a 
serious issue because, there are those who would have everybody 
believe that you are a victim, and that everybody is against 
you.
    We need to be concentrating on how can we actually get 
people to climb that ladder of opportunity. We have to 
recognize things like education. It doesn't matter where you 
come from or your background, if you get a good education in 
this country, you are going to write your own ticket. We need 
to emphasize that. That needs to be integrated into our living 
situations, as well.
    Health care needs to be taken out of the political arena. 
We need to be putting clinics into our neighborhoods so that 
people don't use the emergency room as their primary care. That 
costs five times more, and also, you wind up with all the stage 
IV diseases because people don't have consistent care.
    All of these kinds of things, we can solve, if we as 
Americans are willing to work together and not allow ourselves 
to be polarized.
    Mr. Huizenga. In closing seconds, I believe that we need to 
look at how current housing assistance programs either 
incentivize that, or hinder that opportunity. And hopefully you 
will be able to talk more about that.
    Secretary Carson. Absolutely.
    Mr. Huizenga. Thank you.
    Chairman Hensarling. Time of the gentleman has expired.
    The chair now recognizes the gentlelady from New York, Ms. 
Velazquez.
    Ms. Velazquez. Thank you, Mr. Chairman.
    Dr. Carson, I am here. I am the only member who is a Puerto 
Rican American citizen who sits in this committee. So, since I 
don't have the--President Trump in front of me, I just would 
like for you to let him know how shameful all the tweets that 
he put out this morning--how offended and insulted I am as an 
American citizen.
    And I would like to suggest that the President get some 
history lessons regarding the Puerto Rican relationship with 
the United States. In 1898, American troops invaded Puerto 
Rico. American troops took over Puerto Rico.
    In 1917--so Puerto Ricans didn't invite the United States 
Armed Forces. It was invaded. So with that invasion comes 
responsibility. In 1917, American citizenship was imposed on 
Puerto Ricans--timely, so that they could join the Armed Forces 
and fight in World War I.
    So those tweets are unPresidential. The most basic, 
fundamental responsibility of the President of the United 
States, the President of the most powerful country in the 
world, is to show up and make--and provide the assistance and 
the relief that American citizens needs.
    They don't need this type of insult. And by the way, why is 
it that he doesn't put the same tweets when it comes to Texas 
or Florida? You invaded Puerto Rico. We invaded--the United 
States of America invaded Puerto Rico.
    My uncle participated in the Korean War. We shed blood to 
defend the freedoms that every American in this country enjoys. 
So to kick fellow citizens when they are down is shameful.
    You said that you are providing assistance for those who 
lost their homes in Puerto Rico. I hear from the National Low 
Income Housing Coalition and affordable housing groups on the 
island that the Federal Government's housing response has not 
been sufficient.
    What are you doing? In my hometown, Yabucoa, we lost 10,000 
homes that were destroyed. What kind of assistance are you 
providing?
    Secretary Carson. Thank you for asking that question. And, 
I too sympathize greatly with the people who have lost so much. 
There are 114,000 single-family homes that are FHA-backed, and 
that--many of them have sustained significant damage.
    Our people are on the ground, including one of our 
associate senior assistant secretaries, Nelson Bregon, who is a 
Puerto Rican and has been extraordinarily helpful to me. He has 
moved over there. We have dozens of others--
    Ms. Velazquez. So what kind of assistance are you providing 
for those who lost their homes?
    Secretary Carson. --Dozens of others who have gone over 
there.
    And what we are providing is insurance for those who have 
lost their homes through Section 203(h), 203(k) for 
rehabilitation of homes.
    Ms. Velazquez. Dr. Carson, are you working with some 
housing groups on the ground?
    Secretary Carson. And I will be going to Puerto Rico myself 
next week.
    Ms. Velazquez. That is great, but that doesn't provide the 
assistance that they need today. People are dying.
    Secretary Carson. I am very--
    Ms. Velazquez. And it is the reason--it is the rainy season 
in Puerto Rico. I understand that FEMA promised to bring parts 
for roofs that were lost. It is the rainy season. People are 
dying today.
    Secretary Carson. FEMA is the first responder there. They 
are gathering information. We are working with them in that 
process for the long-term recovery.
    Ms. Velazquez. Dr. Carson, when you were nominated by the 
President, I said, ``What does he know about housing?'' But 
then, you are a doctor, and you said that you are going to take 
care of those who are suffering from health issues in public 
housing.
    I see a disconnect between your confirmation hearings and 
your commitment to address the issue of asthma, respiratory 
illnesses in public housing, and cutting $2 billion out of the 
capital and operating funds for housing.
    Do you believe that--
    Chairman Hensarling. The time of the gentlelady has 
expired.
    The chair now recognizes the gentleman from California, Mr. 
Royce.
    Mr. Royce. Thank you, Mr. Chairman. Mr. Secretary, at the 
outset here, I just wanted to invite you to come to my 
district, especially out to San Bernardino, California, where 
the housing authority is working on a Moving to Work program.
    It is an agency that has been up and running for some time 
there, and it is running very, very effectively. And they have 
had a number of successful self-sufficiency programs, including 
homeownership programs and term limits on those, and work 
requirements. We would love to have you see this firsthand, if 
you could.
    Secretary Carson. Sure.
    Mr. Royce. Wanted to extend that. And I was wondering if 
you could talk a little more about what the department is doing 
to advance MTW, as it is called, the Moving to Work program, 
and other sustainable best practices which lift people out of 
their situation, and on to economic independence.
    Secretary Carson. Sure. Thank you for that question. The 
Moving to Work initiative really was to provide various 
municipalities with the ability to be flexible, recognizing 
that they were probably the people who best knew what their 
needs were. And this really allows for a significant amount of 
innovation.
    The first 39 districts that benefited from this have 
produced some pretty good results, and that has resulted in us 
extending the program to another 100 communities over the next 
7 years.
    I am hopeful that we will be able to go far beyond that. 
And we look forward to working with you on ways that we can 
expand that program. We are looking for everything that is 
highly effective.
    Mr. Royce. Very good.
    Secretary Carson. And, some of the programs that have been 
talked about here this morning have had some components that 
are highly effective. We are going to make sure that we learn 
from those things and continue to push those things. There may 
be different mechanisms to do it, but we are not going to 
abandon those things. That would be foolishness.
    Mr. Royce. And two other questions. One is the department 
is reviewing its policy to allow PACE liens on FHA finance 
loans. As you know, the defaults on these loans are on the 
rise. And I was going to ask if you could comment on when you 
might make a decision on whether to withdraw the current 
mortgaging letter or clarify how the FHA will treat these PACE 
loans.
    Secretary Carson. Obviously it is a serious issue when you 
put in the first lien position somebody other than the major 
lender--
    Mr. Royce. Exactly.
    Secretary Carson. --That is an issue.
    Mr. Royce. It is very concerning to us.
    Secretary Carson. Yes, that is very concerning to me too, 
and we are taking that into consideration. We will have a 
decision on that soon.
    Mr. Royce. And one last question--as you know, Mr. 
Secretary, the GSEs have engaged in significant credit risk 
sharing transactions. This shields American taxpayers to some 
extent, and Gwen Moore and I have a bill to get them to do even 
more in terms of that approach.
    I have been told that the FHA may have the authority to do 
similar risk sharing transactions, or at least purchase 
coinsurance to reduce the risk to the public.
    I think this could be a very constructive means of reducing 
taxpayer exposure. Would you support legislation here or 
regulatory clarification of FHA's existing authority to explore 
credit risk sharing?
    Secretary Carson. We have already engaged in some 
discussions on that, are continuing those. I am looking forward 
to having an FHA commissioner, but I agree with you that that 
is an area ripe for discussion and movement.
    Mr. Royce. Thank you, Secretary Carson, and I will yield 
back. Appreciate it.
    Chairman Hensarling. Gentleman yields back.
    The chair now recognizes the gentlelady from Ohio, Mrs. 
Beatty.
    Mrs. Beatty. Thank you, Mr. Chairman, and thank you, 
ranking member.
    And, to the witness, thank you for being here. I have a 
series of questions and, for the sake of time to get through 
them, many of them, Mr. Secretary, I will ask you to simply 
affirm or deny with a yes or no vote.
    On July 12th, I sent you a letter, signed by more than 15 
or 20 of my other colleagues as Members of Congress. And in 
that letter--and I want to, Mr. Chairman, enter that letter 
into the record.
    Chairman Hensarling. Without objection.
    Mrs. Beatty. So first of all, I want to know, did you 
receive the letter and read it?
    Secretary Carson. I don't know what was in the letter, so I 
can't tell you whether I received it.
    Mrs. Beatty. OK. It was requesting that you follow through 
on your predecessor's decision to lower these annual premiums, 
citing the fiscal strength of the fund and historically low 
homeownership rates, especially among first-time home buyers.
    Secretary Carson. Certainly I have had some correspondence 
on that. So it was probably your letter.
    Mrs. Beatty. So did you respond to it and I didn't get it? 
Is that what you are saying? You read it. Did you respond to 
it? Or I am--
    Secretary Carson. I personally did not. Did my staff 
respond to you? I don't know.
    Mrs. Beatty. I think we did, from--some intergovernmental 
relations person sent us a paragraph. It was--it didn't--it did 
not, in my opinion--it did not answer my question.
    Secretary Carson. OK, I can answer for you now.
    Mrs. Beatty. I guess the reason I am asking you this--is it 
your practice, when members of the U.S. Congress sends a letter 
personally addressed to you, that you pass it on to a 
congressional intergovernmental--I don't know what that person 
does--relations person, to say that they have received it? I 
did not address it to them.
    Secretary Carson. Yes, many letters that come do not--
    Mrs. Beatty. Many letters from Members of Congress--
    Secretary Carson. --Do not come--
    Mrs. Beatty. --On the committee that you are testifying 
before?
    Secretary Carson. --Do not come personally to me.
    Mrs. Beatty. No, this was sent personally to you.
    Secretary Carson. I am saying, it may be sent personally to 
me, but it doesn't actually end up in my hands. Somebody else--
actually looking at it.
    Mrs. Beatty. So, you don't get--people write me personally 
all the time. But if a member of--so let me ask a different 
question. So if a Member of Congress is writing to you about 
issues that you are coming to testify before this committee--
you get it, and it doesn't get in your hands, and you say ``Oh 
well, so what,'' and you don't answer?
    Secretary Carson. No, someone else actually goes through it 
first--
    Mrs. Beatty. OK. So, let me ask a different question--
    Secretary Carson. --And then--and then they bring it to me.
    Mrs. Beatty. --For the sake of my time. No. It is my time.
    So I am going to resend the letter, and I want to ask you, 
would you answer the letter that is coming from me and 20 other 
Members of Congress?
    Secretary Carson. If I get the--if the--when the letter is 
brought to me, we will give you a response.
    Mrs. Beatty. No--we, or you? I would like to ask, would you 
respond to my letter?
    Secretary Carson. I can respond to you right now.
    Mrs. Beatty. I have some other questions. So maybe 
afterwards, I will leave the letter with you and you can 
respond to me.
    So, oftentimes, when members come here, you represent not 
only a secretary of housing, but the President. So I have a 
question for you. We have spent a lot of time talking about 
Puerto Rico and the Virgin Islands, so this can be yes or no.
    Do you think it was Presidential for President Trump to 
throw paper towels, when he was in Puerto Rico? Yes or no.
    Secretary Carson. That is not a yes or no question.
    Mrs. Beatty. Sure it is. Yes, it was Presidential, or no, 
it was not Presidential?
    Secretary Carson. I don't believe--
    Mrs. Beatty. Second question; do you think it was 
Presidential when President Trump talked about two members in 
Puerto Rico--that they were messing up the budget?
    Secretary Carson. You know--
    Mrs. Beatty. Was that Presidential, yes or no?
    Secretary Carson. --I think it would be wonderful if we 
talked about what we can do to help our people--
    Mrs. Beatty. Do you think it was Presidential--
    Secretary Carson. --Rather than divide them.
    Mrs. Beatty. --When he asked the people in Puerto Rico how 
many people had died, and then compared it to a greater number 
in Katrina?
    Secretary Carson. Again, I think we should be talking about 
positive things and what we can do to ameliorate the situation.
    Mrs. Beatty. I think you are absolutely right. And for me, 
positive, like Congressman Cleaver--all my life, I have wanted 
to serve on this committee. I didn't live in public housing, 
but I dedicated more than 25 years of my life--my very first 
job, professional job, was working in public housing.
    So let me move to something positive. In this committee, 
Chairman Clayton of the Securities and Exchange Commission 
testified before this committee. He said, although he had not 
asked for more funding in Fiscal Year 2018, that in Fiscal Year 
2019, he would be requesting more money.
    In Fiscal Year 2018, the budget request from HUD, you 
requested a 15 percent cut to your budget. Will you be asking 
for an increase in your fifth--in Fiscal Year 2019? It is 
positive, so I assume you are going to tell me yes.
    Secretary Carson. We may well. We continue to ask for what 
we need, based on information that we derive, so evidence is 
what drives our budget request.
    Mrs. Beatty. Thank you, and I yield back.
    Chairman Hensarling. Time of the gentlelady has expired.
    The chair now recognizes the gentleman from Florida, Mr. 
Posey.
    Mr. Posey. Thank you, Mr. Chairman.
    And, Mr. Secretary, thank you for appearing today, and 
thank you for the character and the integrity, the heart and 
the class and the aspirations that you bring to your position.
    Many people would say that you had maybe one of the best 
opportunities in the world to become a failure, to be dependent 
on government. You proved all the critics wrong, and you became 
the model of success, of achieving the American dream, and 
proof that anyone can do it. And I applaud you for that. I 
think a lot of people applaud you for that, and I applaud you 
for trying to help others do that, too.
    Secretary Carson. Thank you.
    Mr. Posey. Unfortunately, there are a lot of people that 
somehow benefit from people being dependent on government, 
because they think it keeps them being elected. I think self-
sufficiency is the way to go, and you obviously do too. And 
thank you for your efforts to transfer people from dependency 
to self-sufficiency.
    I want to apologize for some of the mean and nasty comments 
made toward you today. They are undeserving. They are attempts 
to shame you, while they criticize the government for 
attempting to shame somebody--the President for attempting to 
shame somebody. That may be logical to some people, but I am 
sure it is probably foreign to you, and you are probably 
wondering about that. Most intelligent people would.
    Secretary Carson. Yes, I am used to it.
    Mr. Posey. Yes. Most intelligent people would.
    But we all have the same people in our districts. They hate 
the President, and they hate anybody that doesn't hate the 
President. So we are going to--they are going to be around for 
a while, so we just get used to it and do the right thing for 
the right reasons, which you have a history of doing.
    Your forward initiative to reimagine how HUD works, to 
restore the American dream and to rethink American communities 
is an awesome plan. And my question to you this morning is, how 
can we become more engaged in helping you achieve those goals?
    Secretary Carson. Thank you very much for your comments, 
and for that question.
    I will be coming back to you, particularly as we continue 
to analyze what works, because, in order to be efficient, we 
need the ability to be flexible and to be able to address 
things quickly so that we don't have to go through so many 
different channels.
    We are not just going to come to you vaguely with something 
like that. We are going to say specifically, ``We need to do X 
and Y so we can get to Z quickly.'' So just be open to that.
    We want to work with you. We want to benefit from your 
collective knowledge, experience and the fact that you 
represent the people. And we are public servants. That means we 
work for the people, they don't work for us. And therefore, we 
need to know, through you, how we can best serve them. But we 
want to work with you to do things in an effective way.
    Mr. Posey. Thank you, Mr. Secretary. Clearly, you have a 
heart of a servant, and you can always count on me, I know, and 
probably most the people here, for our support.
    Secretary Carson. Thank you.
    Mr. Posey. God bless you.
    I yield back, Mr. Chairman.
    Chairman Hensarling. Gentleman yields back.
    The chair will now recognize the gentleman from Washington, 
Mr. Heck.
    Mr. Heck. Thank you, Mr. Chairman.
    Secretary Carson, I have been interested, since I first 
arrived here, in the reverse-mortgage market, and not just 
because it is called the HECM program as an acronym. We were 
able to pass legislation giving you more flexibility at the 
department to run the program, with an eye toward improving its 
financial performance.
    But it has always been hard to get a good sense of how the 
reverse-mortgage program is doing, because the actuarial 
numbers swing so wildly from year to year. In addition, 
although the program is small, compared to the FHA forward 
mortgage program, the swings in reverse-mortgages are so large 
they are pushing around the capital ratio, as you know, for the 
MMI Fund and affecting mortgage insurance premiums for the more 
stable forward program.
    I know you haven't been though a reporting cycle yet for 
these actuarial reports. But I wanted to get your initial 
thoughts on whether you would be open to changes in the 
framework.
    I am thinking about asking GAO to consider options, 
including moving the reverse-mortgage program out of the MMI 
Fund, or creating new forecasting assumptions for the reverse 
program that would create more stability over time and from 
year to year. What are your impressions?
    Secretary Carson. I think that is a very worthy thing to 
pursue. We are looking at, just over the last year, $7.7 
billion out of the MMI because of HECM.
    The changes that we have made as of this month, and all the 
ones that will be going forward from this point, I don't think 
will have that problem. But we still have the residual problem 
there. So yes, I believe that would be a worthy pursuit.
    Mr. Heck. Second, I want to ask about housing. I think the 
cost of shelter is kind of rapidly going out of control in a 
lot of communities, especially my part of the country. I think 
part of the reason for that, personally, is that we have poorly 
designed Federal structure for dealing with housing policy, 
because nobody is looking at the whole picture at all.
    There are no policymakers charged with looking across the 
whole spectrum. It is incredibly siloed. That is not just an 
observation on the number of programs; I am talking about 
policymaking itself. So even if you look at Congress, for 
example, Federal mortgage assistance is spread across 
Agriculture Committee, this committee and the Veterans Affairs 
Committee.
    Even within this committee, the primary mortgage market is 
overseen by Financial Institutions Subcommittee, while the 
secondary mortgage market is in the Housing and Insurance or 
Capital Markets, depending on who is doing the securitizing.
    It may be that a bunch of narrowly tailored programs is the 
best way to address housing costs, although I frankly doubt it. 
But as a result of the silos, I think we address the problem--
each of the problems in isolation.
    So we separate homeownership from rentals, market-rate 
housing from affordable housing, and homelessness from ``the 
rent is too damn high.'' But my view is housing is an 
ecosystem, and all the parts are connected, and especially 
through housing prices.
    You are new to this, this whole world of housing policy, 
and so my hope is that you are kind of looking at it with fresh 
eyes. I am wondering if you see the same thing I do, that we 
deal with this in a fractured and fragmented and siloed way.
    And if you do, do you have any ideas about how we might be 
able to address it so that we can all get about the business of 
ensuring--not just keeping the dream of homeownership alive for 
Americans, but also ensuring that everybody has a good place, a 
good shelter, a good home in which to reside?
    As I say, the number 1 priority here ought to be, blanket, 
pillow, roof. If you don't have a pillow to lay your head on, a 
blanket to cover yourself with and a roof over your head, all 
the other problems in life get amplified very considerably.
    Secretary Carson. We do have to make sure that we will are 
willing to work across different silos so that we can--
    Mr. Heck. Do you see it as a problem?
    Secretary Carson. --We can address it holistically. In the 
past, we have not done that. I have been engaged with--several 
conversations with Secretary Mnuchin, as well as the NAC, the 
Domestic Policy Council, Department of Agriculture, to develop 
more holistic approaches to these problems. I think that is the 
only way we are going to get them solved.
    Mr. Heck. I look forward to working with you on that. I 
yield back the balance of my time, Mr. Chair.
    Chairman Hensarling. Time of the gentleman has expired.
    The chair now recognizes the gentleman from Florida, Mr. 
Ross.
    Mr. Ross. Thank you, Chairman.
    And, Secretary, thank you for being here, and again, I 
appreciate all your efforts.
    You know--and where I am from is central Florida, and Tampa 
Bay area has made quite an expansion in public housing, and has 
done, I think, a very good job, to the point where they have a 
waitlist of 13,000 people. And, we are trying to expand it, we 
are trying to work more with, of course, your office.
    But one of the things that I have a concern about is the 
voucher recipients and the portability of vouchers. And I guess 
my concern is that you have regional housing authorities--how 
can we best design these so that we can get some of these 
people off a waitlist and, if nothing else, consolidate them, 
but allow them to have better access to affordable housing 
through this voucher program?
    Secretary Carson. That is obviously a huge issue and a big 
question, how do we get those waiting lists down? Should we be 
prioritizing certain types of people, rather than just have a 
consecutive waiting list?
    Those are questions that we are examining now. We will be 
happy to work with you on those. But, again, the key, I think, 
is the public-private partnerships: programs like RAD, which 
has brought in $4.3 billion of private money to get rid of some 
of these capital backlogs and to create even more housing.
    We need to create win-win situations, even utilizing LIHTC. 
In the new tax plan that has been put forward, they recognize 
how important LIHTC is, and have included a way to make sure 
that it remains profitable for people, because this is how we 
are going to get out of this problem. This is how we can get 
out of that backlog.
    Mr. Ross. I agree, and I--we have a good voucher program. I 
think that it needs to be able to follow the jobs, because that 
is important, because of course work brings dignity. But the 
incentive of private capital coming into the market to partner 
with HUD is very crucial.
    And I guess my concern is we have seen some successes in 
that regard, and not only the capital, but also the discipline 
and the counseling that is necessary. The Family Self-
Sufficiency Program, for example--
    Secretary Carson. Right.
    Mr. Ross. --One that I think--that has shown some success. 
Do you think that that has been a program that we should 
continue to not only fund, but to expand?
    Secretary Carson. Absolutely. Anything that has to do with 
creating self-sufficiency--and we are looking for innovative 
approaches for that. One of the things that I am looking at in 
the future is taking a sliver of the monthly subsidy, and 
putting it in what would be like an escrow.
    Mr. Ross. Yes.
    Secretary Carson. And that would be used for the routine 
maintenance of that unit. So if there is not a lot of routine 
maintenance, it just continues to grow and grow. But if the 
holes poked in the screen and the light bulbs are broken and 
paint--door needs to be painted, everything--it is not going to 
accumulate.
    But you let it accumulate, you let the people know how much 
money is in it, because that incentivizes them to really take 
care of their property, and if they leave public housing within 
5 to 10 years, they get that money for a down payment.
    That has the dual effect of allowing people to get into 
housing, but it also teaches them the responsibilities of 
homeownership, because they start acting like homeowners in 
order to make it accumulate.
    Mr. Ross. It changes the culture. It changes the culture. 
It grows appreciation and builds a base of dignity and 
ownership, and I think that is--when you stop--talked on your 
opening about innovation is key, I think innovation is the 
absolute compass that we need to be following, in order to 
change a model that has not worked very well over the last 50 
years.
    Secretary Carson. Exactly.
    Mr. Ross. Finally, the Moving to Work program--what more 
can we do for those that are non-elderly and are work-capable, 
to provide them with a Moving to Work incentive?
    Secretary Carson. The key thing that we have to recognize 
is that people have tried different iterations of that over the 
years, trying to--you work and you get out--and as they start 
climbing the ladder, we pull the rug out from underneath them.
    Mr. Ross. Right.
    Secretary Carson. What we have to do is we have to let them 
get far enough up the ladder that they are not even looking 
down the see if the rug is there anymore. So we just need to 
understand how that works, and the timing of it.
    Mr. Ross. I appreciate it. I think that program--I would 
like to see it expanded. It is a pilot program right now. And 
we have seen it in Orlando.
    Secretary Carson. Absolutely.
    Mr. Ross. It is working there. With that, my time is up and 
I will yield back. Thank you, Chairman.
    Chairman Hensarling. Gentleman yields back.
    Chair now recognizes the gentlelady from New York, Mrs. 
Maloney.
    Mrs. Maloney. Thank you very much, Mr. Chairman and Ms. 
Ranking Member. I would like to build on Congressman Ross's 
questions about public-private partnership. And you have 
discussed right now the importance of it and your support for 
it in addressing our housing needs.
    But in your 2018 budget request, you target programs that 
encourage these partnerships, personally to leverage, as you 
said, is so important--there are not enough dollars out there 
in affordable housing, and private housing organizations really 
depend on these government programs.
    One in particular, 202, senior housing--there is always a 
waiting list by seniors needing the housing, but also 
developers who are willing to put it up. But the funding hasn't 
been there. I am glad to see there is more in this budget. But 
still, it has been cut back dramatically, quite frankly, from 
when I first came to Congress.
    But how can you think the administration can encourage 
public-private partnerships if its budget largely cuts out the 
government's role, and cuts the funding for the government's 
role in the relationship?
    Secretary Carson. All right, thank you for that question. I 
understand the basis of it.
    Here is the situation. Would we like to have almost 
unlimited money to deal with these problems? Absolutely. That 
would be ideal. But we don't, and we have a $20 trillion 
national debt.
    Now, I am not going to have to pay it. You probably won't 
either, although you are younger than I am. You may have to pay 
some of it. But your children and your grandchildren will--
    Mrs. Maloney. That is true, and I want to get on to another 
question. You know--but if you put your money into things that 
leverage more money and more housing, it is certainly a dollar 
well spent. And the budget does cut the private-public 
partnership section, and I--my request is to see if we can work 
together to see if we can restore some of it.
    Secretary Carson. Absolutely. I would be happy to work with 
you on it.
    Mrs. Maloney. I also--I want to invite you to my district. 
I represent a lot of HUD projects. My mayor, my city council 
president--everybody is asking you to come and take a tour. So 
if you are ever in New York, we would love to set something up 
for you to look at some of the things we have going on the 
ground.
    Secretary Carson. OK.
    Mrs. Maloney. But my district is very different. As you 
know, in New York, people don't live horizontally. We live 
vertically. And we live in co-ops and we live in condos. And 
people are asking for you to revisit opening up assistance to 
first-time homeowners. That has been one of your themes.
    And right now, especially seniors are asking if the co-op 
owners could be part of HUD's reverse-mortgage program. This is 
the type of housing I represent, and right now, co-op owners 
are unfairly excluded from FHA's reverse-mortgage program, and 
I would say for no real reason.
    So my question is, will you consider allowing owners of 
housing co-ops to participate in FHA's reverse-mortgage 
programs?
    Secretary Carson. I certainly don't see any reason why we 
shouldn't engage in that conversation with you.
    Mrs. Maloney. That is great.
    Secretary Carson. And let's look at the numbers, and let's 
see what works, because I am for doing things that make sense.
    Mrs. Maloney. Thank you very much, because people are 
requesting that, particularly seniors, and we have not been 
able to achieve that. So this would be a great breakthrough. 
Thank you for--
    Secretary Carson. Absolutely.
    Mrs. Maloney. --Wanting to look at it.
    As you know, FHA plays a countercyclical role in the 
housing market. It expands in times of market stress, which we 
went through in 2008, when everyone else is pulling back, and 
it shrinks in times of market stability.
    And the most recent annual report shows that FHA's market 
share has actually diminished substantially since its peak 
during the housing crisis, and has stabilized in these past few 
years.
    But despite this, some people continue to claim that the 
FHA is playing an outsized role in the housing market, and 
demand that FHA shrink. So do you agree that FHA is currently 
playing too large a role in the housing market? Or, you know--
    Secretary Carson. Yes. Right now we are at about 13.2 
percent, which is sort of back down to the pre-housing-crisis 
level. It expanded during the crisis like it should. It is sort 
of like an accordion, right? It is a buffer, and that is the 
way that it is supposed to work.
    That is the ideal situation--doesn't mean that there aren't 
some reforms that we are looking at that make it even more 
efficient, but generally, it has a very positive balance, and 
it allows people to be able to get into homes, particularly 
first-time homebuyers, a lot of minorities. And we want to make 
sure that we maintain that strength.
    Mrs. Maloney. Thank you very much.
    Secretary Carson. OK.
    Chairman Hensarling. Time of the gentlelady has expired. 
The chair wishes to inform all members that we will be excusing 
the witness at 12:30 today.
    Chair now recognizes the gentleman from North Carolina, Mr. 
Pittenger.
    Mr. Pittenger. Thank you, Mr. Chairman.
    Mr. Secretary, thank you again for being with us today. 
Your demeanor and patience has been exemplary. I have so much 
appreciation for the focus and clarity of mission that you 
bring. Your life experience offers so much for each of us to 
pay keen attention to.
    I particularly appreciate all of your continued efforts on 
behalf of those individuals who are suffering, of course, from 
the national--the natural disasters that have occurred in our 
country.
    We have seen unprecedented damage that has been caused by 
Hurricane Harvey and Irma and Maria. Our hearts go out, 
obviously, to the victims of all of these awful storms.
    As you are very much aware, a year ago, Hurricane Matthew 
struck North Carolina with subsequent thousand-year floods, 
severely damaged 98,000 homes and 19,000 businesses. We still 
have 150 or so families that are still living in FEMA trailers.
    It has affected our poorest counties in our State and, 
frankly, some of the poorest counties in the country: Bladen 
and Cumberland and Robeson, some of those counties, I know, 
that we hope to show you, hopefully, in early November, when 
you can return to our State.
    What I would like to ask you, Mr. Secretary, is, what can 
you say in terms of what the department is doing on long-term 
disaster relief for these areas? They are not in the media, and 
they are not the--on everyone's attention, but the pain and 
suffering is still there. What can you say is being done 
currently?
    Secretary Carson. Thank you for that, and thank you for 
your extremely good advocacy for the people of North Carolina.
    I did have a scheduled visit there--
    Mr. Pittenger. Sure.
    Secretary Carson. --As you know, recently. And then this 
little problem called Harvey came up. But we are rescheduling 
that visit to look at that very issue in terms of the long-term 
recovery function. We didn't get the final plan from the State, 
in terms of recovery, until the 21st of April--
    Mr. Pittenger. Yes, sir.
    Secretary Carson. --Of this year. So we are working with 
your State and local officials already, and we will continue to 
do so. But we have not, by any stretch of the imagination, 
forgotten about that just because these other ones have come 
up.
    Mr. Pittenger. Are you comfortable that HUD has mechanisms 
in place in not just our State, but all States, to ensure the 
money is spent in a fiscally accountable and timely way?
    Secretary Carson. For some reason, I am not hearing well.
    Mr. Pittenger. Are you comfortable that the States have 
accountable structures in place, that the taxpayer money is 
being used in an appropriate way.
    Secretary Carson. Let me put it this way. At the State 
level, there seems to be more accountability than there is, 
frequently, at a lower level. So one of the things that I am 
finding just in looking at past data, in terms of efficiency--
working with the State tends to be a little bit better than 
working with 100 different municipalities.
    Mr. Pittenger. Yes, sir.
    And my district, as you may be aware, includes Charlotte. 
It is a major metropolitan area of our State. I have seven 
other additional rural counties, and I would like to ask you, 
what is HUD's involvement in these rural areas, particularly, 
and the value that it can bring to these communities?
    Secretary Carson. One thing that sometimes people assume is 
that HUD is not interested in rural areas because it is called 
Housing and Urban Development. But obviously, if you look at 
programs that we have and those in association with USDA, we do 
pay quite a bit of attention--maybe want to rename the 
department, at some point, to reflect that.
    There are particularly large issues with poverty and with 
drug use in the rural areas, and we are working with--across 
the silos, with the Department of Justice, Department of 
Agriculture, on those issues.
    Mr. Pittenger. Thank you, Mr. Secretary, and thank you 
again for your great spirit and your clarity of mission and 
dedication. We truly appreciate you.
    Secretary Carson. Thank you. Thank you.
    Mr. Pittenger. I yield back.
    Chairman Hensarling. The gentleman yields back.
    The chair now recognizes the gentleman from Michigan, Mr. 
Kildee.
    Mr. Kildee. Thank you, Mr. Chairman.
    And thank you again, Secretary Carson for being here. As I 
mentioned in my opening statement, and as we chatted briefly 
before the beginning of this hearing, I am from Flint, 
Michigan, a community not far from where you grew up, and a 
community that has been struggling in many ways for decades, 
but in a particular way for the past few years as a result of 
the water crisis.
    And you referenced in your testimony that the department, 
under your leadership, intends to take on some of these issues 
of exposure to toxic chemicals in housing. And lead is a really 
significant issue. As a physician, the impact that lead 
exposure--high levels of lead exposure can have on the brain of 
a developing child.
    And so this tragedy, while in many--in the eyes of many is 
sort of over--it is not in the news every day--it is an ongoing 
struggle, not only in terms of the infrastructure needs, which 
are slowly being met; the health and development needs, which 
are not entirely met; and the redevelopment challenge that this 
community faces as a result of a real gut punch to the 
community.
    So the challenges that it was already dealing with have 
been exacerbated by being known as a city of 100,000 people 
that had poisoned water. The impact on housing values, the 
impact on neighborhood development is palpable, and it is 
dangerous.
    In the previous administration, we had kind of an all-
hands-on-deck approach to Flint's recovery. And I was pleased 
to see, during the campaign, when then-candidate, now President 
Trump visited Flint, he said, and I am quoting him--this is 
regarding Flint--``We will get it fixed. It will be fixed 
quickly and effectively.'' And as I stated, Flint is not fixed 
yet.
    I reached out to the White House very early on and asked 
for a point person on Flint's recovery, because there is a 
legitimate and important Federal role in this. Have not 
received a response. It is important that we have some sense of 
who we can work with.
    To your knowledge, is there a point person? I haven't been 
able to get an answer out of the White House. I wonder if you 
have a sense of that, if there is a point person that we can 
work with.
    Secretary Carson. I agree that there needs to be one. And I 
would be certainly willing to look into that for you.
    Mr. Kildee. I appreciate that. And perhaps, as we 
mentioned, you and I could find time to meet. I have a real 
interest in the work of your department broadly, and I would 
like to share some thoughts with you, but specifically, to talk 
about how my community can continue to receive the support that 
it surely deserves. So, if we can find time to do that, I would 
enjoy getting on your calendar. So thank you for that.
    And I know this has been raised. I raised it a bit. The 
preconditions that led to the crisis in Flint are not unique to 
Flint. We have seen a lot of older communities--and I heard the 
reference to not just traditional large cities, but small towns 
as well--that have not seen the kind of private investment, and 
that still do require some public support for their development 
challenges, in order for them to be fully competitive and make 
the contributions that they should make.
    So I am really concerned about continuing deep cuts to the 
Community Development Block Grant program, for example, a 
highly flexible program, a former Federal investment that 
really defaults to the States and, in many cases, directly to 
local jurisdictions, making decisions for themselves as to what 
their needs might be.
    As in the case of any program, there could be problems. But 
what I fear is that this administration--and I am really 
interested in your take on this--is taking a ``throw the baby 
out with the bath water'' approach.
    This is a really important program that is essential to 
lots of communities. And can you help me understand what your 
position is on this important program?
    Secretary Carson. Yes. My position is we should save the 
baby. Don't throw it out with the bath water.
    The fact of the matter is, as I mentioned before, there 
are--there are multiple good things in these programs that have 
been very effective, some of which you have just mentioned. We 
will make sure that those things continue.
    Mr. Kildee. So long--I appreciate that, so long as we don't 
take the approach that the only way to help the programs is to 
just make them so small, that they are not consequential any 
longer.
    I agree that there is a need for change. I have talked to 
the ranking member about changes in CDBG that I am interested 
in pursuing. So long as the solution is not simply to 
essentially eliminate the program over time, I am happy to work 
with you on that. Thank you very much.
    Secretary Carson. Absolutely.
    Mr. Kildee. Thanks for your testimony.
    Chairman Hensarling. Time of the gentleman has expired.
    The chair now recognizes the gentleman from Pennsylvania, 
Mr. Rothfus.
    Mr. Rothfus. Thank you, Mr. Chairman.
    Good morning, Mr. Secretary. Welcome.
    Secretary Carson. Good morning.
    Mr. Rothfus. My district is home to an organization called 
HEARTH, which provides vital transitional housing services to 
victims of domestic violence. For more than 20 years, women and 
families in Allegheny County fleeing domestic abuse have had a 
reliable and caring place to go to that provide temporary 
shelter and protection from danger.
    HEARTH has provided hundreds, if not thousands of my 
constituents with a safe space and the support they need to 
transition to permanent housing. HEARTH has a compelling 
mission, and it fulfills a priceless service for the community.
    This program has a strong track record, because it provides 
residents with the supportive services they need to transition 
to self-sufficiency. Despite this, HEARTH and similar providers 
have lost or are in danger of losing their HUD funding, unless 
they abandon the services and high standards that have 
contributed to their success.
    This ties in to the Housing First policy that my colleague, 
Mr. Barr, raised earlier in the context of drug treatment 
programs. Under your predecessor, HUD adopted the Housing First 
policy and de-prioritized programs that failed to conform to 
that orthodoxy. Indeed, continuums of care were told that HUD 
will be less generous in funding transitional programs.
    I asked Secretary Castro about his position on transitional 
housing programs like HEARTH and their future place in our 
housing assistance toolbox. I greatly--I would generally 
characterize his response as a full endorsement of the Housing 
First policy which, again, is going to entail a de-
prioritization of transitional housing.
    I would appreciate your taking a look at this issue, and I 
would appreciate your feedback on whether you think that we 
have to really keep our eye on the ball on transitional 
housing, in the context of this Housing First policy.
    Secretary Carson. I would be very, very happy to work with 
you on that. But everything that we are going to do is going to 
be driven by the numbers, driven by the evidence. What is 
actually effective?
    And again, when I talk Housing First, I may be talking 
something a little different than what the previous secretary 
was talking.
    Mr. Rothfus. Yes, we want to follow up with you on that 
because we want to make sure that this orthodoxy that he was 
going after isn't really negatively impacting on really good 
programs--
    Secretary Carson. Right.
    Mr. Rothfus. --That have been very beneficial to our 
community.
    Secretary Carson. I agree.
    Mr. Rothfus. A number of folks have mentioned the Moving to 
Work program. We have had hearings about that, and it has been 
discussed today. I believe that this program offers 
flexibilities that can help public housing authorities better 
serve their local populations.
    My district has--one of the housing authorities does have a 
Moving to Work program. There are others that would like it. 
And I am--want to hear from you whether you support the 
expansion of the Moving to Work program.
    Secretary Carson. I was very happy with the expansion to 
another 100 areas. And I am hopeful that we can, with the help 
of Congress, move far beyond that.
    Mr. Rothfus. Yes, I would like to see it really transition 
from being a pilot program--it has been a pilot program since 
1996. I don't know how long you have to have a program be a 
pilot program.
    One of the three national program objectives for CDBG is 
that projects principally benefit low and moderate-income 
persons. Critics have noted that CDBG funds often end up being 
used for parks, pools, street signs and community centers, 
diverting dollars from those communities with the greatest 
need, particularly in housing.
    In your testimony before the House Appropriations Committee 
this past June, you stated that the CDBG program is, quote 
``not well-targeted to the poorest populations, and has not 
demonstrated a measurable impact on communities.'' Can you 
elaborate on that?
    Secretary Carson. Yes. Some of the same things that you 
just mentioned in the question, and some abuses that are even 
more significant than that--this is a program that, again, has 
some very good components, and the things that are good in that 
program, and HOME Program, and various programs--we are not 
just going to abandon those things. We are going to obviously 
utilize the information in order to improve what we are able to 
do.
    Mr. Rothfus. You mentioned in your testimony before the 
House Appropriations Committee earlier this year that the first 
HUD secretary, Robert Weaver, said that we must look for human 
solutions, not just policies and programs. What do you think he 
meant by human solutions?
    Secretary Carson. I hope what he meant is that we need to 
be looking at the people themselves, as opposed to just the 
concept of sticking them in a house and thinking that our job 
is done. If we develop the human capital that exists here, it 
benefits us all.
    Mr. Rothfus. It sounds like--that that would still be 
relevant today--as relevant today as it was when Secretary 
Weaver first said that. Would you agree with that?
    Secretary Carson. That would--that would be the way that I 
would look at it.
    Mr. Rothfus. Thank you, Mr. Secretary. I yield back.
    Chairman Hensarling. Gentleman yields back.
    Chair now recognizes the gentleman from Texas, Mr. 
Gonzales.
    Mr. Gonzales. I yield to the ranking member. I yield my 
time.
    Ms. Waters. Thank you very much. I appreciate having the 
time.
    I am sitting here, and I am listening to how much you care 
about the most vulnerable in our society and how you want to 
help people become independent and out of poverty. And yet your 
budget and what you are advocating for and what you are 
advocating against does not really define your representation 
that you care about these vulnerable people.
    You are cutting public housing by $2 billion, Housing 
Choice vouchers by $800 million, project-based rental 
assistance by $65 million. You have members on the opposite 
side of the aisle talking about programs that are funded by the 
Community Development Block Grant. They don't even know that 
you have completely eliminated that.
    The Home Investment Partnership Program--we talk about the 
national housing crisis that we have, and the National Housing 
Trust Fund is completely eliminated, and the Choice 
Neighborhoods initiative eliminated. And Section 811 housing 
for persons with disabilities--cut by $121 million.
    And so there is one thing that stands out in my mind, based 
on the campaign, and looking at what happened in the primaries 
and things that the President said, and how he talked to you 
and others and demeaned you so much.
    But one of the things that stands out in my mind so vividly 
is how he mocked and mimicked a disabled journalist. And so you 
have a--he has openly mocked disabled people, and HUD's most 
recent budget proposal, which you supported and defended, 
proposes a steep 18 percent cut for Section 811 program, which 
is focused on serving low-income persons with disabilities, as 
well as harmful rent increases on Section 811 residents.
    This is very concerning, in light of the critical role that 
HUD plays in providing housing assistance to low-income persons 
with disabilities, as well as enforcing the Fair Housing Act, 
which protects persons with disabilities against discrimination 
in the housing market.
    Are--do you remember seeing that display by the President 
where he mocked and mimicked a disabled journalist? Do you 
remember seeing the sight of that?
    Secretary Carson. I remember seeing the episode that you 
are referring to.
    Ms. Waters. Do you think it was wrong for the President to 
send that kind of message about what he cares--about disabled 
people?
    Secretary Carson. I am not really here to talk about the 
President. I really want to talk about the people that we are 
trying to help.
    Ms. Waters. Yes, I want to talk about the people, too. 
Right now, I want to talk about the disabled people. And I want 
to know if his attitude is such that it is reflected in this 
budget.
    And you defend the budget. And are you defending in any 
shape, form or fashion the fact that the person who wanted to 
be the President of the United States of America, for all 
people, would treat disabled people that way? What do you think 
about that?
    Secretary Carson. As a pediatric neurosurgeon a large 
portion of my patients were disabled people.
    Ms. Waters. All right, so you do care about disabled 
people. Is that right?
    Secretary Carson. Of course.
    Ms. Waters. When you are in front of disabled people who 
are advocating for resources to help with their lives, and they 
ask you about the President and the fact that he mocked and 
mimicked disabled journalists during the campaign, and they ask 
you, ``Do you defend the President in doing that,'' what would 
you say to them?
    Secretary Carson. I would say that I am going to use the 
resources and the talents that we have to look out for the 
interests of the disabled people. We are going to commit to 
making sure that they are not displaced.
    Ms. Waters. So do you think a cut of $121 million is a 
demonstration of your support for the disabled? Section 811 
housing is for persons who are disabled--who are disabled.
    Secretary Carson. I would say it is not the amount of 
money, it is the result that you get that that is important.
    Ms. Waters. I beg your pardon? I can't hear you.
    Secretary Carson. I would say it is not the amount of 
money, but rather the result that you achieve that is 
important.
    Ms. Waters. You keep talking about the amount of money, but 
you know your real concerns and what you care about is 
reflected in the budget. And it is difficult for me to believe 
that you really care about the disabled when you are cutting 
the resources to them because of the difficulty in their lives 
and the tremendous needs that they have.
    It is difficult for me to believe you care about them with 
these kind of cuts. I yield back.
    Chairman Hensarling. Time of the gentleman has expired.
    The chair now recognizes the gentleman from Texas, Mr. 
Williams.
    Mr. Williams. Thank you, Mr. Chairman.
    And thank you, Secretary Carson, for being here today, and 
thank you for your testimony.
    Secretary Carson. Absolutely.
    Mr. Williams. And, for a personal note, I would like to 
thank you for reaching out to the--those of us who were 
involved in the baseball shooting.
    Secretary Carson. Yes.
    Mr. Williams. Thank you very much. Also, I want to thank 
you for your leadership. I have been around leaders all my 
life, and you are a leader, thank you for that.
    And also, I want to thank you for what you have done in 
Texas. I am from Texas. I want to thank you for what you have 
done in Texas with the--Hurricane Harvey, for reaching out 
quickly. Your response has just demonstrated the swift action 
and resolute--and Texans are grateful for what you--for what 
you have done.
    And I am also happy that, in such a pivotal time for our 
country, history of our Nation, that your leadership 
understands the challenges we face. We have talked about them 
today, and you understand the actions necessary to be the best 
possible steward of the taxpayer, which is important, while 
assisting those in need to achieve their God-given potential.
    So, Mr. Secretary, I want start by talking about FHA's 
mortgage insurance program, which so many in my district have 
addressed with my staff and myself. We are aware of many 
complaints from mortgage lenders who are being subjected to 
extended, costly investigations and then lawsuits by the 
Department of Justice for their participation in the Federal 
Housing Administration's mortgage insurance program.
    While I applaud efforts to penalize lenders who 
deliberately submitted false or fraudulent mortgages, many 
lenders are being asked to pay penalties for loans they were--
that were reviewed and audited by the FHA and HUD.
    These actions, forcing many lenders to avoid--or to keep 
them from participating in the program make it difficult for 
many first-time homebuyers to purchase homes. So can you 
explain what circumstances would institute a penalty on a 
lender, after FHA and HUD have approved their mortgage?
    Secretary Carson. It has been a problem because of all the 
red tape and all the regulations. And there are so many traps 
involved, when people do things that are really non-material 
mistakes, and then they find themselves in the kind of 
difficulty that would basically drive them away from even 
wanting to be involved in the first place.
    I have talked to Attorney General Sessions about that, and 
my staff and staff from DOJ are working on those regulatory 
barriers that are precluding people from wanting to get 
involved.
    Mr. Williams. The HUD work force, which you supervise, is 
just short of 8,000 full-time employees. In comparison to some 
Federal agencies, this may appear to be fairly lean--8,000 is 
hard to say lean--but given the responsibilities and scope of 
the department, many could argue that the organization is 
unnecessarily large.
    Do you have the flexibility and authority to right and--to 
right the size of the department, if needed, and moving the 
resources and employees as needed to meet the goals that you 
and the President have set?
    Secretary Carson. I think we have close to what we need. We 
have come down from 15,000 to 8,000 in recent years, and are 
looking with a very careful look at the actual need to hire and 
bring people on and utilizing them effectively, and utilizing 
people in multiple areas in order to increase the efficiency, 
recognizing that we do have to be stewards of taxpayers' money.
    Mr. Williams. And then what challenges stand in the way of 
you organizing your department to achieve the best return on 
taxpayer investment, which would be cost in return?
    Secretary Carson. Well what we have done is divided people 
into work groups with captains, who are responsible, who bear 
some fiscal responsibility, so that we don't simply say to the 
CFO, which we don't have right now, ``That is your 
responsibility.'' And I think that the more we can distribute 
that responsibility and make people responsible, the more 
fiscally responsible they will be.
    Mr. Williams. Last, one of the promises President Trump 
made to the American people was to direct his administration to 
decrease regulation in order to spur growth. Regulations choke 
growth. Since you assumed your current position, what steps 
have you and President Trump taken to roll back harmful 
regulations in the housing industry?
    Secretary Carson. We have established a regulatory reform 
committee. And they work through the Office of the General 
Counsel, looking at major regulations. We are going--we have 
about 10 of them right now, which we are looking to be able to 
get rid of, on the way to quite a few more than that.
    Mr. Williams. Thank you again for being here. Thank you for 
your testimony. I yield my time.
    Secretary Carson. Thank you.
    Chairman Hensarling. Time of the gentleman has expired.
    The chair now recognizes the gentleman from Nevada, Mr. 
Kihuen.
    Mr. Kihuen. Thank you, Mr. Chairman, and thank you, Mr. 
Secretary, for being here and for sharing your testimony and 
also your time, as well. We know you are a very busy person, 
and we appreciate you taking the time to be here.
    Mr. Secretary, as you know, Las Vegas was the epicenter of 
the foreclosure crisis. My neighbors lost their home to 
foreclosure. I lost my home to foreclosure. The American dream 
of homeownership from all these families was ripped away.
    In the intervening years, Las Vegas has thankfully 
recovered. Foreclosures have slowed down. Our economy has 
continued to grow at a healthy pace. We are adding tens of 
thousands of jobs a year.
    However, housing stock isn't being built at a proportional 
rate. We are starting to see both home sale and rental prices 
rising at an alarming rate. Year over year, housing prices were 
up 13.7 percent from September 2016 to September 2017.
    The apartment vacancy rate is one of the lowest in the 
country, at 3.1 percent. In Clark County as a whole, we need 
more than 157,000 affordable housing units, but we only have 
31,870 available.
    Unlike other cities, low-income people cannot--can't move 
further out into the suburbs when housing prices increase in 
the Las Vegas area, since the city is surrounded by desert. 
These residents are increasingly being forced to live in 
untenable situations or leave Las Vegas.
    Mr. Secretary, you have spoken before about the need for 
people to pull themselves up by the bootstraps. However, there 
are situations, like in Las Vegas, where people have jobs, work 
hard, but still can't get ahead in the housing market, where 
rental prices are increasing faster than their paychecks. Do 
you think there is a government role in helping these people 
with affordable housing?
    Secretary Carson. There is, in the sense of creating the 
proper environment for the economy to grow, because a lot of 
the problems that we are having in that regard is because wages 
are stagnant, and they are not keeping up with the--with the 
increasing cost of the housing.
    So that will be the solution to many of the issues that are 
going on our country, including some of the social issues, 
because people get more irritable when they are not doing well 
economically.
    Mr. Kihuen. Another question: In HUD's Fiscal Year 2018 
budget proposal, the Home Investment Partnerships Program would 
be eliminated, and--instead of relying on local and State 
governments to fill the gap.
    However, the city of North Las Vegas relies on HOME to 
expand affordable housing options. What if local governments 
can't pick up the slack? Is it your opinion that they are just 
out of luck and the Federal Government shouldn't be assisting 
them?
    Secretary Carson. We are certainly looking for State and 
local governments to play a bigger role. There is no question 
about that. But in terms, as I have said before, of the good 
things that programs do, including the HOME Program, we are 
examining those things and looking at the best ways to be able 
to continue them.
    Mr. Kihuen. Thank you, Mr. Secretary.
    And, last question, according to Amparo Gamazo, the 
executive director of the Southern Nevada Regional Housing 
Authority, your proposed fiscal 2018 budget would make it 
very--and I quote ``very difficult for us to keep up with the 
maintenance of existing public housing units.''
    Mr. Secretary, I just read a slew of statistics that pretty 
clearly show me we are not going to need less public housing 
going forward, but more. If our local experts are saying your 
budget--it is going to make it harder for them to just maintain 
what we have, how can we fulfill HUD's mandate of helping the 
American people put a roof over their heads?
    Secretary Carson. I hope that that will be one of the 
reasons that I can count on Congress to help lift the cap on 
rent, because that is how we get rid of those capital need 
backlogs.
    Mr. Kihuen. Thank you, Mr. Chairman. I yield back the 
remaining time.
    Chairman Hensarling. Gentleman yields back.
    The chair now recognizes the gentleman from Maine, Mr. 
Poliquin.
    Mr. Poliquin. Thank you, Mr. Chairman, very much.
    Mr. Carson, it is wonderful that you are here. I appreciate 
it very much. Good to see you again.
    Secretary Carson. Thank you.
    Mr. Poliquin. Dr. Carson, I represent rural Maine--not the 
urban parts of Maine, but rural Maine. And you folks might 
not--might not be familiar with this, but Maine is the oldest 
average in the country. It is not Florida, or it is not 
Arizona. It is Maine.
    I worry about folks that live in the rural area. I worry 
about our seniors, and I worry about making sure we have a very 
strong safety net for those that are less fortunate than us.
    But even though I worry about our seniors, they are also 
great teachers. My mom is 89, my dad is 87. I love them to 
death. I am very close to my parents, in their life and in 
their stage in their life.
    But I remember, when we were kids growing up in central 
Maine, it was a vibrant area with lots of paper mills that were 
just humming along, and folks were happy and taking care of 
themselves. And my parents were always working. That is what I 
remember--and I am sure, similar to your situation, in some 
regard, Dr. Carson.
    My dad was a teacher and coach, and he was always 
traveling. And when he wasn't teaching, he was coaching--or 
rather, refereeing high school basketball all around the State. 
And it is an 8-hour drive from one part of my district to the 
other.
    And my mom was a nurse. She worked the night shift at 
nursing homes. So she was home when Jim and myself--my brother 
and I--got back to school. And so we grew up with education and 
compassion. And during the summertime, they were always 
working. Dad had a little lobster pond.
    So what my parents taught me more than anything--it is not 
what they said; it is what they showed me. It was honesty, 
compassion and hard work.
    Secretary Carson. Yes.
    Mr. Poliquin. Hard work--now, my first full-time job was 
when I was 12 or 13 years old. I worked for 50 cents an hour, 
pumping gas at a marina on a little lake in Maine. And, man, I 
worked 40 hours a week, and got a $20 bill.
    I was just on my way. I remember the excitement and purpose 
I had, getting up every morning, and making my lunch, and going 
to work. And the next year, I parlayed it into my next job, 
working at a restaurant, running the cash machine--the cash 
register, for a buck an hour. Now I get two $20 bills for 
working 40 hours a week.
    This is what I learned, now. What I have found is that 
there are so many people, Mr. Carson, that look for the perfect 
job and retirement. You live long enough, you know there is no 
perfect job.
    Secretary Carson. Right.
    Mr. Poliquin. The value of work is the journey. You learn 
something from every job. You find dignity and self-purpose, 
and that is what your kids see. And that is what your grandkids 
see. That is the value of hard work.
    Now, I have one son, who is 26. We are very close. He is a 
hard worker. I worry about Sam all the time. I worry about his 
generation. But I worry about him less, because he knows the 
value of hard work. I can't even imagine, Mr. Carson, raising 
my son to say, ``OK. Now, you have had a good education. You 
know how to work. Now we want to make sure you sign up for 
every government program you can find.''
    And I know you believe the same thing. So my question to 
you, sir, is--you believe in the dignity and self-purpose of 
hard work, and what it shows the next generation. What are you 
good folks doing at HUD to make sure that our families are 
upwardly mobile, our families can escape government dependence 
and have better lives, with better futures, more promise and 
more freedom?
    Secretary Carson. I thank you for that question. One of 
things that we are doing--we developed this concept called 
Envision centers. It comes from the Bible verse, Proverbs 
29:18, that says, ``Without a vision, the people perish.''
    And a lot of times, when you go into the low economic 
areas, and you say to the kids, ``What do you want to do when 
you grow up?'' you get a blank stare. But sometimes, you might 
get a few things--maybe five things. But there are 1,000 
things.
    And the Envision centers are to expose them to the other 
995 and tell them how to get there, and also to serve as a 
nidus for mentorship programs, because it has been demonstrated 
by multiple studies that low-income students who are mentored 
have a much higher high school graduation rate than those who 
do not.
    It also facilitates child care, because so many of the 
young women get pregnant, and their education ends at that 
point. And we want them to get their high school diploma. We 
want them to be able to get their Bachelor's degree, Master's 
degree, become independent, but more importantly, teach that to 
their children so we break the cycles of dependency that have 
occurred.
    And it is also going to be an nidus for health care, for 
clinics, a whole host of things that--to really expose young 
people, because a lot of them--they have not really been 
exposed to those things that are necessary in order to be 
successful in our society.
    Mr. Poliquin. Thank you for what you do for our country, 
Mr. Carson, and keep doing what you are doing. I yield back my 
time, sir.
    Secretary Carson. Thank you.
    Chairman Hensarling. Time of the gentleman is expired. The 
chair now recognizes the gentleman from Texas, Mr. Green.
    Mr. Green. Thank you, Mr. Chairman.
    I thank the witness for appearing, as well. Mr. Carson--Mr. 
Secretary, Dr. Carson, sir, you have indicated that there will 
be substantial cuts to the budget that HUD has. Can you give me 
that dollar amount? I am showing that it is about $6 billion. 
Is that correct?
    Secretary Carson. That is about right.
    Mr. Green. Is that about 13 percent of the budget?
    Secretary Carson. Yes.
    Mr. Green. And will these cuts, Mr. Carson, come from 
public housing, housing vouchers, community development block 
grants and other aid to low-income persons?
    Secretary Carson. They come from a variety of sources, 
including--
    Mr. Green. How much from public housing, Mr. Carson?
    Secretary Carson. Probably in the neighborhood of, if you 
combine all the programs, $2 billion to $3 billion.
    Mr. Green. $2 billion to $3 billion? How much from housing 
vouchers, Mr. Carson?
    Secretary Carson. Rather than go through a quiz on all the 
numbers--
    Mr. Green. It is not a quiz, Mr. Carson. I have the time to 
ask you questions about things that you should have some 
knowledge of. If you have no knowledge of them, you can simply 
say so. I will accept it as an answer. But this is something 
that is within your bailiwick, my dear sir. How much from 
housing vouchers?
    Secretary Carson. Again, I can give you that number, but--
    Mr. Green. If you would give it to me, I would greatly 
appreciate it, because I would like to go on to community 
development block grants.
    Secretary Carson. Here is my point. I agree with you that 
it is difficult to do these things.
    Mr. Green. That is not--that has little to do with my 
question. You are answering a question that I am not asking, to 
be quite candid with you.
    So would you kindly tell me how much HUD is going to--how 
much you are going to cut from the HUD budget, as it relates to 
housing vouchers? Now, if you don't know, it is OK to say you 
don't know, Mr. Carson. I don't hold you to things that you 
don't know.
    How much are they going to--
    Secretary Carson. Let's just move on and say that I don't 
want to offer a number, because it is subject--
    Mr. Green. Why would the secretary of HUD not give the 
number--the amount that you are cutting from housing vouchers, 
Mr. Carson?
    Secretary Carson. Because--
    Mr. Green. You are the secretary of HUD.
    Secretary Carson. --Because--
    Mr. Green. You are making the cut.
    Secretary Carson. --Because we have already talked about 
the total amount of the cut.
    Mr. Green. The total amount does not help me when it comes 
to the housing vouchers. I have people who use housing 
vouchers, and I need to be able to explain to them, Mr. Carson, 
how much the cut portends for them. How much, Mr. Carson?
    Secretary Carson. Let's hear your number.
    Mr. Green. Mr. Carson, forgive me for coughing while 
speaking. But, Mr. Carson, you are the witness testifying 
today, and if you want a moment to ask someone behind you, I 
would gladly accord you that moment.
    Secretary Carson. I don't--I don't want to open the book 
and look at the numbers.
    Mr. Green. I see.
    Secretary Carson. I want--I want--
    Mr. Green. So you choose not to say how much you are 
cutting from housing vouchers. All right. How much are you 
cutting from community block grants, Mr. Carson?
    Secretary Carson. --I want to talk about--
    Mr. Green. Mr. Carson, you don't get to talk about what you 
want to today. You get to talk about what I want you to talk 
about. You get to answer the questions that I pose, Mr. Carson. 
That is the way it works.
    Secretary Carson. Yes, but I also get to answer the 
question the way I want to.
    Mr. Green. You can answer them the way you want, but if you 
want to show a lack of knowledge, you can do this. It is quite 
all right, Mr. Carson.
    So, now, how much from community development block grants, 
Mr. Secretary?
    Secretary Carson. Again, I am not willing to sit there and 
go through--
    Mr. Green. So you don't know how much from community 
development block grants?
    Secretary Carson. --I am not going to go through the list, 
this much, this much and this much. I think that is--
    Mr. Green. I don't--I will move on, Mr. Carson. I accept 
that your lack of knowledge.
    Now, Mr. Carson, there seems to be a belief among the ranks 
of those who have opportunities to help others who have been 
blessed, themselves. They seem to think that the rich need 
more; that the poor can do more with less, but the rich will 
have to have more to do more.
    Mr. Carson, if poor people could do more with less, there 
would be no poor people. Poor people are not poor because they 
choose to be. I know about your ``state of mind'' comment. But 
they are not poor because they choose to be poor.
    Have you not noticed, just for edification purposes--and I 
am sure that you are aware of it, but there may be people who 
are listening who are not--black unemployment, Mr. Carson, is 
always, with some exceptions, about twice that of white 
unemployment. There are many reasons for this.
    But that fact has a lot to do with what people can do with 
money that they have, and what they can't do with the money 
that they don't have. There are other factors involved in this 
country, other than a state of mind. There is still, Mr. 
Carson, invidious discrimination in the United States of 
America.
    While you may not suffer it, there are others who do, and 
they need to know what you plan to do, and I regret that you 
are unable to tell us today. I yield back the balance of my 
time, Mr. Chairman.
    Secretary Carson. The positions that you ascribe to me are 
your opinion of what I think. They are not what I think.
    Chairman Hensarling. Chair--
    Mr. Green. Mr. Chairman, if he chooses to respond and say 
this, I would then asked to--
    Chairman Hensarling. --The time--
    Mr. Green. --Be allowed to let him know that my positions 
are--
    Chairman Hensarling. The time of the gentleman has--
    Mr. Green. --What you articulated and did not articulate.
    Chairman Hensarling. --Expired.
    The chair now recognizes the gentleman from New York, Mr. 
Zeldin.
    Mr. Zeldin. Thank you, Mr. Chairman.
    Secretary Carson, is there anything that you would like to 
say using my time?
    Secretary Carson. Thank you very much. I appreciate that.
    Sometimes I get a little bit tired of people ascribing to 
me things that people have said that I believe. And I 
appreciate an opportunity to say this.
    When I say that poverty is largely a state of mind, what I 
am saying is that the way that people approach things has a lot 
to do with what happens to them. If your mindset is one that 
``I am a victim'' and that ``everybody else is in control of my 
life and I just need to sit here and wait for them to do 
something for me,'' you are going to approach life very 
differently from somebody who says, ``I am going to take this 
issue into my own hands.''
    It was one of the things that I learned from my mother. She 
came from a very large rural family, got married when she was 
13, later on discovered her husband was a bigamist, had only a 
third-grade education, worked three jobs at a time. But the one 
thing about my mother--she was never a victim, and she never 
allowed us to be victims.
    And that was very important. And she did that for other 
members of our family, too, who were in a very bad situation. 
And she convinced them that they didn't have to be there, and 
they came out of that situation. She was really quite an 
interesting person.
    Now, I realize that not everybody has a mother like mine. 
But I also recognize that we, as a society, would do much 
better if we stopped sitting around trying to tear each other 
apart, and start saying, ``What can we do to change the 
attitudes and to create different outcomes from people?''
    And there are those who allow themselves to be manipulated 
into just creating dissension, rather than try to figure out a 
way that we can actually solve the problems. Isn't that what 
this whole government was supposed to be about, representatives 
who can help us solve the problems, not people who simply sit 
there and try to tear things down and try to create dissension 
and try to create victimhood?
    We don't need that. We can do much better than that. This 
is America, the United States of America, a place that rose 
from nowhere to the pinnacle of the world in record time. Why? 
Because we created an atmosphere of innovation.
    Were there mistakes made? Were there problems? Absolutely. 
Are we a perfect society? We are not, because we are--we 
consist of human beings. That is why--that is why we need a 
savior.
    But, we really can do much better than what we are doing, 
if we stop fighting each other and start figuring out how we 
are going to solve these problems.
    Mr. Zeldin. Thank you, Mr. Secretary, for being here, for 
your service. You are someone who wants to lift people up and 
provide more opportunity, not to keep them struggling, but to 
have all of the abilities, all the tools necessary to be able 
to rise up out of that situation for a better life.
    I feel like our country is blessed to have you serving as 
our secretary of HUD. It is a calling that hopefully will 
provide great opportunity for you to empower many Americans 
desperate for your leadership, to help them have that 
opportunity.
    Secretary Carson. Thank you.
    Mr. Zeldin. I wanted to speak briefly about veteran 
homelessness. On any given night, with HUD numbers, 40,000 
veterans in the United States are struggling with homelessness.
    Any veteran who raises their hand, willing to serve our 
country, should have a roof over their head. They should have 
shoes on their feet. They should have food on their table. So 
the ultimate goal for that number will always be pursuing the 
permanent solution of zero.
    We know that voucher programs, which give flexibility to 
Americans struggling from affordable housing, has been shown to 
be more effective than the traditional housing project 
programs. I applaud your efforts to move more to a voucher 
model at HUD for all housing programs.
    Earlier, you noted that the agency is making progress, but 
that the HUD Veterans Affairs Supportive Housing Program is in 
need of more flexibility to get the vouchers in the right 
hands, and in the right place.
    Additionally, you spoke about the expansion of public-
private partnerships and increasing the collaboration of your 
agency with local non-profits to assist in veteran housing.
    I stand eager to work with you. I am sure many of my 
colleagues are, as well, with the ultimate goal of getting to 
zero veteran housing--homelessness one day. I thank you again 
for your leadership.
    I yield back.
    Secretary Carson. Thank you.
    Chairman Hensarling. The chair now recognizes the 
gentlelady from Utah, Mrs. Love.
    Mrs. Love. Thank you, Secretary Carson, for being here 
today. I would like to talk to you a little bit about the 
Moving to Work program, which is meant to give public housing 
authorities the flexibility to pursue innovative strategies to 
increase housing choices for low-income families and ultimately 
to encourage economic self-sufficiency.
    This program, now operating at only 39 of the approximate 
3,200 housing authorities in the U.S., was authorized to expand 
to more--to 100 more agencies more than 2 years ago, through 
the consolidation--Consolidated Appropriations Act of 2016.
    Your department, both under your predecessor and now under 
your leadership, has moved slowly and cautiously on this 
directive from Congress to expand that. HUD has missed some of 
its deadlines. From that viewpoint, some of our housing 
authorities, it looks like HUD is trying to add more 
regulations to a program that was meant--that was designed for 
deregulation.
    Two of my home State housing authorities, of Salt Lake City 
and Salt Lake County, are desperately awaiting the chance to 
apply. They see it as a chance to redesign and streamline 
antiquated HUD programs to meet local needs more directly and 
successfully.
    So how can we help you advance the Moving to Work program 
so that local agencies can apply for it and hopefully gain that 
flexibility that they are seeking?
    Secretary Carson. You have already helped me by that 
question, because I wasn't aware that that was going on--that 
we were trying to increase the regulations, rather than 
decrease them. That is the exact opposite of what we should be 
doing.
    Mrs. Love. Right.
    Secretary Carson. So we will look into that.
    Mrs. Love. OK.
    Can you tell us a little bit more, generally, about your 
assessment of the Moving to Work program? Has it been 
successful in moving more people to economic self-sufficiency?
    As we know--and I think that we can all agree on both sides 
of the aisle that we should not be in the business of giving 
people exactly what they need to stay exactly where they are. 
We should be giving people opportunities to be able to have 
their needs met, and then be able to move out of there, and be 
contributing members of society, and help other--and help their 
communities.
    So can you tell me how successful this program has been in 
helping people move and be self-sufficient and--
    Secretary Carson. Yes--yes. First of all, we discovered 
through this program that we have some incredibly innovative 
people, if we take the barriers out of their way and allow 
them, because they are able to see the community that they live 
in and see the opportunities that exist in their community. And 
therefore, they can design the program in order to take 
advantage of what exists where they are, not what exists in 
Washington, DC.
    And that is one of the reasons that the 39 programs that 
existed have done well enough that the expansion was 
authorized. I think the expansion probably should be authorized 
far beyond another 100, because it is working.
    And we are continuing to accumulate data, but it all is 
pointing in the same direction, and that is giving local 
control, as long as you have a responsibility.
    We have to have a way that we measure what they are doing 
and make sure that we are not having any type of inappropriate 
activity going on. But, as long as we have that in place, this 
is clearly the way to go.
    Mrs. Love. I just have two things I want to bring up really 
quickly in the minute that I have left.
    According to CBO, Federal spending on programs to serve 
low-income families was approximately $744 billion in 2016, to 
take into account 80 programs throughout the 13 different 
Federal agencies, and that doesn't include the States that are 
helping out.
    I am trying to figure out how much goes to brick-and-
mortars. One of the comments that you had made is--and I think 
it was actually a good comment--is that, as a bureaucrat, you 
feel--you are going to be a fish out of water.
    And I want you to be a fish out of water, because it is--it 
should be uncomfortable. We shouldn't be sustaining 
bureaucrats. We should be sustaining people.
    Secretary Carson. Right.
    Mrs. Love. And I want you to just keep conscious of the 
fact that these programs are meant to make sure that we make it 
so that people can have an opportunity to get out of the 
system. We should be incentivizing good behavior--
    Secretary Carson. Right.
    Mrs. Love. --And people who are wanting to get up. And most 
people that are there--they do. They want to be masters of 
their own life.
    Secretary Carson. I agree. They want that.
    Mrs. Love. So thank you. Thank you for being here.
    Secretary Carson. That is--OK.
    Chairman Hensarling. Time of the gentlelady has expired. 
The chair expects to clear one more member in the queue.
    Chair now recognizes the gentleman from Michigan, Mr. 
Trott.
    Mr. Trott. Thank you, Mr. Chairman.
    Secretary Carson, thank you for being here today. And I 
represent Michigan's 11th district, which is Oakland County and 
Western Wayne County. So we are awfully proud of your--
    Secretary Carson. Very familiar.
    Mr. Trott. --Awfully proud of your Detroit roots. And I am 
happy to report to you that Detroit is making quite a comeback 
under Mayor Duggan.
    Secretary Carson. Absolutely.
    Mr. Trott. And I know you visited.
    Secretary Carson. Yes.
    Mr. Trott. And you are always--
    Secretary Carson. I was very impressed.
    Mr. Trott. --As am I.
    So I am the last person, so I am going to end with a couple 
of compliments. I have been in Congress about 3 years, and more 
often than not, the witnesses that appear before us do what we 
call the old political pivot, and they get a question they 
don't like, or they feel insulted by, or is self-serving from 
the person who is asking the questions, and they talk about 
something else.
    You have actually sat here all morning--and I have been 
watching in my office and been here in the committee room--you 
have actually listened to our questions and done your best to 
answer our questions. And I suspect it is because you are 
brighter than most of us, so you are not intimidated by any of 
these questions. But I want to acknowledge that you have been, 
actually, one of the more productive witnesses I have seen 
during my tenure in Congress.
    Also, I want to compliment you on the President's choice--
and I am sure you had some input on--I think Brian Montgomery 
is going to be nominated as the FHA Commissioner. He served 
with distinction toward the end of the Bush Administration, and 
I think he will be a great asset for you at HUD.
    Secretary Carson. Absolutely.
    Mr. Trott. So let's talk about the FHA program. There is a 
great article from the HousingWire from July of this year, 
written by David Stevens from the MBA. And it talks about the 
unprecedented use of the False Claims Act by HUD and the 
Department of Justice, starting around 2011, under President 
Obama.
    And the False Claims Act is a very important Federal 
statute. It was promulgated under President Lincoln to deal 
with profiteers who were supplying the Union Army and cheating 
the government. Been used over the last several decades to deal 
with Medicare fraud and to deal with defense contractors who 
are ripping taxpayers off.
    And so I am all for the False Claims Act being used. But 
are you familiar at all with how it has been used in the 
context of FHA lending--
    Secretary Carson. Yes.
    Mr. Trott. --And some of the ramifications of that?
    Secretary Carson. Very much so.
    Mr. Trott. So I believe you and Attorney General Sessions 
could easily solve that problem. And the consequence of the 
improper use of the False Claims Act to impose outrageous 
penalties against lenders for immaterial defects in loan 
origination files on FHA loans--the consequences are many 
lenders have left the FHA program, and those that have stayed 
in the program are more costly for the borrowers who can least 
afford it.
    So do you have any plan, once Commissioner Stevens is in 
place, to quickly address that problem?
    Secretary Carson. Yes. We are already addressing that 
problem, our staff along with the DOJ staff, and we are 
committed to getting that resolved, because it is ridiculous, 
quite frankly.
    And I am not exactly sure why there had been such an 
escalation previously, but the long-term effects of that 
escalation is obviously providing fewer appropriate choices for 
consumers, and that is exactly the opposite of what we should 
be doing.
    Mr. Trott. Who can least afford it, too, so--right? So 
great, that is good news on the way there. And I know the MBA 
has done a great white paper on the issue, and I commend it to 
you in terms of seeking out an easy solution that can be put in 
place without congressional action.
    Secretary Carson. Absolutely, yes.
    Mr. Trott. I dealt with HUD for many years in my prior 
life, and I always found--and this has been a real interesting 
dichotomy today, because you have been attacked for the budget 
issues that you propose for HUD, and some people think that we 
have unlimited amounts of money here in Washington. There is a 
debt clock behind you that will tell you differently.
    But your answer has been a good one, which is, ``I am more 
interested in results than I am in funding, and we have to get 
results for the people that need it, and for our taxpayers.'' 
And in my experience with HUD, you have talked about the 
reforms that you are working on--the field offices need to be 
empowered.
    Secretary Carson. I agree.
    Mr. Trott. It is kind of like Tip O'Neill's old comment, 
``All politics is local.'' I think all housing is local, and 
the more the field offices can act and focus on results and 
the--and the department here in Washington's focused on big-
picture, broad issues, I think you get better results. So I 
commend that to you, number 1.
    And, two, and I guess this is more of a lecture than a 
question, but in my experience, it was very important that HUD 
try and partner whenever possible, and not create--like, under 
Secretary Cuomo, it was an adversarial relationship between the 
local and State housing agencies and HUD.
    It doesn't need to be that way. They should be partners to 
deliver results. And again, the best results are delivered 
local and closer to home than here in Washington. So I commend 
that you, as you look at reforms.
    And I believe my time has expired, but I thank you for your 
time today and I thank you for your insightful testimony--one 
of the more productive mornings I have spent here in committee.
    Secretary Carson. Thank you.
    Mr. Trott. And I think, last time, I was on Judiciary 
Committee last Congress, and Attorney General Lynch said, ``I 
don't know; I can't help you'' 74 times, and you have tried to 
answer our questions. I thank you.
    Chairman Hensarling. Time of the gentleman has expired.
    The chair now recognizes the ranking member for a unanimous 
consent request.
    Ms. Waters. I would like to submit to the record--need 
unanimous consent--to submit the National Housing Law Project's 
opposition to the funding in HUD, particularly the $3 billion 
at CDBG--
    Chairman Hensarling. Without objection.
    Ms. Waters. --$4.6 million will be lost in substance abuse, 
and--
    Chairman Hensarling. Without objection.
    Ms. Waters. --Domestic violence, $9 million will be lost. I 
submit--
    Chairman Hensarling. I would like to thank Secretary Carson 
for his testimony today.
    The Chair notes that some Members may have additional 
questions for this panel, which they may wish to submit in 
writing. Without objection, the hearing record will remain open 
for 5 legislative days for Members to submit written questions 
to these witnesses and to place their responses in the record. 
Also, without objection, Members will have 5 legislative days 
to submit extraneous materials to the Chair for inclusion in 
the record.
    This hearing stands adjourned.
    [Whereupon, at 12:32 p.m., the committee was adjourned.]

                            A P P E N D I X



                            October 12, 2017





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