[Senate Hearing 115-197]
[From the U.S. Government Publishing Office]




                                                        S. Hrg. 115-197


                            OVERSIGHT OF HUD

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

                                HEARING

                               before the

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

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                                   ON

EXAMINING THE OPERATIONS AND ACTIVITIES UNDERTAKEN BY HUD THIS CONGRESS 
 AND THE AGENCY'S FY2019 BUDGET PROPOSAL, AND TO HIGHLIGHT REGULATORY 
          EFFORTS THE AGENCY PLANS TO TAKE IN 2018 AND BEYOND

                               __________

                             MARCH 22, 2018

                               __________

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



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                Available at: http: //www.govinfo.gov/


                                   ______
		 
                     U.S. GOVERNMENT PUBLISHING OFFICE 
		 
29-552 PDF                WASHINGTON : 2018                 




















            COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

                      MIKE CRAPO, Idaho, Chairman

RICHARD C. SHELBY, Alabama           SHERROD BROWN, Ohio
BOB CORKER, Tennessee                JACK REED, Rhode Island
PATRICK J. TOOMEY, Pennsylvania      ROBERT MENENDEZ, New Jersey
DEAN HELLER, Nevada                  JON TESTER, Montana
TIM SCOTT, South Carolina            MARK R. WARNER, Virginia
BEN SASSE, Nebraska                  ELIZABETH WARREN, Massachusetts
TOM COTTON, Arkansas                 HEIDI HEITKAMP, North Dakota
MIKE ROUNDS, South Dakota            JOE DONNELLY, Indiana
DAVID PERDUE, Georgia                BRIAN SCHATZ, Hawaii
THOM TILLIS, North Carolina          CHRIS VAN HOLLEN, Maryland
JOHN KENNEDY, Louisiana              CATHERINE CORTEZ MASTO, Nevada
JERRY MORAN, Kansas                  DOUG JONES, Alabama

                     Gregg Richard, Staff Director
                 Mark Powden, Democratic Staff Director
                      Elad Roisman, Chief Counsel
                          Matt Jones, Counsel
                 Elisha Tuku, Democratic Chief Counsel
           Beth Cooper, Democratic Professional Staff Member
            Erin Barry, Democratic Professional Staff Member
           Megan Cheney, Democratic Professional Staff Member
                       Dawn Ratliff, Chief Clerk
                      Cameron Ricker, Deputy Clerk
                     James Guiliano, Hearing Clerk
                      Shelvin Simmons, IT Director
                          Jim Crowell, Editor

                                  (ii)

























                            C O N T E N T S

                              ----------                              

                        THURSDAY, MARCH 22, 2018

                                                                   Page

Opening statement of Chairman Crapo..............................     1
    Prepared statement...........................................    39

Opening statements, comments, or prepared statements of:
    Senator Brown................................................     2
        Prepared statement.......................................    39

                                WITNESS

Benjamin S. Carson, Secretary, Department of Housing and Urban
  Development....................................................     4
    Prepared statement...........................................    40
    Responses to written questions of:
        Senator Brown............................................    44
        Senator Scott............................................   104
        Senator Kennedy..........................................   109
        Senator Menendez.........................................   112
        Senator Warner...........................................   118
        Senator Heitkamp.........................................   121
        Senator Schatz...........................................   126
        Senator Cortez Masto.....................................   130

              Additional Material Supplied for the Record

Letter to Secretary Benjamin S. Carson from Senator Tim Scott....   147
Josh Siegel, Washington Times, ``HUD Tells States To Consider Sea 
  Level Rise When Rebuilding From Storms'', article dated 
  February 7, 2018...............................................   149

                                 (iii)

 
                            OVERSIGHT OF HUD

                              ----------                              


                        THURSDAY, MARCH 22, 2018

                                       U.S. Senate,
          Committee on Banking, Housing, and Urban Affairs,
                                                    Washington, DC.
    The Committee met at 10:01 a.m., in room SD-538, Dirksen 
Senate Office Building, Hon. Mike Crapo, Chairman of the 
Committee, presiding.

            OPENING STATEMENT OF CHAIRMAN MIKE CRAPO

    Chairman Crapo. This hearing will come to order.
    Today, the Committee will receive testimony from Dr. Ben 
Carson, the seventeenth Secretary of Housing and Urban 
Development. Welcome back, Mr. Secretary.
    Secretary Carson. Thank you.
    Chairman Crapo. Over the past year, Secretary Carson has 
made significant strides in his efforts to make HUD programs 
more effective and efficient.
    He has embarked upon a multi-month listening tour, 
traveling across the country to develop a deeper understanding 
of the effect that HUD policies have on affordable housing 
practitioners and families who are the most vulnerable.
    Not long after returning from the tour, Secretary Carson 
took on a major leadership role in coordinating hurricane 
relief efforts in Texas, Florida, Puerto Rico, and the U.S. 
Virgin Islands, providing both immediate and long-term relief 
to thousands of families who have been displaced from their 
homes and are without electricity. That work continues.
    As a nominee just over a year ago, Secretary Carson 
testified before this Committee about the importance of 
revisiting our Nation's housing programs to ensure that 
families who are struggling in America have the best 
opportunity to climb the economic and social ladder, to break 
intergenerational cycles of poverty, and to become self-
sufficient.
    Secretary Carson has also stressed the importance of 
aligning regulatory requirements in ways that incentivize 
landlord participation in HUD programs, eliminate undue burden 
on program participants, enhance workforce mobility, and 
maximize the percentage of HUD dollars that go straight to the 
families that need it.
    I could not agree more with these goals, and I thank 
Secretary Carson and his team for working with this Committee 
to achieve these objectives.
    Last week, by voting 67 to 31 to pass the Economic Growth, 
Regulatory Relief, and Consumer Protection Act, the Senate took 
a decisive step forward in addressing these same issues.
    A lot of the debate on the floor last week highlighted how 
the legislation right-sizes regulations for community banks and 
credit unions to promote economic development and lending, but 
the bill also makes important improvements to housing programs.
    It provides critical regulatory relief to over 1,000 small 
rural public housing agencies, making it easier for them to 
develop new projects and coordinate with their neighbors, and 
it ensures that more of their budgets go straight to families, 
rather than legal paperwork.
    The bill makes it less expensive for nonprofits like 
Habitat for Humanity to build homes in underserved communities.
    It makes a greater number of families eligible for HUD's 
Family Self-Sufficiency Program and enhances the program so 
that it can offer new additional services to participants.
    It permits renters to stay in their homes for at least 90 
days after their home is foreclosed upon, and it permanently 
extends the amount of time a servicemember may stay in his or 
her home after returning from military service to 1 year before 
the home may be foreclosed upon.
    We hope this bill will be signed into law.
    Today, I look forward to hearing about more opportunities 
for us to keep moving forward, working together to modernize 
and improve our housing programs.
    Senator Brown.

           OPENING STATEMENT OF SENATOR SHERROD BROWN

    Senator Brown. Thank you, Mr. Chairman, and welcome, Mr. 
Secretary. Glad you are here.
    Secretary Carson. Thank you.
    Senator Brown. HUD plays a critical role in the success of 
our housing market, our communities, our families, our goals as 
a Nation. So it is disturbing, extremely disturbing to read 
about one controversy after another at your Department--ethics 
lawyers ignored, procurement guidelines scoffed at, 
whistleblowers facing retaliation, antidiscrimination efforts 
downgraded, key positions filled based on patronage rather than 
competence. It goes on and on and on and on.
    Instead of taking responsibility, Mr. Secretary, you seem 
to want to blame others. Your wife picked out the furniture 
without knowing the price. Your spokesman said something but 
not you. You should not be blamed for not listening to your 
ethics lawyers. The press is unfair. It goes on and on and on 
and on. Blaming others seems to be the order of the day in the 
swamp.
    I think you need to take responsibility and get things 
right. HUD's mission is too important to do otherwise, and 
getting things right means fighting for the funding needed to 
help more people in this country get a roof over their head.
    Despite the importance of affordable housing, it is 
increasingly out of reach. A quarter of all renters today pay 
over half their incomes for housing, including 400,000 
households in Ohio alone.
    Homelessness increased last year in the eighth year of an 
economic expansion. Repeat that. Homelessness increased while 
you were Secretary of HUD in the eighth year of an economic 
expansion beginning with auto rescue with President Obama 
setting the course of that economic expansion.
    Earlier this week, one of our great Ohio housing advocates 
described the affordable housing crisis as an, quote, ``all 
hands on deck'' situation, but HUD chose to go AWOL instead. 
Rather than making new investments in affordable housing in our 
communities, the budget proposal--there is no debate in this. 
The budget proposal adds to the ranks of the homeless.
    Three months ago, the Administration was entirely 
unconcerned about the deficit when it chose to add more than a 
trillion dollars to our national debt over the next decade. Say 
that again. When this Congress passed the tax cut that went, as 
we know, overwhelmingly to the wealthiest people in our 
country, it added a trillion dollars to the deficit, did not 
seem to be much interest from you, the members of the Cabinet, 
the President, or members of this body in the majority about 
the national debt increase over the next decade.
    But, all of a sudden, Secretary Carson and your colleagues, 
you have discovered--you have rediscovered grave concerns about 
the budget deficit, such that it is time to charge extremely 
poor people significantly higher rents. It is outrageous.
    The top 1 percent of the country--and you and most members 
of the President's Cabinet are among that top 1 percent--the 
top 1 percent of this country will eventually get 83 percent of 
the benefits of the trillion-dollar tax cut. Then you and this 
Administration think it is OK to charge poor people more for 
their rent.
    To reduce the deficit that this tax cut for millionaires 
and corporations will create, HUD proposes that some of the 
poorest households in this country must pay an increase of as 
much as $1,800 a year in rent. That is just shameful. All told, 
HUD wants to charge an estimated $2 billion in higher rents to 
low-income families through what you all call rent reforms.
    The Administration claims its cuts will recognize a greater 
role for State and local governments in the private sector. You 
always say that, but Federal assistance, you know reaches only 
one out of every four eligible families. State and local 
governments are already strapped for cash. Go anywhere in the 
country and ask them that. We know they do not have the 
capacity to take on those evicted by Federal cuts without 
raising taxes on working families.
    Last year, Secretary Carson, you reassured the public that 
HUD's budget cuts--you said it in this Committee. HUD's budget 
cuts would be offset in the Administration's infrastructure 
package. I have no idea if you pushed the Administration 
infrastructure package to live up to your promise, but I do 
know the President's proposal included--did not include funding 
for housing and community development despite your assurances, 
quote, ``housing is part of the infrastructure in this country, 
and it will be treated as such.'' That is shameful too.
    There is on funding for capital spending for public 
housing, despite a backlog of needed repairs of tens of 
billions of dollars. Under your leadership, Secretary Carson, 
HUD has decided a wobbly chair in a private D.C. dining room 
requires the urgent attention of no fewer than 16 staffers and 
thousands--thousands of taxpayer dollars.
    Unsafe and unsanitary conditions in public housing that 
puts working families and children at risk? Not our problem, 
you say; let them use vouchers. Sounds rather 19th century, 
doesn't it? Excuse me. Eighteenth century.
    But there is a problem. You are already underfunding 
Section 8 accounts. You cannot say everybody in public housing 
must shift to Section 8 and then not provide the money for it 
to happen.
    This budget is an embarrassment, but it and the news out of 
the Administration of late seem all--the Department of late 
seem all too common in this Administration.
    Thank you, Mr. Chairman.
    Chairman Crapo. Secretary Carson, we now turn to you. You 
can make your opening remarks, and then we will follow that 
with questions from the Committee. Please proceed.

   STATEMENT OF BENJAMIN S. CARSON, SECRETARY, DEPARTMENT OF 
                 HOUSING AND URBAN DEVELOPMENT

    Secretary Carson. Thank you.
    Chairman Crapo, Ranking Member Brown, and Members of this 
Committee, thank you for inviting me here today to discuss the 
work 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.
    The President's 2019 budget proposes more than $41 billion 
for HUD, a 1.4 percent increase over last year's request. We 
believe this is sufficient to effectively administer our core 
programs, continuing needed assistance to those individuals and 
families whom we currently serve, our most vulnerable 
populations, especially the elderly and persons living with 
disabilities.
    In addition, the requested level of funding for the Housing 
Choice Voucher program will continue to support the same number 
of households as we currently serve and should not result in a 
termination of any housing vouchers.
    HUD's budget would also make a significant investment to 
continue the fight to end homelessness. Our budget proposes a 
record $2.4 billion to support thousands of local homeless 
assistance programs across our country.
    As a doctor for many years, I am all too familiar with the 
effects of lead exposure and a developing brain. As a result, 
we are requesting $145 million to ensure that homes are free of 
lead-based paint hazards and other dangerous contaminants, 
especially for families with small children.
    I also recognize that we need to do a better job respecting 
that the funds we spend ultimately belong to the public.
    Consequently, I have directed HUD's new Chief Financial 
Officer, Irv Dennis, to design and implement a transformation 
plan and lead an internal task force within HUD to combat 
waste, fraud, and abuse. Irv has more than 36 years of private 
sector experience and is the perfect person to bring that kind 
of business acumen to the task.
    Mr. Chairman, in spite of the billions of dollars we spent 
as a Nation trying to keep pace with the capital needs of our 
public housing stock, it has not worked. In fact, we are 
falling further and further behind.
    This budget recognizes that we need another way. HUD is 
proposing to pivot from the current financially unsustainable 
public housing model and working with public housing authority 
seek a new way to propose and preserve affordable housing that 
so many families need.
    We are asking for the authority to give local public 
housing authorities the flexibility to use their operating 
funds to support their capital needs, and we are proposing to 
convert many more distressed public housing units to a project-
based Section 8 financing model through the Rental Assistance 
Demonstration, or RAD.
    To date, RAD has stimulated more than $5 billion in private 
investment to preserve this housing. Simply put, RAD is 
working.
    The budget proposes to open the door wider and allow more 
public housing authorities to participate in this innovative 
approach.
    HUD is also supporting sustainable home ownership through 
the programs at the Federal Housing Administration. Building 
household wealth through home ownership remains a keystone to 
helping Americans climb the economic ladder of success.
    That is why we have taken several steps to ensure FHA can 
continue to be a reliable source of mortgage financing in years 
to come.
    I am also here today to repeat a request that you have 
heard from us for many years now and from several 
Administrations. We absolutely need to invest in FHA's 
information systems. FHA is built on a mainframe that is over 
four decades old. Staff at our home ownership centers still 
work on paper case files, creating inefficiencies and posing 
numerous quality control issues.
    Mr. Chairman and Members of this Committee, last year was 
one of the most destructive in our Nation's history in terms of 
natural disasters, with three devastating hurricanes and 
destructive wildfires and mudslides in California. HUD is 
already supporting the long-term recovery that is taking shape 
in Texas, Florida, Puerto Rico, and the U.S. Virgin Islands. 
Clearly, we have a lot of work ahead of us.
    Since last September, Congress has appropriated more than 
$35 billion through HUD's Community Development Block Grant 
Disaster Recovery program. We have allocated the $7.4 billion 
appropriated in September and soon will be allocating another 
$28 billion.
    Nearly every program office at HUD has staff working on 
disaster recovery, many of whom have volunteered to travel to 
disaster-stricken areas and serve on the front lines. My 
prayers are always with those who are still struggling to 
recovery. We will continue to stand with them throughout the 
recovery process.
    Chairman Crapo, before I conclude, I want to take a moment 
to comment you and your colleagues from both sides of the aisle 
for your work on S.2155, the Economic Growth Regulatory Relief 
and Consumer Protection Act. This legislation contains a number 
of common-sense housing provisions, including regulatory relief 
for small rural PHAs, streamlining the HUD's Family Self-
Sufficiency Program and important protections for veterans with 
federally backed mortgages.
    In closing, Mr. Chairman, HUD's essential mission is to 
provide safe, fair, and affordable housing for the American 
people. Our mission also supports opportunity and self-
sufficiency so that families can move toward economic 
independence.
    I am eager to work with Congress and all the Members of 
this Committee to achieve what I believe are our common goals 
to better serve our fellow Americans.
    Thank you.
    Chairman Crapo. Thank you, Mr. Secretary, and again, we 
appreciate your being here with us today.
    I assure you there is strong support for the commitment you 
have made to improving and strengthening affordable housing in 
America, and we appreciate the efforts that the agency is 
putting into it.
    I also appreciate your comments with regard to the recent 
legislation we passed in the Senate, Senate Bill 2155, and that 
is where I am going to focus my questions.
    Secretary Carson. OK.
    Chairman Crapo. S.2155 would streamline regulatory 
requirements for small public housing agencies operating in 
rural areas, including simplified calculations for utility 
consumption in public housing, relaxed inspection requirements, 
exemptions from environmental review requirements, and shared 
waiting lists.
    The feedback I have received from the small public housing 
authorities is that these reforms would benefit residents, 
local housing authorities, and other sponsors of public housing 
and housing choice voucher programs.
    First of all, do you agree with that analysis, and could 
you explain how this would help?
    Secretary Carson. Yes, I do agree with them very strongly. 
I mean, these are common-sense solutions and take into account 
the differences between small PHAs and the large ones, and now 
they can focus their attention on actually services for the 
people as opposed to filling out endless forms, and I am sure 
they are extremely grateful for this.
    Chairman Crapo. Well, thank you, and just one more question 
on that bill. S.2155 would also enhance HUD's Family Self-
Sufficiency Program by expanding it to more HUD-assisted 
families and enabling current participants to obtain job 
training, education, and child care services as they save up to 
achieve financial independence. Can you talk about how these 
provisions will help the families receiving housing assistance 
and help them to achieve economic stability and mobility?
    Secretary Carson. Yes. Well, this is exactly what we need 
to be doing. Obviously, by amalgamating the programs, the self-
sufficiency programs for both the public housing and the 
Section 8 program, a lot of efficiency and savings has 
occurred, and we can move people toward better education, jobs, 
decreasing debt, increasing savings, and really making them 
much more a part of the American dream. So that is why I am 
such a strong supporter of self-sufficiency acts.
    And in the past, one of the things that we have been guilty 
of--and I say ``we'' collectively as Government--is we tend to 
pull the support from people when they being to climb the 
ladder of self-sufficiency, and we are acutely aware of that 
and work with you all to make sure that we are not sending the 
wrong messages to people.
    Chairman Crapo. Thank you.
    And now I want to turn to one of our next very high 
priorities in the Committee, housing finance reform. We are now 
approaching a full decade since Fannie and Freddie were taken 
into conservatorship. Finding a comprehensive solution to our 
housing finance system remains a top priority for me for the 
remainder of this Congress, and I think for all of us.
    Can you speak to the role HUD has played and will continue 
to play in exploring opportunities for housing finance reform?
    Secretary Carson. Well, you know, HUD obviously is the home 
of FHA and Ginnie Mae. FHA has a portfolio of $1.2 trillion; 
Ginnie Mae, $1.9 trillion. So you are talking over $3 trillion. 
So, obviously, it is a very important player in the whole 
discussion about finance reform.
    Also, FHA has been the one who has really concentrated on 
first-time home buyers, on minorities, and people who 
frequently have not benefited as much from the private sector 
lending facilities, and we must continue that strong component 
if we want these people to be able to realize the American 
dream itself.
    Also, in terms of making sure that fair housing practices 
prevail throughout our system, that is something that we are 
very, very much concentrated on, and making sure that we 
maintain the financial stability of the system with such things 
as the mandated 2 percent capital ratio, and things have been 
done to make sure that we maintain that, against popular 
demand.
    Chairman Crapo. Thank you very much.
    Senator Brown.
    Senator Brown. You testify--you began your testimony by 
saying your--this year's request is 1.4 percent above last 
year's request, and it is--and I need a yes-or-no answer here 
because I have a lot of things I want to cover, but it is a 14 
percent cut from fiscal year 2017 enacted level, right?
    Secretary Carson. Yes.
    Senator Brown. OK. Thank you for that. I think it is 
important to put that out there and not to mislead by saying it 
is a 1.4 percent increase from a proposal that was ignored by 
this Congress last year.
    One of your proposals would charge mandatory minimum rents. 
What is the annual income of a typical family that would be 
affected by this policy change?
    Secretary Carson. Most of these families are obviously 
distressed. I think the number that you are probably looking 
for is about $9,870.
    Senator Brown. It is actually less. I am not looking for 
any number. I just want the facts. It is less than that.
    How much would they be charged under your policy?
    Secretary Carson. The charge is going to be 30 percent of 
the income, and for those who are work-able, do not have any 
things that are impinging upon them, 35 percent of gross.
    Senator Brown. Does not that strike you as fairly 
remarkable in the era of tax cuts that have gone to upper 
income people in a bigger deficit that--you say $9,000. Our 
numbers are that the income is less than that, but if it is 
$3,000 or $9,000, that you are charging that group of people as 
much as $1,800, and that is a version that CBPP says was, a 
leaked version, as much as $1,800, so that somebody is making 
3-, 4-, 5-, 6-, 7-, 8-, $9,000 a year, and you are charging 
them $1,800 more for their rent? Is that what you became 
Secretary of HUD to want to do?
    Secretary Carson. One of the things that I think is very 
important is that we be realistic about our budgets. We are----
    Senator Brown. Really about a budget after you all 
supported this tax cut, blowing a hole in the Federal budget, 
and you want to make up for it by charging somebody making 
$5,000 a year, $150 extra a month. You call that realistic.
    Secretary Carson. Last Friday----
    Senator Brown. Others would call it cruel.
    Secretary Carson. Last Friday, for the first time, we 
passed a $21 trillion threshold in terms of the national debt. 
If we----
    Senator Brown. And that is----
    Secretary Carson. If we continue to accumulate debt at that 
rate----
    Senator Brown. Nice try. I do not need the lecture, Mr. 
Secretary. I understand that, but I wish you had said that 
several months ago when this Congress passed a tax cut that 
went to you and the President's Cabinet and people in the top 1 
percent that are getting millions of dollars in a tax cut. Now 
it is time to talk about the budget deficit? Maybe you should 
have thought a little ahead as you plan to cut funding for low-
income people.
    Do not forget one out of four people in this country who 
rent spend 50 percent or more of their income in for housing. 
One thing happens in their lives, and it is just a downward 
spiral. You know that. OK.
    A couple other questions. 5,200 Ohioans died from drug 
overdoses in the 12 months measured by the most recent CDC 
report, a 36 percent increase from August to August, what we 
have. That number probably understates the death. You 
apparently hired a 24-year-old campaign worker, with no 
relevant experience, to work on this issue at HUD. Is that 
true?
    Secretary Carson. There was someone who was hired. I 
generally do not get involved with lower level----
    Senator Brown. OK. So you do not get involved in table 
selection. Your wife does, even though she is not a Federal 
employee. You do not get involved in ethics issues because----
    Secretary Carson. If you are going to be throwing out these 
kind of charges, you should give me an opportunity to answer 
them.
    Senator Brown. I will after I am finished with the last 
question.
    Last June, you hired a Chief Information Officer, Johnson 
Joy, who resigned this week. Why did you choose him, and why 
did he resign after only 9 months on the job?
    Secretary Carson. He had a tremendous amount of experience 
and technological advancement, and we needed to make a very 
significant transformation.
    I lost confidence in his ability to lead.
    Senator Brown. Mr. Joy apparently used a contractor to a 
contractor to hire a friend, Naved Jafry, who wildly 
exaggerated his resume. Do you think it would be better to 
advertise and compete for these jobs rather than hiring cronies 
through a subcontractor in the future as you move forward?
    Secretary Carson. I do not hire cronies and subcontractors. 
I do not do that.
    Senator Brown. Well, HUD seems to under your leadership.
    Why did Mr. Jafry and Mr. Joy leave only this week after 
this story hit the media? Is that the first you knew about it?
    Secretary Carson. As soon as I found out about the 
problems, we dealt with them.
    Senator Brown. Does it bother you that you do not know 
these things are going on in your agency until the media writes 
about them?
    Secretary Carson. I do not think that that is a fair 
characterization.
    Senator Brown. Well, it just was with these two. You just 
said you found out about it, and these were pretty high-profile 
political people. You found out about it, and then you fired 
them.
    Secretary Carson. One was high profile; one was not. And 
when we find out about it, we dealt with it.
    Senator Brown. Mr. Secretary, as you remember, I voted to 
confirm you. Four other Democrats on this Committee voted to 
confirm you. I am not sure I made the right decision.
    Thank you.
    Chairman Crapo. Senator Shelby.
    Senator Shelby. Thank you, Mr. Secretary. A little 
different tone now.
    Secretary Carson. Thank you.
    Senator Shelby. You have been here a year, about a year as 
Secretary now, more or less. What are some of the things that 
you have gotten your arms around? What are some of the 
accomplishments in a year? A year is not a long time. I know 
that.
    Secretary Carson. Right.
    Senator Shelby. What are just some of the positive things?
    Secretary Carson. Well, there has been a multitude of 
things. One of the firs things I was hit with was the demand 
that we proceed with the 25-basis-point reduction and the 
insurance premium, and that had been put in place by the 
Administration that was leaving, without, I think, a lot of 
thought and----
    Senator Shelby. That would save people a lot of money, 
would it not?
    Secretary Carson. Yeah. And they thought it would allow 
more people to be able to purchase homes.
    We thought it was done inappropriately and said, ``Hold on. 
Let us look at this.''
    Senator Shelby. OK.
    Secretary Carson. If we have to maintain that 2 percent 
capital ratio, we maintained a 2.09. If we had gone with the 
25-basis-point reduction, we would have ended up with a 1.76, 
and we would have had to come to the Treasury to borrow money 
like we did in 2013, and this whole hearing would have been 
about that and tables.
    Senator Shelby. As you look forward now, what are still--
you have been here 1 year, been there 1 year now. What are 
still your biggest challenges? I know there are a lot of them 
in the HUD.
    Secretary Carson. Homelessness is a big one.
    Senator Shelby. Senator Brown mentioned homelessness a few 
minutes ago.
    Secretary Carson. Right.
    Senator Shelby. But is not there some connection to our 
challenges in our community of mental health of all of our 
people and homelessness? I know in my hometown of Tuscaloosa, 
Alabama, a lot of the homeless--maybe not everywhere--are 
deeply challenged with mental health.
    Secretary Carson. Absolutely. That is a huge----
    Senator Shelby. Is there a connection?
    Secretary Carson. That is as huge problem throughout our 
country.
    You know, we made a mistake about 30 years ago with some of 
our rulings to take these people out of a setting where they 
could be easily taken care of, and we have an obligation, I 
think, to take care of those people.
    Senator Shelby. What are some of your other challenges that 
you are trying to get your arms around?
    Secretary Carson. Well, we have the Superfund problem going 
on in various places around the country, dilapidated housing in 
many places. We have----
    Senator Shelby. Expand on dilapidated housing because I see 
it everywhere. I see it in Birmingham. I see it in Atlanta. I 
see it in Chicago. I see it everywhere.
    Secretary Carson. Yeah. For instance, in Cairo, there was 
just horrible oversight there by the housing authority, and 
these places are totally uninhabitable. We had to come in and 
find a way to house those people in a relatively quick manner.
    There are other places. You look at what is happening 
NYCHA. There are issues going on all over the country. We are 
trying to address them. We are looking at why did these things 
happen in the first place. We have had to get rid of dozens of 
inspectors who have consistently been providing inappropriate 
scoring.
    There are a number of other underlying issues that have to 
be taken care of in order to create the right kind of platform 
so that we do not have these problems.
    Senator Shelby. What do you expect to accomplish, you hope 
if everything worked out for you, say, in another year? What 
would you hope to get your hands around?
    Secretary Carson. Well, I want us to, first of all, get 
systems in place and the kinds of operating controls in place 
at HUD so that we do not have things being done in an 
inappropriate way.
    You know, this whole furniture issue is an example of that. 
We are putting in controls so that that does not happen while I 
am here or after I leave. I think that is vitally important, 
and it will save taxpayer money that way as well.
    I also want us to change the image from that of just trying 
to get more people into a program and to one where we actually 
provide people with a ladder to be able to escape, and we are 
working through the EnVision Centers concept because there is a 
lot of need in our country, and there is also a lot of 
resources, a lot of people who actually are compassionate. But 
the two generally are not juxtaposed.
    We are going to juxtapose those, and I think that is going 
to make an extremely big difference.
    We are also enhancing Section 3. It has been on the books 
for 50 years. We are going to put some teeth into it so that we 
can increase the workforce and also give people the kind of 
skills which will allow them to escape dependency. It is really 
about empowering our people, and yes, we need more affordable 
housing. We need to look at creative ways in which to create 
affordable housing, but we also need to be looking at ways to 
move people out of affordable housing in a positive sense and 
making more room for others so that we do not have these long 
waiting lists. We need to look at it from both ends.
    Senator Shelby. Thank you, Doctor.
    Thank you, Mr. Chairman.
    Chairman Crapo. Thank you.
    Senator Menendez.
    Senator Menendez. Welcome, Mr. Secretary.
    Mr. Secretary, in an interview with the New York Times last 
May after visiting low-income housing in Ohio, you cautioned 
against making such housing, quote, ``a comfortable setting 
that would make anybody want to stay.'' ``I will just stay 
here, and they will take care of me,'' was your quote.
    Now, apparently, your aversion to comforts and extravagance 
do not flow to your office. In response to news reports that 
you had ordered a $31,000 dining room set, a HUD spokesman told 
CNN in February, quote, ``Mrs. Carson and the Secretary had no 
awareness that the table was being purchased.''
    Now, when you were asked this Tuesday in the House, you 
replied that you do not intend to be responsible for what 
anyone else said, which is an extraordinary statement because 
every one of us is responsible for what our spokespeople say. 
If he was wrong, he or you should have had the record set 
straight.
    Given what your spokesperson had said and the lack of any 
correction from HUD, your post to Facebook on March the 5th can 
only be read to indicate that you had no prior knowledge of the 
furniture selection. You said, quote, ``I was surprised as 
anyone to find out that a $31,000 dining room set had been 
ordered.''
    But in a chain of emails dating back to August of last 
year, staff at the Department refer to the furniture set, 
quote, ``The Secretary and Mrs. Carson picked it out.''
    So let me ask you: Why did you mislead the American public, 
the taxpayers that fund the Department's activities and tell 
them you were not aware of this purchase when it is 
indisputable that you and your wife were involved in selecting 
this particular furniture set?
    Secretary Carson. Well, it is not indisputable. I wrote in 
the post on the 5th what my involvement was. It says there very 
clearly what the involvement was. So for----
    Senator Menendez. All those emails of your staff were 
wrong? Your spokesperson was wrong? I mean, it is unbelievable.
    Secretary Carson. All what emails? Tell me what the email 
said.
    Senator Menendez. The emails go back to August 2017. Staff 
at the Department refer to the furniture set that, quote, ``the 
Secretary and Mrs. Carson picked out.'' Did they make that up?
    Secretary Carson. No. But I indicated that in the posting 
that we were involved because they asked us to be involved to 
pick something and that I thought the pricing was too high.
    But here is the bottom line. The bottom line is that the 
furniture is not at HUD, and there is no charge to the American 
people, to the taxpayer, and we have put----
    Senator Menendez. But only because the issues were raised, 
Mr. Secretary.
    Secretary Carson. And we have put special--or I have asked 
the CFO to put in place what we need to make sure that this 
does not happen again.
    Senator Menendez. Let me go to a different set of 
questions. January 5th, 2018, is it true that the Department 
issued a notice effectively delaying implementation of the 
affirmatively furthering fair housing rule, a long overdue rule 
to help communities address persistent racial segregation, and 
meet their obligations on the Fair Housing Act?
    Secretary Carson. It is----
    Senator Menendez. Is it just simply true? Yes or no.
    Secretary Carson. It is true to say that we have been asked 
by dozens of municipalities to hold off on that because it was 
costing them between 100- and $800,000----
    Senator Menendez. Has it been--has it been--so yes?
    Secretary Carson. ----and to hire people----
    Senator Menendez. Yes, it has been delayed?
    Secretary Carson. ----and they were not able to comply with 
it.
    Senator Menendez. Yes, it has been delayed; is that 
correct?
    Secretary Carson. Yes.
    Senator Menendez. That is not a false statement.
    Now, is it true that the Department's fiscal 2019 budget 
requested $3.5 million less than 2017 enacted levels for fair 
housing programs?
    Secretary Carson. I think----
    Senator Menendez. Just simply a yes or no. Is that a 
factually correct statement?
    Secretary Carson. It is not a simple yes or no.
    Senator Menendez. Whether there is $3.5 million less?
    Secretary Carson. No. What----
    Senator Menendez. I think it does not take a brain surgeon 
to understand whether there is $3.5 million less in the budget 
or not.
    Secretary Carson. What is important is what are we 
attempting to do.
    Would it be possible to actually talk about some of the 
actual principles of what we are trying to do?
    Senator Menendez. Is it true that--I would like you to 
answer my questions since you are rarely here before the
    Committee on housing issues. This is, I think, the first 
time since your nomination.
    So is it true that the Department is considering changes to 
is mission statement? I read that in March 7th, the Department 
confirmed that it is considering changes to its mission 
statement, including to remove references to inclusive 
communities and communities free from discrimination.
    Secretary Carson. It is not at all unusual when a new 
Secretary comes in to change the mission statement and----
    Senator Menendez. Do you intend to take those, those 
statements?
    Secretary Carson. And we have, at the senior staff level, 
discussed changing it. The first iteration is the one that you 
have read from. The next iteration was after we have gotten 
input from all the staff, all 7,000 people who work at HUD. 
That was my instruction.
    That it got out and became a news story, that was not the 
intention.
    Senator Menendez. Well, look, let me close by saying 
mission statements may not be policy directives, but in this 
case, you have established your pattern and a practice of 
suggesting that HUD intends to reverse course and ignore its 
statutory obligations to end housing discrimination and promote 
inclusive communities.
    Secretary Carson. But I think----
    Senator Menendez. And that is not something that many of us 
are going to stand by and----
    Secretary Carson. I am not going to stand by it either when 
characterized that way. That is not at all what we are doing.
    Senator Menendez. Well, we will see what the end result is, 
Mr. Secretary.
    Chairman Crapo. Senator Scott.
    Senator Scott. Thank you, Mr. Chairman.
    Secretary, thank you for being here this morning.
    Secretary Carson. Thank you.
    Senator Scott. I am not sure that you realized that you 
signed up to be a human pinata, for it has been a bit 
challenging this morning, and part of it has been around the 
issue of the table. Folks are seeing that as an opportunity to 
delve into some important questions, important issues as well, 
as opposed to the focus and the attention that you have given 
to HUD and self-sufficiency.
    So I would love for you to have an opportunity to answer 
the question about the table on record, and as it relates to 
the overall spending that you have seen or that you have 
authorized in HUD around refurbishing, refurnishing, 
decorating.
    Secretary Carson. Thank you.
    Senator Scott. Please put that to rest for us.
    Secretary Carson. Thank you.
    You know, the initial stories talked about extravagant 
taste of my wife in decorating my office. We spent a total of 
less than $3,500 decorating my office, considerably less than 
the historical norm.
    The second story, it is not a table. It is 17 pieces of 
furniture that we were asked to replace because it could no 
longer be repaired after multiple attempts to repair it.
    The bottom line is that table has not materialized, and 
there is no cost to the people, none whatsoever, not even a 
penalty cost for whoever ordered it, initially ordering it.
    Also, we have taken advantage of the opportunity to put in 
place controls to make sure that this process is done 
correctly, and even though I was not aware of the $5,000 
requirement, I still take responsibility for it as the head of 
the agency. And I take responsibility for fixing it.
    Senator Scott. Good.
    Secretary Carson. And we have done that.
    Senator Scott. Thank you.
    Let us talk about HUD and the responsibilities of HUD for a 
few minutes, as I have a few minutes left.
    You were kind enough to start a listening tour around this 
country to understand and appreciate the severity of the 
problem of housing.
    Secretary Carson. Yes.
    Senator Scott. You were born and lived in poverty. I lived 
in a single-parent household and understand the fragile nature 
of housing for those folks who are living close to the edge and 
frankly sometimes under the edge.
    Secretary Carson. Absolutely.
    Senator Scott. You spent some time in Spartanburg, South 
Carolina, looking at the benefits of the historic preservation 
tax credit and the power of making housing more affordable.
    Part of the legislation that you mentioned, 2155, is my 
Family Self-Sufficiency Act. That has a pathway to a better 
future, when you talk about the importance of legislation like 
the Family Self-Sufficiency Act as well as our conversation 
yesterday around the Opportunity Zones and the opportunity for 
us to leverage private capital with public dollars and do 
something significant for those folks living in public-assisted 
housing today.
    Secretary Carson. Well, thank you so much, first of all, 
for the tremendous effort that you have put in to family self-
sufficiency, with the right attitude, because these people are 
resources for this country, and we need to be thinking about 
how do we develop people, not spending so much time talking 
about objects and houses. Houses are an important part of the 
development of a person and giving them the kind of foundation 
that they need.
    I am absolutely thrilled with the public-private 
partnerships and some of the things that I saw in South 
Carolina with you, how you are able to convert a place that was 
previously a refuge for drug addicts and people who were 
selling drugs and all kinds of criminal activity, prostitution, 
et cetera, and change that to a flourishing community, and the 
big key being by bringing the private sector into the equation, 
they now have an interest in the maintenance of that facility.
    There are a number of different types of family self-
sufficiency programs. One of the ones that we are proposing now 
would take part of the monthly subsidy and put it into an 
escrow account, and you are very familiar with that concept. 
And that escrow is tied to that particular unit, and all the 
routine maintenance for that unit comes out of that escrow. So 
if the screen always needs to be replaced, that is coming out 
of that. Light bulbs. If you are always calling the plumber, 
that is coming out of that. But if you learn to lift a lid and 
fix that plunger yourself, it is growing, and if you leave 
public support within a number of years, you get that entire 
amount for a down payment because, as you know, that is one of 
the major impediments for poor people being able to buy a home. 
They may be able to maintain it, but they would never be able 
to get it in the first place.
    And they have also learned how to think like a homeowner, 
and that really is what these self-sufficiency programs are 
about, getting them to the point where they are able to 
accumulate savings, where they are able to take advantage of 
educational opportunities, where they are able to get the 
training that they need, where we are able to provide day care 
for a lot of the young women so that they can get their GED, 
their associate's degree, their bachelor's degree, learn to be 
self-sufficient, more importantly teach that to their children, 
so we can break these cycles of poverty that have plagued our 
country.
    Senator Scott. Thank you, sir.
    I will just close and wrap it up, Mr. Chairman, with just a 
few thoughts.
    First, I really appreciate your panoramic view of the whole 
person and looking for ways to move folks toward self-
sufficiency. I think as we continue to focus on the actual job 
of the HUD Secretary that we will be surprised and pleased with 
the outcome.
    The distractions that we have seen in the news is not 
helpful whatsoever. I appreciate you taking responsibility, 
number one, as you just did.
    Number two, I appreciate the fact that you have set 
internal controls so it will not be repeated.
    And number three, I hope that all that leads us back to 
what we should be focused on is the incredible human potential 
that resides in so many places that only needs home and 
opportunity and a pathway carved forward so that they can make 
the decision to move forward because I know that they want to, 
and they will, if given the opportunity.
    The rest of the sideshow should be stopped and moved out of 
the way so that folks can see their best and brightest days 
ahead of them.
    Thank you.
    Secretary Carson. I thank you, sir. That is very 
encouraging.
    Chairman Crapo. Senator Jones.
    Senator Jones. Thank you, Mr. Chairman, and thank you, Mr. 
Secretary, for being here.
    I would like to talk a little bit about the--as I 
understand it--and you correct me if I am wrong here, but the 
Department's budget proposal is to eliminate funds for 
community development block grants, and much in my State, I 
think, has been impacted a lot by those block grants, 
particularly with regard to sewers.
    We have some serious, serious issues in Alabama, 
particularly in the Black Belt with sanitation and sewer 
systems that are outdated. Raw sewage is being--backing up into 
homes. I know that is not the case for everyone, but it is a 
serious problem in Alabama.
    So I have not seen in the President's proposal certain 
infrastructure dollars available for a sewer project, so how 
would you address in the housing context an issue for sewer if 
you plan on doing away with the block grant, Community 
Development Block Grant proposal.
    Secretary Carson. Thank you for that question, and 
congratulations on your election.
    Senator Jones. Thank you.
    Secretary Carson. First of all, CDBG has had a very 
positive impact in many areas of the country. There also have 
been problems with directing the funds to the people who are 
supposed to be impacted, which are the low-income individuals.
    There are other mechanisms for taking care of it, but I 
will tell you that there are billions of dollars in the CDBG 
pipeline already. It is going to take more than a year to 
disburse those funds, number one.
    Number two, through programs like the Opportunity Zones, 
which I hope you are becoming familiar with, it will be 
possible to address many of the same types of issues while at 
the same time encouraging tremendous input of private capital 
into those zones.
    Senator Jones. On that real quick, I mean--and I appreciate 
the fact that you have got money in there. We need some, and I 
would invite you to come to Alabama to see some of this.
    But, look, I am all in favor of the Opportunity Zones. I 
think that is a great idea, but do you really expect a New York 
investor or somebody to invest money in one of the poorest 
counties in Alabama to help with their sewers? Do you really 
think that that is something that an investor is going to do?
    Secretary Carson. When it is incorporated into a much 
larger project, when you incorporate the whole area, very 
frequently you have to deal with the infrastructure problems as 
well. You have to deal with the housing problems as well. So 
all of them are interconnected.
    Senator Jones. I hope you are right. I really question 
whether or not we are going to get that kind of private 
investment in the areas that are impacted most in poor rural 
America, but be that as it may, I am hoping that--I think 
Congress will continue to fund those grants.
    The other thing, I want to follow up with Senator Shelby's 
question about the dilapidated housing that is apparently a 
problem that you have recognized. Senator Shelby has seen it. I 
have seen it. But, again, the Administration proposed to 
eliminate the housing capital fund that repairs this public 
housing. It is aging.
    In Alabama, we have $50 million that usually comes in, and 
those funds are also desperately needed. How are you going to 
make up that difference to address the very needs that you 
yourself talked about a few minutes ago in your answer to 
Senator Shelby?
    Secretary Carson. Well, one of the things that I have 
noticed is that we are not building a lot of public housing 
anymore. There is a good reason for that. It generally tends to 
fall into disrepair, simply because there is not the local 
interest in it.
    By converting these to public-private partnership 
opportunities, through things like the RAD program, which has 
been extremely successful, 88,000 units have already been 
revamped that way. We have 30,000 more scheduled for this year. 
We have a waiting list of 86,000. Those things have been 
working very, very effectively. That coupled with monies that 
will be brought in through the Opportunity Zones, I think will 
take care of a lot of issues.
    We are looking at unleashing probably in excess of $2 
trillion. Those are major, major changes.
    Senator Jones. Well, I hope you are right. I question 
whether or not there is going to be that kind of investment in 
these housing projects. They do not make a lot of money. There 
is not that much of a return of represented people that have 
been in those projects, of represented people who have owned a 
couple of those, but we will see. We hope you are right, but I 
also hope that the Congress will once again come back and find 
a different route and continue to fund that program as well as 
the development block grants.
    Secretary Carson. Thank you.
    Senator Jones. I appreciate your efforts.
    And the one thing I would say finally--and I know my time 
is up, but I do appreciate the fact that--despite all the 
distractions, I do appreciate the fact that you are focusing on 
trying to lift people up. I think that is a good thing. I just 
do not want to ignore the fact that people, despite all the 
efforts to lift them up, they just cannot quite make it, and 
there is a lot of people in my State, that despite their 
efforts and their desire and their heart and they are trying 
like hell, but they just cannot quite make it. And we need to 
be there for those people continually.
    Secretary Carson. I agree. We do need to be there for them, 
but that is part of the reason that we are embarking upon the 
EnVision Center project because we want to put the resources in 
place conveniently for them to be able to get there.
    The reason that you are successful, the reason I am 
successful is because there were things in our environment, 
there were people in our environment that helped us along the 
way. Nobody makes it on their own.
    Senator Jones. We can agree on that one.
    Thank you, Mr. Chairman.
    Chairman Crapo. Senator Tillis.
    Senator Tillis. Thank you, Mr. Chairman.
    Doctor, Secretary Carson, welcome to the Committee.
    Secretary Carson. Thank you.
    Senator Tillis. When we met in my office before your 
confirmation, I talked a little bit about how I thought you 
could be a change agent in the Department and what was going to 
be critical is fairly quickly get in there and identify 
programs that are working and double down on them and identify 
programs that are not, returning the value, and take the tough 
political position that we can put this money to a better and 
higher purpose.
    I, for one, think that the discussion about reducing your 
resources right now is premature. I think you need--probably 
need what you have and maybe some more, and what progress have 
you made in terms of really looking at the Department and 
trying to really effect change so that we know that we are 
getting the best value and having the best impact on the people 
who need it?
    Secretary Carson. Well, thank you for asking that question.
    We have made an enormous amount of progress: first of all, 
in terms of stabilizing the Mutual Mortgage Insurance Fund; in 
terms of stopping the hemorrhaging coming from mortgage 
program; stopping the endorsement of PACE loans, which were 
putting the taxpayers at risk; stopping the churning that was 
going on with veterans and strengthening, you know, the HUD-
VASH program and other homelessness programs. This is one of 
the reasons that we have asked for more for homelessness than 
we ever did before.
    But looking at the actual numbers for the programs--there 
is over 7,000 programs--we are looking at the ones that 
actually work, evidence-based changes.
    And then looking internally, this is the first time that we 
have had a CFO in years, and what happens when you do not have 
a CFO in a large organization? You develop multiple little 
siloes, every one of which thinks that they are doing things 
the correct way. Well, we are bringing that all under one dome 
and assigning responsibilities, and I think that is making a 
very large difference. It is ruffling a few feathers in some 
places, but people do not like change. That is OK because it is 
change for the good. It is going to work in the long run.
    Senator Tillis. Mr. Secretary, I did not plan to speak 
about it, but Senator Jones prompted a thought, and it has to 
do--I think it is very important for you to hold the line on 
identifying as many people that you can lift up and out of any 
reliance, mainly because that will provide you ultimately with 
more resources for those, as Senator Jones has correctly 
stated. It may not. So I think that we always have to 
constantly make sure that we have got that balance right so 
that we can have that impact that actually changes the 
trajectory of somebody's life, and when you do that, then you 
can start really focusing on those who have unique 
circumstances that maybe with additional resources, they too 
can be lifted out of their circumstances.
    Secretary Carson. Yes.
    Senator Tillis. I think it is very important, as somebody 
who was in those circumstances, and actually, it relates to my 
next question.
    About a month ago, I was in Nashville, where I spent my 
junior high and high school years, and I went--rode always to a 
trip down Memory Lane and go to the places I lived. I lived in 
a trailer park there, and I went to Sugar Cane Lane, which was 
the trailer park I lived in, and I took a picture of the 
trailer. And it made me think about manufactured housing, and 
it made me think about people who--when I--I ended up having to 
live there. I moved out of the trailer park. I moved back, 
bought my own. I lived there with my family first.
    I do not think that most people recognize that the 
regulatory burden that we place on the citizens of the United 
States hit the poorest among us the hardest.
    Secretary Carson. Mm-hmm.
    Senator Tillis. And if you are buying a mobile home and you 
are buying manufactured housing and you have got to go through 
the morass of regulations that we have today, there is no doubt 
that you are creating a higher price point.
    Secretary Carson. Absolutely.
    Senator Tillis. My case, it could be the difference between 
a single wide and a single wide with a bump-out.
    But what are you doing--and that is more of blade levels. 
You may not be able to answer the question specifically, but it 
is one example of regulatory streamlining and regulatory relief 
that I think we need to focus on, and there are a number of 
others. Can you shed some light on that?
    Secretary Carson. I am glad you brought that up.
    Manufactured housing accounts for 10 percent of single-
family dwellings, 22 million households. So it is substantial, 
and it is actually a potential solution for some of the housing 
issues, particularly in rural areas.
    If you look at the progress that has been made in 
manufactured housing recently, it is amazing. In fact, a lot of 
the housing, you would not be able to distinguish from site-
built housing, and yet the pricing is better.
    But the regulations are ridiculous. So we have put a 
moratorium on that. We are inspecting from top to bottom all of 
those regulations right now and getting rid of a lot of them 
because I think this is an area where we can take advantage.
    Senator Tillis. Thank you, Mr. Chairman.
    Chairman Crapo. Thank you.
    Senator Van Hollen.
    Senator Van Hollen. Welcome, Mr. Secretary.
    Secretary Carson. Thank you.
    Senator Van Hollen. I want to go back to the question asked 
by the Ranking Member at the beginning regarding the overall 
budget priorities because, as you agreed, the proposal that was 
put forward was a 14 percent cut from what had actually been 
provided the year before, and it does go to the question of 
priorities.
    Are you pleased with what you have seen of the current 
budget proposal working its way through the Congress on a 
bipartisan basis in terms of the numbers for HUD?
    Secretary Carson. It could be improved. There is no 
question that it could be improved, but we will work with what 
we have. And we recognize that the whole budgetary process is 
not a simple one.
    Senator Van Hollen. Right.
    Secretary Carson. We make proposals. It is actually 
Congress who actually establishes what the budget is.
    Senator Van Hollen. In terms----
    Secretary Carson. And whatever that budget is, we will work 
with it.
    Senator Van Hollen. I understand that.
    But in terms of the overall levels for HUD, it is 
substantially more than you asked for. Are you pleased with the 
increase that was provided by the Congress?
    Secretary Carson. I am happy that we will be able to do 
even more----
    Senator Van Hollen. Right. You will be able to do more.
    Secretary Carson. ----more effectively and more 
efficiently.
    Senator Van Hollen. So I was just reading a tweet from the 
President of the United States this morning, where he was 
praising the funds for the Defense Department and military, 
which has bipartisan support here. He says he got the most ever 
for the military, and in fact, Congress has been really working 
on a bipartisan basis. Then he goes on to say had to waste 
money on Democratic giveaways. You do not believe that the 
budget here for HUD is a giveaway, do you?
    Secretary Carson. I would not use those terms, but I would 
point out, by the year 2048, everything we take in will be used 
to service the debt, and there will not be any money for any 
program.
    Senator Van Hollen. And, Mr. Secretary, I have been talking 
about the dangers of the debt for a very long time, and I think 
the Ranking Member pointed out that----
    Secretary Carson. Well, you are an ally, then.
    Senator Van Hollen. ----the President just signed something 
that added over $1.5 trillion to the debt.
    CDBG, because you zero that out, right? You zeroed that out 
2 years in a row in your proposal. The Congress has restored 
those fundings. I know there is a number of projects that are 
still working their way through the pipeline, but that is an 
oversubscribed problem--program. The demand for that, I can say 
in the State of Maryland, is much larger than the resources 
provided.
    And it is interesting that when we provided hurricane 
relief, a huge amount of that money went in the form of CDBG, 
did it not?
    Secretary Carson. Well, remember, with hurricane relief, 
you are talking about CDBG-DR; a completely different program, 
by the way.
    Senator Van Hollen. But one of the benefits of that program 
is that the money is flexible and can go to local jurisdictions 
for needs.
    But let me--I want to ask you a particular----
    Secretary Carson. No, that is not true. DR, it is very 
targeted.
    Senator Van Hollen. But I actually have--and I am also 
looking now at the regulations that you had that went through 
that accompanied the monies for hurricane relief, and there is 
actually something I thought was a good policy in there, which 
is that you say that we should not be using these Federal funds 
to rebuild in areas where you have flood plains, and it is 
important to take into account continued sea level rise. Can 
you explain to the Committee why that is important to have 
there as part of the regulations?
    Secretary Carson. Yeah, because it really does not make any 
sense to create the circumstances for the same thing to occur 
once again. And that includes also looking at things like 
building materials, and perhaps instead of just using drywall 
and creating the same problem if you have a flood, using some 
of the aquaphobic materials, which repel water, so that you do 
not have that problem again.
    Senator Van Hollen. I appreciate that.
    I just, Mr. Chairman, would like to put in the record, an 
article, Washington Times, ``HUD Tells States To Consider Sea 
Level Rise When Rebuilding From Storms.''
    Chairman Crapo. Without objection.
    Senator Van Hollen. And I think this was a good policy. I 
hope you will talk to the President about it because one of the 
first things the President did was reverse an executive order 
from the previous Administration that applied that common-sense 
principle governmentwide. I mean, the same goes for Federal 
funds through HUD or transportation. It does not make sense to 
invest taxpayer dollars in places where it will not go.
    So, Mr. Chairman, as we consider the flood reform 
legislation, I really hope we will focus on this, and I 
appreciate the Secretary's testimony.
    The last thing I will say--and Senator Menendez mentioned 
this--I hope you will go back, as you look at that HUD mission 
statement--the omission, at least in the current draft of 
inclusive communities free of discrimination, I think the 
concern here is that some of the policy positions that you and 
the Administration have taken, including your early opposition 
to the new rental--the provisions put forward by the previous 
Administration to try and prevent the concentration of poverty 
and segregation and the use of vouchers, that sent a signal. 
And when you see the proposed change in mission statement on 
top of that, it is troubling. So I just wanted to flag it.
    Secretary Carson. I will take that----
    Senator Van Hollen. It is not just a question of words. It 
is real concerns about actions out there suggesting a real 
production of mission.
    Secretary Carson. I appreciate that, sir, and that is, in 
fact, the reason that I wanted input from all 7,000 of our 
employees, did not necessarily want input from all the news 
media, but we got it, anyway.
    Senator Van Hollen. Thank you, Mr. Secretary.
    Chairman Crapo. Thank you.
    Senator Cortez Masto.
    Senator Cortez Masto. Thank you, Mr. Chair.
    Welcome back----
    Secretary Carson. Thank you.
    Senator Cortez Masto. ----Secretary Carson.
    And I am going to harp on the same thing because it is a 
crisis in this country, particularly in Nevada, which is 
affordable housing crisis.
    Nearly every community in this Nation has an affordable 
rental housing crisis, and it is worse in Nevada. Families 
earning $30,000 a year are unable to find an affordable home. 
For every 100 extremely low-income families, there are only 15 
affordable apartments.
    High rents are driving thousands into homelessness. Our 
waiting lists for public housing and Section 8 are in tens of 
thousands, with families waiting years for help, yet this is 
the second year in a row that this Administration planned to 
eviscerate the already inadequate funding that we provide for 
affordable housing.
    Thank goodness, Congress is the one that provides the 
funding and saw the need to ensure that we are shoring up those 
resources for affordable housing.
    But what I would like to know, now that you have those 
resources, what is your plan to help us address the affordable 
housing crisis in this country?
    Secretary Carson. You know, one of the things that has 
really impressed me as I have traveled around the country are 
places like Liberty Square--you may be familiar with that in 
Miami, one of the notoriously horrible public housing sites--
that through the public-private partnerships is going from 700 
units to 1,600 and developing a complete holistic community. 
Those are the kinds of things that I like.
    You look at East Lake in Atlanta, one of the most crime-
ridden places, with schools that were failing, and now one of 
the two top charter schools and a neighborhood that is 
flourishing and trying to keep people from the outside from 
coming in and taking over.
    Senator Cortez Masto. Thank you.
    And, Secretary Carson, I do not mean to interrupt. I only 
have so much time. I am talking about affordable housing, not 
just Section 8. I am talking about housing for individuals that 
want to rent a home because they cannot afford to purchase it, 
and they cannot even afford the rents. So what are you doing? 
What is----
    Secretary Carson. Sure. Those are affordable housings that 
I just talked to you about.
    Senator Cortez Masto. Right. And there is workforce housing 
that we need in this country that is not affordable as well.
    So talk to me about what HUD is specifically doing, what 
programs. What are you doing to address this need in our 
communities and working with our State and local communities?
    Secretary Carson. One of the things that I think has been 
quite effective is our push to enhance Section 3 and make it 
more than just a suggestion.
    Senator Cortez Masto. What do you mean by a push to 
enhance?
    Secretary Carson. Well, Section 3 has been on the books for 
50 years, has been seldom used because it is easy for people to 
find excuses not to use it. So we are tightening that up to 
make it--and use it, and for example, I was in Chicago 
recently. An entire building was being redeveloped by Section 3 
workers. They were incredibly proud of the work they were 
doing, but more importantly, they were gaining skills which 
allowed them to the move out, which made room for others.
    Senator Cortez Masto. So besides Section 3 housing and a 
push to enhance it, what else are you doing?
    Secretary Carson. Well, we are trying to increase the 
number of units that are dealt with through the RAD program--
this has proved to be incredibly effective--other types of 
public-private partnerships, especially going to be enhanced 
through the Opportunity Zone, with an enormous amount of 
infusion of private capital into these distressed areas.
    Senator Cortez Masto. OK. So can I get a commitment from 
you that you will work with us on addressing affordable housing 
and specifically identify the programs within HUD and within 
your agencies that are geared toward addressing this issue?
    Secretary Carson. I would be more than happy to do that. 
That is what we are trying to do.
    Senator Cortez Masto. Thank you.
    When you appeared before this Committee prior to your 
confirmation, you promised me that you would make sure that 
lesbian, gay, bisexual, and transgender people were not faced 
with discrimination.
    At your confirmation hearing on January 12th, in response 
to a question from Ranking Member Brown about some of the 
concerning comments you have made about LGBTQ people, you 
assured this Committee saying, quote, ``I would enforce all the 
laws of the land, and I believe that all Americans, regardless 
of the new things that you mentioned, should be protected by 
the law.'' But instead, you have continued to undercut 
provisions, HUD's efforts to end discrimination.
    On July 6th, 2017, I along with 28 other Senators sent a 
letter to the Department requesting that you reinstate 
resources that were on your agency's website that protect LGBTQ 
people from housing discrimination, and I still have not 
received a response. What has been the delay? Is it normal for 
your agency to take nearly 9 months to respond to 28 U.S. 
Senators?
    Secretary Carson. Well, first of all, we have finally got a 
General Council in December. I do not know that you can have it 
both ways.
    Senator Cortez Masto. What does that mean?
    Secretary Carson. That means you cannot tell us to deal 
with this complex legal issue and not give us the people that 
we need to do it.
    Senator Cortez Masto. A complex legal issue that was 
already determined by legal counsel in the Administration prior 
to you? You failed to make changes and then think that you need 
to have a second look at it?
    Secretary Carson. A complex legal issue that must take into 
account the rights of all the constituents who are involved and 
not just from one point of view.
    Senator Cortez Masto. I am not sure I understand what you 
are talking about, but I would appreciate a rapid, quick 
response. Now that--are you saying that you still need legal 
counsel before you can make a determination----
    Secretary Carson. I am saying we----
    Senator Cortez Masto. ----that you want to prohibit 
discrimination?
    Secretary Carson. We have spent a lot of time talking about 
this issue since the General Counsel has been there, and I 
think there is going to be something going back up very soon. 
We have already got something going up about the homeless 
children who are being affected.
    This is an issue that we are truly concerned about, but it 
has to be done----
    Senator Cortez Masto. Well, you should be, and I think we 
are all concerned about it.
    Secretary Carson. ----the right way.
    Senator Cortez Masto. Secretary Carson, I know my time is 
up. I appreciate the Ranking Member and the Chair's indulgence.
    Thank you.
    Chairman Crapo. Senator Warren.
    Senator Warren. Thank you, Mr. Chairman.
    Fifty years ago, Congress passed the Fair Housing Act, but 
housing discrimination is still a huge problem in this country. 
According to a recent study, minority borrowers were more 
likely to be denied a mortgage than similar white borrowers in 
61 cities across this country.
    Now, HUD is responsible for combating housing 
discrimination, and during your confirmation process, I asked 
you about your commitment to enforcing laws against housing 
discrimination, despite whatever personal feelings you had 
about those laws, and you said at that hearing, quote, ``I will 
follow the law.'' And I remember hoping that that was true.
    So, Secretary Carson, it has been a year now. Can you name 
a few of the things you have done to reduce housing 
discrimination in your time at HUD?
    Secretary Carson. First of all, we are constantly involved 
in lawsuits that we have brought against people for housing 
discrimination.
    Senator Warren. So are you saying you have initiated many 
lawsuits over the past year on discrimination issues?
    Secretary Carson. Yeah.
    Senator Warren. Is that what you are saying?
    Secretary Carson. That is an ongoing process, even to this 
day.
    Senator Warren. So you have initiated how many lawsuits 
over the last year?
    Secretary Carson. I cannot tell you how many. We can 
certainly get someone to follow up with you on that.
    Senator Warren. OK. Anything more?
    Secretary Carson. I think those--that is obviously very 
important.
    The way I kind of look at it is--when I talk about fair----
    Senator Warren. I am sorry. I am not asking you to get into 
your description. I just want to know what you have done to 
reduce--the specific things you have done to help reduce 
housing discrimination, and you said you have initiated many 
lawsuits, and you will get back to me on the exact number. And 
I just want to know other specific things you have done. 
Anything more?
    Secretary Carson. Well, I would simply say that what we do 
is to try to create a fair environment for all people in all of 
our policies. So when we create a fair environment for 
everybody----
    Senator Warren. Secretary Carson, I will take that----
    Secretary Carson. ----that means minorities as well.
    Senator Warren. That is the question I am asking, though, 
is dealing specifically with discrimination, which is the 
problem.
    Mr. Secretary, I wanted to give you a chance to make your 
case because when I look at your track record at HUD, I just 
see you heading in the wrong direction; that is, going 
backwards.
    And I want to give you one example. The Fair Housing Act 
directed HUD to, quote, ``affirmatively further fair housing.'' 
That is the law, and in 2015, HUD implemented that mandate by 
issuing a rule that required communities that asked for block 
grants from HUD to analyze obstacles that minority residents 
face and to propose plans to address them.
    Civil rights groups and housing advocates at the time said 
the rule would be an important tool for reducing segregation 
and discrimination.
    Then you took over, and you delayed the effective date of 
that rule until at least 2020. You even said that HUD would not 
even review whatever information cities had about 
discrimination that they had already submitted to HUD.
    So, Secretary Carson, do you think that delaying the 2015 
HUD rule for several more years has helped reduce housing 
discrimination?
    Secretary Carson. I hope you will give me an opportunity to 
answer that question.
    Senator Warren. Well, I hope you will answer it.
    Secretary Carson. OK. First of all, we were petitioned by 
dozens and dozens of cities and municipalities to, in fact, 
delay it because it cost between 100- and $800,000 to follow 
the regulations that were put in place, and they had to hire 
two or three people.
    This is great if you have a lot of money. It is not good if 
you do not.
    Senator Warren. Excuse me, Secretary Carson. Let me just 
remind you, this is a question about following the law. The law 
clearly says affirmatively further fair housing. It does not 
say cut back on that because you are concerned about compliance 
cost, and I have to say I am very concerned that you pick 
compliance costs as your answer, when how you had previously 
described your real concern as, quote, ``that this was a failed 
socialist experiment to try to reduce discrimination.''
    Let me ask you about another example. The Obama 
administration had issued a rule on housing vouchers that made 
a critical change in how the value of a housing voucher was 
calculated. It was called the Small Area Fair Market Rent Rule. 
The Obama administration had collected mountains of data 
showing that changing the calculation would reduce segregation 
in metro areas.
    But when you took over, you tried to delay the effective 
date of the rule for another 2 years. So did you think that 
delaying the effective date of this rule would reduce housing 
discrimination?
    Secretary Carson. Well, first of all, we did not delay it. 
What we----
    Senator Warren. You tried.
    Secretary Carson. Let me tell you what we did. We said 
those municipalities that are not ready to implement it, 
because we had multiple people call, said, ``We cannot do 
this,'' we said, ``You have another year to get ready.'' For 
the ones who were ready to do it, we said, ``You can do it 
right now or any time up until that year.'' So we did not delay 
it. That was a mischaracterization.
    Senator Warren. You know, I am sorry. The reports were that 
you tried to delay it and got into some trouble on this.
    Secretary Carson. Those were the reports. That is not the 
facts.
    Senator Warren. You know, Mr. Secretary, a lot of people 
are criticizing you for spending tens of thousands of dollars 
in taxpayer money on fancy furniture, and do not get me wrong. 
I think scamming the taxpayers is a scandal. But the biggest 
scandal of your tenure is your unwillingness to do your job and 
enforce the laws that reduce housing discrimination and 
segregation across this country.
    Decades of housing discrimination have helped create an 
enormous wealth gap between white and black families, and the 
gap between white home ownership rates and black home ownership 
rates is 30 percentage points, larger than it was back in 1968. 
In 1968, the typical black family had one-sixth as much wealth 
as the typical white family. Now it is one-tenth. We have gone 
backwards since the Civil Rights era.
    It is HUD's job to help end housing discrimination. That is 
what the law said. You said you would enforce these laws. You 
have not, and I think that is the scandal that should get you 
fired.
    Thank you, Mr. Chairman.
    Secretary Carson. Well, I do not think that you have 
characterized things in any way close to what is accurate, but 
you are welcome to say whatever you want.
    Senator Warren. I really resent that remark. I have asked 
the question about how it is that delaying enforcement of rules 
that were already in place, to delay--to help end housing 
discrimination would help. I asked you to make your case----
    Secretary Carson. And I explained to you----
    Senator Warren. ----and all you can say is compliance costs 
were high.
    Secretary Carson. And I explained it to you.
    Senator Warren. That does not explain how it is that you 
were going to delay enforcement of those rules and that was 
going to help end housing discrimination.
    Secretary Carson. I think I explained it to you quite well 
that with the Small Area Fair Markets----
    Senator Warren. Well, we see that very----
    Secretary Carson. ----that we could not tell people that 
they could not do it.
    Senator Warren. We see your--we see that very differently. 
I would not describe it as quite well.
    Secretary Carson. And we told them that they could go ahead 
with that immediately. There is no delay if you are ready to do 
it.
    Senator Warren. You will not even look at the data that has 
come into HUD. That is not a commitment to ending housing 
discrimination.
    Chairman Crapo. Senator Reed.
    Senator Reed.
    Senator Warren. I apologize for going over.
    Senator Reed. Thank you, Mr. Chairman.
    Mr. Secretary, in our several conversations before your 
nomination and otherwise, I made the point about veterans 
homelessness.
    Secretary Carson. Yes.
    Senator Reed. We owe a great deal to our veterans, and it 
is, I think, discouraging to all of us when we see them without 
adequate housing, and too many of them are in that situation.
    The Interagency Council on Homelessness will be completing 
a report soon, which we have requested. Could you update the 
Committee on your efforts that you have taken directly to 
address this issue of veterans homelessness?
    Secretary Carson. Well, 1 percent of our population 
protects the other 99 percent of us, and I think we owe a great 
deal to our veterans.
    And the HUD-VASH program has been responsible for a 47 
percent reduction in homelessness for veterans. We will 
continue to support that program and enhance it.
    Also, many of our other homeless programs affect veterans. 
We have asked for a record amount of money for homeless 
programs this year, including the Continuum of Care Program, 
which supports more than 7,000 different homeless programs, 
many of which are affecting our veterans.
    But the place where the biggest problems with veterans 
homelessness are on the West Coast and in New York City, and it 
is principally because the incomes are not rising as fast as 
the property values. And because of some of the restrictive 
regulations and zoning characteristics, that is a big problem, 
which we are going to need a lot of help because we do not have 
jurisdiction over the zoning.
    Something needs to be done about that because a lot of 
people have this idea that if you are bringing multifamily 
housing in that you are going to bring in some kind of 
dilapidated project. That is on longer the case, particularly 
when it is done through public-private partnerships. These are 
beautiful places, and we are going to need help obviously from 
Congress and from local and State governments to be able to 
help rectify that situation.
    But across the rest of the country, not including the West 
Coast and New York City, homelessness is actually going down, 
and you have probably have read many of the reports that a 
number of municipalities have declared victory when it comes to 
homelessness for veterans.
    Senator Reed. In fact, Mr. Secretary, I think in Rhode 
Island a few years ago, thought we were at that moment, and in 
fact, ironically and unfortunately, our homelessness population 
of veterans is going up. And we are not alone. Because of our 
small size, we are looking at estimates of about 89 homeless 
veterans in 2016, but that is 95 now. That is just six or seven 
men and women, but that is important to me.
    The other issue--I am glad you put the emphasis on the HUD-
VASH program because, unfortunately, the President requested in 
FY18 just $7 million of a $40 million program and nothing for 
FY19.
    Secretary Carson. Yes. The reason for that is because we 
have adequate vouchers. They can be reissued.
    We do need some authority from Congress to shift the 
vouchers around, but we have adequate numbers. When we get to a 
point where it is getting close, we will ask for more money.
    Senator Reed. Well, you know, again, my concern is that it 
is more than close, and particularly, you point out some of the 
higher-price areas of the country where the--if you could 
consider even increasing the voucher, that would make a 
difference, but we have just too many veterans that are not 
housed, to be sitting back and saying we do not need any 
additional resources.
    I think--I hope our omnibus, with Senator Collins' efforts 
and my effort, but her efforts particularly, we will provide 
$40 million for 5,100 new housing vouchers for veterans. With 
the President's proposal, there would be zero, and we would 
have some real problems.
    The other issue is not so much the veterans population. It 
is the chronically homeless, those people who consistently are 
unable to be housed, despite efforts. Sometimes they qualify 
for benefits, sometimes they receive benefits, but they just 
cannot find themselves into a permanent stable living 
arrangement. Any comments or thoughts to identify and address 
these needs?
    Secretary Carson. Well, first of all, we need to recognize 
that it actually costs more to keep a person on the street than 
it does to house a person, and that is the whole concept 
between Housing First, which we appreciate and embrace.
    But I add to it housing second and housing third, which 
means housing second, you diagnose the reason that they are 
there, and housing third, you do everything you can to fix it.
    And that along with examining each of the homelessness 
programs in terms of their effectiveness is what is making the 
difference as we continue to drive it down.
    And someone did make a comment that homeless had gone up on 
the watch of this Administration. That .7 percent increase was 
from the homelessness count in January of 2017, which was for 
the year 2016, just to set the record straight.
    Senator Reed. Well, again, we have to do all we can to keep 
that record of decline, which I think it has been over the 
years preceding 2017, accelerating, not decelerating, and that 
is one of the reasons we funded the VASH housing, HUD voucher, 
so----
    Secretary Carson. And I appreciate your attention to that.
    Senator Reed. Thank you, Mr. Secretary.
    Thank you, Mr. Chairman.
    Chairman Crapo. Thank you.
    Senator Cotton.
    Senator Cotton. Thank you, Mr. Chairman.
    Thank you, Mr. Secretary. It is good to see you again.
    Secretary Carson. Me too. Thanks.
    Senator Cotton. I want to speak about Property Assessed 
Clean Energy loans. We discussed this last year.
    In June 2016, the Department of Housing and Urban 
Development decided the Federal Housing Administration would 
change its mortgage policy to start ensuring mortgages that had 
a PACE lane. For those not familiar with it, PACE loans or PACE 
lanes are collected through local taxing authorities. They did 
not go through any kind of underwriting, and they had super 
priority over mortgages. So that meant in default, the lender 
who had installed, say, solar panels or new windows or 
something, would be paid back before the mortgager or before 
the taxpayer if that mortgage is insured by FHA.
    There were horrible cases, instances of elderly widows 
being scammed out of $50,000 on loan shark-level interest 
rates, and we first discussed that back in April of 2017.
    I want to show you a flier that we recently came to see. I 
think it goes to show that these loans are placed in priority, 
no money down, and clearly demonstrates, if you just look at 
some of the language on this flier, that they are being 
marketed toward people who had bad credit or who have no 
credit, and designed to scam out homeowners and ultimately the 
people from whom they borrow money or, in your case, the 
taxpayer who insures their mortgages.
    I mean, look at this. ``Have bad credit? No problem. What 
qualifies is your property.''
    These loans average $25,000, which means the taxpayer could 
be on hook under the 2016 policy for up to $25,000, and I would 
ask you to look at it and put out some new guidance, and I want 
to thank you.
    Secretary Carson. Absolutely.
    Senator Cotton. Your decision in December, on December 5th, 
you announced that FHA would no longer issue new mortgages on 
properties that included these kind of PACE loans. I just want 
to read briefly from the statement you issued at the time 
because I found it very compelling: ``FHA can no longer 
tolerate putting taxpayers at risk by allowing obligations like 
these to be placed ahead of the mortgage itself ahead of 
default. Assessments such as these are potentially dangerous 
for our mutual mortgage insurance fund and may have serious 
consequences on a consumer's ability to repay or when they 
attempt to refinance their mortgage and sell their home.''
    Thank you again for that decision, Mr. Secretary. I want to 
point out to you, though, that the Senate recently passed the 
Economic Growth Regulatory Reform and Consumer Protection Act, 
which included language from my bill that would subject these 
scam loans to the Truth in Lending Act.
    Secretary Carson. Absolutely.
    Senator Cotton. In your opinion, does that represent a 
positive step forward for these consumers and the taxpayer?
    Secretary Carson. That is a huge step forward, and I just 
want to thank you for taking the lead on this because it was 
really you who brought this to my attention in the first place. 
And we did act upon it, and I do appreciate the fact that there 
is recognition that we actually do do some good things.
    Senator Cotton. Thank you.
    And I hope the House passes it and the President can sign 
it into law in short order, so when vulnerable consumers are 
targeted by these scam loans, they will at least know the true 
terms that they are facing for the loans.
    However, even if that is--does pass into law and the Truth 
in Lending Act applies to these PACE loans, they would still 
have priority over mortgages. So I assume that even if that 
provision passes into law, you will continue with your December 
2017 decision that the FHA will not insure loans----
    Secretary Carson. Absolutely.
    Senator Cotton. ----that have a PACE lien on them.
    Secretary Carson. Without question.
    Senator Cotton. Thank you very much.
    Secretary Carson. Thank you.
    Chairman Crapo. Senator Donnelly.
    Senator Donnelly. Thank you, Mr. Chairman.
    Good morning, Secretary Carson.
    Senator Donnelly. Good morning.
    Senator Donnelly. When you were nominated for this 
position, you committed both in my office and before this 
Committee to personally visit and provide full HUD resources to 
assist East Chicago, Indiana, where the lives of more than 300 
families, including many children, were at risk due to 
significant lead and arsenic exposure. You did as you said. You 
supported HUD's continued relocation efforts for those 300 
families.
    You joined me in August of last year to visit East Chicago 
and in September awarded $4 million to the East Chicago Housing 
Authority for the safety, security, and demolition of the 
contaminated complex.
    We are grateful for your attention, and we are grateful for 
the commitments to the residents of East Chicago.
    Secretary Carson. Thank you.
    Senator Donnelly. Can I have your commitment that HUD will 
continue to partner with East Chicago as demolition of the 
housing complex is actually set to begin this month, followed 
by a lengthy environmental cleanup and redevelopment effort, 
that you will continue to be our partner in this effort?
    Secretary Carson. We will not only continue to be your 
partner with that, but this is an area, particularly 
Superfunds, and the lead that we are concerned about across the 
Nation, putting a great deal of emphasis on because it has huge 
implications down the road in terms of the health of those, 
particularly children, who are affected and also the cost of 
dealing with the problems that they develop.
    Senator Donnelly. Last week, the Senate passed S.2155, a 
package crafted by Members of this Committee, including myself. 
Section 312 requires HUD to report to Congress on its policies 
and enforcement related to lead-based paint hazard prevention 
and abatement.
    The report also requires HUD to offer recommendations and 
best practices for itself, for public housing agencies, and 
landlords to ensure our housing policies fully protect the 
health and safety of children.
    This legislation is at the House now, but are you willing 
to direct HUD staff to begin this review immediately and 
instruct them to complete the report as soon as possible?
    Secretary Carson. Yes, absolutely. And I appreciate your 
leadership in this area.
    Senator Donnelly. It is imperative that HUD updates its 
lead-based paint policies, particularly in housing with young 
children. We can never allow there to be another East Chicago 
situation. The report we discussed a minute ago is intended to 
require HUD to take a holistic look at your policies. It is not 
intended to delay ongoing efforts in Congress to enact the 
Lead-Safe Housing for Kids Act, to require additional lead-
based paint testing and risk assessments in federally 
subsidized households with young children.
    Senators Scott and Menendez on this Committee are also 
cosponsors of this bipartisan bill.
    As a medical doctor, do you believe visual assessments 
alone are sufficient to identify the presence of lead-based 
paint hazards to ensure the environmental safety and health of 
our children?
    Secretary Carson. I think there is a lot to be said by 
visual inspections, but no, I do not think that is adequate. 
And we are continuing to look at other things.
    There is a multi-agency task force to look at environmental 
problems, such as lead, and we have talked about that.
    I actually would love to see universal screening for this. 
Just make it part of the panel that we look at because 
sometimes we think that this only affects people in a certain 
area, but it affects people everywhere, everywhere there is 
older housing, even in some of the most luxurious places in our 
country. And the impact on those brains is going to be 
significant.
    So I again want to thank you for leading out on this.
    Senator Donnelly. Thank you.
    One more question. As you know, 80 percent of global RV 
manufacturing occurs in my State, especially in the area of 
Elkhart County, just down the road from where I happen to live.
    As we have discussed many times, RVs are specifically 
exempted from HUD's manufactured housing regulations. However, 
due to technological industry advancements, the RV exemption 
that was written by HUD in the 1980s is outdated and in 
desperate need of update.
    Later today, Secretary, you will receive a letter from me 
and several other Senators urging HUD to finalize its proposed 
rule from 2016 to properly exempt RVs from manufactured housing 
regulations. When can we expect HUD to finally complete this 
rulemaking?
    Secretary Carson. As I mentioned earlier, probably before 
you came in, we are conducting a top-to-bottom review of all 
the regulations associated with manufactured housing. That will 
include the regulations, putting RVs under the HUD's 
jurisdiction.
    Senator Donnelly. Thank you, Mr. Secretary, and thanks for 
your work.
    Secretary Carson. Thank you.
    Senator Donnelly. Mr. Chairman.
    Chairman Crapo. Thank you.
    Senator Kennedy.
    Senator Kennedy. Thank you, Mr. Chairman.
    Mr. Secretary, how are you?
    Secretary Carson. Doing well. Good to see you.
    Senator Kennedy. Please give my best to your better half.
    Secretary Carson. I will.
    Senator Kennedy. I want to talk about two subjects. First, 
of the flooding in Louisiana, you were very generous with your 
time, you and Mrs. Carson. You came down and toured Louisiana.
    Our flooding took place in the spring of 2016 in North 
Louisiana, some in South Louisiana, and then in South Louisiana 
in August of 2016, so let us call it 2 years ago.
    The American taxpayer has generally given Louisiana $1.3 
billion to help us recover. That the good news.
    The Governor in my State appointed a committee to disburse 
the money. We have had the money a long time. Thank you very 
much. The Governor's committee has disbursed a grant total of 
61 million bucks out of $1.3 billion to taxpayers.
    Now, everybody else has got paid, including but not limited 
to the contractors. But our taxpayers are not getting very 
much, and I wish I could tell you it is going to get better. 
They have set up a bureaucracy down there to rival anything we 
have got in Washington, DC.
    Here is my question. We are probably going to be getting 
more money--thank you once again, American taxpayer--in CDBG 
funds, about $800 million. You are in charge of that.
    Secretary Carson. Right.
    Senator Kennedy. I know you respect taxpayer money, unlike 
some.
    Would you ask your folks, please, to try to help us ensure 
that that money is going to be spent on people----
    Secretary Carson. Right.
    Senator Kennedy. ----and not on consultants, not on 
contractors, not on people's friends, but to the people who 
flooded? Just a thought.
    Secretary Carson. Absolutely.
    Senator Kennedy. And please insist on that with this $800 
million because the Governor keeps asking me and Senator 
Cassidy, ``Give us more money. Get us some more money.'' And my 
response has always been, ``John Bel, you know, the first 
question I always get is `Well, how much of it have you spent 
that we already gave you?' ''----
    Secretary Carson. Right.
    Senator Kennedy. ----``and I have to tell the truth.''
    Secretary Carson. Well, you will be pleased to know that 
with the advent of our CFO, one of the very first things that 
we have begun to look at is the grant process, how the grants 
are given, what the metrics and requirements are, particularly 
in terms of dissemination, spending of the money. And it is 
particularly for the reason that you just mentioned. So that is 
something that you will be seeing the results of quite quickly.
    Also, with disaster funding in general, we have cut a large 
number of regulations in order to get money into people's hands 
much faster, working with FEMA, working with SBA, working with 
local State governments and officials. That is one of our prime 
goals, and I think with the disasters that occurred last year, 
we have already seen a vast improvement. And we are going to 
continue to work on that to improve that.
    Senator Kennedy. Well, I have Governor Edwards to get rid 
of his committee and just take control of this thing himself 
and put a select group of people in charge and call them in and 
say, ``Start distributing this money to the real people who 
were hurt.''
    Secretary Carson. Right.
    Senator Kennedy. And I have been in Government long enough 
to know that if he brings in four or five of them, at least one 
of them is going to say, ``Oh, Governor, it is really 
complicated, and I need more money for administration.'' That 
is the one you fire.
    Secretary Carson. Right.
    Senator Kennedy. And then the other four kind of realize 
you are serious, and if you could help us on this CDBG money to 
make sure that they have a plan to spend it, that the money is 
going to actually be spent on people and not the consultants, 
so we can try to help these poor folks.
    Secretary Carson. Yeah. You and I are completely aligned on 
that. We will be working very hard with you on that.
    Senator Kennedy. Well, and thank you for your leadership. 
Do not let them get you down.
    Secretary Carson. They will try, but they will not. They 
just encourage me.
    Senator Kennedy. I understand.
    Thank you, Mr. Chairman.
    Chairman Crapo. Thank you, Senator Kennedy.
    And Senator Brown has asked for another round for some more 
personal--I mean another round for him to ask some more 
questions.
    [Laughter.]
    Senator Brown. I am not sure who this ``they'' is that are 
trying to keep him down.
    But, Mr. Secretary, I thank you again for being here, and 
I--yesterday--was with Secretary Shulkin in the Veterans 
Committee, and I appreciate the efforts on HUD-VASH. I 
appreciate the efforts on eliminating veterans homelessness 
that began several years ago that, as you said, has made 
progress.
    I do not understand, though, when we know HUD-VASH works, 
and we know we put more money in HUD-VASH, that Secretary 
Shulkin had--I could not tell for sure--either not had 
conversations with you or not been encouraged by you to 
increase the budget nor you to him.
    Secretary Carson. We had multiple conversations.
    Senator Brown. Good. But why then is the HUD-VASH vouchers 
not increasing when we know they work?
    Secretary Carson. Again, it is because we base our requests 
on what the requests are, what people need, and we have 
adequate number of vouchers and an adequate number of vouchers 
that can be reissued.
    The biggest problem is that we do not have the authority to 
move the vouchers from a place where there is access to a place 
where they are needed. This is what we really need. We do not 
need to just throw more money.
    Senator Brown. Well, if that is the case, we will work with 
you. I never heard that, but if that is the case, we will work 
with you----
    Secretary Carson. That is the case.
    Senator Brown. ----on making that happen.
    A couple of question. You say you want to promote self-
sufficiency by increasing the number of people who leave the 
program with positive outcomes, an admirable approach. What do 
you consider a positive outcome?
    Secretary Carson. I consider a positive outcome not 
requiring Government assistance.
    Senator Brown. And that is how you measure the outcome for 
families?
    Secretary Carson. I would consider that a positive outcome.
    Senator Brown. Do you measure negative outcomes too?
    Secretary Carson. What do you mean by that?
    Senator Brown. Well, do you measure an outcome that is not 
positive? If you do not consider it positive, do you provide 
measures for when they are not?
    Secretary Carson. Well, yeah. In measuring the positive 
outcomes, you automatically measure the negative outcomes.
    Senator Brown. Well, do you break that down on how many 
people will lose housing under your proposal for rent reforms?
    Secretary Carson. Under our proposals, we do not anticipate 
anybody losing houses, housing.
    Senator Brown. So you increase $1,800 a year requirement 
for housing; you do not think you will lose people who are 
making 3- or $4,000 a year?
    Secretary Carson. We do not because----
    Senator Brown. Where is that money coming?
    Secretary Carson. Because one of the other things we are 
doing is instead of requiring an annual assessment of their 
income, it is going to be moved to every 3 years because, in 
the past, people hit that ceiling. They say, ``I do not want to 
make any more money because it is going to cost my rent to go 
up.'' That does not happen now, and that means that they are 
more likely to get into a position where they are making more 
money and where they are more likely to be able to get out of 
the housing.
    Senator Brown. Well, that is magical Presidential candidate 
thinking. I just do not--somebody is making 3- or $4,000 a 
year. They do not want to make more because their housing would 
cost more, and I----
    Secretary Carson. Well, 3- or $4,000, that is not the right 
number by the----
    Senator Brown. Well, you said 9,000. The number that was 
leaked seemed closer to 3, but I will give you the 9. I just 
cannot imagine in these calculations when people pay half their 
rent, half their income in housing, that they are making that 
calculation that way, and you base your numbers that way.
    Secretary Carson. Well, you probably also know that that is 
not the complete number. You probably know that.
    Senator Brown. Well, it is a big part of the number.
    Let me shift some here. You indicated to Senator Jones, the 
reason for the poor repair of public housing is a lack of local 
interest. So should local government maintain these Federal 
assets? Is that what you are saying?
    Secretary Carson. When I talk about local interest, I am 
talking about private sector.
    Senator Brown. So these people that are living----
    Secretary Carson. Of course, the local government should be 
involved as well, but the private sector----
    Senator Brown. But these people that are living there just 
are not keeping up their homes well enough. Do these very, very 
low-income people who have money, often not enough money to 
paint, not enough money to fix much of anything--it is kind of 
blaming them, right?
    Secretary Carson. No, not at all. Traditionally----
    Senator Brown. Well, what is it? If they are not--who is 
not keeping it up, then?
    Secretary Carson. Traditionally, if you know much about 
real estate, you know that whether it is a Government property 
or not, when people are there who are renters and do not have 
any particular dog in the fight that places tend to 
deteriorate. You know that, don't you?
    Senator Brown. They do not have a dog in the fight. They 
also do not have money much to keep it up. I understand the law 
of the commons and all that, but should not the Federal 
Government be more of a partner? You mean, you are cutting the 
budget to renovate, to keep up, to repair these homes. Is not 
the real problem a lack of Federal support for these homes?
    Secretary Carson. Well, in terms of capital funds, for 
decades now, we have been putting billions of dollars into the 
capital funds, and what has happened?
    Senator Brown. So let us just pull out money. You have 
acknowledged that HUD-VASH works better because we actually 
fund it. You have acknowledged that more money means when--in 
the response to the budget, I believe from Senator Van Hollen, 
that there is more money in the budget. Well, you said, ``I 
will be able to do more good things with that money,'' but you 
are advocating a smaller budget when your assessment----
    Secretary Carson. Well, I think you are a good man, and I 
think you are going to understand what I am about to say. OK. 
We have been putting a lot of money into these capital funds to 
maintain these buildings, and the number that we need to 
maintain it keeps going up. Therefore, what we need to do is 
look for a different way. We need to look for a better way to 
maintain and to redevelop these things.
    Senator Brown. Well, perhaps, Mr. Secretary, but when a 
better way is when one in four people renting in this country 
spend more than half their--spend at least half their income on 
housing, when one in four residents, homeowners and renters in 
Cleveland, Ohio, not Cleveland, the county of Cuyahoga, which 
has a lot of wealth too, a lot of middle-class people, a lot of 
working families, a lot of everything, one out of four of those 
people, of those residents--I am one of them--one out of four 
of them spend more than half their--at least half their income. 
How can you say that withdrawing--cutting the budget 14 percent 
is going to make this a better situation when the Government 
only--when vouchers and housing assistance is only about one-
fourth for those families?
    Secretary Carson. Well, it probably would have been even 
more than 14 percent if I had not made multiple trips to talk 
to people.
    We have to recognize that we are in a difficult situation. 
I would love to work with you.
    Senator Brown. With the Federal budget.
    Secretary Carson. I have already been working with some of 
the housing advocates. We are trying to find solutions. I do 
not think----
    Senator Brown. The difficult situation meaning the budget 
deficit, is that what you mean?
    Secretary Carson. Yeah.
    Senator Brown. And did you speak up about this last year 
when we blew a hole in----
    Secretary Carson. I constantly speak up about it.
    Senator Brown. Well, you spoke up about the budget deficit?
    Secretary Carson. Yes, I did.
    Senator Brown. Did you ask any members of the House or 
Senate to vote no on the blow-a-hole-in-the-budget tax bill?
    Secretary Carson. Not on this tax bill. I have not talked 
to them, but it is----
    Senator Brown. Well, that is the most recent one that blew 
a huge hole in the Federal budget, and then now we are coming--
we have got to make up for it and----
    Secretary Carson. Well, I hope you will join me in talking 
to everybody you can about it because we are talking about the 
future of our country. We are talking about our children and 
our grandchildren.
    Senator Brown. As we were last--as we were last fall when 
we gave huge tax cuts to people like you and the Cabinet 
member, the wealthiest 1 percent.
    Secretary Carson. I did not get a tax cut.
    Senator Brown. Well, you will----
    Secretary Carson. No.
    Senator Brown. ----under this.
    Secretary Carson. I did not. I will not.
    Senator Brown. Well, maybe----
    Secretary Carson. My taxes are going up.
    Senator Brown. We will see.
    Secretary Carson. There is no question about it.
    Senator Brown. I do not know about your taxes.
    Secretary Carson. Big time.
    Senator Brown. I will say it more precisely. Many in the 
President's Cabinet, because the 1 percent--and lots of them 
are well represented in the Cabinet--1 percent did really, 
really well under this tax bill. You know that. That is fact, 
and we have a hole in the budget. And Speaker Ryan says we have 
got to go after Medicare. We have got to go after Medicaid. Why 
is it the wealthy do better and better, but those who are 
struggling, we take it out on them? We put the burdens on their 
backs? And you are part of that, Mr. Secretary.
    Secretary Carson. Well, is it a problem that more companies 
are returning to our shores----
    Senator Brown. Well, we will see.
    Secretary Carson. ----from overseas?
    Senator Brown. We will see how many do that.
    Secretary Carson. Is it a problem that people are getting 
bonuses that are helping them?
    Senator Brown. I can answer. I can answer.
    Secretary Carson. Is it a problem that a child----
    Senator Brown. You asked it. I am sorry.
    Mr. Secretary, I will take the--I can anecdote you with--I 
can anecdote back to you on stories as well.
    Secretary Carson. Those are not anecdotes. Those are facts.
    Senator Brown. Well, so yes. So is an engineering that came 
up to me that said his company, because of the tax bill, is 
going to move engineers, going to move dozens of engineers from 
Ohio to----
    Secretary Carson. But the point is we do not need to fight 
about this.
    Senator Brown. Because of the tax bill.
    Secretary Carson. We do not need to fight about that.
    Senator Brown. We do not need to fight about it, but if you 
are going to talk about the budget deficit and build your 
budget on that and your reason for cutting spending on a whole 
lot of low-income people, do not blame it on the Federal budget 
when the Federal budget got worse because of what you--your 
President--our President and your Cabinet was advocating in 
this Congress.
    Chairman Crapo. We are going to leave the debate over the 
tax bill at that.
    Senator Brown. Thank you, Mr. Chairman.
    Thank you, Mr. Secretary.
    Chairman Crapo. Senator Kennedy has asked for the last 
word. I would ask him to please keep it brief.
    Senator Kennedy. I will follow the Sherrod's lead there.
    [Laughter.]
    Senator Kennedy. Look, Senator Brown, as usual, made some 
very salient points, but I want to--I want to thank you for 
trying to help Americans know the dignity of being self-
sufficient.
    Secretary Carson. Thank you.
    Senator Kennedy. I do not think the American people get 
enough credit, Mr. Secretary. We spend about a trillion dollars 
a year, State and local social programs, and in our country, if 
you are hungry, we feed you. If you are homeless, we house you. 
If you are too poor to be sick, we pay for your doctor. A lot 
of other countries would just let you die.
    Secretary Carson. Right.
    Senator Kennedy. But the problem is that so many of our 
programs to help people have become parking lots, when they are 
supposed to be bridges.
    Secretary Carson. Mm-hmm.
    Senator Kennedy. And it seems to me that we have become a 
Government that automatically sees folks as victims, which can 
breed dependency as opposed to potential workers.
    Secretary Carson. Right.
    Senator Kennedy. And I would strongly--I thank you for and 
I strongly encourage you to continue the effort. So if somebody 
needs a place to live, we ought to provide it, but if they are 
between the ages of 18 and 65 and they are not disabled, then 
we need to ask them to work 20 hours a week or go back to 
school 20 hours a week or do community service 20 hours a week, 
and I am not talking about a mother with a sick baby in her 
arms. I am not talking about asking grandpa to leave the 
nursing home.
    And you have done a lot toward that, and I know a lot of 
people say it makes you cold and heartless. And they say that--
my implication about the American people. We are spending a 
trillion dollars, and I do not know. I just--I try to be a good 
Methodist. I believe in free will, and I do not think our 
people who need a hand up or want to stay there.
    Secretary Carson. Right.
    Senator Kennedy. And you have worked at that, and I know 
some people have bashed you. And I just wanted to thank you for 
it.
    Secretary Carson. Well, thank you. I appreciate that, and, 
you know, in the sermon of the Mount, Jesus said, ``Do not 
worry about it when people say all kind of horrible things 
about you. Just do the right thing.''
    And that is what is driving us right now. I have been 
blessed with a tremendous team, just wonderful people, and we 
are going to get people out of poverty. And it is going to 
change the paradigm in this country.
    Senator Kennedy. I mean, to sum it up, I do not want to 
take food stamps or affordable housing away from people in 
need.
    Secretary Carson. Sure.
    Senator Kennedy. But I do want fewer people to need food 
stamps and affordable housing, and I do not know a single 
person--maybe there are some, but I do not know a single--and I 
know a number. I do not know a single person who is dependent 
on Government who really wants to be.
    Secretary Carson. Right.
    Senator Kennedy. And I am not talking about just, ``OK. Go 
get a job.'' There are programs that have been set up--Kentucky 
has a great one--where we will help you get a job. This 
economy, thanks to those tax cuts, is doing great.
    But, anyway, I am still doing 5 minutes better than Senator 
Brown.
    [Laughter.]
    Senator Kennedy. I am going to wrap it up here.
    Secretary Carson. Well, thank you, Senator.
    And I just want to say that we the Government, maybe not 
the current Government, but collectively, we are the ones who 
created the situation of dependency, and I think we have a 
responsibility to fix it.
    Senator Kennedy. Thank you, sir.
    Chairman Crapo. All right. With that, the hearing will 
conclude. That concludes the questioning, and I want to once 
again thank you, Secretary Carson for coming and reporting to 
us and being here with us this morning.
    Secretary Carson. Thank you.
    Chairman Crapo. For Senators who wish to submit questions 
for the record, those questions are due next Thursday, March 
29th.
    And, Mr. Secretary, I would ask that you respond to any 
questions as soon as you possibly can.
    Secretary Carson. Thank you.
    Chairman Crapo. With that, this hearing is adjourned.
    [Whereupon, at 11:51 a.m., the hearing was adjourned.]
    [Prepared statements, responses to written questions, and 
additional material supplied for the record follow:]
               PREPARED STATEMENT OF CHAIRMAN MIKE CRAPO
    Today, the Committee will receive testimony from Dr. Ben Carson, 
the 17th Secretary of Housing and Urban Development.
    Welcome back, Mr. Secretary.
    Over the past year, Secretary Carson has made significant strides 
in his efforts to make HUD programs more effective and efficient.
    He has embarked upon a multi-month listening tour, traveling across 
the country to develop a deeper understanding of the effect that HUD 
policies have on affordable housing practitioners and families who are 
the most vulnerable.
    Not long after returning from the tour, Secretary Carson took on a 
major leadership role in coordinating hurricane relief efforts in 
Texas, Florida, Puerto Rico, and the U.S. Virgin Islands, providing 
both immediate and long-term relief to thousands of families who have 
been displaced from their homes and are without electricity. That work 
continues.
    As a nominee just over a year ago, Secretary Carson testified 
before this Committee about the importance of revisiting our Nation's 
housing programs to ensure that families who are struggling in America 
have the best opportunity to climb the economic and social ladder, to 
break intergenerational cycles of poverty, and to become self-
sufficient.
    Secretary Carson has also stressed the importance of aligning 
regulatory requirements in ways that: incentivize landlord 
participation in HUD programs; eliminate undue burden on program 
participants; enhance workforce mobility; and maximize the percentage 
of HUD dollars that go straight to the families that need it.
    I could not agree more with these goals, and I thank Secretary 
Carson and his team for working with this Committee to achieve these 
objectives.
    Last week, by voting 67-31 to pass the Economic Growth, Regulatory 
Relief, and Consumer Protection Act, the Senate took a decisive step 
forward in addressing these same issues.
    A lot of the debate on the floor last week highlighted how the 
legislation right-sizes regulations for community banks and credit 
unions to promote economic development and lending.
    But the bill also makes important improvements to housing programs.
    It provides critical regulatory relief to over one thousand small, 
rural public housing agencies, making it easier for them to develop new 
projects and coordinate with their neighbors, and it ensures that more 
of their budgets go straight to families, rather than legal paperwork.
    The bill makes it less expensive for nonprofits like Habitat for 
Humanity to build homes in underserved communities.
    It makes a greater number of families eligible for HUD's Family 
Self-Sufficiency Program, and enhances the program so that it can offer 
new, additional services to participants.
    It permits renters to stay in their homes for at least 90 days 
after their home is foreclosed upon, and it permanently extends the 
amount of time a servicemember may stay in his or her home after 
returning from military service to 1 year before the home may be 
foreclosed upon.
    We hope this bill will be signed into law as soon as possible.
    Today, I look forward to hearing about more opportunities for us to 
keep moving forward, working together to modernize and improve our 
housing programs.
                                 ______
                                 
              PREPARED STATEMENT OF SENATOR SHERROD BROWN
    Thank you Chairman Crapo and welcome, Secretary Carson.
    The Department of Housing and Urban Development, or HUD, plays a 
critical role in the success of our housing market, our communities, 
our families, and our goals as a Nation.
    So it is extremely disturbing to read about one controversy after 
another at the Department--ethics lawyers ignored, procurement 
guidelines scoffed at, whistleblowers facing retaliation, 
antidiscrimination efforts downgraded, key positions filled based on 
patronage rather than competence--it goes on and on.
    And instead of taking responsibility, Mr. Secretary, you seem to 
want to blame others--your wife picked out the furniture without 
knowing the price, your spokesman said something but not you, you 
shouldn't be blamed for not listening to your ethics lawyers, the press 
is unfair--it goes on and on.
    I think you need to take responsibility and get things right. HUD's 
mission is too important to do otherwise.
    And getting things right means fighting for the funding needed to 
help more people in this country get a roof over their head.
    Despite the importance of affordable housing, it is increasingly 
out of reach. A quarter of all renters today are paying over half their 
incomes for housing, including 400,000 households in Ohio alone. 
Homelessness increased last year--in the eighth year of an economic 
expansion.
    Earlier this week, one of our great Ohio housing advocates 
described the affordable housing crisis as an ``all hands on deck'' 
situation.
    But HUD wants to go AWOL instead. Rather than making new 
investments in affordable housing and our communities, the budget 
proposal would add to the ranks of the homeless.
    Three months ago, the Administration was entirely unconcerned about 
the deficit when it chose to add more than a trillion dollars to the 
national debt over the next decade.
    All of the sudden, Secretary Carson and his colleagues have 
rediscovered their grave concerns about the deficit, such that they 
want to charge extremely poor people significantly higher rents.
    This is outrageous. The top 1 percent of the country will 
eventually see 83 percent of the benefits of the trillion tax cut.
    But to reduce the deficit that this tax cut for millionaires and 
corporations will create, HUD is proposing that some of the poorest 
households in the country must pay an increase of as much as $1,800 a 
year in rent. All told, HUD wants to charge an estimated $2 billion in 
higher rents to low-income families through rent ``reforms.''
    The Administration claims its cuts will ``recognize a greater role 
for State and local governments and the private sector.'' Federal 
assistance reaches only 1 out of every 4 eligible families. State and 
local governments are already strapped for cash. We know they do not 
have the capacity to take on those evicted by Federal cuts without 
raising taxes on working families.
    Last year, Secretary Carson reassured the public that HUD's budget 
cuts would be offset in the Administration's infrastructure package. 
But the Administration's proposal did not include funding for housing 
and community development, despite the Secretary's assurances that 
``housing is part of the infrastructure of this country, and it will be 
treated as such.''
    There is no funding for capital spending for public housing, 
despite a backlog of needed repairs of tens of billions of dollars.
    Under your leadership, Secretary Carson, HUD has decided a wobbly 
chair in a private D.C. dining room requires the urgent attention of no 
fewer than 16 staffers and thousands of taxpayer dollars.
    Unsafe and unsanitary conditions in public housing that put working 
families and children at risk?
    Not our problem, you say--let them use vouchers.
    But there is a problem--you're already underfunding the Section 8 
accounts. You can't say everybody in public housing must shift to 
Section 8 and not provide the money for it to happen.
    This budget is an embarrassment, but it and the news out of the 
Department of late seem all too common in this Administration.
    Thank you, Mr. Chairman
                                 ______
                                 
                PREPARED STATEMENT OF BENJAMIN S. CARSON
         Secretary, Department of Housing and Urban Development
                             March 22, 2018
Introduction
    Chairman Crapo, Ranking Member Brown, and Members of this 
Committee, thank you for inviting me here today to discuss the work we 
do at the Department of Housing and Urban Development (HUD), and my 
plans for fulfilling our mission with fidelity to our Congressional 
mandate and the best interests of the American people.
    I also want to thank the Members of this Committee for your support 
as HUD and other Federal agencies continue to work to ensure full 
recovery of the States and territories impacted by last year's natural 
disasters.
Accepting Our Challenge
    The President's Fiscal Year 2019 Budget request lays out a vision 
for a Federal Government that is efficient, effective, accountable, and 
provides for a strong national defense and economy.
    It also reflects the fact that we must better serve the American 
people by tackling our staggering $20.6 trillion national debt. This 
requires tough budgetary choices. Our children's and grandchildren's 
futures depend on it.
    At HUD, we believe the requested level of funding--$41.244 
billion--is sufficient to effectively administer our core programs, 
particularly as we are committed to running our programs more 
efficiently, spending every tax dollar with which we are entrusted 
wisely. I have directed HUD's new Chief Financial Officer, Irv Dennis, 
a Certified Public Accountant with more than 36 years of experience, to 
put the controls, systems, and processes in place to ensure we do just 
that.
    Even within this context of fiscal restraint, it is important to 
note this year's Budget request represents a 1.4 percent increase over 
last year's request.
Budget Highlights
    The Budget proposal ensures that HUD continues to serve the most 
vulnerable in our society--half of HUD-assisted households are elderly 
or living with disabilities. Our budget anticipates the adoption of 
forthcoming proposed legislative reforms and will not increase rent 
payments for currently served elderly or disabled households. In 
addition, the funding level for the Housing Voucher program would 
support the same number of households as currently assisted and should 
not result in the termination of any housing vouchers.
    HUD's Budget also makes a significant investment in the fight 
against homelessness. The Department's Point-in-Time count, conducted 
in January 2017, indicated homelessness was on the rise for the first 
time in a decade, primarily driven by high-cost housing markets along 
the east and west coasts. Our Budget proposes spending $2.383 billion, 
a $133 million increase over last year's request, and includes $40 
million for rapid re-housing targeted to communities with high rates of 
unsheltered homelessness.
    Additionally, as a neurosurgeon, I am all too familiar with the 
effects of lead exposure on the developing brain. As a result, we are 
requesting $145 million to ensure that homes are free of lead-based 
paint hazards and other dangerous contaminants, especially for families 
with small children. This is an 11.5 percent increase over last year's 
request.
Refocusing Our Efforts
    The centerpiece of this year's Budget proposal is our promotion of 
economic opportunity and self-sufficiency.
    For too many years, we have measured the effectiveness of housing 
and other antipoverty programs by the number of Americans participating 
in them. With this Budget, we propose measuring success by the number 
of people we help to exit the programs with positive outcomes. To help 
transition the people HUD serves towards economic independence, we are 
requesting $75 million for the Family Self-Sufficiency program and $10 
million for Jobs Plus.
    We are also requesting funding to evaluate the EnVision Center 
Initiative, a demonstration that will leverage public-private 
partnerships to connect individuals and families living in HUD-assisted 
housing with job-training, education, health and wellness, and other 
streamlined services that lead to self-sufficiency.
    HUD is also beginning to pivot from the current, financially 
unsustainable model of public housing and will be working with Public 
Housing Authorities (PHAs) to find the best way to support assisted 
families through other housing platforms. It was a difficult decision 
to not request funding for capital improvements in Public Housing. 
Instead, we've asked for PHAs to have the flexibility to use operating 
funds for capital needs. This will allow PHAs to function more like 
every other multifamily building owner in America. We also believe that 
encouraging States and localities to bring more resources to the table 
helps ensure that PHAs are empowered to make decisions at the local 
level that best address the needs of their communities.
    As part of the transformation of public housing, HUD is committed 
to providing new strategies and enhancing existing tools so that PHAs 
are provided with additional options to operate their portfolios. For 
example, HUD is developing a streamlined process to allow PHAs to 
convert public housing assistance to vouchers where this would save 
taxpayer money and give families more choice in deciding where to live.
    HUD is proposing to convert an expanded number of units in our 
Nation's housing stock to project-based Section 8 ownership via the 
Rental Assistance Demonstration (RAD). RAD is a program that multiplies 
the impact of private and other investment in order to rehabilitate 
aging affordable housing across the country. In order to stretch those 
dollars further, HUD is requesting $100 million specifically for RAD 
and supports lifting the cap on RAD units so more communities can 
participate. To date, PHAs and their partners have raised $5 billion to 
improve and recapitalize 88,000 public housing units at revenue neutral 
rent levels. This would have taken decades to accomplish through 
traditional public housing funding streams.
Rent Reform
    HUD spent the past year examining its main rental programs--Housing 
Choice Vouchers, Project-Based Rental Assistance, Public Housing, 
Section 202 Supportive Housing for the Elderly, and Section 811 
Supportive Housing for Persons with Disabilities--with the goals of 
improving resident outcomes, decreasing administrative burdens, and 
maximizing public investment.
    As a result of this work, HUD's Budget proposal is based on a 
legislative package to modernize and streamline existing rental 
assistance programs. Our plan will simplify program administration, 
encourage work and stable family formation, increase local control and 
choice, promote fiscal sustainability, and protect currently assisted 
elderly and disabled households from adverse impacts.
    Features of the plan include establishing mandatory minimum rents; 
simplifying rent calculations; increasing tenant rent contributions 
while protecting the most vulnerable current tenants, primarily the 
elderly and disabled; incentivizing work by limiting income 
recertification for all households to once every 3 years; providing a 
hardship exemption for tenants who are unable to pay their rents; and 
giving PHAs and property owners the option to choose alternative rent 
structures that work best for their communities.
Federal Housing Administration
    HUD is also laying a better path to home ownership through programs 
at the Federal Housing Administration (FHA). Building equity in a home 
remains a critical component of helping Americans climb the economic 
ladder of success. But we don't do the families we serve any favors if 
we facilitate lending that is unsustainable--not to mention the 
taxpayers who stand behind our $1.2 trillion book of business.
    That is why we have taken several steps to ensure FHA can play a 
viable role in mortgage lending for years to come. One of the first 
actions the Trump administration took was to pull back the prior 
Administration's proposed mortgage insurance premium decrease for FHA. 
Our analysis shows this was the absolute right decision: had the 
premium reduction gone forward, FHA would have found itself below its 
statutory 2 percent minimum capital ratio requirement.
    We also acted swiftly to improve the health of the Mutual Mortgage 
Insurance (MMI) Fund by placing FHA's reverse mortgage program, the 
Home Equity Conversion Mortgage (HECM) program, on a more financially 
sound footing for new books of business. HECM has been a drain on the 
MMI Fund, depleting it of $11.7 billion since 2009. We are monitoring 
this program closely to determine what additional changes are 
warranted, while simultaneously expecting to face continued losses due 
to older, existing loans in the portfolio.
    Another change we made recently involves protecting the taxpayers 
who make FHA insurance possible. A few months ago, we made ineligible 
for FHA insurance properties encumbered with Property Assessed Clean 
Energy (PACE) obligations. Prior to this decision, PACE obligations had 
effectively been given priority lien status over FHA-insured mortgages, 
which presented unacceptable risks for taxpayers.
    Managing our risk also involves operating a stable technology 
platform for FHA. HUD can no longer defer this important investment. 
FHA is built on a mainframe that is over four decades old. Staff at our 
home ownership centers still work on paper case files, which not only 
presents inefficiencies, but also poses numerous issues for quality 
control.
    That is why HUD has proposed up to $20 million to fund targeted 
improvements in single-family Information Technology (IT) and allow FHA 
to better interact with a modern financial system. To offset the cost 
of this critical investment, the Budget proposes a modest fee of no 
more than $25 per loan that would apply on a prospective basis and 
expire after 4 years. It will take the cooperation of Government and 
private sector lenders to make this needed investment, but I am certain 
it is one that will lead to mutually beneficial outcomes.
    Another important source of affordability for millions of Americans 
is manufactured housing. Today, it accounts for about 10 percent of the 
market, and an even greater share for those in rural areas. As the 
agency that implements the Federal laws governing the quality, safety, 
and affordability of manufactured housing, HUD has a key role to play 
here. We have instituted a regulatory review of all manufactured 
housing rules with an aim towards reducing undue burdens on production. 
We must strike the right balance between ensuring the availability of 
such homes and protecting the families who will reside in them.
Disaster Recovery
    It is important to note the ongoing disaster recovery efforts 
underway at HUD. Since last September, Congress has appropriated $35.4 
billion in long-term disaster recovery funding under the Community 
Development Block Grant--Disaster Recovery (CDBG-DR) program. The 
initial amount of $7.4 billion has been fully allocated and related 
guidance has been issued. The Department is now working to allocate the 
$28 billion contained in the Bipartisan Budget Act and will allocate at 
least one-third of that amount by April 10.
    HUD has also provided ongoing relief to homeowners in the 
Presidentially Declared Major Disaster Areas. This includes the 
recently announced ``Disaster Standalone Partial Claim'', a new option 
that covers up to 12 months of missed mortgage payments through an 
interest-free second loan on the mortgage, payable only when the 
borrower sells the home or refinances the mortgage. In addition, the 
moratorium on foreclosure actions against insured borrowers in Puerto 
Rico and the Virgin Islands has been extended until May 18, 2018. Other 
resources, including forbearance and loan modification options, 
continue to be available as well. HUD continues to provide technical 
assistance to mainland PHAs and displaced residents.
    Nearly every program office at HUD has staff working on disaster 
recovery, many of whom have volunteered to travel to disaster-stricken 
areas and serve on the front lines. My prayers are always with those 
who are still struggling to recover.
    HUD has a Government-wide mission to coordinate housing recovery, 
not just for HUD-assisted households, but for all Americans who are 
impacted by disasters. We continue to take this obligation seriously 
and are committed to supporting the communities as they rebuild.
Conclusion
    HUD is committed to safe, fair, and affordable housing for the 
American people. It also acts as a stepping stone to opportunity and 
self-sufficiency so that families can graduate from assisted housing to 
economic independence. President Trump's proposed FY2019 Budget will 
enable HUD to fill this role, now and in the future, through reforming 
and refocusing our programs and necessitating careful stewardship of 
taxpayer dollars.
    I am eager to work with Congress and all the Members of this 
Committee in achieving these worthy goals to better serve our fellow 
Americans.









              Additional Material Supplied for the Record
              
              
                 LETTER TO SECRETARY BENJAMIN S. CARSON
                         FROM SENATOR TIM SCOTT


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


HUD TELLS STATES TO CONSIDER SEA LEVEL RISE WHEN REBUILDING FROM STORMS
             Washington Times, Wednesday, February 7, 2018
                             By Josh Siegel
    The Department of Housing and Urban Development this week put out a 
notice to states receiving federal funding to help recover from last 
year's three major hurricanes to ``take into account'' sea level rise 
when they build new structures in flood-prone areas.
    The directive appears to mostly follow requirements established in 
the Obama administration requiring federally funded infrastructure 
projects to account for climate change and sea level rise when building 
in areas that could be vulnerable to flooding.
    But six months ago, before Hurricane Harvey hit Texas, the first of 
the three major storms, President Trump, who is skeptical of the 
impacts of climate change, rescinded the Federal Flood Risk Management 
Standard, established by former President Barack Obama in 2015.
    ``When President Trump rescinded Obama's executive order, we feared 
all of this federal disaster aid money, of which HUD is one of of the 
biggest recipients, would go toward building exactly the way things 
were before the hurricanes, which would have been throwing money at bad 
decisions,'' said Rob Moore, a senior policy analyst at the Natural 
Resources Defense Council. ``But HUD is doing the right thing here. It 
will require projects they fund to be built with this additional margin 
of safety to help ensure communities are rebuilding smarter and more 
resilient against future hurricanes and flood events, which is exactly 
what a responsible agency should be doing.''
    HUD spokesman Brian Sullivan told the Washington Examiner that the 
agency, by asking states to describe how they will ``take into account 
continued sea level rise,'' is continuing its long-standing policy that 
dates to when Hurricane Sandy devastated much of the East Coast in 
2012.
    Sullivan said the agency is not deliberately contradicting Trump's 
elimination of the Obama-era building standard.
    ``This is an expression of what we have baked into disaster 
recovery rules since Sandy, when we have asked grantees to consider 
future flood risk and other natural hazards in the development of their 
building plans,'' Sullivan said. ``It does not signal a departure from 
really anything.''
    The HUD notice to states, which became effective Tuesday, told them 
how to spend the $7.4 billion in disaster recovery money Congress 
approved after Hurricane Harvey.
    Sullivan said $5 billion of that funding went to Texas.
    HUD distributed another $1.5 billion to Puerto Rico and $243 
million to the U.S. Virgin Islands, which were hit by both Hurricanes 
Irma and Maria. The last $616 million goes to Florida for recovery from 
Irma.
    The notice says states must provide HUD with an explanation for how 
their rebuilding plans will ``promote sound, sustainable long-term 
recovery planning informed by a post-disaster evaluation of hazard 
risk, especially construction standards and land-use decisions that 
reflect responsible floodplain and wetland management and take into 
account continued sea level rise, if applicable.''
    It also says that all residential structures built with federal 
funding in the 100-year flood plain, meaning there's a 1 percent chance 
of a flood event in that area in a given year, must be elevated at 
least two feet above the level at which flood water would be 
anticipated to rise.
    The White House did not respond to questions from the Washington 
Examiner asking if it approved or knew about the language HUD used in 
Tuesday's directive.
    But in September, in the weeks after Hurricane Harvey, White House 
homeland security adviser Tom Bossert indicated the Trump 
administration, after responding to the storm and realizing the major 
costs required to rebuild, was considering replacing Obama's 2015 
standard with a new one that imposes similar requirements.
    ``At the time we rescinded [the 2015 standard], we did so in the 
hope of expediting infrastructure development in this country, which I 
think was a smart move, and the president did as well,'' Bossert said 
at a Sept. 8 White House press briefing. ``But now we have to replace 
it with thoughtful building standards and practices for the expenditure 
of federal money that makes floodplain and risk mitigation sense. We 
need to build back smarter and stronger.''
    Experts say HUD, by asking states to consider sea-level rise when 
rebuilding, is doing the right thing, even if it's not clear how or if 
the directive reflects or contradicts Trump administration policy.
    ``The Obama policy was a smart, common-sense fiscal conservatism,'' 
said Eli Lehrer, president of the R Street Institute, a free-market 
think tank in Washington. ``The Trump administration made a mistake 
when they did away with it, but HUD is doing the absolute right thing 
by bringing it back in this context.''