[House Hearing, 119 Congress]
[From the U.S. Government Publishing Office]
______
EXAMINING THE GROWTH OF
THE WELFARE STATE,
PART II
=======================================================================
HEARING
before the
SUBCOMMITTEE ON HEALTH CARE
AND FINANCIAL SERVICES
of the
COMMITTEE ON OVERSIGHT
AND GOVERNMENT REFORM
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED NINETEENTH CONGRESS
FIRST SESSION
__________
MAY 7, 2025
__________
Serial No. 119-24
__________
Printed for the use of the Committee on Oversight and Government Reform
Available on: govinfo.gov
oversight.house.gov or
docs.house.gov
COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM
JAMES COMER, Kentucky, Chairman
Jim Jordan, Ohio Gerald E. Connolly, Virginia,
Mike Turner, Ohio Ranking Minority Member
Paul Gosar, Arizona Eleanor Holmes Norton, District of
Virginia Foxx, North Carolina Columbia
Glenn Grothman, Wisconsin Stephen F. Lynch, Massachusetts
Michael Cloud, Texas Raja Krishnamoorthi, Illinois
Gary Palmer, Alabama Ro Khanna, California
Clay Higgins, Louisiana Kweisi Mfume, Maryland
Pete Sessions, Texas Shontel Brown, Ohio
Andy Biggs, Arizona Melanie Stansbury, New Mexico
Nancy Mace, South Carolina Robert Garcia, California
Pat Fallon, Texas Maxwell Frost, Florida
Byron Donalds, Florida Summer Lee, Pennsylvania
Scott Perry, Pennsylvania Greg Casar, Texas
William Timmons, South Carolina Jasmine Crockett, Texas
Tim Burchett, Tennessee Emily Randall, Washington
Marjorie Taylor Greene, Georgia Suhas Subramanyam, Virginia
Lauren Boebert, Colorado Yassamin Ansari, Arizona
Anna Paulina Luna, Florida Wesley Bell, Missouri
Nick Langworthy, New York Lateefah Simon, California
Eric Burlison, Missouri Dave Min, California
Eli Crane, Arizona Ayanna Pressley, Massachusetts
Brian Jack, Georgia Rashida Tlaib, Michigan
John McGuire, Virginia
Brandon Gill, Texas
------
Mark Marin, Staff Director
James Rust, Deputy Staff Director
Mitch Benzine, General Counsel
Reagan Dye, Senior Professional Staff Member
Peter Spectre, Professional Staff Member
Mallory Cogar, Deputy Director of Operations and Chief Clerk
Contact Number: 202-225-5074
Jamie Smith, Minority Staff Director
Contact Number: 202-225-5051
------
Subcommittee on Health Care and Financial Services
Glenn Grothman, Wisconsin, Chairman
Paul Gosar, Arizona Raja Krishnamoorthi, Illinois
Pete Sessions, Texas Ranking Member
Anna Paulina Luna, Florida Emily Randall, Washington
John McGuire, Virginia Wesley Bell, Missouri
Brandon Gill, Texas Lateefah Simon, California
C O N T E N T S
----------
Page
Hearing held on May 7, 2025...................................... 1
Witnesses
----------
The Honorable Dr. Ben Carson, M.D., Former Secretary, U.S.
Department of Housing and Urban Development
Oral Statement................................................... 4
Mr. Chris Edwards, Kilts Family Chair in Fiscal Studies, The Cato
Institute
Oral Statement................................................... 6
Mr. Howard Husock, Senior Fellow, Domestic Policy Studies, The
American Enterprise Institute
Oral Statement................................................... 8
Mr. Indivar Dutta-Gupta (Minority Witness), Advisor, Community
Change
Oral Statement................................................... 10
Written opening statements and statements for the witnesses are
available on the U.S. House of Representatives Document
Repository at: docs.house.gov.
Index of Documents
----------
* Article, San Francisco Chronicle, ``Homegrown and Homeless in
Oakland''; submitted by Rep. Simon.
Documents are available at: docs.house.gov.
ADDITIONAL DOCUMENTS
----------
* Questions for the Record: to Dr. Carson; submitted by Rep.
Gosar.
* Questions for the Record: to Mr. Edwards; submitted by Rep.
Gosar.
* Questions for the Record: to Mr. Husock; submitted by Rep.
Gosar.
These documents were submitted after the hearing, and may be
available upon request.
EXAMINING THE GROWTH OF
THE WELFARE STATE,
PART II
----------
Wednesday, May 7, 2025
U.S. House of Representatives
Committee on Oversight and Government Reform
Subcommittee on Health Care And Financial Services
Washington, D.C.
The Subcommittee met, pursuant to notice, at 10:05 a.m.,
Room 2247, Rayburn House Office Building, Hon. Glenn Grothman
[Chairman of the Subcommittee] presiding.
Present: Representatives Grothman, Gosar, McGuire,
Krishnamoorthi, Randall, Bell, and Simon.
Mr. Grothman. This hearing on the Subcommittee on Health
Care and Financial Services will come to order. Welcome,
everyone. Without objection, I may declare a recess at any
time.
I recognize myself for the purpose of making an opening
statement. For the people in the room today, I will point out
there are a lot of other hearings going on, so a lot of the
Congressmen are going to be jumping in and out, which I do not
like, but that is what we have got. OK.
At our last hearing, we learned about some of the
disincentives that happened because of our welfare program. And
the fact is the Federal welfare system--I am talking about food
stamps, low-income housing, Medicaid, Pell grants, everything--
is filled with horrible incentives and disincentives. It
certainly discourages marriage, and I know there is kind of
Marxist, the 1960s sort of thing, that kind of makes fun of the
old-fashioned ``Leave it to Beaver'' family. So, we have a
program that discourages marriage and hard work, and at the
same time encouraging dependency.
It costs taxpayers more than $1 trillion annually while
failing to lift people out of poverty.
Today's hearing, and this is kind of the second one we are
taking up on this topic, will provide an opportunity to hear
from three witnesses who are experts in Federal rental
assistance programs, including Dr. Ben Carson, the former
Secretary of HUD, a good friend of mine.
These programs are textbook examples of good intentions
that have gone awry. I do not even know if they are good
intentions. I cannot see how you could put programs like this
out there, not knowing what would happen.
For example, Section 8 housing vouchers and public housing
programs contain marriage penalties, making it foolish to get
married. In many cases, individuals risk losing their Section 8
voucher if they marry somebody with an even average income, and
their combined threshold brings them out of eligibility for
those programs.
As we discussed during Part I, marriage and a strong family
unit are a well-established way to get people out of poverty.
And not just out of poverty. We know that you are going to be
raising children, less likely to commit crime, more likely to
do well at school, less likely to have drug problems, less
likely to have depression, anxiety, other disorders.
And yet, our current welfare system, including housing
assistance programs, discourages marriage. It is not hard to
find people who say, ``I cannot work more. I cannot get married
or I will lose my benefits.''
Due partially to these penalties, the number of children
born to unmarried women has skyrocketed. In 1960, 5 percent of
children were born to unmarried women--5 percent. We are now at
40 percent. And, of course, it is not coincidence that things
began to shoot up after Lyndon Johnson, in the 1960s, declared
war on marriage.
Like marriage, the current system discourages rental
assistance recipients from seeking employment, higher wages, or
overtime if the increased income pushes them out of
eligibility. We are fostering a cycle of dependency on
government assistance.
The average Section 8 tenant spends 10 years on the
program, and the average public housing tenant, 12 years.
Welfare also benefits the middlemen and the administrative
state more than the low-income Americans it purports to be for.
The Section 42 Low-Income Housing Tax Credit give the
developers tax incentives to build affordable housing for low-
and moderate-income people. Yet, the program's complicated
design mostly benefits developers, law firms, accounting firms,
and state bureaucrats. I do not know who thought that thing up,
but man, that is a mess. Middlemen and administrators can take
advantage of Section 8 and public housing as well.
The Milwaukee Housing Authority reported in January that
its leadership misused $2.8 million Federal dollars, intended
for the tenants, to pay its staff. The problem had apparently
been ongoing since 2019 but was not caught for 6 years.
Meanwhile, taxpayers are on the hook for more and more spending
on these programs every year.
But of course, the biggest problem is not the fact that we
are overspending on this at a time when we are broke out of our
mind. The biggest problem is what it does to the people who
become part of the program. Rental assistance programs account
for more than $53 billion of Federal spending each year, which
is just amazing. And nearly every problem we will discuss today
applies to dozens of other programs and hundreds of billions of
taxpayers' dollars.
We owe it to our constituents to be responsible stewards.
During a recent interview, Senator Schumer criticized our
constituents for expecting this of their elected officials. He
said, ``Their attitude is, 'I made my money all by myself. How
dare the government take my money from me?' '' To that I say--I
mean, this is just horrible. Everybody knows back home people
are mad at the welfare system. Of course, people are mad
because they know people in the system, who do not have to be
in the system, which creates hatred and dislike of the system,
and somehow we have got to get back trust of the American
worker. To do that, we must attempt to disentangle the web of
welfare programs and find ways to fix it.
I hope today's discussion will provide an opportunity to
learn more about how the current housing system is failing
taxpayers and program participants alike, and how we might fix
it, so we stop discouraging people from getting married and
discouraging people from work. And like I said, I think the
current system, it is like designed by somebody who, like,
makes fun of the ``Leave it to Beaver'' sort of family. And,
you know, I think there were a lot of radicals in the 1960s,
Kate Millett and that crowd, who actively discourages keeping
the man in the family. And it is like their dream program. I do
not know whether Lyndon Johnson was intentionally trying to
destroy the family in the 1960s, but that was his effect.
In any event, with that I yield to my good buddy, Ranking
Member Krishnamoorthi, for your opening statement.
Mr. Krishnamoorthi. Thank you, Mr. Chair. Thank you for
convening this hearing, though I must once again express my
frustration with its premise.
I, myself, am a product of the very life-sustaining
programs this hearing is attacking, programs that time and
again have proven to lift individuals out of poverty, stabilize
families in times of crisis, and build the foundation for long-
term economic stability, mobility, and growth. At our last
hearing, Majority witnesses spent their time, in part,
demanding beneficiaries of the social safety net rather than
offering bipartisan solutions to make these programs more
effective. Slashing the budgets of these critical lifeline will
not magically eliminate inefficiencies. What they will do is
inflict real, immediate harm on our constituents, no matter if
they live in red states or blue states. Children will go to bed
hungry. Seniors will forego lifesaving medications. Hard-
working families, many of whom are already working multiple
jobs, will face the agonizing choice between paying rent and
putting food on the table.
We must not lose sight of the real-life consequences of
these policy debates. The truth is that the overwhelming
majority of recipients of these programs are not abusing the
system. They are doing everything they can to survive and
improve their lives while continuing to contribute meaningfully
to our society.
I am so passionate about the benefits of the safety net
because I have experienced them. When my family legally
immigrated to this country we fell on hard times and utilized,
for a short period, public housing and SNAP's predecessor, the
food stamp program. The programs sustained my parents until my
father got a great job in, of all places, Peoria, Illinois. My
parents realized the American Dream, and they never took it for
granted, and I have not either.
Every night in Peoria my father would say, ``Think of the
greatness of this country, and whatever you do, make sure it is
there for the next families who need it.'' That has been and
will continue to be my mission statement in Congress.
According to H.Con.Res 14, the House Republicans'
instruction with regard to the budget reconciliation process,
social safety net programs, very likely Medicaid and SNAP, will
be cut to the tune of $1.1 trillion. That is trillion with a T.
There is no plausible way that such deep budget cuts will only
rid those programs of waste, fraud, and abuse. If Republicans
go through with this plan, kids will go to sleep hungry because
their parents lost their SNAP benefits. Millions--millions--
will lose their health coverage. These cuts will be
catastrophic. Funding tax breaks for special interests and the
wealthiest among us by gutting life-sustaining programs is
disgraceful.
I am proud of what these programs have allowed my family
and millions of others to achieve. I have no intention of
sacrificing these programs on the altar of tax cuts for the
wealthiest among us. Not only is such a plan fiscally
imprudent, it is flat out morally wrong.
I yield back.
Mr. Grothman. Thank you. I am pleased to welcome today our
witnesses for today, Dr. Ben Carson, Mr. Chris Edwards, Mr.
Howard Husock, and Mr. Indivar Dutta-Gupta. Was that pretty
good?
Mr. Dutta-Gupta. Pretty good.
Mr. Grothman. Dr. Carson is the former Secretary of HUD and
founder of the American Cornerstone Institute. Mr. Chris
Edwards occupies the Kilts Family Chair in Fiscal Studies at
the Cato Institute. Mr. Husock is a Senior Fellow in Domestic
Policy Studies at the American Enterprise Institute. Mr. Dutta-
Gupta is an Advisor for Community Change and Doris Duke
Distinguished Visiting Fellow at Georgetown University's
McCourt School of Public Policy.
Pursuant to Committee Rule 9(g), the witnesses will please
stand and raise your right hand.
Do you solemnly swear or affirm that the testimony you are
about to give is the truth, the whole truth, and nothing but
the truth, so help you God?
[Chorus of ayes.]
Mr. Grothman. Let the record show the witnesses have
answered in the affirmative. Thank you. You may take a seat.
We appreciate you guys all being here today and look
forward to your testimony. Let me remind the witnesses that we
have read your written statement and this will appear in full
in the hearing record. Please limit your opening statements to
5 minutes. As a reminder, please press the button on the
microphone in front of you so that the Members can hear you.
When you begin to speak the light in front of you will turn
green. After 4 minutes the light will turn yellow. When the red
light comes on your 5 minutes have expired, and we would ask
that you please wrap up.
OK. We will start with you, Mr. Carson, for your opening
statement. Dr. Carson. I am sorry.
STATEMENT OF THE HON. BEN CARSON
FORMER SECRETARY
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Dr. Carson. Thank you, Mr. Chairman, Ranking Member, and
Members of the Committee.
Mr. Grothman. By the way, he has got a great autobiography.
I strongly encourage everybody in the room to read it. OK. Go
ahead.
Dr. Carson. Reclaiming my time.
[Laughter.]
Dr. Carson. Thank you for the opportunity to testify today.
I am Benjamin Carson, Sr., former Secretary of the U.S.
Department of Housing and Urban Development, where I had the
honor of leading an agency that serves the housing needs of
millions of Americans.
After my tenure at HUD, I founded the American Cornerstone
Institute, where I currently serve as Chairman of the Board. I
appreciate the Subcommittee's commitment to examining federally
assisted housing policies and programs, and I welcome this
chance to share my perspective on improving affordable housing
delivery, safeguarding taxpayer dollars, and ensuring program
integrity while strengthening American families and
communities.
I would like to address one of the most critical factors
undermining American society today: how public policy,
particularly housing assistance programs, disincentivizes
family formation and contributes to the dissolution of American
families. Marriage is an essential social institution, and
while many societal factors influence family formation, Federal
housing assistance programs, even unintentionally, create
barriers to marriage.
We have created a system where growing numbers of citizens
have become reliant upon government subsidies, incentivizing
government dependency over self-sufficiency. The so-called
``marriage penalty'' embedded in assistance programs creates a
tangible disincentive to family formation. For example, when
two adults marry and live together, their incomes are combined
to determine eligibility and rent contribution. If their
combined income exceeds program limits they may lose
eligibility or face substantial rent increases.
Conversely, if they remain unmarried and maintain separate
residences, each may independently qualify for benefits such as
separate vouchers, lower rent contributions, or continued
eligibility. This financial reality causes many individuals to
delay or entirely forgo marriage, undermining traditional
family structures, particularly among lower-income Americans.
Instead of functioning as a temporary safety net,
government assistance has increasingly replaced the family as
the primary provider for many Americans. If America is to
reclaim its strength and spirit, we must once again elevate the
role of marriage and family rather than replacing it with
bureaucracy.
Economic mobility is a cornerstone of the American Dream,
yet this dream is increasingly out of reach for many. One-third
of children who grow up poor in the United States remain poor
in adulthood. Addressing this perpetuating cycle of poverty
requires prioritizing programs that support economic mobility
and self-sufficiency as the true key to escaping generational
poverty. Programs that emphasize work, education, family
stability, and homeownership are essential tools for breaking
cycles of poverty and building lasting prosperity. It is with
this vision that public assistance can transform from a final
destination into a stepping stone.
As we all know, one of the keys to the American Dream is
homeownership as it represents more than a place to live.
Owning a home is a personal achievement that fosters a sense of
investment in one's community. Homeowners are more likely to
engage in civic organizations, local businesses and schools,
and community affairs which strengthen the bonds of civil
society. Yet, homeownership has become out of reach for far too
many Americans, and housing unaffordability has become a
stumbling block to family formation as young people, unable to
afford homeownership, often delay marriage.
Protecting access to homeownership is not just an economic
imperative and vital to keeping the American Dream alive, it is
a key cornerstone to support family creation.
Yet, too many believe that government involvement in
housing must expand. Government should not be in the business
of owning, operating, or constructing housing projects on a
large scale. History has shown that government-run housing
often leads to inefficiency, neglect, and the erosion of
individual dignity. Government can facilitate opportunity, but
it should not replace private initiative.
Therefore, the Low Income Housing Tax Credit, when properly
administered, can be an important tool for addressing America's
housing challenges. The program leverages housing market
forces, entrepreneurial innovation, and private accountability
to increase housing supply. Private sector leadership through
LIHTC allows communities to benefit from high quality
development and local expertise. By aligning incentives toward
self-sufficiency, promoting upward mobility, and reducing long-
term taxpayer burdens by avoiding the pitfalls of direct
government construction, LIHTC can continue to play a role in
building a future where housing is available, communities are
strengthened, and the American Dream remains well within reach.
Programs that uphold the dignity of work, strengthen
traditional family structures, and offer real hope for upward
mobility are the ones that truly serve the American people.
This is why I support the efforts of the President, Secretary
Turner, and the DOGE team in their goals of restoring fiscal
health to America. This work is essential to safeguarding the
future of the American Dream and promoting true upward
mobility. Americans rightfully demand responsible stewardship
of tax dollars. Every dollar lost to mismanagement and fraud is
a dollar that could have helped a struggling family secure
stable housing.
Government waste and fraud undermine public trust in
programs meant to lift Americans out of poverty. We must
restore integrity to the system, preserve opportunities for
future generations, and ensure the American Dream remains
within reach for all who strive for it.
Thank you for your attention to these critical issues. I
look forward to your questions.
Mr. Grothman. Thank you. Chris Edwards?
STATEMENT OF CHRIS EDWARDS
KILTS FAMILY CHAIR IN FISCAL STUDIES
THE CATO INSTITUTE
Mr. Edwards. Thank you, for inviting me to testify. I will
discuss Federal subsidies for affordable housing, in particular
the Low-Income Housing Tax Credit, which provides $14 billion a
year of income tax credits to multifamily housing developers.
The Housing Tax Credit, or LIHTC as it is often called,
while well-meaning it is a complex and inefficient solution to
housing affordability. The program displaces market-based
housing, and part of the benefits go to developers, not to
tenants.
A better way to reduce housing costs is tax and regulatory
reforms, as I will discuss. LIHTC is an incredibly complex
program with vast amounts of regulations. A standard industry
guidebook to LIHTC is 1,940 pages in length. There is a huge
bureaucratic overhead and lawyers in place for the LIHTC
program. It is not a simple tax cut.
LIHTC apartment buildings cost substantially more than
market-based projects because the financing is complex and
because the construction is micromanaged by state-imposed
blueprints. A 2024 article in a Chicago business magazine
reported that local LIHTC projects cost up to $900,000 per
unit. The article said, quote, ``Costs are driven by the
byzantine rules of the Federal tax credit system,'' unquote.
One LIHTC project in the city, quote, ``took nearly 4 years to
get the project financed, with legal fees three times the cost
of a market-rate apartment tower,'' unquote.
A 2024 article in The Wall Street Journal compared
subsidized housing projects in Los Angeles that had an average
cost of $600,000 per unit to a market-based, low-income
apartment project that cost half of that per unit. The market-
based apartment developer said, quote, ``We believe there is a
different way than using government money, which really becomes
slow and arduous and increases costs.'' Studies by the GAO and
academics confirm that LIHTC projects cost substantially more
than market-based projects.
There is a fraud problem with the LIHTC program. Developers
have been found to inflate construction costs to take excessive
tax credits. The GAO noted that there is little policing of
contractor costs in LIHTC.
The LIHTC program has encouraged corruption in some cities.
Officials have handed out housing subsidies to developers in
return for bribes and campaign contributions. IRS oversight of
LIHTC to police such abuse is minimal, according to GAO.
So, who benefits from the LIHTC program? Well, statistical
studies suggest that a large share of LIHTC benefits go to
investors and developers, not to tenants. One 2024 study by MIT
economist, Evan Soltas, found, quote, ``Developers capture
around half of the LIHTC subsidy in profits,'' unquote.
LIHTC housing substantially displaces market-based housing.
Many academic studies that I cite in my written testimony find
that only half or less of LIHTC housing units actually increase
the overall housing stock. The rest are displaced market-based
units that would have been built. The 2024 MIT study I
mentioned found, quote, ``LIHTC has little impact on the
overall size of the housing stock, as LIHTC heavily displaces
private development that would have otherwise occurred,''
unquote.
So, how do we boost affordable housing which is, of course,
a very important goal? The states should liberalize zoning and
building regulations that reduce housing supply and raise costs
for multifamily housing.
Another problem is property taxes. This is often
overlooked. Across 50 U.S. cities, the average effective tax
rate on apartment buildings is 44 percent higher than on owner-
occupied homes, for no good reason. Cities should cut these
high property taxes to boost multifamily investment.
As for Congress, it should reform tax depreciation rules
for multifamily investment. Apartment buildings have a lengthy
27.5-year write-off period, which raises effective tax rates.
The Tax Foundation estimated that depreciation reforms for an
apartment building would boost construction by 2 million units
over 10 years.
So, in sum, with tax and regulatory reforms, markets, in my
view, would supply more housing for moderate-income families.
Congress should reform depreciation rules for apartment
buildings and the states should cut property taxes on apartment
buildings and liberalize zoning and building regulations that
reduce supply and increase costs.
Thank you very much.
Mr. Grothman. Thank you. Mr. Husock?
STATEMENT OF HOWARD HUSOCK
SENIOR FELLOW, DOMESTIC POLICY STUDIES
THE AMERICAN ENTERPRISE INSTITUTE
Mr. Husock. Good morning, Chair Grothman, Ranking Member
Krishnamoorthi, and Members of the Subcommittee. I will suggest
changes in the regulation governing tendencies in public and
subsidized housing that I believe will help the housing voucher
and public housing programs cease to encourage dependency,
instead encourage upward mobility, and in the process allow
them to serve more of those who currently languish on waiting
lists.
First is background. Let me turn to a comparison between
one aspect of our social safety net, housing subsidies, and
another, temporary assistance to needy families, which
provides----
Mr. Grothman. Here, I will tell you. Do you want to move
next door and maybe use a different microphone? There is
something wrong with yours.
Mr. Husock. OK if I start over?
Mr. Grothman. Yep, yep, yep, yep.
Mr. Husock. I did push the button.
[Laughter.]
Mr. Husock. Once again, good morning, Chair Grothman,
Ranking Member Krishnamoorthi, and Members of the Subcommittee.
I will suggest changes in the regulations governing tendencies
in public and subsidized housing that I believe will help the
housing voucher and public housing programs cease to encourage
dependency, instead encourage upward mobility, and in the
process allow them to serve more of those who currently
languish on waiting lists.
First is background. Let me turn to a comparison between
one aspect of our social safety net, housing subsidies, and
another, temporary assistance to needy families, which provides
cash welfare.
It is little appreciated that we budget twice as much for
housing vouchers alone, $30 billion, as for cash welfare, $16
billion. Although both are intended to alleviate poverty, the
rules governing the two programs are strikingly different.
Beginning with the Personal Responsibility and Work Act of
1996, there has been a 5-year time limit as well as a work and
education requirement for those receiving public assistance.
The effect was dramatic. Welfare rolls declined from $13.6 to
$1.9 million. Over the past 35 years, the child poverty rate
has declined, from 18.7 to 8.6 percent.
Housing voucher recipients, in contrast, qualify for a
lifetime stay in almost all localities. The median stay, 9
years. In New York City, as of 2025, 23 percent of public
housing tenants have lived in their unit 40 years or more.
New research we are currently undertaking at AAI, between
myself and University of Chicago economist Bruce Meyer,
indicates that 87 percent of current voucher recipients,
excluding the elderly and disabled, will, based on past data,
likely spend more than 5 years in subsidized housing, including
73 percent who will spend more than 10 years. I have submitted
this data in my written testimony.
It is worth noting that according to HUD data, the largest
percentage of non-elderly subsidized tenants are single parents
with children. Only three percent of all tenants are two
married adults.
What is more, if even one resident of a multi-bedroom
apartment is a legal citizen or a legal immigrant, the
remaining tenants may be undocumented migrants.
It is time to align the rules for our housing subsidy
programs with those of public assistance. To begin to support
housing policy in line with those values, we should begin by
permitting a ceiling on length of tenure, a time limit for new,
non-elderly, non-disabled tenants. A 5-year limit, as with
TANF, makes sense. It would not affect the majority of new
tenants. It would encourage planning for a post-subsidy future
as well as an out-and-up turnover to make way for those on
waiting lists, such as those of the more than 22,000 households
currently on active waiting lists in the city of Milwaukee, and
6.5 million households on housing authority waiting lists
nationwide.
Currently, this should be complemented instead with a
voucher and housing system to replace the 30 percent rule. It
sounds like a good deal if you only pay 30 percent of your
income, but that means as your income goes up, so does your
rent. I do not think anybody on this Committee would sign a
lease like that. As household income rises, instead of paying
more in rent, what would have been an increase should be
deposited in an escrow account, like a Health Savings Account.
And so, on exit, that would be available for a down payment on
homeownership, as Secretary Carson has emphasized. An increase
in income would require employment, which should also be
required, nor should rent increase if marriage occurs, as the
Chair has so importantly pointed out.
At the same time, there is a role for local discretion.
Across the country, many housing authorities are using the
Rental Assistance Demonstration Program to draw private capital
into the renovation of aging, deteriorated housing projects.
These require long-term guarantees of housing vouchers. These
upgrades, which bring in private money, should not be
undermined, and may require local adjustment of time limits.
It is worth noting that time limits are not unprecedented.
They have been implemented, for instance, in San Bernardino,
California, where most housing authority tenants moved out
before the 5-year time limit, saw their incomes increase, and
their employment levels increase.
Finally, at a time when waiting lists are long, the scarce
housing assistance safety net benefit should go to U.S.
citizens and legal immigrants. This is not to take a stand on
long-term immigration policy and how we might deal with the
undocumented but to give priority to those who work hard and
play by the rules, as President Clinton once put it.
Taken together, these suggestions, I believe, should draw
bipartisan support in order to encourage turnover, reduce
waiting lists, and reduce penalties for earned income. Our
housing subsidy policies should switch from being a dependency
trap to what Lyndon Johnson had hoped his war on poverty would
be, not a handout but a hand up.
Thank you very much for your time.
Mr. Grothman. Thank you. Now trade places again. OK, Mr.
Dutta-Gupta.
STATEMENT OF INDIVAR DUTTA-GUPTA
ADVISOR
COMMUNITY CHANGE
Mr. Dutta-Gupta. Thank you. Chairman Grothman, Ranking
Member Krishnamoorthi, and Members of the Subcommittee, thank
you for the opportunity to testify today. I am Indi Dutta-
Gupta, and I am here as an advisor to Community Change and as
the Doris Duke Distinguished Visiting Fellow at Georgetown
University's McCourt School of Public Policy. We are here to
discuss America's basic needs programs.
While the framing of the hearing focuses on the growth of
the welfare state, I believe it is more accurate and productive
to view these basic needs programs as essential components of a
social protection system, helping families afford health care,
groceries, caregiving, and housing, which helps stabilize
communities and raises employment and earnings over time.
Instead of cutting vital services like health care, food
assistance, and childcare, Congress should improve their
effectiveness by expanding them and removing burdens like asset
limits that hold people back. This can be done by ensuring that
the wealthy pay their fair share of taxes, helping us all
afford these essential needs. Proposals moving through Congress
now are moving unequivocally in the wrong direction and would
inflict enormous harm.
Now, the vast majority of our families depend on income
from work, but the United States does far less than other
wealthy countries to ensure adequate wages for our workers. For
example, we rank 31 out of 32 OECD countries for our high share
of low-paid jobs. Partly because of this, we need more robust
investments in basic needs programs than other wealthy Western
nations.
And indeed, these programs should be understood as
investments, especially in children and families, rather than
solely as spending. The evidence shows that they provide
dramatic immediate benefits, significantly reducing hardship.
In 2023, programs like Social Security, SNAP, Rental
Assistance, the Child Tax Credit, and the Earned Income Tax
Credit kept over 34 million people above the poverty line.
Furthermore, these programs provide stunning long-term
benefits. Research on the introduction of the Food Stamps
program, now SNAP, shows that early childhood access led to
increased educational attainment, higher adult earnings, and
even greater life expectancy. The benefits to the participants
have been estimated to be 62 times the cost to the government,
and the net fiscal cost to the government was estimated to be
zero. Similar evidence exists for other programs, including
Medicaid, cash support, Head Start, and more. So, Mr.
Krishnamoorthi's story is actually much more the norm with
these programs.
Proposed cuts to basic needs programs like SNAP, Medicare,
and housing assistance threaten to undermine these positive
impacts. We are seeing a recurring theme in these proposals--
bureaucrat work reporting requirements, harsh and
counterproductive time limits, and shifting financial burdens
onto states and localities who are ill-equipped to absorb them.
For SNAP, proposals could take away or reduce food
assistance for millions of low-income families, including by
requiring states to pay a portion of benefit costs and
expanding existing harsh work mandates. For Medicaid, proposals
repeat failed work mandates and shift costs to states, in turn
leading to reduced coverage and services. Housing assistance
programs face potential funding cuts, rent hikes, and damaging
time limits, which threaten to increase homelessness.
Instead of cuts and new red tape, policymakers should
prioritize strategies that boost employments and incomes. We
need to raise the minimum wage, expand the Earned Income Tax
Credit and Child Tax Credit, fund jobs programs, invest in care
infrastructure, and ensure housing affordability.
Cash supports have proven effective with long-term benefits
to children. Research shows that these funds are primarily used
for essential needs, and they can increase employment in some
instances.
Subsidized employment and other jobs programs have proven
effective at preventing divorce and facilitating more two-
parent families. Investing in care enables parents and other
caregivers to work and creates jobs in the care sector here at
home. A large, sustained commitment to expand affordable
housing and rental assistance would bridge the gap between
incomes and housing costs for many.
In conclusion, we should embrace basic needs programs as an
investment in opportunity. We should strengthen and expand
proven strategies, and we should move away from outdated
narratives and burdensome mandates on families. Rising costs
are hurting families who are often just one paycheck away from
a crisis.
Basic needs programs have been there when Americans fall on
hard times, and they provide millions of us the foundation we
need to access and take advantage of opportunity in this
country. We should protect and strengthen them so they are
there, and always there when we or our loved ones need them.
Thank you.
Mr. Grothman. Thank you very much. I am going to call upon
myself to begin to ask some questions.
Just a brief comment. Look, the Earned Income Tax Credit is
just one more program, the more you work, the more you lose the
money. If you marry somebody with an income, you lose the
benefit.
But I will start with Mr. Edwards. This LIHTC stuff, I have
really delved into it for the first time in the last week, and
I have a feeling whoever came up with it, and lobbied Congress
to begin it, was not the poor people it was designed to
benefit. It was the property developers. But you have said that
it benefits the developers and middlemen more than the average
American. Could you elaborate on that a little bit? I think it
is so true.
Mr. Edwards. The reason why that is, is because as the
recent MIT study that I mentioned--which was a very detailed
study, it collected data from hundreds of LIHTC projects across
40 states--found that the average rent savings from LIHTC
buildings compared to nearby private market, unsubsidized
buildings was only 12 percent. Other studies find there is
really not that much difference between rent and LIHTC
buildings.
So, the Feds give $14 billion in tax credits, so where do
the benefits go? A number of studies find that most of the
benefits go to the developers, because the system is so
complex.
We also know this is true because there is a huge, intense
competition at the state and city level to get these credits by
the developer. That is how we know they are extremely
lucrative, because they all want to get these benefits.
So, that has been the general conclusion from the academic
literature.
Mr. Grothman. Do you know about what percentage-wise--and
we are working on a change in LIHTC right here--do you know
percentage-wise how much the cost of a building is paid for by
the tax credits, about?
Mr. Edwards. Well, essentially all of the costs of the
building is paid by the tax credits. I mean, the 9 percent
credit covers 70 percent of the cost of construction. That is
kind of the standard. But the investors get more benefits than
just the credit. They get the benefit of the tax losses that
flow from the projects, and they get the benefit, potentially,
in 15 or 30 years, from selling the buildings and getting a
capital gain.
Mr. Grothman. My god. You mean 70 percent of the building
is paid for by the government, but the developers and the
syndicates are the ones who wind up owning it?
Mr. Edwards. That is right. The investors own it. The 9
percent credit covers 70 percent of the cost of construction.
And again, that is only part of the tax benefit that the
investors get.
Mr. Grothman. Oh, my god. No wonder so many people are
running around here trying to keep that program going. Is there
a better way to, if it is the government's business, a better
way to set up housing to help people?
Mr. Edwards. Well, I mean, I talked in my testimony about
deregulation and tax cuts. One thing that is striking, that is
often overlooked, is property taxes on apartment buildings are
far higher than single-family homes. There is no good reason
for that. Property tax rates should be the same across the
board. So, there is a bias in local government tax codes
against people who live in apartment buildings.
For Congress, in 1986, Congress increased the depreciation
lifespan on buildings--that was a mistake, it increased taxes
on apartment buildings. I think Congress ought to fix that
mistake and reduce the write-off period for apartment buildings
to get more private sector investment.
Mr. Grothman. OK. Mr. Carson, you know, we are talking
about housing here, and we can talk about Section 8, but we are
also talking about SNAP. We are talking about a variety of
other programs. And it is not unusual--is this your experience?
To say, a single mom, if she wants to marry a guy, and maybe
even the father of her children, the guy is making $40, $50
grand a year, that she would lose tens of thousands of dollars
in benefits?
Dr. Carson. Unfortunately, that is the case. And it becomes
a lifestyle, a way of living. You know, I grew up I poverty and
I listened to a lot of the people who were on these programs,
and the various schemes that they would come up with, rather
than trying to figure out how to get out of poverty, rather
than trying to figure out how to----
Mr. Grothman. We cannot hear you. Can you press the----
Dr. Carson. It is pressed.
Mr. Grothman. OK. Go ahead. Go ahead.
Dr. Carson. It is. Yes. But rather than trying to figure
out how to improve their lives, improve their education,
improve their income, they are always trying to figure out how
to get around the various rules.
Mr. Grothman. I have heard that too. It is like a full-time
job to make sure you keep the money coming.
Dr. Carson. Yes.
Mr. Grothman. Mr. Husock, yes or no, are there marriage
penalties in housing assistance programs like Section 8?
Mr. Husock. Definitely, and it is because of the 30 percent
rule. You pay 30 percent of your income in rent. So, as your
income goes up, you pay higher rent. If you get married and
there are two incomes, you pay higher rent still.
Mr. Grothman. Does that sometimes cause people not to get
married, do you think?
Mr. Husock. Logically, it is a disincentive to marriage.
Mr. Grothman. Right. And I think if more Congressmen got
out of showing up at fundraisers and spent time with average
people, they would come up with tons of examples of people who
are specifically not married, to keep these things going.
In any event, I used up my time. We are going to give
ourselves a chance to ask questions later. But I will turn to
Mr. Krishnamoorthi to ask his questions.
Mr. Krishnamoorthi. Thank you, Mr. Chair. Good morning, Mr.
Edwards. The title of this hearing is ``Examining the Growing
Welfare State,'' and I actually have an article here which
talks about cutting corporate welfare. You remember this
article, right? And in this article, it says, ``One ripe area
for reform is corporate welfare, which a new Cato study
estimates costs the Federal budget $181 billion a year.'' That
is what you said, right, in this article?
Mr. Edwards. Absolutely.
Mr. Krishnamoorthi. And your study helpfully breaks down
the number $181 billion, by agency and program. Right?
Mr. Edwards. That is right.
Mr. Krishnamoorthi. Unfortunately, however, H.Con.Res 14--
this is the Republican House budget resolution--does not use
your study, believe it or not, to find savings. For example,
you have identified subsidies to different corporations, but
this particular budget resolution does not actually use your
study, or any study, to cut those subsidies. You do not dispute
that, right?
Mr. Edwards. No, right. I think Congress should cut
corporate welfare and low-income welfare.
Mr. Krishnamoorthi. Well, let me talk about corporate
welfare for a second and what this particular budget resolution
tries to do. H.Con.Res 14 targets social safety net programs.
It directs the Energy and Commerce Committee, which oversees
the Medicaid program, to cut $880 billion from its budget. You
do not dispute that, right?
Mr. Edwards. I have not looked in detail, but I assume that
is right.
Mr. Krishnamoorthi. Additionally, H.Con.Res 14 directs the
Ag Committee, which oversees SNAP, to cut $230 billion from its
budget. You do not dispute that, right?
Mr. Edwards. Right.
Mr. Krishnamoorthi. When I was young, I relied on the Food
Stamp program, which was the predecessor to SNAP, and it was
critical for my family. And I believe that cutting food aid is
just plain wrong.
Let me turn to another topic. Dr. Carson, you said the
following: ``Obamacare is really the worst thing that has
happened in this Nation since slavery.'' You do not dispute you
said that, right, sir?
Dr. Carson. I do not dispute that.
Mr. Krishnamoorthi. Well, let us look at the facts.
Obamacare is really the Affordable Care Act, or the ACA. In
2024, the government reported that over 65 million people have
health insurance because of the ACA. You do not dispute that,
right, sir?
Dr. Carson. What I am making a point, and when I said that
is that, all of the socialists and the Marxists say that
socialized medicine is the linchpin to providing socialism
throughout the entire system. And that is a system that moves
us much closer to socialized medicine.
Mr. Krishnamoorthi. Well, I--let me ask you this. The ACA
prohibits health insurance companies from refusing coverage for
preexisting conditions. You do not dispute that, right?
Dr. Carson. I would have to have a little more context than
you just gave.
Mr. Krishnamoorthi. Well, believe me, the ACA prohibits
health insurance companies from refusing coverage for people
with preexisting conditions. It also allows children to stay on
their parents' health plans until the age of 26.
You know, it does not sound like the catastrophe that you
painted to be akin to slavery. On the contrary, the ACA is not
keeping people down. It is lifting people up. And I find your
prior comments about Obamacare being the worst thing since
slavery really appalling.
Mr. Dutta-Gupta, right now, according to realtor.com, the
U.S. has a shortage of nearly 4 million homes, causing a
housing crisis, right?
Mr. Dutta-Gupta. Yes.
Mr. Krishnamoorthi. In addition, since Donald Trump took
office, the Bureau of Labor Statistics found that price hikes
for food have accelerated. Correct?
Mr. Dutta-Gupta. Yes.
Mr. Krishnamoorthi. The Wall Street Journal also found that
new Trump tariffs are expected to cost American households at
least $2,100 annually. You do not dispute that, right?
Mr. Dutta-Gupta. I believe it is analysis from the Budget
Lab at Yale, but yes.
Mr. Krishnamoorthi. The affordable housing crisis is
squeezing families today, and these new tariffs will make
everything from rent to groceries even more unaffordable,
unfortunately.
Let me return to Dr. Carson. Dr. Carson, you did not live
in public housing, right?
Dr. Carson. That is correct.
Mr. Krishnamoorthi. I spent part of my childhood in Section
8 housing. This is actually a picture of the public housing
that I lived in. It gave my family the stability we needed to
work, breathe, and build a new life, and my parents were
actually married. My family story is not unique, sir. HUD found
that for every year a woman spends in public housing as a
teenager, she generated $925 additionally in adult earnings
than someone with unsteady housing. You do not dispute that,
right?
Dr. Carson. Well, the issue is not whether public housing
is helpful or not. The issue is, are there things that we can
do to improve the situation and to make people more likely to
exit from public housing. Real success is the number of people
we can get off of assistance, not how many we can put on it.
Mr. Krishnamoorthi. I agree with you, 100 percent. I exited
public housing, sir. My family exited public housing. We moved
to Peoria, Illinois. We entered the middle class. And I sit
before you as a United States Congressman.
Dr. Carson. And I applaud you.
Mr. Krishnamoorthi. That is the hallmark of a successful
program.
Dr. Carson. That is good, but unfortunately----
Mr. Krishnamoorthi. Thank you, and I yield back. Thank you.
Dr. Carson. Unfortunately, that does not happen for
everybody.
Mr. Grothman. OK. I now recognize Mr. Gosar for 5 minutes.
Mr. Gosar. Thank you, Mr. Chairman. We are over $36
trillion in debt, and public housing has only contributed to
that cost. Section 8 housing, for example, does not have a time
limit. Participants can receive subsidized housing for decades
while those most in need are stuck on a wait list.
But the housing cost crisis is not the result of just one
regulatory requirement but rather a series of challenges that
forced costly and unattainable standards on local communities.
Not only did Biden's HUD inflate the cost of housing welfare,
but it also reinstated Obama's Affirmatively Furthering Fair
Housing Initiative, or the AFFH rule. You are very familiar,
aren't you, Doctor?
In 2015, Obama introduced the AFFH rule to dictate zoning
requirements in any community across the country that applied
for Community Development Block Grant. According to the Cato
Institute, Mr. Edwards, AFFH required Federal and local
agencies to spend $55 million each year to comply with its
regulations, thus increasing local taxes, reducing property
values, and causing greater harm than good to impoverished
communities. Luckily, President Trump terminated this rule, and
my legislation, the Local Zoning Decisions Protection Act will
codify that termination. I invite all of my colleagues to join
in on helping me with that.
Dr. Carson, it is great to see you again, and thanks for
testifying. As Secretary, you worked to give Americans a hand
up, not a handout. How does the AFFH rule harm local
communities?
Dr. Carson. Well, it is just a very good example of how the
government insinuates itself into places where they do not need
to be. You know, communities have developed on their own
throughout the time that we have existed as a Nation. Many of
them thrived extremely well. They had people who came from
different countries. They could not speak to each other because
they did not have the same language. But they understood one
important thing. That is called the common good. It is a phrase
used frequently by our founders, that means not what is good
for this group versus that group but what is good for
everybody.
AFFH has a bunch of bureaucrats who impose their rulings in
a situation like that. The reason that those communities thrive
is because if it was harvest time and Mr. Jones broke his
ankle, everybody else harvested his crops. They did not ask
what his religion was or what his politics were. They said,
``This is my neighbor. They need help.''
That is the kind of communities we need to get back to, not
government-sponsored and dictated communities.
Mr. Gosar. That sounds great. Thank you.
Mr. Husock, in February 2024, 70 New York City Housing
Authority employees were charged with accepting cash from
contractors in exchange for awarding certain contracts to these
entities. Is it correct that public housing authorities that
administer these HUD programs are required to place tenants who
receive housing benefits on their Housing Authority boards?
Mr. Husock. There are representatives required--it varies
state by state, but that certainly is possible. And that was
one of the largest corruption cases in New York municipal
history.
Mr. Gosar. In your opinion, what is the first step to
addressing abuse of these public housing authorities?
Mr. Husock. Well, I think they should not be in the
management business at all. We have--and I live in the metro
New York area--there are a lot of companies that really know
how to manage buildings, and one of them is not the Housing
Authority of New York.
Now, there may be well-meaning people who could oversee
contracts. That is a proper role for government. It happens all
the time. This Congress does it. But we should have private
management. And we are moving slowly in that direction, through
the Rental Assistance Demonstration Program, where we are
bringing in private management. You some people yell ``That is
privatization and it is bad.'' But no, we need to bring in
private management and not let these housing authorities, which
have a proven record of corruption and incompetence. The New
York City Housing Authority, the largest one in the country, is
under the oversight of a Federal monitor because of dilapidated
conditions.
Mr. Gosar. Mr. Edwards--and first of all, thank you very
much for your institute, Cato, looking into the national
emergencies that I was so hyped up about, showing that there is
$12 trillion that between Bill Clinton and Joe Biden, all that
time in between, we ran up $12 trillion worth of our debt, one-
third of our debt with no receipts. So, thank you very much for
that.
In my legislation, Putting Trust in Transparency Act, would
require any NGO that receives even a penny of Federal funding
to disclose its extravagant donors so Congress can see what
NGO's have nefarious intentions. So, in the case of affordable
housing, the American people would have access to the books of
NGO's, that house illegal aliens at the expense of the
taxpayer. Is that true? If that were to pass, is this a place
to be looking?
Mr. Edwards. There are entities that receive Federal
grants--are required, do have required financial disclosure.
But the threshold is very high. It is like a million dollars,
or something like that, annually.
Mr. Gosar. Yes. Thank you. I will have more questions
later. Thank you.
Mr. Grothman. The gentleman from Missouri.
Mr. Bell. Thank you, Mr. Chair and Ranking Member. With all
due respect, Dr. Carson, really? I just do not understand the
logic. We are talking about schemes, and housing assistance and
people who need these programs, and labeling it as ``schemes''
is off-putting and offensive, to be perfectly frank. As someone
who lived in housing projects and had families--my family, when
we were younger, had housing assistance--let me tell you about
a scheme.
This woman that I know, she was a single mom at the time,
and she took an entry-level position because that is the best
position she had because she did not have a degree at the time.
And she worked her way up. But in the meantime, she did not
make a lot of money. And so, she had a son, who, she worked so
that he could go to undergrad, go to law school, and then
eventually sit before you on this dais as a Congressman. Then
she went on, after she did that for her son, to get her degree,
and her master's degree. But without having some assistance
early on, none of those things would have happened.
So, when we look at the worst offender, we cherry-pick a
particular offender and say, oh, well this is the rule for all
of these hardworking people who are just trying to move up in
life, and are not asking for handouts, but just--and I will
even say this. It is not even about handouts. If the rules were
fair, a lot of these folks would not ask for anything. But a
lot of them are starting from a position where they are
handcuffed and their shoelaces are tied, and then they are told
to go run a race and win the race. So, it just seems
disingenuous when we talk about schemes, when we should be
supporting these individuals.
And I will say this. As a Christian, I do not believe that
anything that is man-made is going to be perfect. So, you can
pick any program, that a Democrat or a Republican started, and
you will find something that is not perfect about it. But
instead of gutting the programs, perhaps we could actually sit
down, work together, and improve those programs.
So, I want to paint a picture of how urgent these issues
are. The low-income assistance programs we are discussing are
not just numbers on a page. They are lifelines. And despite
what some of my Republican colleagues may suggest, what is
happening her is not isolated. It is part of a troubling
pattern. And right now, this Administration is targeting
programs like Medicaid, not to reform them but to bankrupt them
and gut them to fund for tax breaks for billionaires. Cuts to
Medicaid do not just hurt on paper, they hurt real people in
every community. Medicaid funds critical mental health care,
from school counseling to crisis and addiction services. In
Missouri, in my state, more than 48,000 people rely on Medicaid
expansion. Without it, many would have nowhere else to turn.
And yet, while some Republicans claim mental health is the root
of tragedies like mass shootings, they are cutting the very
programs designed to help.
So, if mental health is truly a priority, why are we
slashing Medicaid? If mental health is truly a priority, who
are proven mental health programs on the chopping block? If
mental health is truly a priority, why was funding just frozen
for the bipartisan Safer Communities Act, which improves school
safety and expands mental health care? That law, which was a
bipartisan bill, has been unraveled in 100 days, and President
Trump's budget would make even deeper cuts.
If Republicans were serious about mental health, they would
not be cutting student support, slashing Medicaid, and
undermining community safety. And as a prosecutor, mental
health and public safety should not only matter after
tragedies. We need to act before lives are lost. Protecting
Medicaid, SNAP, housing, and other vital programs is how we do
that, and this is not rocket science. The choice is simple--
protect billionaires or protect communities.
I have a quick question for Mr. Dutta-Gupta. Given that
stable, long-term housing is essential to children's
development and mental health, does it make sense to push
millions of families onto the streets?
Mr. Dutta-Gupta. Absolutely not. It is completely counter-
productive. And your life experience and Mr. Krishnamoorthi's
is the norm that these programs substantially improve the
outcomes, especially of children.
Mr. Grothman. OK. We are like over a minute.
Mr. Bell. I yield back. Thank you.
Mr. Grothman. OK. Mr. McGuire?
Mr. McGuire. Thank you, Mr. Chairman. Thank you to our
witnesses for being here today to answer our questions.
You know, I grew up in poverty, as well. My older sister
and I were abandoned. The police found us. And we bounced
around to different foster homes. I attended nine different
elementary schools. But through the grace of God, my
grandparents, who had already raised their children, rescued me
and my older sister and raised us until my dad got sober. And I
think God gives us adversity to chisel us into the men and
women we are supposed to be. I decided I wanted to serve our
country, because my grandfather served in the Navy in World War
II, to become a Navy SEAL. Typically, 200 men per class.
Usually 20 graduate. One class graduated 0 out of 200, because
not everybody gets a trophy.
But what you learn in the military, it is not what you look
like. It is what you fight like. And if somebody saved your
life on the battlefield, you would not care if they were pink
or blue, male or female, if they called themselves a Democrat,
Republican, or an independent. We are all Americans.
We qualified for free lunches when we grew up. We did not
have health care. And we somehow, some way, we learned to
improvise, adapt, overcome, and work hard.
I want to commend President Trump's budget. President
Trump's budget request ensures taxpayers will not continue
paying for housing for illegal immigrants. It also ensures that
the Department of Housing and Urban Development concentrates
its funding on our most vulnerable, including the elderly,
disabled, and foster children. Importantly, it puts a 2-year
cap on rental assistance for able-bodied adults, which I
believe will help address many of the challenges we are
speaking about today.
So, I have a question for Dr. Carson. We really appreciate
you being here today. Thank you so much for all you have done.
We appreciate your expertise and what you did. You did a
phenomenal job leading the Department of Housing and Urban
Development during President Trump's first Administration.
Earlier this year, this Committee looked at welfare
programs like Medicaid and SNAP. What we found is incentives
for these programs to discourage work, marriage, and other
behavior that may reduce their need for welfare. In fact, we
looked at every single safety net program, and witnesses said
that every single one of them incentivized single-parent homes.
And I think the breakdown of the nuclear family is what is
threatening our country. I heard the Chairman say that, in
1960, 5 percent of American homes had a single parent. Today it
is 40 percent and growing. That is a recipe for destroying our
country and everything that so many men and women, military or
not, gave their life for.
Dr. Carson, when you arrived, did you see these bad
incentives at welfare programs at the Department of Housing and
Urban Development?
Dr. Carson. We definitely had many disincentives for self-
sufficiency. And I thought, you know, coming into the
Department, that it would be easy coming to Capitol Hill and
getting bipartisan support for self-sufficiency programs and
getting rid of the dependency. I was wrong. There are many
people who were not interested in doing that and perpetuating
this situation because it gave them a power base.
And I think it is time for us, really, to sit down, put the
facts in the middle of the table, and think about what are our
goals? Our goals are not just to support people who have
difficult situations. Our goals are to get them out of that
situation and help them to be able to realize the American
dream.
So, you know, I do not disagree with some of the things the
Congressman from Missouri was saying, but the Bible tells us we
have an obligation to the poor, but we do not have an
obligation to keep them poor.
Mr. McGuire. I love it. It makes sense. A hand up, not a
handout.
Let us see, Mr. Husock, for a couple living in poverty, how
significant are the financial penalties they face if they get
married while on welfare?
Mr. Husock. Well, I am not an expert on temporary
assistance to needy families, although we, in 1996, this
Congress passed a 5-year limit on cash welfare, and cash
welfare dropped tremendously in terms of the number of people
on it, and it helped reduce the poverty rate.
In terms of public housing and voucher housing, it just
does not make sense to have two incomes, or certainly it does
not make sense to declare two incomes. So, those of us who are
concerned about having formal marriage arrangements as opposed
to partners living together or not having the biological
parents in the same house, there is a tremendous disincentive
for those who would declare legally the incomes that they have.
It is worth noting that in the New York City Housing
Authority, which is the largest in the country, 177,000 units
of public housing in New York City. They estimate there are
400,000 legal residents. They estimate, just in the amount of
garbage that is picked up, that there are 600,000 people living
in public housing.
So, there may be many other partners in the home, but they
are not declared legally, and that is not a good thing either.
Mr. McGuire. Thank you, and I yield back.
Mr. Grothman. Thank you. Ms. Simon?
Ms. Simon. Thank you, Mr. Chair. I want to thank the
witnesses for being here today.
Where do I even begin? The issues surrounding families who
are low income and the working poor, supporting them in their
plight, I believe is what we are all here to do. But this
conversation is extremely troubling.
I came to Congress to represent those families, clearly.
One of those families is the Tsu family in my district, a
multigenerational family in the Bay Area, and they overcame
decades of anti-Asian laws and housing covenants to live the
American dream, a family that bought a home, and season tickets
to the A's, although they have left. Very, very sad.
But to many families like this family, changes did happen.
The Tsu family incurred medical bills, like my family did,
divorce, and the 2008 recession changed everything, broke down
their safety net. Derek Tsu, he lost his home during that
period, and his car, and he could not afford rent on his
$1,000-a-month income that came from disability once he was
disabled. Today Derek is leading advocacy efforts for
dignified--dignified--folks who are too low income to afford
rent. And I am so thankful for that work.
Mr. Chair, I ask unanimous consent to enter into the record
the San Francisco Chronicle's, ``Home Grown and Homeless in
Oakland.''
[Pause.]
Ms. Simon. Well, I hope that can go in without----
Mr. Grothman. Oh, sure, yes.
Ms. Simon. Thank you, sir.
I just want to say, right here in this building, the
daycare workers make $30,000 a year, to take care of the
children, school-aged children, of Members of Congress, $30,000
a year. Suppose two of these folks, who work, are married. They
are married, working in this Capitol. They cannot afford a one-
bedroom in Washington, DC. So, few people who make laws for the
poor have been poor.
Many of you all know that I was a teen mom. I went to
college. I got food stamps, $26 a month. Every other week I was
at the counter putting back food because, again, people were
making policy for poor folks who had no idea what it was like
having to move through an economy that did not understand what
it was really like to be poor.
I want to be clear. Those daycare workers in this building,
don't you think they want a better income, or do you want for
them to leave the daycare here in 2 years? You want full
economies to shift, have people leave, because being poor, to
many folks in this room, is a crime. Being poor, or literally
working at Walmart, where you still, when you work at Walmart,
do you know, across this country, you still qualify for SNAP?
These low-wage jobs that folks are working with their bodies,
cannot afford health care, cannot afford the rents in their
community. I apologize to the folks who are watching this, who
are strong and amazing and dutiful and patriotic folks. Folks
are punching down on you, and it is not just not fair, it is
extremely cruel.
The permanence of poverty in this country is clear. There
is a permanence of poverty of folks who, again, are working day
in and day out, and in my district cannot afford $2,400 for a
two-bedroom, for a one-bedroom.
I just want to be clear. The reality is--and I have been
there--being poor is hard. Being poor is hard. And the Federal
Government should not be making poverty harder. When we ask a
family that is paying 50 percent of their income to rent, to
afford childcare--I have been there--and elder care, and
medical insurance, we are sentencing them to lifelong debt,
housing insecurity, and hunger.
I want to be clear, that any reduction in SNAP, any
reduction in Medicaid, any reduction in housing benefits for
the working poor, or services, that could be the difference
between life and death, or living on the streets, for so many
vulnerable individuals and families is what we are proposing.
President Trump, this week, actually last week, released a
budget that would slash housing vouchers, public housing,
housing programs for seniors and people with disabilities. It
is clear. We have read it. Cut the LIHEAP, which, regardless,
we know it helps working families afford heat in the winter and
cool air in the summer. It would limit homeless individuals who
are at risk of future homelessness because you want to give a
clear-cut cap on how long these deserving people need to get
out of poverty. Believe me, I have gotten out of poverty. It
takes longer than 2 to 4 years.
My constituents have been clear with me. They have brought
me here because they are hard-working and they deserve a
government that is going to work with them as they move through
an economy that has no idea what it means to move through
poverty.
And I yield back.
Mr. Grothman. Thank you. Ms. Randall?
Ms. Randall. Thank you, Mr. Chair, and our guests. I am
also grateful for the remarks of my colleague, Ms. Simon. I
think we so often seek to depersonalize the work that we do in
this chamber and this Capitol. We talk about it in terms of
funding levels and dollars saved. But we are talking about
programs that impact real people, real families who are trying
to live their lives.
And, you know, in addition to the budget reconciliation
package that we have seen and been discussing in committees,
that make steep cuts to Medicaid, SNAP, and other critical
programs to pay for tax cuts for billionaires, the Trump
Administration's skinny budget proposal that they released last
week would slash many of the Federal programs that families
around the country rely on, at a time when this President's
radical tax and tariff agenda is driving the country into a
recession and making daily life, housing, childcare, baby
strollers, more expensive for working families.
This Republican budget reconciliation package that we are
discussing would cut Federal housing support by nearly $27
billion, and limit rental assistance to only 2 years for--and I
am using big air quotes here--able-bodied adults.
What this means is that millions are going to get forced
out of their homes. Millions more are going to be couch surfing
or on the street. And I hear from a lot of business interests
that more people on the streets is not--they do not tell me it
is a community challenge. They tell me it is bad for their
business. And these are problems we can solve. We can solve
homelessness by ensuring that people have housing, through
housing and rental assistance programs. It is not magic. It is
housing.
We can ensure that people are not forced out of their
tenuous living situations by continuing LIHEAP, the program
that Ms. Simon was just talking about. It is a Low-Income
Energy Assistance Program. Now, I do not know if anyone on this
panel has ever had to decide whether they pay for medication, a
medical appointment, or your electricity bill, whether you can
let it go for 3 or 4 days, or whether you let it go for another
month. Maybe you live in a state that has protections, where
they cannot cutoff your heat in the winter. Maybe you do not.
Families are making these challenging decisions every day,
and for us to come in here and hear lines of questions and
testimony about the expanded welfare state, as if human beings
are a drain on our economy, when they are just trying to build
lives for themselves, is truly horrifying to me.
Housing programs in my district are saving people's lives.
New Horizons, in Mason County, is a program targeted at
homeless veterans. It is housing first, tiny homes, that allow
veterans who have been chronically homeless, living on the
street, dealing with challenging medical issues, the chance to
have security, stability, a roof over their head, and be
connected with job support programs.
Peninsula Services is a housing program in downtown
Bremerton focused on supporting people with disabilities. The
top floor has a Hoyer lift in the ceiling, so that someone
wheelchair-bound, who is also a parent, can get from bed to the
shower or the bathroom while also taking care of their kids.
In Jefferson County, Habitat for Humanity is building 134
affordable housing units close to a school and public
transportation, so folks in a rural community can get where
they need to go and find stability. We are seeing housing
programs like Wheaton Landing, that is ensuring that homeless
families with school-aged kids can find stability, and not be
forced to live in a shelter or in the woods.
Now I am reaching the end of my time, but I hear we may
have a few extra minutes later for questions. So, I will yield
at this moment to the Chair. Thank you.
Mr. Grothman. Thank you. Yes, this is such a great hearing,
I thought we would go another 10 minutes, and I would call on
myself first, and I will give you guys some more time.
I want to point out what the goal of the Committee is, and
I will ask another couple questions. First of all, the benefits
right now, the support benefits, be it housing, be it food, be
in earned income tax credit, whatever, all discourage work, and
even more, discourage marriage, because if you marry somebody
who is making $40, $50 grand a year, it takes all these
benefits away from you. I think anybody who goes back home and
talks to people, not lobbyists or other Congressmen, will find
examples of people who even out of the chute do not get married
because they do not want to lose their benefits. But that is
where we stand.
And I wanted to focus a little bit on the LIHTC program,
which, the more you look at it, overwhelmingly the primarily
beneficiary is a bunch of well-off property developers, not the
so-called poor that they claim to be helping.
But in any event, I will ask Mr. Carson one more time. Do
you believe that these benefits, collectively, have changed
society in which there are less children raised in marriage,
and over time more people adapting? Like you said, they spend
time looking at how to get the government benefits instead of
getting a job. Do you think that is true, Mr. Carson?
Dr. Carson. It is true. I do not think it may have been
done intentionally, but we have to be smart enough to look at
the effect of what is happening, and ask ourselves what can we
do to change this outcome? I do not think anybody disagrees
with helping poor people and giving them a hand up. I think the
issue here is do we perpetuate that situation? And I think some
people obviously do not realize that if we continue down the
pathway we are going, with waste, fraud, and abuse, our whole
country will go bankrupt, and everybody will be in a terrible
shape at that time. It is being able to look at the big picture
that sometimes people are not able to do.
Mr. Grothman. OK. In your experience, and I know you came
out of a tough background, but in your experience can you see
benefits, not just to the children but to the men, as well, who
frequently our society has set up programs designed to make
sure the men are not in the household, benefits not only to the
father of the children as well as benefits to the children if
we had more of a society in which marriage was the goal?
Dr. Carson. Well, marriage is the institution that was set
up by our God, and it is the perfect environment for children
to be raised in. There was a recent study done by the Brookings
Institute and Princeton University, looking at the effect of
traditional nuclear families on the well-being of the state.
And it was pretty dramatic, that those states that had the
largest number of traditional nuclear families did much better,
provided a much better environment for the raising of their
children. It is something we need to be concerned about as a
Nation.
Mr. Grothman. OK. Thank you much.
Mr. Edwards, I did want to focus a little bit more on the
LIHTC stuff and the fact that, you know, lobbyists are always
moving around this building. Do you believe, one more time,
that this program primarily benefits the so-called low-income
or working poor, or does it primarily benefit the property
developers, the lawyers, the accountants?
Mr. Edwards. The statistical studies that have been done
have shown that half or more of the benefits go to the
investors and the developers and not to low-income tenants. You
could see that, for example, by the fact that the rent, the
average rent payments in the LIHTC buildings, are not much
lower than nearby market housing.
To build on something quickly that Dr. Carson touched on,
there is a big difference between the intentions of programs--
all of these programs are well meaning. The actual reality is
often different. The SNAP program, the N is for Nutrition, a
quarter of the benefits go to junk food. So, the results are
actually different than the intention, and that is the same
with the LIHTC program. The intention is to benefit tenants,
but the reality of the program is it has been taken over, as
you mentioned, by the corporate lobbyists, the banks, the
investors, and most of the benefits go to them.
Mr. Grothman. OK. Thank you. We are going to go to Mr.
Gosar, but first of all, Mr. Krishnamoorthi, do you want to say
anything else, briefly?
Mr. Krishnamoorthi. Are you going to yield us 5 minutes
total?
Mr. Grothman. Total, yes.
Mr. Krishnamoorthi. OK. I will yield myself 1 minute. Let
me ask Mr. Dutta-Gupta. Look, I think that there is a
misconception that somehow Democrats would want to discourage
marriage, or harm the institution of marriage. As you know, in
my own particular story, my parents remained married, and then
we exited successfully from public housing, and went on to live
a middle-class life.
But to address the issues that Dr. Carson and others raise,
what is a reform that you would suggest?
Mr. Dutta-Gupta. Well, for one thing, we have a lot of
evidence of programs that do reduce divorce, which we need to
think about too, and facilitate marriage, with positive
outcomes. These are not, unfortunately, the Bush-era Healthy
Marriage programs, some of whom actually increased domestic and
intimate partner violence. These are really jobs and income
programs.
So, we have track record, with some jobs and income
programs, particularly in the Midwest, that by helping people
have health coverage, decent-paying jobs, which the United
States has way too few of, in fact, we found that then people
chose to get married at higher rates, and they chose to stay
together and avoid divorce at higher rates. So, jobs and income
support programs can be the best way to promote that outcome.
Mr. Krishnamoorthi. Thank you. I yield back to you.
Mr. Grothman. OK. I guess Paul Gosar, and then another.
Mr. Gosar. Yes, Dr. Carson, I want to give you ample time
to come back at something that was said about Medicaid,
slashing Medicaid. Only in Washington, DC, is an increase a
cut. You know, so one of the core tenets of Obamacare was to
expand Medicaid, was it not? And during Biden's term, we saw
60-plus percent increases in the number of people that were
placed on Medicaid. Key here is ``placed.'' Would you agree?
Dr. Carson. Yes.
Mr. Gosar. So, part of the problem here is that when you
are looking at debt service of $36 trillion--and Mr. Edwards,
thank you again, from Cato, from the bottom of my heart, for
looking at that national emergencies--you have got to make some
hard choices. How, if you are just going to cap those rates--
let us just say you are going to cap them, as inflated as they
are--you increase it by the medical inflationary aspect, which
is twice what normal inflation is. It sounds to me like that
would be something that could work. Would you agree?
Dr. Carson. I would agree, but also would bring up the
point that we spend over $13,000 per capita, per year, on
health care in this country. That is more than most concierge
practices cost. So, obviously there is a lot of money going
places where it does not need to be going. What do you need?
You need a patient. You need a health care provider. Along
comes the middleman to facilitate, and becomes the principal
entity, sucking out most of the money out of the system, and
people are not getting the care that they need. We need some
major reforms there.
Mr. Gosar. Oh, I am glad you said that, because, you know,
it is now cool to eat well. Maybe when Mrs. Obama was around,
when she wanted to eat well, it was not cool. But it is cool
now to eat good food. So, we ought to be pushing pay-to-play to
pay for well health.
Thank you. I appreciate it. I yield back.
Mr. Grothman. Thank you. Mr. Bell.
Mr. Bell. Thank you, Mr. Chair. You know, I talked tongue-
in-cheek about schemes when I was referring to my mom.
Obviously, I was making a point. But I do think there is a
scheme when we talk about how these programs, it was mentioned,
that these programs benefit lawyers, they benefit developers,
and I guess rich folks, for the most part.
So, I mean, another side of that is we could talk about the
fact that, how about improving these programs so that they do
not. But instead, it seems like Republicans are saying, OK, we
are also going to give benefits to the rich in the form of tax
cuts, because those tax cuts, they are not helping poor folks.
They are helping millionaires and billionaires.
When we look at these tariffs that have been implemented
whole-heartedly, or holistically, across everything, without
any kind of target or plan, the benefit does not go to poor and
working-class people because the cost of food, the cost of
housing, that all goes on the back of poor folks. Folks who are
making good money, it does not impact them as much. But folks
who are trying to rise, to take a step up, and move out of
public housing, move off of assistance, makes it a whole lot
more difficult when the cost of food is ridiculously high, when
we see kids get out of high school or college and there is no
way they can afford a house.
So, how does this work out when we have these benefits that
go to the rich people? We say we are going to cut Medicaid. We
are going to cut all these programs that help people make that
step up, and then we turn around and say, oh well, this is just
a scheme, and we need to gut all of these programs. I think
this is completely out of whack. I think everyone on this dais
and in this room should be focusing on working-class families
and the things that are going to help people move themselves
out of poverty, and not handcuff them to the situations that
they are in.
I yield back. Thank you.
Mr. Grothman. OK. Ms. Simon?
Ms. Simon. Thank you so much. I wanted to quickly comment
and ask a quick question to Mr. Dutta-Gupta. There have been
conversations about SNAP, and I really love that you brought up
that poor folks with SNAP just by junk food.
Mr. Dutta-Gupta, can you give us 40 seconds and talk to
this room and folks who are watching about food deserts,
particularly in urban and rural communities, and what is
usually available to poor people? I understand that the
Administration that is in power right now wants to cut the
program where farmers actually bring fresh fruits to
communities, that allow folks to use their SNAP. Give us a
little bit. Educate us.
Mr. Dutta-Gupta. Fresh, healthy produce, in particular, can
be far more expensive than processed and ultra-processed food
that is often shelf stable, and is often unavailable precisely
where people with the lowest incomes live. So, that would be a
move completely in the wrong direction.
Ms. Simon. And we call those food deserts, communities
without grocery stores, with bodegas and corner stores and
candy shops, but no fresh food. If you have not seen it, Bryan
Stevenson says, ``Let us get proximate.'' I will take you on
tours all across the country of food deserts. It is important
for folks who are making policy around this stuff to see those
places.
Mr. Grothman. Thank you. We have Ms. Randall.
Ms. Randall. Thank you so much, Mr. Chair, for this extra
bit of time.
You know, some of my colleagues have mentioned programs
that help get folks out of poverty, and, you know, we talked
about jobs that even in a two-parent household, twoadult
working household, barely allow you to pay for housing in your
community, near where you work. You know, maybe you have public
transit, but in my district you do not have a lot of public
transit to get to your job, as you get pushed farther and
farther and farther out into rural communities.
I spent a lot of time working in the state legislature on
housing and food assistance programs for particularly community
and technical college students, students of all ages who are
trying to build themselves out of poverty. One in every two
college students in Washington State is housing or food
insecure. That is half, half of the students, those who
persist, anyway. Many of them do not because they lose
childcare subsidy because they are going to school and not
working. They lose some of the other assistance programs, which
we have tried to expand in Washington State.
But some of the programs that really work are project-based
vouchers that allow working student parents, who are doing like
six jobs, at the end of the day, a little bit of stability.
Now, I think--I am seeing some nods--I think some of these
project vouchers are at risk of being cut. Can anyone on the
panel attest to that, under this budget reconciliation package?
Mr. Dutta-Gupta, maybe?
Mr. Dutta-Gupta. Well, under the skinny budget that the
Administration put forward we know that for sure. And by the
way, Ms. Randall, you have hit on exactly the sort of
population that is doing everything right, everything we want
them to do, and you put some new bureaucratic work reporting
requirements, and you will ensnare them. You will bump off
people who should be eligible and who deserve the support, and
for whom, not that we need this in every instance, but we will
get a huge return on investment. Sometimes we do things because
it is the right thing to do, and in this case that happens to
be the smart thing to do, economically.
Ms. Randall. Thank you. Thank you, Mr. Chair.
Mr. Grothman. OK. I will yield to Ranking Member
Krishnamoorthi for your closing remarks.
Mr. Krishnamoorthi. Well, thank you so much, Mr. Chair.
Look, I think that what we need to recognize is that we have a
large number of programs designed to help people who are
struggling in this country. As I mentioned before, my family
was one of them, so I have personal experience with the safety
net. And I can say, without a doubt, I would not be here but
for that safety net. I would be here but for that food stamp
assistance, now known as SNAP. I would not be here but for that
public housing.
And so, my father would say, ``Think of the greatness of
this country, and whatever you do, make sure this country is
there for the next families who need it.'' That has become the
mission statement of my office, and, indeed, my why, at this
point. My why.
And so, when I hear repeated attacks on those programs and
proposals to cut them to the tune of, we are talking $1.1
trillion, with a T, we are talking about programs that are
going to hurt real people, and people just like me.
And so, I would just make two comments. One, do those
programs require improvements that could make them more
efficient? The answer is yes. But do those programs require
such deep cuts that tens of millions of people who are already
struggling would then fall further into poverty, or become more
sick, or become more unable to work? No.
And so, we have to work together, I think people of
goodwill among Republicans and Democrats, to make the programs
more effective, more efficient, and make sure that the people
who need help get the help in a timely fashion. And so, I
welcome the opportunity to work with anybody, on any side, to
make them hit their marks.
But cutting them or sacrificing them on the altar of tax
cuts is a bridge too far, completely unacceptable, fiscally
imprudent, and morally repugnant.
Thank you, and I yield back.
Mr. Grothman. Thank you. A few final comments. We have gone
from a society in which the married couple was the norm to much
less common. I do want to point out that there are many
tremendous single parents out there. I am looking at Dr.
Carson. His mom, his grandparents, real heroes in that regard.
And we heard several other testimoneys from people up here on
the Committee.
I do believe, whether it is right or wrong, I do not know,
but we do have many examples in this country of particularly
immigrants who come here. I am thinking of the Hmong in my
district who came here straight from Laos, who needed some of
these programs when they first landed here.
However, there has been some question as to whether the
overwhelming prejudice against married couples was intentional
or not. I would like to believe it was not. However, it is not
hard to find, like very powerful feminists in the 1960s or Karl
Marx himself, who were very hostile to the traditional nuclear
family. It was their goal to break it down. How much influence
they had on the programs that were created in the 1960s and
which survive today I do not know.
But in any event, I hope everybody here, when they continue
to work on public policy dealing with poor people, remembers
that we should not be expanding or coming up with new programs
designed to put a married couple at a disadvantage compared to
couples without both Mom and Dad at home. And right now, it is
not unusual to be at a $20,000 or $25,000 disadvantage, which
is preposterous.
And I did try to highlight the LIHTC program as an example
of a program that I think benefits--it is corporate welfare at
its worst. I kind of did not like it when I found out that the
credits were going to be equal to 70 percent of the value of
the cost of a building. And if you build a new building to help
the poor, the government kicks in 70 percent of the cost of the
building, but winds up with none of the ownership of the
building. On its face, it ought to cause people to wonder what
in the world is going on here. So, hopefully we can find, if we
have to have low-income housing, a way for somebody else to
benefit.
Earlier today, we also talked about food stamps, and the
huge degree that you buy junk food with food stamps, which is
not really helping anybody and probably causing people's health
to decline. But again, I think, just like the LIHTC, the
program is sometimes used to benefit big corporations or well-
off people and not the people it is designed to help.
But in any event, I would like to thank--well, this is very
good, very honored to have all four of you stay here to the
bitter end. That is good.
Now, we have a little script here. With that, and without
objection, all Members have 5 legislative days within which to
submit materials and additional written questions for the
witnesses, which will be forwarded to these witnesses.
If there is no further business, without objection, the
Subcommittee stands adjourned.
[Whereupon, at 11:41 a.m., the Subcommittee was adjourned.]