[Congressional Record Volume 150, Number 54 (Monday, April 26, 2004)]
[Senate]
[Pages S4368-S4369]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              HUD'S SECTION 8 VOUCHER REIMBURSEMENT CRISIS

  Mr. KENNEDY. Mr. President, I take this opportunity to warn my 
colleagues about the potential low-income housing crisis that could 
jeopardize hundreds, if not thousands of people in their States as a 
result of an irresponsible, punitive, and unnecessarily harsh action 
taken last week by the Department of Housing and Urban Development.
  For the first time in the 30-year history of the Section 8 Voucher 
Choice Program, there is the very real possibility that tens of 
thousands of low-income Americans will lose their housing vouchers this 
summer and fall and be left with nowhere to turn but homeless shelters 
and the streets. The mere possibility of this is shocking and it's 
something my colleagues need to be aware of immediately.
  Congress did not intend for this to happen, and the appropriators 
pushed HUD to make sure it would not happen, but that is the course we 
are on. And it's all because of HUD's callous indifference to the 
plight of the most vulnerable and this administration's unrelenting 
drive to destroy the safety net.
  Using the most narrow possible interpretation of the appropriations 
bill, HUD issued a notification on Thursday that would retroactively 
abandon the long-standing practice of reimbursing public housing 
agencies for the actual costs of assisting the poor, the disabled, and 
the elderly through the section 8 voucher program. Instead, the new HUD 
policy will reimburse them on an inflation factor concocted by HUD's 
budgeteers that has absolutely no bearing on the actual operating costs 
of the Section 8 housing voucher program.
  As a result, public housing agencies across the country are about to 
be blindsided by a rule change they did not anticipate and could not 
have prepared for.
  The National Association of Housing and Redevelopment Officials--
NAHRO--is conducting a complete national survey of the potential 
effects of this change, which should be available later this week. But 
early analysis is already available, and it is not reassuring. As a 
result of this change, the association thinks that maybe 60,000 
families may be at risk of losing their vouchers in the coming year. 
60,000.
  The notification does inform public housing agencies that they can 
appeal the decision by July 15, but offers no information about just 
how to do that. The notification also points out that HUD may not have 
any funds by then to adjust reimbursements that were appealed. So, go 
ahead and send the appeal letter, but just don't expect HUD to do 
anything about it.
  If my colleagues harbor any doubts that this HUD notification will 
have severe consequences, they need only look at what is happening in 
Massachusetts now. The State has directed public housing agencies to 
notify 600 families that their vouchers will be terminated effective 
June 1 as a result of HUD's abrupt funding change. Barring an 11 hour 
temporary reprieve, those notices go out tomorrow. And that is just the 
tip of the iceberg in Massachusetts, some thousands more may be in 
jeopardy.

  The State is being hit now because it must reconcile HUD's funding 
cuts within its existing fiscal year, which ends June 30, and there is 
no other way to do that other than withholding assistance from those 
currency receiving it.
  Who are these 600 families? More than 60 percent of them are 
disabled, a significant portion are elderly, and all are low-income.
  They are people like Mr. Milton Servis II. At the age of 15, he was 
hit by a speeding car while he walked. As a result of the collision, he 
sustained a serious head injury that has left himself disabled, with 
impairments of his vision, balance, and ability to walk.
  Then, just last year, Mr. Servis II, sustained third degree burns on 
his hands in the Station Nightclub fire in

[[Page S4369]]

Rhode Island. He lost his two best friends there as well, on that 
horrific and tragic night.
  Despite these hardships, he continues to work to lead an independent 
and dignified life. His only source of income is his monthly $698 SSI 
check, but he is able to make ends meet because of his section 8 
voucher, which covers $394 of his $550 rent.
  Because of HUD's abrupt change, he may have to stretch his Social 
Security check all the more, because he is currently scheduled to 
receive a termination notice tomorrow, informing him he has 1 month 
before he is tossed out on the street.
  This doesn't have to be this way. People like Milton Servis II, who 
have struggled hard to overcome misfortunes that few others can relate 
to, don't need to be terrified by the prospect of homelessness.
  It should never have come to this. Last year, when the administration 
sent its budget to Congress, we didn't believe they were being accurate 
with the numbers.
  As our colleague, Senator Mikulski, the ranking member of the VA-HUD 
Appropriations Subcommittee, wrote last week to HUD Secretary Alphonso 
Jackson, ``. . . the fiscal year 2004 appropriations bill provides 
$17.6 billion to renew expiring section 8 contracts. This amount was 
$1.4 billion above the amount requested by the Administration to renew 
existing vouchers.''
  Congress went out of its way to make sure that adequate funding was 
available to renew all vouchers, even adding an additional $1.4 billion 
in these difficult budget times to make sure no one would lose their 
section 8 voucher. What is HUD done with this money?
  But the administration doesn't care what Congress intended with 
regard to this program. They remain committed to their ideological goal 
of ending the section 8 voucher program, and shredding the safety net.
  Last year, the administration proposed block granting the section 8 
program so they could shift more of the responsibility for housing the 
elderly, the disabled, and the poor onto the State and local 
governments and reduce Federal spending on this critically important 
program.
  On a bipartisan basis, Congress rejected that radical proposal, 
because it would have provided fewer resources and contained perverse 
incentives.
  It would have actually rewarded housing agencies for terminating 
assistance for the poorest citizens and replacing it with assistance to 
people in less need. These ``compassionate conservatives'' described 
this new ability to ignore the truly neediest as a type of 
``flexibility.''
  The flexibility to abandon people, I guess.
  But despite Congress's complete rejection of the proposal, the 
administration is not about to concede defeat.
  If Congress will not accede to its demand to dismantle the 30-year-
old section 8 program, HUD will do its best to ruin it 
administratively. And with this notification, HUD is attempting to do 
just that.
  They can't win the battle of ideas in an open and full debate. So 
they are trying to win it deviously by simply undermining the program's 
integrity.
  We know a Trojan Horse when we see it.
  Here is how they are using it on section 8 vouchers.
  First, HUD changes the rules in the middle of the fiscal year so that 
public housing agencies have to take drastic and truly brutal measures 
to comply, such as throwing people off public housing.
  Then HUD blames the public housing agencies for being mismanaged.
  In other words, HUD claims that public housing agencies are at fault 
for not having budgeted the resources to comply with HUD's unexpected 
policy change.
  HUD has already begun condemning the public housing agencies for not 
maintaining adequate reserves to offset this most recent HUD-
manufactured financial crisis. HUD does this event though it knows that 
over 800 public housing agencies serving 690,000 people have already 
depleted their reserves to address other HUD policy changes or funding 
shortfalls in the past 2 years.

  HUD intends to use this funding crisis to claim that public housing 
agencies can't manage their programs effectively, compassionately, and 
efficiently.
  Once the horror stories start about people losing their vouchers and 
landlords leaving the program, HUD can then declare the existing 
program a failure and revive its block grant proposal that Congress has 
already flatly rejected before.
  This is not an academic issue.
  Real people are about to suffer for HUD's actions. Many are elderly, 
many are disabled. They deserve to be treated with respect and 
compassion, which is in short supply in this administration.
  HUD is about to impose these immense hardships on those of our 
constituents who need our help the most.
  The administration may not care that low-income, elderly, and 
disabled Americans are being needlessly hurt, but this Senate does, and 
we need to join together to fight these changes before this crisis gets 
any worse.

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