[Congressional Record (Bound Edition), Volume 156 (2010), Part 13]
[Senate]
[Pages 19419-19423]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              THE ECONOMY

  Mr. BOND. Madam President, I am going to take advantage of the 
attention Senator Bennett brought to give some of my views on the 
economy and the compromise bill that we hope will be pending before the 
Senate. My apologies for lowering the grade of discourse by moving down 
to such a mundane but nevertheless important subject.
  Madam President, it has been more than 2 years since the severe 
crisis beginning in the housing and mortgage markets nearly brought 
down the financial system, and with it the entire economy, in late 
2008.
  The American people are still struggling from the effects of this 
crisis. Unemployment continues to rise and is nearly a staggering 10 
percent, millions of families continue to face home foreclosure, and 
many more are having difficulties finding financing to make large 
purchases or run businesses.
  We face no more important task than stabilizing the economy. On 
November 2, Americans sent a clear message to Washington.
  They have had enough of the runaway spending, the exploding debt, the 
bailouts, and the job-killing policies coming out of this Congress and 
administration. The recent election showed us that Americans will not 
settle for a Washington agenda that does not make economic recovery, 
fiscal restraint and job creation the top priority.
  We need new jobs now. Plain and simple I cannot be any clearer about 
this point. As I have said repeatedly on this floor, government cannot 
create jobs, but it can create the conditions to allow the private 
sector to flourish through low taxes, commonsense regulations, and 
enhanced trade opportunities.
  Unfortunately, for the past 2 years, Washington has moved in the 
opposite direction, seeking to raise taxes, increase regulation, and 
allow trade agreements to wither.
  We now have an opportunity to move towards more commonsense 
approaches that will help in job creation. And we can start now, during 
this lameduck session.
  We must address the looming tax hikes scheduled to hit every American 
on January 1.
  The proposal the President outlined earlier this week is an important 
step., His efforts to stop the crippling tax hikes in January from 
hitting American families and small businesses show he has gotten the 
message.
  I only hope he can convince Democrats in Congress what Republicans 
and the American people understand, raising taxes on the people and 
small businesses that create jobs is a really bad idea. The President's 
plan first and foremost ensures that our small businesses will not face 
the largest tax increase in American history.
  Why is this important? Because our small businesses: Represent 99.7 
percent of all employer firms, employ just over half of all private 
sector employees, pay 44 percent of total U.S. private payroll and, 
have generated 64 percent of net new jobs over the past 15 years.
  As my colleagues know, most small businesses are taxed as individuals 
through their proprietorships, partnerships, or subchapter-S 
corporations. So if you raise taxes on those earning above $200,000 or 
$250,000, you are raising taxes on small business owners--the ones most 
able to create jobs.
  The President's compromise also ensures the death tax will not come 
back to life at the sky-high rate of 55 percent. This is an important 
provision, because the death tax is anti-savings, anti-family, and 
anti-investment. It is quite simply unAmerican, and it should be 
eliminated entirely. The President's plan increases the estate 
exemption from $3.5 million to $5 million and maintain the 2009 rate of 
35 percent is a step in the right direction. It will keep families 
production farms and businesses from having to sell the farm or 
business to pay estate tax. We need to pass this compromise before we 
leave town.
  Extending tax cuts is one way we can help the private sector create 
jobs. That alone is not enough.
  There is another area that Congress has direct control over, and that 
is spending. For the economy to recover and create jobs in the long 
term, Congress simply must control spending. Today, our debt totals 
more than $13.8 trillion, which breaks down to more than $44,000 for 
each citizen's share of that mind-boggling amount.
  Likewise, our annual deficit, the amount we add to our children and 
grandchildren's credit cards, stands at roughly $1.34 trillion, but 
left unaddressed, could reach as high as $9 trillion over the next 
decade.
  Both entitlement and discretionary spending must be cut. Runaway 
entitlement spending is stifling our prosperity and will continue to 
hold our economy back if not addressed promptly.
  I am hopeful the next Congress will make this debate their top 
priority, enact necessary legislation to curtail our drastic runaway 
spending and raise revenue through a more fair and efficient tax 
regime.
  I believe the debt commission has come up with a reasonable proposal. 
I may be so bold as to suggest that we establish a BRAC-type 
commission, a BRAC-type proposal, to deal with that Commission and say 
it can be accepted or rejected on a simple up-or-down vote by both 
Houses. That is one good step.
  The other step that has to be taken is to reform entitlements. I am 
disappointed they did not deal with that. But the health care costs of 
Medicare and Medicaid plus Social Security are what is going to drive 
our spending through the roof.
  Along with extending tax cuts and restraining spending, opening new 
markets to American businesses through free trade is another critical 
component to future economic and job growth.

[[Page 19420]]

  Up until President Obama's recent push for trade in Korea, our 
pending free trade agreements have been held up to safeguard the 
interests of labor and extreme environmentalists. I congratulate the 
President for moving forward on this important job-creating agreement.
  With the election behind us, I hope that the politicization of trade 
in Congress will be behind us as well.
  The new Congress must renew its efforts to expand and open up new 
markets abroad, particularly in Asia where the most dynamic growth in 
this century will take place.
  The Obama administration deserves credit for attempting to 
reinvigorate the U.S. focus on Asia and trade with this dynamic region.
  Trips by the President and the Secretary of State to Asia have helped 
to elevate ties with longstanding friends and allies like Korea and 
Japan. They have also been working to forge deeper, stronger 
relationships with India, Indonesia, Malaysia, and Vietnam.
  Reaching an agreement on the U.S.-Korea FTA signals that the United 
States can return to a leadership position on trade and create some 
much-needed jobs based on exports here at home.
  We must play a leadership role in negotiating and pursuing new FTAs, 
like the Trans-Pacific Partnership and approving the long-awaited 
agreements with Colombia and Panama.
  Even the Chairman of the President's own Export Council, Jim 
McNerney, CEO of Boeing, has warned that a failure to approve the free-
trade agreements will leave the United States at a ``significant 
disadvantage'' to other nations that are working to lower barriers to 
their exports.
  For example in Southeast Asia, where the United States exports as 
much as it does to China, China has negotiated a free trade agreement 
with all 10 ASEAN countries.
  We are languishing while our competitors are moving forward with 
their own FTAs to give their exporters and their workers a competitive 
edge.
  One such opportunity to increase jobs in the U.S. and secure our 
strategic interests in the paramount Asia-Pacific region, is the Trans-
Pacific Partnership or TPP. The TPP would ensure the United States 
remains fully engaged in the Asia-Pacific region where strong economic 
growth will occur in the 21st century.
  The partners involved in the TPP discussions now include, in addition 
to the United States: Australia, New Zealand, Chile, Peru, Malaysia, 
Vietnam, Singapore and Brunei, which represent the fastest growing 
regions in the world.
  Another way in which we ought to view the TPP, and other free trade 
agreements, is as a way to cash in on the peace dividends created in 
the region from our efforts in World War II, the Korean war, and the 
Vietnam war.
  The TPP will open Asian markets to United States exports in a way 
that we have never seen.
  We are already the world's largest exporter. We can build on that and 
create millions of new jobs by aggressively competing in markets abroad 
and by rejecting isolationism at home.
  In closing I will put these economic considerations in a larger 
context.
  In the 24 years I have been in the U.S. Senate, I have traveled 
around the world and have seen the remarkable change that came with the 
fall of the Soviet Union.
  With the fall of Socialism and Communism, countries around the world 
immediately began to look to the United States as ``the'' economic 
model.
  Our free enterprise system has demonstrated that successful 
businesses can provide job opportunities for all our citizens. This is 
a classic case of the rising tide lifting all boats.
  As the economy gets stronger, people up and down the economic scale 
benefit, and people in low-wage jobs have the opportunity, through hard 
work and/or education, to move on up the ladder.
  These countries are not looking to Denmark or Sweden with their very 
high tax rates as a model.
  They see the difference between a government-controlled economy and a 
free economy with appropriate government regulation.
  The European Socialist model has demonstrated that it does not grow 
as quickly as the U.S. economy.
  High levels of unemployment generate more social welfare and transfer 
payments. These transfer payments put pressure on the government to 
raise taxes even higher, and make more people dependent upon the 
largesse of the Federal Government.
  Last year's ``stimulus'' program did a tremendous job of putting more 
people on the government payroll. It did not do much for creation of 
jobs in the private sector.
  The private sector in the United States has historically been vibrant 
and it will create jobs despite increasing government taxation, 
deficits, and regulation.
  But the number of jobs created necessarily will be far less than what 
the free market system could create if it were not inflicted with an 
increasing government role.
  Using history as our guide, high taxes and excessive spending, such 
as the new health care bill, will likely lead to a slower recovery, 
continued high unemployment, and a lower standard of living for all 
Americans than would otherwise be possible.
  There is a chance now for us to reverse course, stop tax hikes, put 
the brakes on spending, reform entitlement programs, and to pursue new 
trade opportunities that will create jobs. I believe that is what the 
American people expect us to do.
  Real growth is only possible if we get our fiscal house in order.
  If we care about jobs in this country and the future of the economy, 
Congress cannot continue to vote for thousand-page bills that are full 
of job-killing provisions.
  And Congress cannot continue spending in such a way as to destroy the 
prosperity of future generations stuck paying the bill.
  I am hopeful that the next Congress will make this debate their top 
priority and enact necessary legislation to curtail drastically our 
runaway spending and to raise revenue through a more fair and efficient 
tax regime.
  Madam President, I wish to include for the Record my discussion of 
the role housing played in the bubble we had, the crash, and the 
recession we have gone through. I have spent all my time in the Senate 
either looking at housing on the Banking Committee or as a member and 
then chairman or ranking member of the appropriations subcommittee that 
funds housing. Most of my friends are not interested in hearing a full 
description of the housing crisis and what needs to be done. I will 
give them the opportunity to read it at their leisure.
  Promoting what we think is the American dream by giving people no-
downpayment homes, homes which they don't have the financial ability to 
afford, is not the American dream. It leads to the American nightmare. 
The American nightmare, unfortunately, for too many families, has 
resulted in home foreclosures, and communities with large numbers of 
foreclosed houses that are deteriorating thanks to the genius of Wall 
Street which, through its wonderful, innovative efforts, created high-
tech computer game derivatives on which they made profits by selling 
around the world, which crashed and brought not only our economy but 
the world economy down. We have to stop that trend. We need a 
responsible housing policy to rein in Fannie and Freddie, keep them 
from buying up housing mortgages which are not subject to underwriting 
standards which could cause problems in the future. These items are all 
laid out in the statement I include.
  If anybody reads them, I would be happy to answer any questions they 
have.
  I ask unanimous consent to have the statement printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

       As I prepare to leave the Senate after 24 years, I have had 
     the opportunity to reflect upon some of my most rewarding 
     work in various issue areas.
       If my colleagues will indulge me for a few minutes, I have 
     some thoughts to share

[[Page 19421]]

     about America's housing and community development policy.
       This is not typically an area that gets a lot of attention, 
     though certainly it has gotten some negative attention 
     because of the recent housing market meltdown.
       But good housing is fundamental. It is fundamental to each 
     of us as people. And it is the foundation of any community.
       To a community, good housing means economic development and 
     jobs. It means kids are safer, healthier and happier.
       To an individual, a home means safety and security, a 
     starting point from which to do everything else in life.
       And good housing goes hand-in-hand with community and 
     economic development. One cannot sustain a community very 
     long if there are no jobs. And there won't be jobs if 
     companies don't locate in a particular area, and so forth.
       Early in my Senate career, I joined the Housing 
     Subcommittee of the Senate Banking Committee. A few years 
     later, during the 102nd Congress, I became a Member of the 
     VA-HUD-Independent Agencies Appropriations Subcommittee.
       Since that time I have been either Chairman or Ranking 
     Member of the Housing Appropriations Subcommittee.
       And I have had the good fortune of having as partners in my 
     work the Senator from Maryland, Barbara Mikulski and the 
     Senator from Washington, Patty Murray. I cannot say enough 
     good things about each of these fine colleagues and the work 
     they do.
       While bipartisanship has become something of an anachronism 
     in today's Washington, that is not the case on this 
     Subcommittee. These Senators have always been willing to work 
     on a bipartisan basis to get things done for the American 
     people, and I deeply appreciate each of them.
       So I have had the opportunity to be involved in housing 
     issues both from a policy and from a funding perspective.
       As I have worked on these issues through the years, I have 
     discovered that housing and economic development are the glue 
     that holds our communities together, even though urban and 
     rural areas often face difference issues and concerns. Both 
     are important and I have worked to promote their unique 
     needs.
       If we provide the right incentives and investments for 
     growth and opportunity, then families and individuals will 
     prosper and grow, with a tax base that will allow the needed 
     investment for infrastructure, schools, hospitals, libraries 
     and all the necessary amenities that make our Nation great.
       As we are all painfully aware, we are at a crossroads when 
     it comes to housing policy in this country. We have seen the 
     devastating after-effects of a housing ``bubble,'' and how 
     the housing market meltdown nearly precipitated a worldwide 
     economic depression.
       In part, this crisis was preceded by unrealistic 
     expectations in housing.
       Homeownership is perceived by many as key to achieving the 
     ``American Dream.'' However, most of us now recognize that 
     homeownership, while a blessing for many, is not an ideal 
     solution for all. For example, in many cases, rental housing 
     is appropriate for families.
       It provides flexibility while limiting exposure to frequent 
     variations in market conditions.
       Homeownership is a great way to build wealth for those able 
     to maintain financial stability throughout the life of a home 
     loan.
       However, by subsidizing homeownership, and encouraging all 
     families to own homes, even those without realistic resources 
     to maintain their mortgages, the government has turned the 
     American Dream into a nightmare for homeowners, neighbors, 
     communities, the global financial system, and taxpayers.
       Since 2007, millions have had their homes foreclosed; 
     millions more are at risk. In the aftermath of this meltdown, 
     the government's efforts to date fall far short of what is 
     required to address adequately the growing number of 
     foreclosures that are hurting homeowners and communities.
       As we have seen with previous housing bubbles, the taxpayer 
     ends up bearing the brunt of the costs and the government 
     ends up holding foreclosed properties. The last time I 
     checked, the government did not do a good job of being a 
     landlord.
       It is critical that policy-makers address our overall 
     housing policy and the proper role of government versus the 
     private sector.
       I believe that three essential areas of our housing system 
     must be reformed. We must address:
       Housing finance issues;
       Tax policy;
       Affordable housing for all.
       With a comprehensive but balanced approach, I believe the 
     United States can join other nations in creating a market 
     where responsible consumers buy and retain their homes with 
     confidence; where those who should rent are able to access 
     affordable, safe housing; and where the needs of the homeless 
     and vulnerable are met.


                            HOUSING FINANCE

       First, we need to make changes in the amount of involvement 
     the federal government has in housing.
       The federal government is now responsible for 95% of the 
     mortgage market. The Federal Housing Agency (FHA), Fannie 
     Mae, and Freddie Mac guarantee nearly all mortgage loans in 
     the U.S. They are fully backed by the federal government. 
     This means it is the taxpayer who will ultimately be on the 
     line to foot the bill as these entities pay for defaults.


                                  FHA

       As many of you may know, I not-so-fondly refer to FHA as a 
     ``powder keg'' or ``ticking time bomb.'' FHA's market share 
     has increased dramatically while its capital reserves have 
     significantly decreased.
       FHA's rapid growth in the mortgage market is largely due to 
     the fact that the average homebuyer receives a guaranteed 
     loan with a down payment of only 3.5%--lower than any sane 
     lender would require.
       I remember growing up in an era where you did not buy a 
     home unless you had 20% of the loan upfront.
       But who would put that much cash down if they are 
     incentivized by the federal government to pay far less?
       The current ceiling for an FHA loan is over $720,000 
     dollars. While I realize that there are some areas of the 
     country considered ``high-cost,'' keeping the loan limits at 
     such high levels perpetuates big government and increases the 
     risk to taxpayers. It is time to reduce the FHA loan limits.
       There is a private housing market ready to fill the FHA gap 
     and we need to restart the private housing market and let HUD 
     return to helping first-time homeowners and the more marginal 
     housing applicants.
       Rather than continuing to extend these expiring limits, I 
     hope that my colleagues will begin to take a comprehensive 
     look at our nation's housing policies and determine who truly 
     needs the government to back their home loans.
       High loan limits and low down-payments combined with the 
     FHA's seeming inability to prevent waste and fraud, sets up 
     the taxpayers for another huge bailout (estimates range from 
     $54 billion to $100 billion). With FHA's capital reserves 
     already at dangerously low levels (below the mandated level 
     of 2 percent), raising the loan limits is equivalent of 
     pouring more gasoline on the fire. The recently-retired HUD 
     IG testified that the increased loan limits are a 
     contributing factor to FHA's growing risk.
       In the 2010 housing appropriations bill, I worked with my 
     colleagues on the committee to include $20 million dollars 
     for FHA anti-fraud activities and $5 million dollars in 
     additional funding for the HUD Inspector General to conduct 
     oversight.
       FHA has had long-standing management and resource 
     challenges, so we provided $180 million dollars to modernize 
     their information-technology systems to track better mortgage 
     and associated obligations.
       In a rational world, Congress and the White House would 
     tighten FHA underwriting standards, in particular by 
     eliminating the 100 percent guarantee.
       That guarantee means banks and mortgage lenders have no 
     skin in the game; lenders collect the 2 percent to 3 percent 
     origination fees on as many FHA loans as they can push out 
     the door regardless of whether the borrower has a likelihood 
     of repaying the mortgage.
       The bottom line: Congress must take stronger action to 
     shore up the weakening insurance fund to prevent another 
     financial meltdown for another federal entity.


                         fannie mae/freddie mac

       Not only did this Congress fail to address our housing 
     finance system, the Financial Regulatory Reform bill passed 
     without any Republican participation and failed to address 
     the problem of Fannie and Freddie when these two government 
     sponsored entities were, I believe, at the heart of the 
     housing finance bubble collapse.
       The legislation did nothing to rein in the future role of 
     the Government Sponsored Enterprises (GSEs), even though many 
     of us encouraged the leadership to do so during the financial 
     reform debate. Some of my colleagues proposed a finite end to 
     the government conservatorship of Fannie Mae and Freddie Mac. 
     Others favor a gradual move towards reducing the government's 
     exposure to risk by lowering loan limits to a level which is 
     sustainable.
       We have already experienced the pain that the GSEs, Freddie 
     and Fannie, can cause, and that pain is expected to continue.
       The Federal Housing Finance Agency (FHFA) reported recently 
     that the total cost to the federal government since taking 
     Fannie and Freddie into conservatorship could rise from $148 
     billion dollars to an astounding $363 billion dollars.
       Responsible reform would put an end to the taxpayer-funded 
     bailout of Fannie and Freddie and refocus them on promoting 
     affordable housing. I believe strongly that whatever path is 
     chosen for the future of the GSEs, it is essential that any 
     cost to the government for supporting these entities be 
     placed in the annual budget and accounted for with all other 
     programmatic spending.
       I believe the operations of the GSEs must be dramatically 
     wound down to shift the risks from the taxpayers to the 
     private housing finance market.


                                 Taxes

       Today, the tax code provides generous incentives to 
     encourage homeownership

[[Page 19422]]

     through the mortgage interest deduction, property tax 
     deduction, and capital gains tax exclusion. The Joint 
     Committee on Taxation estimates that for 2008 these tax 
     incentives totaled just over $108 billion.
       The tax code needs to be fair and not skewed toward those 
     who are able to purchase million-dollar homes; it should 
     treat homeowners on a level playing field that helps preserve 
     an effective tax code.
       Specifically, the mortgage interest deduction can be 
     claimed by anyone whose mortgage balance is less than $1 
     million.
       Like many, I believe that the federal government should not 
     provide a hefty deduction for mortgage interest paid for 
     million-dollar homes when many families are struggling to 
     maintain homes that average $500,000 dollars or less. This 
     deduction level needs to be revisited soon.
       Other government gimmicks such as the First-Time Homebuyers 
     Tax Credit simply kicked the reality of our housing market 
     woes down the road further, and today we are feeling that 
     pain.
       Initially, I supported the creation and first extension of 
     the home-buyer tax credit. As a long-time housing advocate, I 
     believed the credit, combined with other tools such as 
     housing counseling and refinancing efforts by state housing 
     finance agencies would help in the stabilization and recovery 
     of the housing market.
       Like many of my colleagues, I believed that it was critical 
     to address the housing market that was at the root of the 
     credit crisis and led to our recession. However, the housing 
     crisis evolved from a crisis caused by loose lending through 
     risky subprime loans to a crisis where job loss has become 
     the primary cause of foreclosures and delinquencies.
       Today, we can look back and see that the newly-formed tax 
     credit was costly and a target of fraud.
       Congress needs to stop trying prescriptive programs to cure 
     a systemic disease that has plagued U.S. housing for too 
     long. Rather than credits or incentives for some, we should 
     allow the market to correct itself and truly feel the bottom 
     of the recession so that a genuine, solid recovery can be 
     realized.
       So the question I ask my colleagues is: why are we 
     continuing these debt-fueled policies that led to our housing 
     and economic troubles? Why do we keep using taxpayer dollars 
     to distort and manipulate the housing market?
       Americans expect Congress to address fully the causes of 
     the recent financial crisis. As we work toward a full 
     economic recovery, it is essential that Congress address the 
     root of the problem--failed housing policies that were pushed 
     by the government and manipulated by the private market to 
     reap unprecedented profits for a few bad actors.
       I strongly urge my colleagues to consider carefully the 
     future role of government in housing, so that the people of 
     this great nation do not bear the burden of a housing crisis 
     ever again.


                           Affordable Housing

       As is always the case, the housing collapse and subsequent 
     recession have hit vulnerable people the hardest.
       We must continue to look forward and renew our commitment 
     and energy to ensure that all Americans have fair access to 
     safe and affordable housing.
       It is unacceptable that people with disabilities, families 
     with children and minority residents still meet severe 
     challenges for fair housing.
       It is unacceptable that the 20 percent of Americans who 
     suffer a physical disability face a significant shortage of 
     accessible and affordable housing.
       It is unacceptable that one-in-five Hispanics, African 
     Americans, Asians or Native Americans still face 
     discrimination when renting, buying, or financing a home.
       And it is unacceptable that so many families, veterans and 
     the mentally ill are homeless.


                            VA-HUD Committee

       HUD has a number of primary ``core'' programs to address 
     these needs, including Section 8 housing assistance, public 
     housing, Section 202 housing for the elderly, Section 811 
     housing for persons with disabilities, the Community 
     Development Block Grant program, the Housing Block grant 
     program, the FHA mortgage-insurance programs and the Homeless 
     Assistance program.
       I think it is safe to speak for my colleagues, Ms. Mikulski 
     and Mrs. Murray, in saying that it has not always been easy 
     to garner support for these programs, particularly during 
     tight budget years.
       But we did, in fact, increase funding and make these 
     programs more effective through our partnership on the 
     Subcommittee, even when successive Administrations--
     Democratic and Republican--were not supportive.
       In fact, many of the innovations that provide cohesion 
     among the programs were first included in the VA-HUD 
     Appropriations bill at our insistence.
       Looking ahead, public housing still faces a crisis of some 
     $20 billion-$30 billion in a backlog of capital needs.
       It will take vision and will to persevere and make progress 
     addressing this, but there are some good ideas that can help 
     move us forward. Choice Neighborhoods is one such program 
     that provides a mixture of ideas and perspectives for 
     addressing public housing challenges.
       And this is an expansion of the HOPE VI program which 
     dramatically changed the way we think of public housing in 
     this country.


                                HOPE VI

       A few of my colleagues will remember our efforts in the 
     early 1990s to rid cities of dilapidated public housing 
     projects which forced residents to live in substandard 
     housing and had become breeding grounds for crime and drug 
     abuse.
       The federal government had a rule at that time requiring a 
     one-for-one hard unit replacement of any housing units slated 
     for demolition.
       The intention was good, but in practice this meant that 
     cities could not replace housing stock, even if it was 
     uninhabitable.
       So with the help of Senator Mikulski, I convinced my 
     colleagues to include a provision in the National Affordable 
     Housing Act of 1990 that would allow St. Louis, in 
     particular, to replace a dilapidated complex called Pruitt-
     Igoe with both vouchers and hard units.
       This demonstration led to what is now known as the HOPE VI 
     program, which has been very successful in developing mixed-
     income housing and transforming many distressed communities 
     into revitalized neighborhoods with new jobs and economic 
     investment.


                         Fighting Homelessness

       In 2009, I teamed up with Senator Jack Reed (D-RI) to 
     introduce comprehensive legislation designed to get homeless 
     individuals and families into permanent supportive housing 
     where appropriate and to assist others at risk of 
     homelessness so they do not end up on the streets.
       The Homeless Emergency Assistance and Rapid Transition to 
     Housing Act (HEARTH) builds upon recent research showing that 
     providing permanent supportive housing is a more effective 
     way to fight homelessness than providing only emergency 
     shelter programs.
       Our legislation:
       Provides $2.2 billion for targeted homelessness assistance 
     grant programs;
       Allocates up to $440 million for homelessness prevention 
     initiatives, like those serving people who are about to be 
     evicted, live in severely overcrowded housing, or live in an 
     unstable situation that puts them at risk of homelessness;
       Expands the definition of homelessness to allow families on 
     the verge of becoming homeless to qualify for assistance.
       The HEARTH Act was approved by the Senate as part of the 
     Helping Families Save their Homes Act, and signed by the 
     President in May of 2009.


                           Homeless Veterans

       According to the National Alliance to End Homelessness, 
     about 20 percent of the homeless using shelters in the U.S. 
     are veterans. Homelessness is a major problem among Iraq and 
     Vietnam veterans, particularly those who may have both 
     physical and psychological problems like Post-Traumatic 
     Stress Disorder (PTSD) or Traumatic Brain Injury (TBI).
       Senator Murray and I started a new partnership between HUD 
     and the VA to help homeless veterans in the 2008 
     Transportation-Housing spending bill.
       The program, known as the Veterans Affairs Supportive 
     Housing Program, or HUD-VASH, combines rental housing 
     assistance with case management and clinical services to 
     assist homeless veterans. Veterans use Section 8 rental 
     assistance and the supportive services they need to be 
     integrated back into their communities and former lives.
       We have continued to fund the program in the years since 
     and I hope that will continue after I am gone.
       In closing, I note that many Americans have experienced a 
     very rough time when it comes to housing recently. We have 
     the opportunity now of learning from the mistakes that were 
     made and taking steps to ensure that such a crisis does not 
     happen again.
       One simple principle I hope everyone in this body will 
     remember is that a successful housing program requires that 
     every participant in the process must have ``skin in the 
     game.''
       To ensure that everyone has ``skin in the game'' we must:
       (1) End ``no-down payment'' purchases by homeowners, and 
     require at least a 5 percent down payment;
       (2) End the 95-100% government guarantee of loans; make 
     lenders and loan promoters face a real economic loss for any 
     bad loan they promote; and
       (3) Require that any loan securitizer keep a stake in the 
     loan or mortgage that will be wiped out if the security 
     fails.
       In sum, good housing does not require home ownership; a 
     family can live in rental housing when appropriate to their 
     financial circumstances, and we can encourage the 
     availability of such housing.
       There are a number of ideas worth pursuing in the 
     affordable-housing arena that will ensure that more Americans 
     have stability in their housing arrangements so they can 
     pursue their lives with some security.
       While I will no longer have the opportunity to participate 
     in Senate debates over housing policy, I look forward to 
     continuing my

[[Page 19423]]

     involvement in these issues in the next phase of my life.
       Thank you, and I yield the floor.

  Mr. BOND. I yield the floor to my good friend and fellow retiring 
Senator from my neighboring State of Kentucky, who has been known for 
his talents on the baseball diamond but also has some, I am sure, very 
candid comments on what he thinks the Senate has done and ought to do. 
I will listen with great interest.
  The PRESIDING OFFICER. The Senator from Kentucky.

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