June 8, 2017

House Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies: Department of Housing and Urban Development – Budget Hearing

Key Topics & Takeaways

  • Regulatory Burdens: Rep. David Valadao (R-Calif.) asked how the Secretary plans to reduce regulatory burdens, to which Carson replied that he has appointed a task force as directed by the Presidential Executive Order 13777, and that they are looking at every regulation issued by HUD and listening to local employees of the Department.
  • Public-Private Partnerships: Valadao noted that communities depend on federal community development for housing and infrastructure, and asked Carson about public-private partnerships (P3s). Carson replied that HUD is working with the Department of Treasury across multiple silos to ensure there are programs that encourage P3s because “there is so much more money” in the private sector than the government.

 

Witness

  • The Honorable Ben Carson, Secretary, Department of Housing and Urban Development

 

Opening Statements

In his opening statement, Subcommittee Chairman Mario Diaz-Balart (R-Fla.) stated that the Department of Housing and Urban Development (HUD) has a mission to create “strong and inclusive communities,” as well as affordable homes. He continued that HUD is a “very large” financial institution and that its financial health must be safeguarded. Diaz-Balart noted that HUD’s budget request includes cost-saving proposals and reforms, some of which provide relief from regulatory burdens. He concluded that Secretary Carson should have a “fresh look” at the challenges HUD faces and bring it “back to the successful organization it has to be.”

 

In his opening statement, Subcommittee Ranking Member David Price (D-N.C.) stressed that almost all HUD programs are underfunded, yet they serve some of the most vulnerable people. He also criticized there not being a budget resolution and stressed that the debt limit is “rapidly approaching.”

 

In his opening statement, Committee Chairman Rodney Frelinghuysen (R-N.J.) noted his concern about proposed cuts to programs for the disabled, Section 8, and waste, fraud and abuse at the Department.

 

In her opening statement, Committee Ranking Woman Nita Lowey (D-N.Y.) stressed that the HUD budget is “inadequate at best and unconscionable at worst,” adding that it will cause “great suffering and harm” and that there is “no justification for such a drastic approach.”

 

Testimony

The Honorable Ben Carson, Secretary, Department of Housing and Urban Development

In his testimony, Carson stated the need for HUD to create a path to self-sufficiency, as well as having a mindset of “doing more with less.” He noted that the Department provides rental assistance to low-income households, and promotes affordable housing for Americans and provides access to homeownership. Carson continued that HUD supports borrowers through Federal Housing Assistance (FHA), which is “very important” for first-time buyers and those with low incomes. He explained that the FHA mortgage insurance program and mortgage-backed securities (MBS) guarantee of Ginnie Mae will be a way for these homebuyers to build wealth through homeownership. Regarding HUD’s budget, Caron stated that there is $400 billion in loan guarantee authority for FHA mortgage insurance programs, and $500 billion for Ginnie Mae secondary market guarantees, with $9.5 billion in receipts projected to generate in 2018.

 

Question & Answer

Community Development Block Grants (CDBG)

HUD’s FY18 budget eliminated funding for the CDBG program, and several Republican and Democratic Members of Congress defended the program throughout the hearing.

 

Rep. Charlie Dent (R-Pa.) asked how states and localities will find private investment with the CDBG cut, to which Carson replied that he is supportive of programs such as the Rental Assistance Demonstration (RAD), as it is an example of using public dollars to “rehabilitate housing situations.”

 

Department Transparency
Price noted his concern that the Department has not responded to inquiries from Democrats and asked if there is any policy that inhibits responding to Congressional inquiries, to which Carson replied that transparency is a high priority and that responses from the Department have “nothing to do with political party.”

 

National Debt

Rep. John Culberson (R-Texas) stressed the urgency of balancing the federal budget, adding the need for a “more comprehensive approach.” Carson echoed his concern about the debt, stating that it is “on the backs of our citizens,” and that the debt will not just “go away.” He added that the Administration is trying to lay the groundwork for economic growth.

 

Regulatory Burdens
Rep. David Valadao (R-Calif.) asked how the Secretary plans to reduce regulatory burdens, to which Carson replied that he has appointed a task force as directed by the Presidential Executive Order 13777, and that they are looking at every regulation issued by HUD and listening to local employees of the Department.

 

Public-Private Partnerships (P3s)
Valadao noted that communities depend on federal community development for housing and infrastructure, and asked Carson about public-private partnerships (P3s). Carson replied that HUD is working with the Department of Treasury across multiple silos to ensure there are programs that encourage P3s because “there is so much more money” in the private sector than the government.

 

Price asked if anyone on the listening tour suggested eliminating programs in the budget, to which Carson replied that attendees suggested HUD do “everything they can” to facilitate P3s, and that HUD is “working on that.”

 

Department Vacancies
Rep. David Young (R-Iowa) asked about the hiring status of the Department’s Chief Information Officer (CIO) and Chief Financial Officer (CFO), to which Carson replied that hiring for those positions is a “huge goal,” and that he hopes to run the Department like a business.

 

Valadao asked for a status update on the hiring of a CFO, to which Carson replied that there are several people who are qualified for the position, and that they are in the process of narrowing down the list to present to Congress.

 

For more information on this hearing, please click here.