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tv   Housing Urban Development Secretary Ben Carson on 2019 Budget Request  CSPAN  March 20, 2018 11:09pm-1:03am EDT

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look at election security measures with homeland security secretary kierstin nielsen and jeh johnson, head of dhs during the obama administration. later there is a hearing on the president's 2019 budget request with agriculture secretary sonny perdue. ♪ our podcast, c-span's "the weekly" takes you behind the headlines to explore one significant news story shaping the conversation. you will hear from journalists, policymakers, and experts providing background and context. app it on the c-span radio as well as itunes, stitcher, and google play, and online at c-span.org. next, another hearing on the president's 2019 budget request. , whoone with ben carson
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faced several questions about a 31,000 dining room set that was purchased for his office last year and later canceled. the house appropriations subcommittee hearing is just under two hours. >> the subcommittee will come to order. good morning everyone. we welcome secretary ben carson from housing and urban development to discuss the fiscal year 2019 budget. hard to believe we are discussing 2019 when we have not finalized 2018. past,ave stated in the you have one of the most difficult and important jobs in the country. i think our country is blessed and fortunate to have somebody with your level of commitment, so we are grateful for what you are willing to do for our country.
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ad's mission is to create sustainable, inclusive communities and affordable homes for the american people. achieving this mission is by no means an easy task. hud administers housing and community development programs that millions of citizens rely on. it also oversees billions of dollars in disaster recovery grant funds that are critical to helping communities recover after disaster. i want to thank you for always being accessible and always being willing to work with this chairman and the members of the subcommittee. thank you for that. additionally, the housing -- are critical to the stability of the housing markets and obviously the economic health of our nation. hud is requesting -- in resources for 2019.
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that is below the fiscal 2017 level. i would note this budget request was developed prior to the bipartisan budget deal that was to be sequester and raise the cap on both defense and non-defense discretionary spending. we need to keep that in mind. the breakthrough sets the stage for us to take immediate action to deal with an investment in our nations future. much of this spending will be targeted toward addressing the needs of our nation's infrastructure, something the white house has been very emphatic and a lot of us support. the subcommittee considers housing to be a critical part of infrastructure. we will be investing in the housing priorities under the jurisdiction of this committee. the administration's request has
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been overcome by events due to this budget cap steel. -- budget caps deal. we only hearing to the proposal and knowing it will change. the budget request proposes to eliminate programs that are important to our mayors and city's in small towns. mr. secretary, we have had conversations about the block grant program, in particular. we have had strong bipartisan support for these programs over the years, as you know. we continued funding them last year. we can all assume some of those decisions will be reflected in the 2019 your budget as well. year budget as well. we look forward to continuing to work together to ensure these programs are made as efficient and cost-effective as can possibly happen. we understand the department has
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been developing a reform program. these reforms will make changes to existing rent rules across rental system programs and introduce other requirements. reforms are the outside this committee's jurisdiction and must be addressed first by the authorizing committee. i will tell you, while the previous administration did not always submit it specific legislative proposals to the authorizer's, it is my understanding you do intend to do so. that would be a major step in the right direction. we thank you for that. consider newnt to ideas and proposals that make dollars go farther. we look forward to seeing the details of this rent reform proposal when they are finalized. mr. secretary, thank you for your service to the country. i look forward to continuing to work with you. we have a very good relationship and i think that's helpful to make sure that together we can
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address our nation's housing and economic development needs while obviously being accountable to the taxpayer. with that, that me yield to the ranking member, mr. price. >> thank you mr. chairman. i'm happy to join you in welcoming the secretary of housing and urban development, dr. ben carson. we welcome you to your second appearance before this subcommittee. mission is -- hud's to protect renters and homeowners from determination. these missions are as important, possibly more important, then they have ever been. access to stable and affordable housing has brought positive impact. it leads to better health, higher lifetime earnings, providing families with affordable housing improves lives. it can lift entire communities. how can we expect people to find and maintain employment, to go
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to school, or raise a family without affordable housing? a state in this country can person working full-time at the federal minimum wage afford a two bedroom apartment at the fair market rents. just one in for families eligible for federal housing assistance against the help they need. what does that say about our national priorities? hud'sars nearly all of programs have been underfunded compared to demonstrated need. these programs serve some of the most honorable people in our society, the elderly, children, single parents trying to make ends meet. it's not an exaggeration to say america is the most prosperous , in a in the world national housing crisis. unfortunately, the budget request doubles down on last year's request, which was rejected on a bipartisan, bicameral basis.
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very few cues have been taken from the discussion last year of that first trump administration budget. is doubling down this year. $41.2 billion offset by $10 totaln in receipts, budget authority would be lower than fiscal 2017 enacted level five approximately $7 billion, that's 15%. three quarters of hud's budget is dedicated to maintaining current residents. cuts would this proportionately impact community development. in other grant programs. for example, block grants, a flexible source of funding for hundreds of urban admiral communities to meet the needs of -- urban and rural communities would be eliminated. block grant to state and local governments designed to produce affordable housing, the most flexible money we have in hud budget, eliminated.
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even the shop program, best known because of the use habitat for humanity makes of it. other nonprofits. a limited -- eliminated. my colleagues and i have heard from hundreds of officials and housing leaders. their message is very clear. these programs play a critical role in the creation and preservation of affordable housing. unfortunately, there is even more. requestn, the budget proposes eliminating the choice neighborhoods initiative, a successful program that leverages outside investments to revitalize neighborhoods. a new wrinkle, the department's request to eliminate public housing capital fund despite a massive maintenance backlog in
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are deteriorating public housing stock. finally, the trust fund which is not constitute part of our authority would be eliminated. these funds are derived from contributions by frannie mae and freddie mac. it is being used to finance the rehabilitation, and financing of -- a formal housing. -- affordable housing. drastic cuts in what remains. that is unrealistic. it is unacceptable. if the department wanted to ensure congress would not take a request seriously, the mission has been accomplished. i have not even touched on the numerous reductions proposed in the budget. when you look at core housing assistance program like section eight vouchers, the department requests are inadequate. current low income housing could
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be at risk of losing assistance. we actually lose ground on the subsidized housing front. i also want to register my concern with the departments rent reforms, which would essentially shift program costs onto residents. raising minimum rents, a limiting deductions for medical expenses, could have serious repercussions for people who are on housing assistance. as the chairman stated, if such changes are to be considered, they don't seem like good ideas to me, but if they are to be considered, they are best left to the authorizing committee. mr. chairman, the current state of housing should force us to ask tough questions about our national priority. what kind of country do we want to be? how do our inherited values translate into our present hopes and aspirations, and what we make real through this
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i haveiations process? to conclude the trump administration's priorities are elsewhere. it is a heartless request. how else can you put it? it demonstrates a pinched vision of our country. before i close, i want to register my frustration about several ethical lapses that have occurred. failure to control funds and prevent legally required notifications to congress is that enough. what is more disturbing are apparently public statements that attempted to obscure the truth about the secretary's involvement as well as the reassignment of a whistleblower who brought the public's attention. these mistakes are compounded by roles the members of the secretary's family have taken at the department. a public office is a public trust. the appearance of impropriety can damage our institutions.
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i want to give the secretary the opportunity to address these issues and encourage you to be as forthcoming as possible. we look forward to the testimony today. we look forward to working with the secretary and colleagues on a subcommittee to ensure hud has the resources necessary to carry out its mission. thank you, mr. chairman. >> mr. secretary, your testimony will be included in the record. you are recognized for five minutes. sec. carson: committee, thank you for inviting me here today budgetuss the presidents request for the department of housing and urban development. the presidents 2019 budget proposal is more than $41 , a one .4% hud increase over last year's request. we believe this is sufficient to
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administer our core programs, continuing assistance to individuals and families whom we currently serve, especially the most horrible populations, the elderly, and people living with disabilities. the request that funding for the housing voucher program will continue to support the same number of households we and should not result in determination of any housing vouchers. the budget would also make a significant investment in the fight to end homelessness. our budget proposes $2.4 billion to support thousands of local homeless assistance programs. as a doctor for many years, i am familiar with the effects of lead exposure on the developing brain. we are requesting $145 billion to ensure homes are free from lead-based paint hazards and other dangerous contaminants,
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especially for families with small children. i also recognize we need to do a better job to ensure the funds we spend not only meets all legal requirements, but that we belong these ultimately to the public. financial director will design enablement and annsformation plan and lead internal task force to combat financial mismanagement. he has years of private sector experience and is the person -- perfect person to bring that acumen to the task. billions ofthe dollars we spent trying to keep capital needs of our public housing stock, it has not worked. we are falling further behind each day. this budget recognizes we need another way.
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it is proposing to pivot from the current financially unsustainable public housing model and working with public housing authorities to seek a new way to produce and preserve the affordable housing that so many families need. we are asking for the authority to give local public housing authorities the flexibility to use their operating funds to support capital needs. we are proposing to convert many more distressed public housing units to a project based section eight financing model through the rental system demonstration program. date, rad has stimulated investment to preserve housing. it is working. the budget proposes to allow for communities to participate in this approach. hud is also supporting sustainable homeownership. two programs -- building household wealth through
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homeownership remains a keystone to helping americans climbed the economic ladder of success. that is why we have taken steps fha can continue to be a source of mortgage financing for your sick,. -- years to come. i am also here to repeat a request you have heard for many years now from several administrations. to invest in fha's information systems. f aj is over four decades old. staff at our homeownership servers still work on paper case files, imposing quality control issues. 's effortspivot to hud to aid and recover from last year's natural disasters. when our nation was hit by three devastating hurricanes and distractive wildfires in is supportingd
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the recovery taking place in texas, florida, for rico, the u.s. virgin islands. we have a lot of work ahead of us. congress has appropriated more 'san $35 billion through hud block grant disaster recovery program. we've allocated $7.4 billion appropriated in september and we will be allocating another $28 billion. nearly every program has the staff working on disaster recovery, many of whom have volunteered to travel to disaster areas and serve on the front lines. my prayers are with those who are struggling. we will stand with them throughout the process. 's centralan, hud mission is to provide affordable housing for the american people. our mission also supports and self-sufficiency so families can move toward economic independence.
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i'm eager to work with congress and members of this committee to achieve what i believe our common goals to better serve americans. thank you. >> thank you very much. where going to proceed in standard five-minute rounds, alternating sides and recognizing members in order of seniority as they were seated. with some caveats. give me some flexibility because we have other hearings taking place. folks to come by, we may have to skip ahead of some of the wall. i apologize for that -- some of you all. i apologize for that. mr. secretary, there has been a great deal of news coverage of the issue of the furniture, the dining room set. obviously proper management of funding is something we take seriously. as you know, we sent a letter to the gao and the hud inspector general to look into the
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allegedly misuse of funds dating back to 2008. i appreciate the effort to reassess the department's internal financial controls. i trust your new cfo will lead this task force effectively. will you take a minute to explain to the subcommittee what happened, and go into the specifics about the new financial controls to enhance the departments fiscal integrity? sec. devos: thank you for that opportunity --sec. carson: thank you for the opportunity. i was told traditionally secretaries redecorate their office. you know, i'm not big into decorating. if it was up to me, my office would look like a hospital waiting room. at any rate, i invited my wife to help me downstairs at the subbasement. we have a bunch of used furniture. we made a couple of changes, had
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some drapes added which were down in the basement also in some blinds, the total cost of rep -- was $3500. i was told the dining rooms had to be changed. i said, why? people have been stuck by the chairs. it is 50 years old. i said, ok. we can potentially do that. i asked my wife to help me with that. they showed us catalogs, the prices were beyond what i wanted to pay and i made it clear it did not seem right to me. it withknow can i left my wife. i said, help choose a something, but i said the money that will be used we need to take care of the deputy secretary's office. and whatever is left over, take your of the dining room furniture.
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it was very important to do that i had aalize that, but some many other things to do at that point. i had no assistant secretary, i had no deputy secretary and i was dealing with a lot of important issues, so i was not concerned about furniture. the next thing that i quite frankly heard about was the $31,000 table that had been bought. i said, what the heck is that all about? i investigated and i immediately had it canceled. thethat we do not need furniture, but i thought that was excessive. i always said what my involvement was. it makes for a wonderful story.
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we have been spending a lot of time at looking what is going on externally and we finally got a cfo and we've been able to adjust issues, but now we've added things closer to home to make sure this kind of thing does not happen again. chairman diaz-balart: we might have to do this later, but talk about homelessness and housing first. i appreciate you working to prepare were ties -- to prioritize these systems in the budget. , on theike miami ground, they can provide great help. you, has the housing first approach worked? is it a model that works? can you provide us with success
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stories? secretary carson: who are continuum of care program. aid 750,000to individuals through over 7000 different programs. housing first works very well, because it costs more money to keep somebody on the streets than it does to take them off. many studies have shown that. we believe in housing first, second and third. housing first mean to get them off the street, second means you diagnose the reason there on the street, and housing third means you actually treat that. that i believe is what bill compassion is all about -- is what real compassion is all about. homeless is some thing i believe we can extinguish in our lifetime. chairman diaz-balart: i would later like to talk to you about expanding efforts to reach a
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challenging individuals like those suffering from mental health, but we will continue this conversation. mr. price? me price: mr. secretary, let pick up on the issue of the furniture, just a clear it up and make certain that we are transpired,t has but also a kind of plans you have going forward. uh, there appears to be contradiction in the record about your statements to the press, indicating early on that you had a no knowledge of the purchase. secretary carson: i never said that to the press. mr. price: well, your spokesman, williams, this is a cnn report, then i the car since had involvement -- carsons had involvement. he said you had no awareness it was being purchased. spokesperson,ud
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the same, said david ordered a new table. you mentionedter the issue, saying that the order was canceled. there were other reports having to do with ambiguity about -- secretary carson: i would respectfully cash mr. price: taking responsibility ash secretary carson: i can tell you what i said, but i cannot be responsible for what anybody else that. there is no problem with a facebook post, either? secretary carson: the facebook post is accurate. mr. price: we will include that in the record and other materials that will document what i am talking about and i will take your answer that this was not accurate, that you took full responsible to from the beginning. secretary carson: absolutely. mr. price: alright. then the matter of the failure to notify congress of the purchase, as you are required by
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law. this was a notification requirement, yet your office was aware of it and at the highest levels, apparently, according to email traffic we have seen. it you did not do that. and a whistleblower, the whistleblower made the public aware of the issues, which she said she was the motive, i would demoted, i-- would ask you to comment on that. this is an appropriate and possibly illegal. now you have put out a statement and nothing new internal controls and management practices, that is a good thing. of course, the procedures are already in place, that is the inconvenient fact. as the whistleblower pointed out into the emails demonstrate me you and your wife were involved in the selection of the set, the senior staff know about the requirement, so it would procedures, new procedures, or procedures one help that they
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are not followed. so i do hope you can give us assurance this morning, that the rules will be followed going forward and he will make sure this does not happen again and he would not punish people trying to ensure that the rules are being followed. secretary carson: let me say that i do not know who the whistleblower is. all that is news to me, quite frankly. i would never be involved in repercussions to people like that, i do not believe that that is an appropriate thing to do. and as far as, you know, the arerols, i think there ways they can be enforced so that you do not ignore them. and those are being put into place. as far as the reporting is concerned, it is my understanding that at the facilities, people felt the
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dining room table was dangerous and it was a facilities issue, not a decorating issue. mr. price: and as a requirement, was their awareness of that? secretary carson: i do not think there was one for facilitating issues, as there is for decorating issues. mr. price: the internal email traffic does indicate that your staff was aware of the notification requirements. they clearly were not met. secretary carson: it was never discussed with me and as i said i was dealing with running an organization with virtually no secretary. mr. price: and you are denying that any kind of retaliation occurred against the whistleblower? secretary carson: would not even dream of a thing. it is absurd. mr. price: here too we will furnish the record the accounts of this and of course be happy to receive any further response on your part as to how this has
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been handled. secretary carson: believe in the whistleblower program, i endorse it. mr. price: that was my next question, your testimony is you believe in the production of whistleblowers, and do you intend to act on that? secretary carson: no question. mr. price: thank you. thank you, mr. chairman. chairman diaz-balart: gentleman from california. mr. graves: thank you for being here. there is several programs that provide funds to state and local governments, mainly the community development block grant, the partnerships program, and to the self-help ownership opportunity programs. in proposing to eliminate these programs, the budget request says it will dissolve these to local governments. does hud have a role to play in supporting local government efforts in supporting community development and if so what would it look like in the essence of these programs?
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gapow would hud fill the left by these eliminations, in particular how does hud anticipate that less affluent committees will address these needs in the absence of funds that they may have otherwise received through these programs? secretary carson: thank you for that question. the hud has a role to play, federal government has a role to play, and i think it is a facilitating role. recognizing that these are very expensive endeavors to deal with and recognizing that the programs you mentioned, home, etc., have played important roles. we also recognize that sometimes funding has not been targeted appropriately to low income individuals. does it mean that we do not appreciate what has been done? but we have a very good solution. and that is, you may be aware of
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the opportunity zones program, which allows capital gains interest investment to be put into the zones that are designated by the governor's. s. you are able to actually pull the capital and it will work extremely well. in terms of for instance the gap funding that is frequently provided by the home program, you will have that on steroids. involved inady be many of these redevelopment programs and be able to guide the funding. mr. graves: ok. hosted ah, i roundtable discussing the challenges that law enforcement and community groups are facing. one challenge they mentioned was a lack of resources to get human trafficking victims away from their abusers and place them in safe housing. how is h.u.d. working with organizations to get victims of
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human trafficking support they need? how does this budget request help strengthen capacity building at the local level? ensuring that rural communities to better assist this vulnerable population? secretary carson: we're very concerned about domestic abuse, human trafficking, about being able to get these people into a safe zone. which is one of the reasons we have requested $255 million for the emergency solutions grant problem. and $40 million for rapid rehousing. these are issues that concern our entire society. and they will have our complete attention. as far as the rural areas are concerned, obviously some of the solutions that work densely populated areas don't work as
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well. and we're looking for solutions for them as well through these programs. also one of the things to recognize is there's a tendency in rural communities to want single family housing as opposed to multifamily housing, for obvious reasons. one of the things that has not been used to great effect has been manufactured housing. a lot of times people think of that they think of trailers and trailer parks, but manufactured housing today looks just like on-site housing. beautifully done. much less expensive. rapidly put together. but the reason that it hasn't expanded to the degree it can is because of that dense regulatory forest that people have to go through in order to enact it. we're looking at that because we recognize that with single family housing, manufactured housing represents 10% of it. 22 million americans. so consequently, it is something that is vitally important. that's why we're taking a top to bottom look at those regulation s that is are preventing the use
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of it adequately in a rural area. mr. graves: on the victims of sex trafficking, that's something that law enforcement and some of these n.g.o.'s in my community are looking for ways to get people out of those situations as quickly as possible. to get them out of that life and keep them safe. i hope you look at the bureaucracy there and the process so we can speed that along and help these people. secretary carson: thank you for your concern. it's been a topic of much discussion in this administration. chairman diaz-balart: the gentleman from illinois, mr. quigley. mr. quigley: thank you, mr. chairman. dr. carson, you just said you don't know who the whistleblower is? secretary carson: don't know this person. mr. quigley: helen foster has been on tv for some time. she is hiding in plain sight. secretary carson: i still wouldn't recognize her if she walked in here today. mr. quigley: it implies you weren't aware what was going on
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in these situations. as well as -- if we have, everybody has it, i assume you did the email chain beginning , february 2 of last year going up for extended period of time, august 29, 2017, raising all these issues in quite contradiction to what you just testified, is it just that you are not aware of those situations? secretary carson: tell me specifically what contradictory statement there is. mr. quigley: your knowledge. how this was purchased, whether it should have been reported to congress. secretary carson: everything i told you right now is the you -- truth. mr. quigley: you are aware she's there. i do not knowon: who she is.
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i have never gotten involved in any repercussions. mr. quigley: you know who she is because she's been on tv. you don't know her personally which is a distinction. secretary carson: before this whole thing became a newsworthy item, if it really is, i would not have known who she was. mr. quigley: just to be clear, you now know who the whistleblower person is. that doesn't mean -- secretary carson: i recognize the name, yes. mr. quigley: ok. last year when we were doing this i asked questions about important training material designed to prevent description against lgbtq individuals that were purged from the h.u.d. website. you assured me during that hearing these documents were taken down to ensure that the policies in them were effective and they would be returned to the website, quote, "as soon as possible." according to all published reports, they are not returned to the website. there is a lawsuit now involving this. and the department of justice. this is, again, training materials meant in part to help homeless shelters make sure they were providing equal access to transgender people.
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where are we from last year when you said they would be returned to the website as soon as possible? secretary carson: that's a very complex issue. we finally got general counsel in december. this is march. yes, it has been since we have gotten the general counsel something that we have been looking at. remember, it is complex. we obviously believe in equal rights for everybody, including the lgbt community. but we also believe in equal rights for the women in the shelters and shelters where there are men and their equal rights. we want to look at things that really provide for everybody and doesn't impede the rights of one for the sake of the other. it's a complex issue and it's been on our agenda. we have talked about it quite a bit since we finally gotten general counsel. mr. quigley: how is protecting
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the rights of transgender homeless potentially impact the rights of -- secretary carson: an example, there are some women who said they were not comfortable with the idea of being in a shelter, being in a shower, and somebody who had a very different anatomy. mr. quigley: it's your intention that the general counsel who came on when? secretary carson: december. mr. quigley: december, will spring into action and now four months later have an answer for us. a year from last year by the time you are getting around to this, never mind -- secretary carson: i don't think you would have wanted us to deal with this without a general counsel. mr. quigley: i assume there's somebody involved with legal rights on an ongoing basis at hud, dealing with not just this issue, but a host of other
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issues that involve legal matters that you claim to be concerned about, as you just described. who has been doing this for the last year? secretary carson: i would like to work with you on this. i would particularly be very interested in your ideas on how we protect the rights of all the people involved. i would be very interested, sir. mr. quigley: i would love for you to come to chicago and meet with the lgbtq community and transgender community to help you and whomever your general counsel is better understand the issues they face. and the extraordinary concerns that we have already. that unfortunately, we haven't acted upon in the last year. secretary carson: we're happy to hear from anybody who has good solutions to how you protect everybody's rights. mr. quigley: you would agree to sit down with the lgbtq community, myself, and the transgender community to help you understand us? secretary carson: absolutely. thank you. mr. quigley: thank you. chairman diaz-balart: thank you, mr. quigley. mr. graves has generously agreed to allow the ranking member of
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the full committee, who has a relatively busy schedule these days, not sure why, but she does. thank you, mr. graves, for volunteering to do that. mrs. lowey. nice to have you here. mrs. lowey: thank you to the distinguished member, mr. graves. and welcome to the committee. mr. secretary, there were requests would reduce funding by $26 million for housing opportunities for person with aids, which enables communities to continue their efforts to prevent homelessness and sustain housing stability for approximately 49,175 economically vulnerable households with individuals living with aids, h.i.v. given the evidence that housing stability is one of the strongest indicators of retaining h.i.v. primary care and preventing the spread of h.i.v., why would you reduce
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rather than increase funding to this program? and let me just say in my interaction in my community, there is more need to this program rather than less. and how do you expect communities to make up the lack of funding? secretary carson: first of all, i don't disagree with you that more funding is better for that program. for virtually all the programs, quite frankly. last friday, we crossed the threshold of a national debt of $21 trillion. if we continue to -- mrs. lowey: when you were passing the tax cut, was that on the table? did they talk about that at all? secretary carson: i wasn't at that table. mrs. lowey: i'm sure you were part an advisor to the president, wouldn't you bring it up? secretary carson: here's the point. if we continue to accumulate debt at this rate by the year 2048, which is only 30 years
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from now, every penny that the government takes in will be used to service the debt. there will be no money for any programs, any programs at all. mrs. lowey: except for the tax cut. secretary carson: any money for any programs. it is what we need to start thinking about. this really should not put us on opposite sides. we should be figuring out how we can work together to take care of the problem that you just mentioned, which is a very important project. and i visited some of the housing developments for people with aids. it's very impressive some of the things that have been done. i have talked to people in the communities who didn't want them there at first, who now love them and support them very much. this is something that is beneficial to our society. i agree. and i wish we had money for everything, but we have to make hard choices.
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having said all that, the final budget authority comes from congress. the administration simply makes suggestions. whatever moneys are provided, we will use them in a most efficient and effective way to continue the progress we're making with people with aids. mrs. lowey: i wish i could have taped your comments because i'm in the middle of negotiating the omnibus, you know it's not coming to the floor until thursday now. it seems to me there are people in the administration who have had major input with some of these decisions. i'll move on. mr. secretary, as i previously mentioned, your budget eliminates cdbg from 2005 to 2017. we know this program is so important, it has helped over 1.435 million low and moderate income persons. it's created or retained 401,992 jobs. benefited over 139 million low
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and moderate income persons through public services like job training, meals, and other services to the elderly. assistance to local food banks. every $1 that we spend on cdbg leverages an additional $4.09 in non-cdbg funding, and it reflects every single district represented in this room. could you tell me why you proposed to eliminate this program? it does so much good for our communities. and if your budget request were to become reality, how do you plan to fill the hole that this elimination would create? secretary carson: i don't disagree with you that it has done some very good things. no question about that. but again, the same budgetary argument that i made before still stands. you can change the name of the program. it's all going to stand. nevertheless, we do have a way
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to take care of the good things that cdbg does. and that again is through the opportunity zone program which will bring in up to $2.2 trillion in money. that program and to provide for infrastructure problems. there is a lot -- i suspect we may be asking ourselves how can we use all this money? we're going to be doing that. we're going to be working with you to do that. we're going to make sure that the good things that happen with these programs continue to happen. mrs. lowey: the chairman has been very generous with time. let me just say in conclusion i really look forward to working with you. and i'm sure whether you are a republican or democrat, there will be many people, not just in my district, who will say, what? the cdbg program is going down the tubes? i think that's a real problem. secretary carson: not the good things that happen. believe me. mrs. lowey: i look forward to
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having a conversation with you. thank you, mr. chairman. mr. diaz-balart: let me once again thanks mr. graves for volunteering to let our ranking member go ahead. you are recognized. mr. graves: always happy to yield to the ranking member of the full committee to get the funding bill under way and resolved. mrs. lowey: i certainly hope in your role as a very important member of the majority that we can expedite these discussions that have been going on. as you know, the omnibus is now being introduced until thursday, we're supposed to leave on friday. that sounds like a miracle plus 10. [laughter] mr. graves: a day early if i remember right. [laughter] mrs. lowey: i look forward to working with you. mr. diaz-balart: mr. graves, you are recognized for five minutes. mr. graves: dr. carson, thank you again for joining us.
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let me thank you for your many decades of service and caring for people. you have a servant's heart, we know that. i know there are those here today that are a little critical of things that have been in the news, but you were that have -- you are swift to respond. i'm grateful for that. i'd like to redirect back to the purpose of your department and what you do. if you could help us just a little bit more with some of your vision. this committee also oversees transportation. we have had a lot of discussion in the transportation community about public and private partnerships. and my understanding after reading a little bit about one of your projects is that there might be that opportunity as well in your department. i was hoping you might share with us more about the envision center demonstration project and your goals there and what you hope to see. secretary carson: thank you very much. there is a verse in the bible that says without a vision the people perish. so initially we call them vision centers. then we figure people would think they are getting glasses. now we're calling them envision centers. the whole idea is to juxtapose
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the need with the resources. traveling throughout this country, i discovered we had an enormous number of people who actually care, and who have resources. and who are willing to use those in a philanthropic way. we also have enormous amount of need. but the two generally don't tend to meet each other. we want to provide an opportunity for that. a lot of times when you ask young people, what do you want to do? you get a blank stare. maybe they want to be a basketball player or something. but you don't get a whole lot of choices. the fact of the matter is there are thousands of choices. vision centers will expose them to what those choices are and how to get there. it will also be a site for mentorship. we have millions of people who would be great mentors but they don't have a good mechanism for doing that. we also help a lot of the young people, for instance, who get pregnant early on.
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and go into a dependent situation to hook up with the resources that will take very good care of those children and allow her to get her g.e.d. or her associate's or bachelor's. to become independent, more importantly to teach that to her children and break the cycles of dependency which cause the rolls to keep growing and the government expense to continue to go up. all the people are resources. they are our best resources. we want to aim our efforts to actually developing the people. houses are nice, no question about that. but they are only a part of what is needed to provide the development of people. that's what the envision centers are about. mr. graves: that is great i , agree with you that in our communities we have so many people who want to give. they want to help. they want to take care of their community. that's what community all about.
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sometimes government gets in the way of that. so what i appreciate about your new demonstration project here is that you give a community that opportunity once again to invest and take care of those that are truly part of them. and help them get to a better place in life where they all know they want to be. if i could just shift gears and one final question as it deals with f.h.a. lenders. early in your tenure you expressed an interest in curbing the use of false claims, the false claims act to punish f.h.a. lenders for minor errors and oversight. could you give us an update and what steps you have taken. secretary carson: the problem was that many of the lenders basically were moving away from f.h.a. because a lot of the immaterial mistakes were putting them in financial jeopardy. in no way do we condone those bad actors who take advantage of people. slam them as hard as you can. no problem.
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we're never going to cover for them. but we want a system that makes it easier for our citizens to realize their dreams and f.h.a. is particularly aimed at those first time home buyers, minorities, people who frequently don't seem to have the same advantages -- who frequently don't seem to have the same advantages. we want to make sure we enhance their chances of realizing the american dream. we're working with the department of justice on the false claims act. i think some of the lending community is recognizing that and they are starting to come back. and all of that is good for american consumers. mr. graves: you're right. mr. chairman, thanks again. dr. carson, thanks again. secretary carson: thank you. mr. diaz-balart: thank you very much. we're honored to have the chairman of the full committee. james brown used to be called
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the busiest man in show business. mr. graves: workhorse, not show horse. chairman diaz-balart: this is the busiest man in congress. mr. chairman, a privilege. mr. frelinghuysen: thank you, let me thank mr. diaz-balart and dr. price for their leadership of the committee. let me also recognize your very distinguished career. as secretary and now in a previous life as being a very well-known medical doctor of high repute. let me just address this to your staff. you have been secretary for a year. you and i have really not become acquainted. may i say i often say in my opening remarks, the power of the purse resides here in the appropriations committee. i think -- i would like to better be -- be better acquainted with you. i think this staff needs to bring you up. i as the chairman i have keen interest in a lot of your programs.
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secretary carson: thank you. maybe you could come over for lunch. mr. frelinghuysen: i'm not sure i need the lunch. but it's important for us to talk about our priorities. this is the 1, 2 or three budgets which is going to get a lot of money in this 2018 budget process. i want to thank, even though we haven't rolled out our budget, you should be very grateful as i'm sure you have expressed or will certainly, to the chairman the way he and doctor price have put that money to use. i would like to have opportunities myself to get to know you. i have a keen interest in what we're doing on behalf of veterans and in terms of housing with people with disabilities. i would like to use this opportunity as an offer to get together with you as soon as possible so we can work much more closely together. thank you, mr. chairman. mr. diaz-balart: thank you, mr. chairman.
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the gentleman from massachusetts. you are recognized, ms. clark. ms. clark: thank you for being here, mr. secretary. i want to go about your testimony of dining room table and purchase of furniture. there is a memo from senior staff dated february 28, 2017, talking about this $5,000 threshold before you have to notify the appropriations committee about spending on furniture and having to do with the personal alarm system being installed at your home. is it your testimony that you knew nothing of these requirements? secretary carson: no one discussed that with me. alarm system at my home was discussed with me by security. and they suggested that perhaps there was money to take care of that. i decided i did want an alarm
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system but would pay for it myself. ms. clark: you never saw this memo? secretary carson: no. ms. clark: nobody mentioned he's limits? secretary carson: no discussion about that. ms. clark: these items that were purchased were from an interior design firm in baltimore, maryland, by the name of sabrie and associates. did you personally select that firm? secretary carson: no. i didn't know about that firm. ms. clark: do you or your wife or any member of your family have a relationship with that firm? secretary carson: we do not. i will say to their credit when we canceled the order they didn't impose any penalty. all the money has been returned to the u.s. treasury. ms. clark: this furniture was selected by your wife, is that correct? secretary carson: a style and a color was selected by her. ms. clark: fabrics? secretary carson: with the caveat we were not happy with the pricing and they needed to find something. if anybody knew my wife, they
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would realize how ridiculous -- she's the most frugal person in the world. ms. clark: when did you become aware of the pricing? secretary carson: when the article came out. ms. clark: do you know aida rodriguez? secretary carson: yes. ms. clark: she certainly had the quote on the pricing. that was just never shared with you before this? secretary carson: like i said, i dismissed myself from this issue because i had much more important things to deal with. ms. clark: is your wife involved in any other decisions regarding taxpayer money or funding or purchasing? secretary carson: none whatsoever. and her question about all this was, can we buy used furniture? why can't we buy used furniture? we found out we didn't have a way of doing that. ms. clark: ok. lots to talk about the furniture. does your wife have any office space or h.u.d. email? secretary carson: she does not. my wife comes to my office when we have an engagement to go to so that we can go to it together. that averages out to about once
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a week. my wife is a very friendly, gregarious person. she talks with staff. but she has nothing to do with h.u.d. policy and has no desire to have anything to do with h.u.d. policy. miss clack: last summer you also allowed your son to help organize an agency listening tour in baltimore against the advice of h.u.d. lawyers. following this tour, did your son enter into any business relationships with any of the attendees? secretary carson: he did not. he makes 100% sure he stays an arm's length away from any such things. i discussed the tour with him before. the reason he got involved in the first place is because they were having some difficulty discovering who the right people were to speak to in baltimore. i suggested that he knew just about everybody there. and they should talk to him. ms. clark: have there been any other incidents when you have chosen to ignore the advice of h.u.d. ethics counsel? secretary carson: h.u.d. ethics counsel suggested it might look funny for my son to be there.
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i discussed that with him. left it to him. i'm not a person who spends a lot of time thinking about how something looks. i realize that that's not the way of washington. that's a lesson i have learned. ms. clark: you have recently asked a h.u.d. inspector general to investigate your family's role and influence at h.u.d. can you tell us why you felt that was necessary? secretary carson: yes. i know these things linger and linger. i know that there's nothing there to find. why not just go ahead and get it dealt with? ms. clark: can you provide me a timeline on when h.u.d. is going to begin the moving to work expansion, specifically when h.u.d. will be accepting applications for the first cohorts? secretary carson: the moving to work program has had variable results.
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when it was put into place, metrics were not put in place. this is why we need to add to it with metrics in place. in terms of the timeline i'll be happy to have somebody give that to you. i do not know the timeline. ms. clark: it's been two years since congress authorized regional m.t.w.'s, have you made any progress on that? secretary carson: i would be very happy to have the group that is working on that to discuss that with you. ms. clark: thank you. mr. chairman. mr. diaz-balart: before i recognize mr. joyce. i want to share some -- is it true you spent, this whole thing ending up spending $3,500? secretary carson: yes. for the office decorations. which is considerably less than the historical norm. mr. diaz-balart: i want to make sure we put things in perspective. mr. joyce.
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mr. joyce: thank you, mr. chairman. dr. carson, thank you for being here. i was trying to compute on my calculator here on my phone, you mean $31,000 amounted to $41.244 billion. it doesn't go that high. i'm sure that's got to be less than 0001 of a percent in the whole deal. anyhow, before i started i do want to touch base on something that you brought up earlier about the modular home and how well they are constructed. it is interesting, i happened to look and go to those factories and they say it's much better built than houses in the field because in the factory it's exact and measurements are perfect and wood is cut to word -- cut to order versus out in the field trying to make it happen.
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secretary carson: very impressive. mr. joyce: if there is a way we can do that that would be fantastic. last year, we -- you and i just starting in, but we had an opportunity to talk about blighted housing and the problems that develop in larger inner city tracks where it appeared that local governments end up owning a lot of the blighted or dilapidated houses in order to try to clean up the blocks, if you will. as you are well aware that is where unfortunately drug dealers are there, crimes take place inside of those. i have seen substantial progress thanks to you and my district in the state. as you know there is still work that can be done. do you speak to the challenges that continue to face blight? secretary carson: you have accurately pointed out it is a significant problem. it drives down home values. creates a nice habitat for criminal activity. and that's one of the reasons that we have allocated significant funding for blight removal.
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but also encourage the grantees in the various cities to make that a priority. they have done a very good job of that, for instance, in detroit. and i think they are having a sustained revival now for the first time. many decades we start and then it sputters out. but it is really working now. i think one of the reasons is because the mayor has recognized the terrible effect of that blight. mr. joyce: or in cleveland. [laughter] can you explain to us as appropriators how we can continue to reduce the red tape and guarantee the efficiency of the funds given to you to reduce blight? secretary carson: the first thing we have to do is we have to recognize it as a problem. the red tape issue is a very difficult issue to get through,
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as you know. bureaucracy and red tape go together. and what we have to do is when we are talking to the applicants, make it very clear that that is a priority and that preference is given in situations where they are paying attention to that issue. mr. joyce: i heard from community developers and low income housing authorities in my district as we continue to make progress we should assess the need for commercial and industrial demolition. including abandoned hospitals, factories, stadiums and schools costly to tear down, they pose a unique opportunity for public-private partnerships to delight community development and investment. what type of role do you see h.u.d. potentially playing in commercial and industrial demolition? secretary carson: it doesn't all have to be demolished as you indicated.
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some of it can be rehabilitated. i was in south carolina with senator scott. one of the textile mills had been converted to apartments that were beautiful, quite frankly, and were filling very quickly. that had encouraged the development of other commercial activity around that site. i think there is some innovative ways that that commercial blight can be converted as well. mr. joyce: there are ways h.u.d. is working with local developers , be it in south carolina or other places to do that? secretary carson: absolutely. mr. joyce: as you point out the fact that we know crimes occur in these delighted housing and those issues. they help tear down
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neighborhoods, a good neighborhood goes sour because of a few of these thifpkts thesethese things -- things. the ability we have to go back there and take those blighted buildings out, any help would be fantastic. thank you very much. secretary carson: it will continue to be a high priority for us. thank you. mr. joyce: thank you for your time. i yield back, mr. chairman. mr. diaz-balart: thank you, mr. joyce. the gentleman from california. >> thank you, mr. chairman. mr. secretary, just for the benefit of my colleagues, too, i hope you understand that the -- the importance that we feel our role plays in providing input and oversight of your agency and department. while i can appreciate you have stayed within the statutory cap that was set by congress when it comes to the furniture amount, i think some of the emails show at least the intent to get beyond that initially. so i appreciate once this became public, matters were addressed. i think what some of us have concerns about is absent this being public what would have
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happened? mr. aguilar: would we have remained at that cap? i think it's important you understand we view our role to be thoughtful in setting the budget for your department and making sure that individuals are treated correctly. it's in that intent we ask these questions. secretary carson: that is appreciated. mr. aguilar: do you or your staff use personal email to communicate about h.u.d. policy? i can understand that as a result of this, individuals who may be on your team are upset these became public. do you or your staff use personal email to communicate about agency policy? secretary carson: i do not. i'm not aware of my staff doing that. mr. aguilar: they have been counseled that that may not be appropriate? secretary carson: correct. mr. aguilar: thank you. mr. secretary, i believe we also have a responsibility when it comes to these programs to achieve the american dream for homeowners. one of the policies that we have
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worked with your staff on and the committee on is f.h.a. loan limit policy for consumers out of competitive loan programs, specifically loan limits for m.s.a.'s that can be distorted because of the geographic, large geographic area of those m.s.a.'s. i represent san bernardino county in california that has the largest metropolitan statistical area, spanning 27,000 square miles. the housing market includes very rural and very urban areas. and cities within that m.s.a. have median home price ranging from $250,000 to $550,000. consequently cities closer to los angeles have a higher price with respect to f.h.a. loan limits. and some of the cities in the district also have much lower median prices. this can lock out consumers for a chance to buy a home in their desired location.
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the f.y. 2018 t-h.u.d. appropriations report directed your department to study whether the demographic side distorts f.h.a. loan limit calculations for distinct sub areas such as cities. my office sent along a report language to your staff. hopefully you'll have a chance to look at it. what steps has h.u.d. taken to address the committee's request for that language? secretary carson: i suspect that you recognize that loan limits are the purview of congress. we don't have the ability to change those. but we're very happy to work with you and provide technical assistance in whatever is needed. we look forward to receiving those documents from you. i think it's a very important issue and geographic areas do impact it. mr. aguilar: ok, so you would be open to having a call or meeting? secretary carson: absolutely. mr. aguilar: in your office to chat about these issues.
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i think h.u.d. can do more in this regard. i understand the statutory context that the committee has and we will work to address that. there are some issues we can work on together to help resolve this. i appreciate your willingness to help. i understand h.u.d.'s requesting information technology fee that would be assessed on f.h.a. lenders. this concerns me because some of the largest home lenders have been issuing fewer mortgages insured by f.h.a. that program is critical to many americans, especially latino communities. in 2016, nearly 60% of mortgages made by latino families were insured by the federal government. passing along costs to lenders may discourage the largest lenders from issuing mortgages insured by f.h.a. and raising concerns about access that communities have for low and moderate income families to have an affordable loan. why should i.t. upgrades come from lenders as opposed to traditional process?
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secretary carson: thank you for that question. first of all, i appreciate the role of f.h.a. particularly with first time home buyers. and minorities. we want to expand that as much as possible. having said that, f.h.a. has a portfolio of $1.3 trillion. yet we have an archaic technology platform from which we work with, which puts people at risk. we need to update that. you are looking at a $25 charge per loan. which is like .00000001%. and that even can be waived and in the case of extreme hardship.
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i think you have to look at that perspective. we have to -- i can't emphasize this more strongly than anything i'm talking about today. we have to get the i.t. systems at f.h.a. up to par. we're putting a lot of money and a lot of people in jeopardy by continuing this. by the way, this fee we're talking about, this $25, it has a four-year sunset. and raise about $20 million a year, which only a fraction of what is needed to maintain the system. mr. aguilar: thank you. i look forward to seeing if you move forward with this a detailed plan how that would be spent so we can have a conversation about that as well. secretary carson: no problem. mr. diaz-balart: thank you very much, mr. aguilar. mr. culberson, running between hearings, i want to thank the committee for your flexibility. mr. culberson. mr. culberson: thank you, mr. chairman.
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i appreciate you recognize they made. we have, secretary carson, you are well-known for your compassion, heart, and your dear are dear good friends with my pastor, dr. ed young. you know the houston area well. you were so well respected and loved there. i wanted to urge you to keep us in the forefront of your mind. the people of florida, people in texas who are really suffering as a result of these terrible hurricanes that hit texas, with harvey, 53 inches of rain in an area the size of new jersey. secretary carson: absolutely. >> largest housing disaster in the history of the country. the people of florida. i have thousands of constituents who are still living on the second floor of their homes with either no sheet rock or very little on the first floor. my brother's been living in a driveway, in a trailer in his driveway since the storm. my sister's -- my wife's sister's home was destroyed.
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everyone we know, either family members or people we know, have suffered as a result of the storm. i know you inherited a massive agency with a lot of inertia. got to be frustrating i know for you, sir. but if i could ask you to put -- keep those folks in the forefront of your mind and how they are suffering and how this cold winter has been no fun for a lot of them. snow in houston. no fun. really difficult. one of my greatest frustrations in dealing with the federal government has been this slowness of the cdbg program administered by h.u.d. it's very frustrating to see the slowness. i've discovered there's $500 million from hurricane ike still stuck at g.l.o. waiting to get out. secretary carson: right. >> i wanted to ask you a couple things you could do immediately that would help immensely the people of florida and texas. that is to waive the 70% requirement on the cdbgr money
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under your discretion, the statute gives you the authority to waive that 70% of the money go to low and moderate income and go to 50-50. that would make a huge difference for the people i represent who have sunk their entire life savings into their home. living on the second floor, exhausted their savings. they are drained. nn many cases, they have take money out of their 401-k's to pay for the repairs. what's the status of that? you have done it in others. it is urgent. secretary carson: i would say it's done on an as needed basis. in texas, the first tranche of relief from congress was $7.4 billion. texas ended up with about $5 billion of that. utilizing the 70% l.m.i. formula, that means 30% could go outside of that. you would be talking $1.5
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billion. if in fact that turns out not to be adequate -- mr. culberson: it is not. it is not adequate. secretary carson: certainly we have formulas and we will look at it. mr. culberson: this is urgent you waive. this has been done in other disasters. you are very familiar with the city of houston and the people of west houston who have, again, sunk their entire live savings into their home. they are not wealthy. formula would treat them as wealthy. it's not appropriate. it's urgently needed in this situation. you would provide immediate relief to these homeowners if you will waive the rule. can you tell me when you expect that to happen? we made the request many months ago. the storm hit at the beginning of september, end of august. secretary carson: i will talk to our department and see what the status of that is. mr. culberson: it's urgent. i also wanted to ask about the status of infrastructure unmet need. that money, the bipartisan
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budget act provided an additional $28 billion for h.u.d. cdbgr, there was a $12 billion set aside for mitigation projects to help us protect against the next storm. that money for unmet needs is still sitting there. what is the status of allocating that infrastructure unmet need money to the state of texas? secretary carson: the moneys from the second tranche, a third of them have to be allocated by april 10. a lot of that will be allocated by that time within the next few weeks. mr. culberson: and the additional $28 billion of cdbgr funding provided in february, what's the status of that? allocating those funds to get them out the door and in the hands of -- secretary carson: it will be --
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a third will be allocated by april 10. the rest has to be allocated before the end of the year. mr. culberson: would you give this your personal attention? it's urgent. secretary carson: absolutely. mr. aguilar: thank you very much. secretary carson: i completely sympathize with individuals. particularly in the area that was intentionally flooded. i can't imagine what those people feel like. mr. culberson: that's been the worst part. the gates were opened. the water stopped, gates opened, and here comes the water. my brother was one of those people. near and dear to my heart. secretary carson: i understand. absolutely. mr. culberson: thank you very much. mr. diaz-balart: let me just, if i may, mr. culberson, let me personally thank you. obviously florida was hit hard. everybody who was hit hard owe you a great deal of gratitude for your leadership and aggressive insistence on getting this done. mr. culberson: the florida and texas delegations worked together on this. you are diaz-balart: recognized. >> as you know it came to light last december the v.a. was going
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to reallocated fund interesting the h.u.d. bash program which dealt with veterans facing homelessness and spend this money on other v.a. services. only a day or so later after receiving negative feedback the , v.a. reversed its decision announced there would be no changes to the h.u.d. bash program. i understand this decision was made within the v.a. given there are both h.u.d. and v.a. components to this program, could you tell me if you or your department had any conversations with the v.a. prior to the decision being made? and if so, what was the feedback you provided? secretary carson: i had an opportunity to speak to the secretary about this. because i heard the rumors that they were going to reallocate the funds. each time he assured me that that was not going to happen. i had two or three conversations with them about that. that was always the outcome of the conversation. mr. dent: how would you sure you
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-- ensure you are in communication was the v.a. or others when there are important decisions like this one in the future? secretary carson: we talk frequently. cabinet has a very open conversation policy. that is not going to be an issue. mr. dent: thank you. next question, turn to your budget request for this year. as was the case last year the request does not contain any funding for the h.u.d. bash program. can you elaborate on your agency's rationale for this request? how do you envision this program working in the future and working toward the goal of veterans' homelessness? secretary carson: first of all, i recognize that 1% of our population protects the other 99%. we owe a great deal to the veterans, no question about that. the h.u.d. bash program is responsible for the 47% reduction in veteran homelessness. tremendous program. and the h.u.d. provides the
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housing vouchers. the v.a. provides the wrap around services. it's a very good model, intra agency cooperation. the reason that we didn't ask for more is because we have adequate vouchers already. we have the ability to reissue vouchers. and when we get to a point where we need more vouchers, believe me we'll ask for more. mr. dent: thank you for that. i'd like to quickly move to housing counseling. last year in the 2018 budget you requested level funding for the housing counseling assistance program. as you know this program provides housing counseling services to homeowners and tenants both pre and post purchase and can help struggling homeowners prevent foreclosure and avoiding difficulties in the first place. more people are using these services for prepurchase counseling. and fewer are using it for
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delinquency issues. in reviewing this year's f.y. 2019 budget, your request for this program is 10 million we -- 10 million below the currently enacted level. it's even lower than the amount requested last year. given the continued demonstrated need for these services, especially in light of the major hurricanes that devastated some of our housing markets, can you tell me a little bit more how you arrived at this year's funding request for the housing counseling assistance program? secretary carson: it goes back to the concerns about our national debt. looking to trim where we need to. that's not in any way to say that housing counseling is not warranted. in fact, the statistics would show us that those families that receive housing counseling default at rate of about 30% less than others. it is an important program. and whatever funding we have for it, we will use it effectively to try to make sure as many families as possible benefit
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from that. mr. dent: i want to point out a couple years ago we consolidated some of these housing counseling system programs into this one line. so the program has taken a bit of a hit. i want you to be aware of this. this is really the only substantive line right now to help us -- help those folks. i found in my own district a number of the people who have been involved with counseling have been able to prevent some bad situations. there are many others who wish they had been in counseling prior to the 2008 crisis that could have averted some situations. secretary carson: we have about 2,100 of them active around the country and want to use them to the greatest effect. mr. dent: thank you, mr.
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secretary. i yield back. mr. diaz-balart: thank you, mr. dent. thank you also. you have been a great leader on that issue of housing and counseling. you have talked to a loft us, including me, many times. we'll continue to work with you. thank you. the gentleman from iowa, mr. young. mr. young: thank you, mr. chairman. mr. secretary, welcome. we have a lot of issues today. some issues that my colleagues have covered i was going to cover. i won't be repetitive. we have covered everything from veterans housing programs to counseling to tables. i'm going to go in a different direction. i do want to dovetail on what mr. aguilar was talking about. at the very end you were talking about the i.t. platforms. how you said the technology or lack thereof, incompatibility of it all is putting people at risk. how many different systems are there at h.u.d. that you have to patch together and that you are dealing with? and how subpar are they? how worried are you about this? secretary carson: trying to bring them now under a single umbrella so we can provide the appropriate oversight accountability.
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i can't even begin to tell you how serious an issue it is and how much at risk it puts us. mr. young: when you sebring it under one umbrella, you see a chief officer or putting under an umbrella of one system that talks to each other? secretary carson: both. i want to have a principal person who is responsible, and then, of course, he will have different arms of responsibility going down to the different segments. we need a system whereby i can say, how much money in this grant to cincinnati has been spent and for what purpose? i need to be able to find that out right away. it shouldn't have to take me 3 1/2 months to figure that out. mr. young: no, it shouldn't. when you talk about putting people at risk, are you talking about the integrity of the security of the system in terms of cybersecurity?
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secretary carson: absolutely. mr. young: people trying to hack and steal people's identity or personal or financial information? secretary carson: we are getting 2,000 to 3,000 hack attempts a week. mr. young: goodness. has that been consistent since you've been leading over there at h.u.d.? secretary carson: we get about that many foia's also. mr. young: the numbers, they correlate, maybe. let me just pivot to something else. rural housing, i represent a very rural district. it's a very unique district. i got the most populated county in the state of iowa, polk county in my district. secretary carson: i've been there. mr. young: i've seen you. we thought maybe you'd buy a house there. and then we have the least populated county in the state, adams county in southwest iowa. just what are some of the actions h.u.d. is taking to help alleviate some of the lack of rural housing that we need and where are you going with this?
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what are your challenges? what do you see as solutions? secretary carson: as you probably know, there's multiagency council led by agriculture to deal with the issues of housing, to deal with the issues of communication. because as you know, there's no broadband access in many of those counties which i think is inhibtory to look at education -- inhibitory to look at education. that obviously is going to continue. as i mentioned before, i believe one of the biggest things that we can do for rural housing is to eliminate the huge regulatory burdens we have on manufactured housing. i think this is an area that has been underutilized and will provide tremendous advantage tore us in the -- for us in the future. mr. young: loved to work with you. i appreciate what you do and the heart you have for people.
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thank you for being here today. secretary carson: thank you very much. mr. diaz-balart: let me thank the gentleman. mr. secretary, let me -- i want to throw two quick issues at you. one is home equity conversion programs or reverse mortgages. in november, 2017, article stated that h.u.d.'s own data shows that the default rates have increased 646%. in 2016. there are also studies that show default rates of those mortgages were 10% following the housing crisis. i'm concerned that -- i'm frankly concerned about that program. i want to work with you to kind of dive into it and make sure our seniors are protected. i'm not sure if those default rates are actually accurate or not. i'm not sure -- supposedly there are huge numbers of seniors defaulting which is obviously something that is unacceptable.
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those are folks that have to be protected. not really a question but just let you know this is something i want, if we can soon, let's get together and figure out what we can do to make sure those senior citizens are protected. secretary carson: it's a huge issue. the people who put the program together had very good intentions, but they didn't put it together very well so we inherited a mess. and had to take some pretty severe, stern remedies and i think it has largely stemmed the tide in terms of the disaster that was occurring there. but we were draining from the mmif $12.5 billion over a nine-year period. that was ridiculous. mr. diaz-balart: that's huge. secretary carson: so we understand that problem. we are dealing with it. mr. diaz-balart: good. it's an issue we need to make
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sure is working for the folks that it's supposed to be working for which is our seniors. i think there is question whether it's doing that. obviously the state of florida and other parts were hit hard by the hurricanes. significant -- actually the district i represent was hit rather severely. there are areas, like, plantation island, those are folks that are just anxious to work with the state to get back on their feet. so anything you and your team can do to help them prepare for a long-term recovery plan would be very helpful. secretary carson: absolutely. mr. diaz-balart: i look forward to continue working with you on that. any ideas as to where the action plans -- because obviously the states and the territories have to come up with an action plan. any ideas as to where they are, texas, florida, puerto rico,est? secretary carson: well, we are in constant communication with them. one of the things hopefully have
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noticed is we've made an effort to work with the local agencies and the state agencies, with fema, with s.b.a. we've made an attempt to get rid of a lot of the regulatory burdens so we can get money into people's hands much faster. and we will continue to do that throughout the entire process. mr. diaz-balart: mr. secretary, part of that, which is new, right, which i am very proud of is this mitigation emphasis and about minimum of $12 billion will -- appropriated to mitigation priorities. and it's about making sure we don't throw good money after bad. these storms are coming again. secretary carson: i was thinking about as the gentleman was talking about his brother-in-law living on the second floor and one of the things we're looking at, what kind of materials can we use instead of traditional drywall so there are a lot of things that are aquiphobic.
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they push it away rather than soaking in and we need to look at those things. mr. diaz-balart: i look forward to working with you and also if you have any specific plans to make sure states are prepared to spend those funds, mitigation funds effectively so we don't continue to have these huge costs in both taxpayer money but also suffering for the folks out there. i look forward to working with you and i think we have to be very aggressive to make sure those funds are well spent by the states. secretary carson: absolutely. mr. diaz-balart: mr. price. mr. price: i'd like to turn to public housing and particularly the budget proposal for the public housing capital fund. last year you proposed slashing that fund by 68%. that's the principal source of
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federal funds to preserve affordable housing for more than two million citizens. you proposed that in the face of a backlog now approaching $50 billion in public housing maintenance, deferred maintenance. now, of the 1.1 million households who depend on federal public housing due to the failures of the private housing market, more than half include fixed income seniors, people with disabilities as heads of households. we oppose those proposed cuts, as you know, last year. but instead of taking this lesson to heart you are now proposing to totally eliminate the public housing capital fund. now, i listened carefully to your testimony this morning as to how you propose to deal with that. it seems like you are merging the capital fund into the operating fund. you just said that. secretary carson: yes. mr. price: then you propose cutting the operating fund, proposing cutting that by 25%.
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and then you went one step further. i want to ask you if i have this right. you went one step further. you want to eliminate a lot of public housing and move everyone into the voucher program versus red conversions. now, red conversions are used in my district. they can work well, but it appears you're looking at virtually a wholesale conversion if that were the case, wouldn't we see some inkeys in funding for that? we need to see a corresponding increase for new section 8 vouchers. what am i missing here? i am trying to follow the money. you move into another program that's also cut and then you move into another program that's also cut. what's going on? secretary carson: i appreciate your question and i understand your perspective. the fact of the matter is what seems to work extremely well are
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the red conversions. moving away from the whole concept of public housing, quite frankly. and changing it to communities that are wholeistic and well developed and -- holistic and well developed and that's going to be the primary purpose of the opportunity zones and that's going to release an enumberous amount of money to do what you are talking about. it's going to be a little bit of an adjustment to move from the ideal of public housing because that's what we're used to. i think this will work much better. mr. price: opportunity zones. ok. does that somehow compensate for everything i said here this morning? you're just -- you're just defaulting on that billions, tens of billions of dollars in public housing maintenance. supposedly that's not going to be addressed. second, operating funds for public housing slashed.
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i mean, that's not even adequate for operating. much less be a sushing capital. expenses.ng capital and then rad. if we are going to go to rad we need additional section 8 vouchers. how do opportunity zones compensate for any of that? secretary carson: ok. mr. price: how does the money flow? that's what i am trying to do, follow the money. secretary carson: if you have been following the money you know that capital neglect has continued to grow. you say it's $50 billion now. mr. price: i think a good estimate, yes. secretary carson: you know, when i came into this office it was $26 billion. it seems like, you know, traditionally over the last many years it just continues to grow. mr. price: $46 billion is the 2010 figure. secretary carson: what that says to me, maybe we need to be looking for a different model. maybe we need to be thinking about a different way to do this. something that actually
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works. that's why we're doing it this way. mr. price: could i ask you, mr. secretary? is the fact public housing needs maintenance just as any facility needs maintenance, why is that an indication this doesn't work? that's the basic question. and then, to the extent we need both maintenance and operating funds, how can you slash both? secretary carson: that maintenance cost continues to go up. mr. price: of course. that's the way maintenance works. that's the way maintenance of highways works. secretary carson: it doesn't have to work that way because when you look at a lot of the communities that have been changed through the public-private partnerships, the private sector becomes very
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interested in that development and maintains that development because their income stream is associated with the viability of that. those are the models that work. particularly, when we make them, you know, multi-income facilities, i think that's a much better way to proceed than the way we have been doing it in the past. mr. price: well, i know my time has expired. i would say -- mr. diaz-balart: the gentleman -- why don't you -- mr. dent has questions. why don't you proceed? mr. price: i do want to explore this. i want to go to gentrification. i am just puzzled by this. i admit to being puzzled by this. i've seen the conversions work very well. i am not disputing this is a good solution for many communities, for many housing opportunities. it's worked very well in during ham, north carolina, for example, but -- durham, north carolina, for example. but that begs the question, is the implication just that we abandon public housing? that we conclude it, quote, hasn't worked? secretary carson: we change it.
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mr. price: well, how can you -- in the meantime, it's a very, very messy prospect, isn't it? all this deteriorating housing stock, just deteriorating further, no funds to address that? secretary carson: well, you might be interested to know in their reserves, public housing has over $4 billion. mr. price: we are talking $50 billion. we're talking $50 billion in maintenance needs and i just reiterate, this isn't an indication of program failure. this is just how maintenance works with any facility. secretary carson: i agree with you that we need to do things, but we need to be looking toward a different way, a different solution. and, again, you know, you mentioned the opportunity zones. opportunity zones present a splendity opportunity to do the very same thing that the rad program does for these facilities you are talking about and most of them will tend to be
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in the opportunity zones of the states. mr. price: well, i think this subcommittee in a bipartisan fashion has demonstrated an openness to innovation here and in particular to the rad program. what i think is incredible is simplely choking off the funding for existing public housing, both operating and capital, and then not putting additional voucher money into the rad program, assuming that's where we're going. that just isn't credible as a budget proposition. secretary carson: more money has been put into our request for the rad program, if you -- mr. price: the money, as i understand it, the money in your budget for increased vouchers has to deal with holding section 8 vouchers harmless. it doesn't make room for major new rad conversions. secretary carson: well, i will tell you this, because we may not come to a complete agreement on this.
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whatever the final budget is, we are going to use that money very effectively and very efficiently. mr. price: we will certainly hope to collaborate with you to make sure that's true. if i may, mr. chairman, let me just raise the question -- this can be answered briefly but it's maybe a signaling of a concern and it's not first time you heard that. not the first time i mentioned it or other members. gentrification. we're grappling with this all over the country. economic development is leading to rising rents, property values, displacing longtime residents and businesses. we know this new growth can bring a lot of opportunity and improvements but the benefits aren't usually equally shared. displacement, disportionally impacts communities of color. and so every community in my district is dealing with this. it's true across the country and there are lots of forces, zoning laws, other factors that contribute to gentrification and displacement.
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we need to make sure h.u.d.'s part of the broader conversation and can play a constructive role in mitigating these consequences. i know you thought about this. i know plenty of communities are dealing with it. i wonder to what extent you consider gentrification and economic displacement as carney of federal policy and -- concern of federal policy and how you tailor h.u.d. programs to more effectively address this and give communities resources to address it. secretary carson: well, the key thing we want to do is make sure people have choice. people can go where they want to go. one of the things that i'm sure you've discovered is that, you know, when you're looking at urban areas and you say to people, i want you to move out here, they don't want to move out there.
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they actually want to stay where they are. they just want it to be the right kind of community. and when we've taken some of the worst places -- you look at east lake in the atlanta area. i mean, it was like the epicenter of crime and poverty. you know, to the public-private partnerships, it's now an ideal community. their problem is now everybody from outside wants to move into there. you know, that's kind of the problem we should have. we should be making places so nice that everybody wants to move in there rather than worry about the other way around. mr. price: well, let me just say that we have -- we addressed this in the fiscal 2017 omnibus as you know, asking for a more formal report from h.u.d. about strategies and best practices to address displacement of lower income families and longtime residents from urban areas. this is a report that's past due. i think it would be very helpful if you finalize those thoughts
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in a more formal way and give us a basis for future collaboration. secretary carson: ok. will do. mr. price: thank you. secretary carson: thank you. mr. diaz-balart: thank you, mr. price. mr. secretary, let me just hit you with one last issue and then you've been exceedingly forth right. you have been mentioning -- we talked about h.u.d.'s information technology system and you mentioned about your concerns and i think it's more than valid since 1991 the i.g. has reported that h.u.d. lacks an integrated financial management system. since 2003 h.u.d. has been working to replace it with frankly minimal, minimal success. this subcommittee has tried to help h.u.d. modernize its i.t. systems but projects seem to cost more than anticipated and the results do not measure up to what was promised and you mentioned your concern why that's so important. so g.a.o. published a study last year in the cost estimates h.u.d. developed for i.t.
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investments and only one project more than minimally met g.a.o.'s best practices on comprehensive, well-documented, accurate and credible cost estimates. so we know how desperately h.u.d. needs to revitalize its i.t. system. you have been obviously keen on that. invest in new technology. but obviously we can't keep spending good money after bad money. now you have brought your new c.i.o., brings a great deal of experience in, expertise in his new role. i commend, frankly, your decision to conduct a top to bottom analysis on the i.t. system before deciding where to target funding and where to target investments. this is something you have inherited, mr. secretary. much of the i.t. issues. but now that you had over a year basically about a year to assess h.u.d.'s information technology system, do you have any plans to revitalize h.u.d.'s i.t. infrastructure? how can we ensure that the implementation will actually be
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successful and dollars that this committee provides will be well spent? again, this is a frustration we had. it's an issue i know you are concerned about. i'd like to throw that at you. secretary carson: first of all, our legacy systems require about $250 million a year just to patch and maintain. so in four years, you are talking $1 billion just thrown down the toilet. we are in the process of moving to a cloud platform right now. that process has already started. but, you know, we actually are going to need a significant upfront amount of money, like
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$500 million to really convert ourselves over to the modern technology platform. and, you know, we can keep patching and throwing away money or we can do what needs to be done and fix it for good. mr. diaz-balart: mr. secretary, i want to thank you -- \[inaudible] i know this is something you are focusing on. it has been a huge, huge frustration, to say the least. secretary carson: it's a linchpin. mr. diaz-balart: and it's risky not having an i.t. system that works. let me thank you, mr. secretary, and the h.u.d. staff for your answers and for your participation. you know, you're willing to take on tough issues that have been lingering for h.u.d. in some cases for decades. including the issue of the furniture which you have been very, very aggressive about
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dealing with. the committee staff will be in contact with your budget office regarding questions for the record, mr. secretary. i know we have a number of questions that may be submitted. i'd imagine members, a lot of members have questions as well. if you would please ask and work with o.m.b. to return the information for the record to the subcommittee within 30 days from friday so we will be able to publish the transcripts of today's hearing and maybe obviously informed decisions when crafting the fiscal year 2019 that's already well in progress. mr. price, any final comments? mr. price: no, thank you. mr. diaz-balart: mr. secretary, the country is lucky to have you willing -- your willingness to serve and we thank you for your service. we look forward to continuing to work with you. secretary carson: i appreciate the spirit of this committee. you have been very, very respectful and kind. thank you. mr. diaz-balart: thank you. with that the hearing is adjourned. thank you, mr. secretary. [captions copyright national cable satellite corp. 2018] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org]
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>> there is another hearing on
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the president's 2019 budget request tomorrow with agriculture secretary -- secretary sonny perdue. that's at 1:30 p.m. eastern on c-span three. you can also watch online at c-span.org or listen on the free c-span radio app. with current government funding set to expire this week, congress has until midnight friday to pass a spending measure to the end of september. other legislation in the house this week include the right to try bill that would allow patients to try drugs that have been fully cleared by the fda. and in the senate, there is work on the bill that would make websites more accountable for online sex trafficking. follow the house live here on c-span and the senate live on c-span two. q&a, law on c-span's
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professor amy chu talks about her book. >> we are overcoming political tribalism. need to give to talk to each other as americans again and not to say, you are the evil ones. used to be the people on the other side the political divide just people that we disagreed with. now, it's always like the people who voted for the other all.date rmr are immoral. in places like libya, was there sipping the vietnam united states? libya is a multiethnic country to. 140 different peoples. it's a failed state. it has disintegrated. why? it doesn't have that overarching strong libyan identity. strong enough to hold the country together. we do.
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that's what makes us special. >> in :00 eastern on c-span. -- 8:00 eastern on c-span. landmark cases, a petty thief spent his time in jail studying law. he chose the state of florida, which had denied them access to .n attorney the supreme court's unanimous decision in his favor established a broader sixth amendment right to counsel for alleged criminals. watch landmark cases monday and join the conversation. r #is landmark cases. follow us at c-span. there are lots of resources on our website for background. companionso order the book and finally to the national constitution center. and write the. go to c-span.org. next to look at congressional redistricting with
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representatives ron bloom of iowa and lowenthal california. it also included a constitutional and appellate law attorney to explain why more gerrymandering cases are being challenged in the court system. posted by common cause, this is an hour. >> i want to figure panelists. every 10 years, every legislative district united states must be redrawn.

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