good morning and thank you all of all of you for being here our nation faces the most daunting economic downturn since the great depression one year ago many of our nation's largest and oldest banks teetered on the edge of collapse the value of businesses and personal networks plummeted as a stock market tumble in turn companies downsized closed their doors leaving millions standing in unemployment lines desperate for work home prices plunged and exotic home loans balloons created sticker shock for many homeowners americans began to lose their homes to foreclosure at a terrible pace and response congress extended unemployment benefits created programs to preserve homeownership and pass a massive economic stimulus program to retain and produce jobs while our economy is still fragile there are some signs of improvement but as our nation lays down the tracks of economic revitalization we must be sure that every american has boarded the train headed towards recovery unfortunately recent reports indicate that not only are many racial and ethnic groups being left behind but many never received a ticket to board the recovery train and that is the crux of our problem for most racial and ethnic minority groups the great recession is in reality a great depression people of color were worse off before the start of our nation's economic downturn and have been losing their jobs and their homes at a faster rate every sense disparities in unemployment cuts across a and gender lines particularly among african americans and hispanics and this is even ever did when education is taken into account the national unemployment rate is nine point seven percent african american unemployment is fifteen percent and hispanic unemployment is that thirteen percent in my home state the unemployment rate for african american residents of new york city rose four times as fast as the jobless rate for could cajuns between the first quarter of two thousand and eight and the first quarter of two thousand and nine a similar difference is seen in home foreclosure which are impacting minority groups as far higher level than the national average it appears that african americans and hispanics were far more likely to have higher priced mortgages as indicated in the report by the center for american progress when borrowing from fourteen of the nation's top banks so much as bank of america wells fargo in two thousand and six seventeen borrowers were given higher price mortgages while thirty point nine percent of hispanics and a shocking forty one point five percent of african americans receive them there is evidence that african americans and hispanics may have been targeted for those pricier loans i was appalled to learn of affidavit filed by a form of wells fargo employees which indicate that these loans were routinely call loans of mud people or get old loans if true and if this kind of reprehensible practice was widespread it in a case in need of congressional reexamination of financial services regulations in general and the home mortgage business in particular let me conclude by saying i look forward to hearing testimony on policy solutions that can ensure that all americans see real economic recovery for example does the road map to equitable recovery include a further extension of unemployment benefits or stricter provisions within the mortgage modification program to ensure that banks are properly modifying the mortgages of all eligible homeowners again i want to thank the witnesses for appearing today and i look forward to hearing your testimony and yes before i yield to my ranking member in addition to receiving the testimony of the witnesses before us today the committee has received several statements for the record from an array of experts these statements are authored by the economic policy institute trust and the asian american justice center and these organizations represent vital organizations that stand at the front lines in serving minority communities and examine our nation's recession without  is hearing i met with my staff and many of my staff felt that this was a no when hearing for republicans and in fact if we run away from the crisis that is before us today it would be a no win hearing the truth is that republicans share no small blame for the economic turndown we were in charge during a time in which policies some of them predating us to live for a bit we were very much involved in watching an explosion the home values that led to a lack of affordability that led to both government and non government entities finding more and more clever solutions to try to make sure that somebody could still secure a home mortgage even if in fact it bordered on being a ponzi scheme and certainly depended on a future gain in order to exit or refinance that property but today the hearing is going to go far beyond that it's going to go into some of the core problems that have existed for a generation the nine point seven percent national unemployment rate as compared to the fifteen percent unemployment rate for african americans is not a new figure we have failed to deal with the disparity of employment versus unemployment for all of my life today i believe we need to begin the process of honestly recognizing that whether it's home affordability home foreclosure or most importantly access to real employment to real jobs and access for entrepreneurs in the minority community to get to the american dream through access that this committee has authority over and that is federal contracts and the disbursement of funds including the stimulus i believe this is the beginning of an opportunity for the chairman and the democratic members along with the ranking member and the republican members to come to grips with the fact that until there are jobs in the inner city that well that in fact are jobs created by real entrepreneurial activity by real products and services the american people want we will not deal with that many leaders in the community including a former member of this body jack kemp have often said we also have to come to grips with the other side of the problem we have to come to grips with in fact the family structure and whether the government encourages families stay together families stay together do well or do better finish education go on to have better jobs and better lives additionally we have to recognize that education more than anything else is an indicator of employment in our future economy in the past many good jobs were available in the unionized industries of auto steel rubber and even today when construction times are good lesser skilled lesser educated workers willing to work hard and acquire skills can often go through internships and journeymen programs and become highly paid all of those jobs and more are beginning to be in our rearview mirror and not before us the jobs of the future depend on an education not just a high school education and not an education that simply talks about feeling good about your community but in fact gaining real tangible skills in computer sciences in math and in those skills that allow the future jobs to be available to all so although this is not the committee on education the workforce this is not in fact the appropriations committee we do have a special role we have an ability to set policy for government contracting that has in fact government spending that has in fact  disadvantages the small entrepreneurial businesses in my home of calif fornia we have more hispanics and we have half a can americans in the home i grew up in cleveland we had more african americans we had hispanics but one thing that you see in any inner city in america is in fact mord small businesses more businesses that have limited capital and are less likely to get government contracts unless the government changes how they put contracts together how do they outreach to those we do have an obligation to hear the witnesses today and to take that next step on a bipartisan basis to make sure that we do not come back a generation from now talking about unemployment a lack of opportunity when in fact the largest single spender in america is in fact the federal government and we have done a poor job so mr chairman i ask the remainder of my opening statement we place in the record and i look forward to us working together on these important issues without objection and thank the gentleman for his statement and the other members secretary of the department of housing and community development for the state of maryland since february of two thousand and seven and previously held the same positions from one thousand nine hundred eighty to two thousand and three as secretary mr  o of the skinner group providing consultancy services and affordable housing finance and community and economic development he also previously served as director of the prince george county department of housing is the chief operating officer for the national community reinvestment coalition and better known as in c r c is an association comprised of six hundred local development organizations across the country whose mission is to improve the flow of capital to communities and stimulate economic growth in addition to its current position was to cause a visiting professor at columbia university in new york and has also served as an it's a national advisor on financial modernization and housing finance to china mexico turkey and colombia we welcome you mr carr dr christian weller is a senior fellow at the center for american progress as well as an associate professor of public policy at the university of massachusetts in boston proud to join in the senate he was part of the research staff at the economic policy institute where he remains a research associate he has also worked at the center for european integration studies in germany and served in the banking sector in germany belgium and poland doctor well it comes before us today representing the center for american progress action fund we welcome you to as well dr weldon that we are now mrs skinner with you move forward with those rules that we set thank you very i'm sorry thank you mr chairman and good morning mr chairman ranking member and members of the committee for the record my name is raymond skinner secretary of the maryland department of housing and community development my pleasure to be here this morning representing governor martin o'malley lieutenant governor anthony brown and the people of maryland i'm going to focus my testimony this morning on the impact of foreclosures on minority households and communities in maryland but i hope to have an opportunity to talk about some of the other issues that you raised in your opening remarks i've provided my rip written testimony for the record today's topic is of grave concern to governor o'malley no part of the state of maryland has been immune from the foreclosure and subprime lending crisis but is has hit hardest on the communities that are predominantly african american and hispanic recent figures from realty trac find that maryland has a twelve highest rate of foreclosure events in the nation and the situation in our state is worsening as a result of the troubled economy foreclosures in maryland are highly correlated with race baltimore city and prince george's county maryland majority minority jurisdictions account for twenty six percent of the state's population but forty two percent of the state's foreclosures events according to the realty track data as can be seen on the map of page four of my written testimony seventy four percent of the most severely impacted hotspots and referred to hotspots as those areas of concentrated foreclosures seventy four percent of the most severely impacted hotspots neighborhoods are in fact in minority communities the economic implications of foreclosure are devastating and impact homeowners lenders communities and can lead to longer term social cost foreclosures cost maryland four billion dollars in two thousand and seven with the majority of those costs concentrated in minority communities including nine hundred sixty three million occurring in prince george's county alone this crisis was set off by the resetting of the subprime and exotic loans but now the context is really changing and increasing number of foreclosures are tied to prime loans which is likely the result of unemployment and reductions in income in maryland african americans residents accounted for fifty one percent unemployment claims in two thousand and eight versus being only thirty percent of the population securing access to safe mortgages for minority households is key because they represent the growth area in the state between two thousand and two thousand and seven white households actually declined in maryland while the number of minority households grew substantially i'm proud to say that our department is working aggressively on this front to open the door for homeownership but in the safe and sustainable manner in two thousand and seven fifty percent fifty three percent of the over four thousand mortgage loans that we finance through through my department helped my already households to purchase a home we dramatically outpace private financial institutions which provided in two thousand and seven just thirty percent of their mortgages to minority households according to the honda data at the same time we did a better job of keeping households in their homes as of march thirty first two thousand and nine our single family portfolio delinquency rate was six point four percent which  considerably less than the remainder of the country which for that same period was about eight little over eight percent the success of our efforts to the scylla take greater financial access to minority households while at the same time having a lower delinquen rate underscores that banks and brokers can do a much better job of providing sustainable access to equal credit in june two thousand and seven in response to the mounting foreclosure numbers governor o'malley created a homeownership preservation tach us which i co chaired the task force gave a number of recommendations with pledge to first of all legislative reforms that increase the time between defaulting foreclosure band prepayment penalties on certain loans required that lenders make sure instead a bar can repay a loan at an active greater penalties for mortgage fraud and made for the foreclosure process more transparent and fair the washington post described the bills that were passed in the maryland legislature as one of the most sweeping legislative and regulatory reforms in the country second new loan programs to help homeowners who got stuck in some of the exotic expensive sub prime loans  to help them who are these homeowners who got stuck in these loans we came up with new lending programs to help them get out of some of those subprime loans third we initiated consumer education that included a stablish myth of a maryland hope hotline a web site as well as a state wide network of housing counseling agencies we have helped help to structure workshops that have move affective in bringing distressed homeowners face to face with counselors and attorneys and been able to work out  foreclosure modifications on the spot maryland's efforts are continuing but today is a crisis continue we find ourselves with limited ability and we are seeking some federal help in a couple of areas including  more more funding for counseling agencies and more support for state housing finance agencies in general and colluding the ability of g s e's to purchase our bonds thank you for the opportunity to testify  ranking member and other distinguished members of the committee on behalf of the national community reinvestment coalition i am honored to speak with you today about the racial dimensions of the current economic crisis despite talk of a recovery the u economy remains mired in the worst economic crisis in more than half a century and even the most optimistic economists are expecting a jobless recovery for most people a jobless recovery is a meaningless statistic in the real world where families are struggling to pay their mortgage buy food afford health care pay the college tuition for their children or save to ensure that they can retire in dignity already median income has fallen to the lowest level in more than ten years and poverty is growing at an alarming rate in fact the close examine nation of the fine print and positive fine print of the positive earnings news of many firms further dampens the enthusiasm for the coming recovery recent positive earnings reports for example for large financial firms reveals that creative accounting massive federal subsidies and onetime asset sales are largely responsible for a lot of the good news in fact at the current pace the total number of bank failures this year will likely be the worst year in the industry's history the reason for the disappointing nature of the recovery is that foreclosures which was the problem that imploded the financial and credit markets and the economy continue to rise more than a million and a half families have face foreclosure this year and at least another million and a half are heading that way in fact the center for responsible lending estimates that as many as twelve million more foreclosures may occur by the year two thousand and twelve this is not an equal opportunity economic crisis the current crisis is having a disproportionately negative impact on communities of color in two ways first communities of color with a disproportionate targets for the most abusive and reckless predatory loans and as a result they are experiencing much higher levels of concentrated foreclosures second they are the most negatively impacted by rising unemployment and unemployment rates for l nos african americans and native indians living on native reservations as was stated earlier are either close to or more than twice that for non hispanic white households because african americans latinos have comparatively few savings the poorly position to survive long term unemployment potentially millions of african americans and latinos could find themselves falling out of the middle class and into poverty before this crisis is over current wealth disparities are not the result of market forces or the invisible hand of adam smith rather they are the consequence of the very visible hand of discrimination and its legacy the peddling of high cost and irresponsible loans disproportionately to communities of color is only the most recent manifestation of continuing bias against minorities in the financial markets excessive subprime lending and lower income communities was not the result of pressure placed on financial firms through the community reinvestment act it had nothing to do with lenders attempting to increase homeownership among minority families the sub pri market collapsed because regulation of that market was woefully inadequate and in many respects nonexistent almost every institutional actor in the whole mortgage finance process played a role in the collapsing looting the brokers lenders appraisers credit rating agencies and investment banks together these institutions created a toxic mix percolated for years until it boiled over and over well not just the mortgage markets but the entire financial system five specific remedies should be pursued to address this crisis and i addressed them in detail in my written testimony first more must be done to stem the foreclosure crisis the administration's making home affordable program has a number of important senate to encourage intransigent service to participate but it lacks sticks it needs some sticks such as bankruptcy reform that would cost the american public nothing but potentially save millions of households from foreclosure second we need to restructure the financial system regulation to focus on the protection of consumers protecting consumers rights is the best way to ensure avoiding systemic risk to the system in addition we need to make sure that the community reinvestment act is expanded so as to ensure that all communities receive access equal access to safe sound products third communities that have borne a disproportionate impact of the current crisis should be prioritized for funding that is not happening currently the federal government must more actively combat discrimination which is the largest barrier to economic mobility in conclusion let me just say that within the next thirty five years minorities will constitute half of the american population yet this fastest growing share of the nation's population are among the mostly least well how have the most limited access to labor in financial markets and are disproportionately isolated from quality education and health care which are key to economic mobility globalization represents a competitive challenge for america in this century we have never had before if america is to continue to be an economic political and intellectual superpower it must move further into the twentieth century by eliminating the old paradigm of discrimination all americans must be prepared for and allowed to compete succeeding in a new globalized highly competitive world is not just an option it is an imperative thank you thank you very much mr cox dr weller well thank you very much chairman towns ranking member members of the committee for inviting me here today to speak to you i will make three points in my testimony first minorities have experienced sharper drops in economic security during a recession and those drops occurred from lower levels of economic security and then was the case for a white second their economic structures and not just personal differences that explain the worse experience for minorities have had in this recession relative to whites third public policy can help in many ways to level the playing field for minorities by pursuing strong and sustained growth in good jobs support for wealth creation and greater efficienc markets such as credit markets the economic experience of almost all families during a recession has been dismal the experience of minorities generally been worse than death for whites the unemployment rate of whites increased by four point two percentage points from the end of two thousand and seven th middle of two thousand and nine in comparison the unemployment rate of african americans and hispanics rose by more than six percent to two point at the same time fifty percent faster than for whites we also see family incomes and employer benefits disappearing faster for minorities than for whites during this recession minorities are losing access to good jobs at a faster rate than whites during the great recession this fast decline came after minorities were already in a weaker economic position whites before the recession occurred the unemployment rate for african americans at the end of two thousand and seven for instance was eight point six percent or more than twice the rate for whites who had an unemployment rate of twelve point two percent at that time down a plum rate of hispanics at the end of two thousand and seven was also substantially higher than that of whites sitting at five point eight percent incomes and earnings were generally much lower poverty rates much higher and health insurance coverage leaves lower for minorities than for whites before the crisis even began these compare compensation relates differences were further exacerbated by large differences in household wealth minorities for instance had much lower homeowners than whites before and during the current crisis in two thousand the homeownership rate for whites was seventy five percent compared to forty seven point four percent for african americans and forty nine point one percent for hispanics is the lowest level since two thousand and two for whites and african americans and since two thousand and four we also just learned that the homeownership rates during the crisis dropped the fastest for asian american you also see large differences in other forms of wealth most notably in employer provided retirement plan african americans had a pension coverage rate of forty six percent in two thousand and eight at a participation rate of thirty percent compared to fifty six percent for whites finally the evidence also indicates that minorities regularly face obstacles when building well this is especially true for african americans my colleague andrew jacoby just published a study on the origination of high priced mortgages at the nation's largest banks he finds thirty two percent of african americans with incomes above twice to erick's median income higher priced mortgages in two thousand and six compared to twenty nine percent and eleven percent for whites this confirms my own findings that loan applications for minorities are more likely to be ninety than dos a similar situated white and african americans paid more for the loans than similar situated white minorities enjoys less economic security before the crisis started and the economic security of the period were quickly since the end of two thousand and these differences are unlikely to be fully explained by differences in other correct are almost universally larger for minorities than for whites these figures do not tell the whole story but they are indicative of continued structural problems in the labor market what are those structural problems structural problems can include segment of the labor market where by minorities are disproportionately represented in occupations industries patients industries where whites are more prevalent simply segment of housing market and transportation structural problems can also include the heavy reliance on education levels and wealth where again minorities tend to have larger obstacles than whites to building wealth and attaining education then the final structure problem is racial by racially biased practices at the steering and discrimination in hiring housing markets and other services policy makers thus can produce pursue three separate policy goals to create a level playing field for minorities with respect to economic security first pursue income opportunities through for instance  continuation of the economic stimulus speeding up some of the spend spend out of the money but also extending unemployment insurance benefits which stabilized the loss of income among minorities long term structural policies to help income would mean an inflation indexed minute minimum wage an improvement to the earned income tax credit and labor law reform to make it easier for minorities to join a union minorities particularly benefit from unionization rates and to tend to have benefits larger from you kno wealth building policies this would make it easier for people to save money through for instance automated retirement savings plans progressive tax benefits and lower cost savings options and finally emphasis on market efficiencies to eliminate some of the practices that we seem in the data in terms of credit steering i think the first step would be to audit the banks that have received tarp money for their crack credit practices to see if credit stealing is a persistent problem such an audit could be a condition before banks are allowed to why is this occurring well i think we're still trying to understand some of these problems but as i said in my testimony there is a whole range of what i call structural problems as mr carr ready indicated discrimination is certainly one part of it segment of housing market at lack of access to adequate transportation plays a role in equal access to education tends to play a role there is a whole of obstacles for minorities to be ordered to participate equally in the labor market and i think you we need to take a larger view of this let me give you one example i think in the past w just simply crossed our fingers and said like ok well job growth happens think good things will calm about it but if you look at the data from two thousand and one to two thousand and seven hispanics for instance had stronger job growth than for instance african americans or what but what happened was those were often very low paid jobs with a lot of insecurity and very low levels of benefits so job growth by itself doesn't necessarily create a good a level playing field for minorities we do have to address on an equal access to good jobs and i think that has to happen through structural policies for instance by passing the employee free choice act to make it easier for people to join the union but missed thank you very much dr bell that mr carr sure i would agree with all of those statements and  just add that those structural problems include go beyond just education they also include just mobility physical mobility the ability to access areas where employers are hiring you michel yes political the and when i say that i talk about the fact that it's important to recognize high how highly segregated african americans are and latinos as well and therefore isolated from the growth opportunit it's it is the structural in terms of the education the training the marginal jobs that they whole which are many of the first eliminate it when the economy turns down but it's also economic mobility and it's and it's one of the reasons why purging and breaking the back of discrimination in housing is so important so as to allow individuals to actually access opportunities for which they're prepared right now they simply just can't live in the neighborhood of their choice and let me just build on that because one of the things that's interesting about this foreclosure crisis is going to create ripple effects in terms of lack of access so for example it's damaging unfairly that credit scores of individuals who are prepared for homeownership and now have lost their homes because of predatory products and as you know credit scores are now used for everything from from getting a home to getting a job and in addition much of the wealth has been stripped from black and latino neighborhoods which now come in hansis or further erodes their ability to programs like extension of unemployment food stamps and so forth that's i think for the most part probably did target a number of minority communities on the other hand more the jobs programs are related to jobs construction jobs for example transportation in my area in housing those arts as one of my colleagues indicator are probably not likely to be the areas where there are concentration of minorities were minorities really have access to those jobs so i think we can probably do a better job in terms of things like training programs and so forth to make sure that minority communities in fact have access to the jobs that will be created through the recovery program  three for hiring and reporting do you feel that that is being strictly adhered to in other words could we do more to ensure that the numeric reporting and and hiring  is being strictly adhered to so that the stimulus would get into the minority communities and employ in the minority communities well i mean i can only speak for what we're doing in maryland and in fact because baltimore i'm happy  in terms of the reporting you know we're just starting to to act get the recovery act money out on the street to hire the workers for example in the weather was a sion program we  identify folks who are unemployed underemployed that we can sort of target into those jobs and i think the so far in terms of what we've done particular i believe that it is working it's working well the reporting requirements are just kicking in the first report is due to be on the job creation numbers on october first and we have in fact created  several hundred jobs at this point the majority of those at least in maryland again and in baltimore have been to to minority hires mr card which made me become a little broader nationally is that an area  shortfall that in fact congress has mandated that all of our spending covered by section three but particularly the stimulus disproportionately or at least proportionately be targeted and historically that's not been the case what about this time targets men to my knowledge the best analysis of this subject was her form by the current institute at a high a state university that focuses on race and poverty and they make  an excellent review of the bill and one of the things they highlight is that when you look proportionally at the types of jobs that are likely to get funded it with the economic stimulus package and then look at the types of jobs historically occupied by people of color you see that there are vast variations by race ethnicity and the point that they make is that without specific target to specific neighborhoods to specific communities you just want to achieve any significant disproportionate increase in employment among disaffected minorities or how we can all go up what i think i hear you saying is that even though section three of the hut act may be in use ultimately if the type of money in this or future stimulus is not targeted to get to those communities of highest unemployment we can comply but we're going to comply with jobs that tend not to benefit those communities that's right and what they point out is a host of support mechanisms are also needed in order to create and sustain jobs and that is job training basic education access to jobs and creation of jobs in the green economy which are sustainable jobs so one of the points that they make is there is a difference between a job that pays you today and a job that pays you in the future and so their recovery spending could stand a lot more targeting around jobs of the future targeted on neighborhoods that are most disaffected and specifically around communities of color because there isn't any specific targeting in that way that would leave that money up one more time before i run out of time what i think i hear you're saying is if we do another round of stimulus we probably be better off having a year's worth of training for people who are on employable for the current jobs as a disproportionate amount of the stimulus in other words spend that year and those dollars getting people able to take the job the next year not simply find some we piddle around jobs for them to do for one year the way we are right now at our national parks where we have a huge amount of money but it's just going to cause people to put hats on for the summer and then they're back to where they were is that a fair assessment i would say a more coordinated training program some might last a year some might last longer but some might last significantly less amount of time to gear up to more sustainable job dr weller i'm going to take issue with one thing i just want to stand from a stand point of today's hearing card check dramatically increasing unionization in inner city of of hard core unemployed individuals who lack skills is going to in fact benefit them isn't it true that in fact if you want to create enterprise zones and bring people into the inner city you've got to attract people by competing favorably and if i heard you you were simply saying you know unionization is a panacea if that's the case then auto steel and rubber would not have in fact left cleveland pittsburgh and the cities where i grew up where that used to be an alternative but they have gone to the non unionized areas of the country and left behind my friends and classmates unemployed in ohio and i'm not  well the evidence rather than talking about individual cases if you look at the literature from the world bank and you look at the economics literature ten generally unionization tends to go along with higher benefits better benefits it also tends to go with stronger productivity largely because unions create a channel between employers and employees to talk about professional development and training but just as just because i have to stay on subject the silent depression how are minorities fairing  economic downturn we're trying to focus on that today i certainly want to focus on the economic model but i just want to know are you how would you equate that to getting encouraging people to make investments in areas and job  training and new employees that historically they haven't isn't it true that that in fact although unionization has its place it has not been a pan for these communities well generally if you look at the data for minorities when it comes to unionization it is actually a huge bonus in particular hispanics tend to gain the largest from unionization rates specifically with the aspects of training if you look at the construction industries where hispanic men for instance are disproportionately represented they tend to successful training programs long term training programs they have the ways to bring people from unskilled jobs into a career track in that industry so that during my time is up but you look like you might want to answer your view on how we might encourage urbanization urban employment in the future yes i think that one of the things we should be doing is gearing up much more aggressively for a jobs of the future and a green economy we've talked a lot about it but i believe we are a long way from having actually identified what those g sectors are and fought through how to connect communities doesn't franchesca unities to the job training in the education that's necessary to promote that and many of the most distressed communities in america are the areas in which some of the most important green investments should be made they've been overlooked they're struggling with deteriorated infrastructure brownfields and other things so i believe a much more coherent policy around green jobs is essential and specifically focusing on what is the job training and the technical skills needed to employ individuals as well as i'll add to actually own those jobs of the future not just to have a job to own jobs and which which would also lead to promoting small business lending so it's not all about bringing companies in it's about incubating and building jobs the gentleman's time has long expired the gentleman from texas congressman german thank you very much for having this meeting and i want to thank our witnesses for being here get on the twelfth grade for anglos or whites it was twenty seven percent dropout rates for the african americans who was at thirty four percent dropout rate and then for the past is going north in the state of texas the hispanics there was a forty nine percent dropout rate so you have those large numbers are dropping off so you know we're looking at current situations here but if you look at what's happening in our schools then we can see if we don't make some of those long term and certainly the short term structural changes we're not want to get out of this particular situation my question is and i know that the family parents have a role in making sure our kids go out and at congress can do to help address this whether it's short term or long term or whether it's structural changes and same thing secretary and then mr card dr weil or whoever wants to go first to take i'm not sure whether i can say three things but i think one of the edge of outcomes are intrinsically linked to housing situation stability of housing so i think focusing on stopping the foreclosure crisis the sharp rise that we've seen foreclosures and ultimately maintaining equal access to sustainable housing solutions i think is ultimately going to feed into better education outcomes that means goes back to what mr carr and i have been saying about leveling the playing field to excess to look at lower cost and sustainable mortgages for instance and i think that's those kinds of financial regulations can ultimately feed into a more stable housing situation  more stable education outcomes i would i would say that there are three things one is and i'll go back to something that congressman isis said when he started his conversation about education being the primary tool for upward mobility which i completely agree with but what i would say is this issue of concentrated poverty and segregation is really important the pew charitable trust just released a study which really was mind boggling it concluded that that individuals who live in high concentrated poverty areas even if they're middle or upper income have a fifty percent chance for their children to experience downward mobility compared to people who are living in areas with low concentrated poverty and concentrated poverty was defined is simply twenty percent or more they found that hundred five and two thousand almost half of african americans lived in neighborhoods with more than twenty percent concentrated poverty which predisposes them heavily to downward mobility that compares to one percent for non hispanic white households so dealing with this issue of residential segregation is really important and it's often missed in conversations on the economy but it's absolutely essential and it cost us nothing except regulate fairness in the system the other thing i would say is i completely agree on the issue of connecting housing policy and education policy and i've written about it pretty extensively in my testimony i believe particularly in an area of scarce resources now is the time to actually leverage our investments in housing and in education so as to make sure that when we're spending on those expenditures and including transportation policy that we're doing so in a way that adequate access to all three of those resources as to promote economic development and as i said in my testimony i've discussed it at some length the third thing i would go back to small business development most people think of big corporations and fortune five hundred but most americans don't work for fortune five hundred corporations so helping individuals become more entrepreneurial i think is one of the easiest steps to promoting economic vote vibrancy in distress communities and that means open the opening the doors to finance for individuals who are already qualif well as giving additional training and support to individuals who could be qualified with that little additional help i agree with my colleagues and just want to add that i think transportation is also very important in that mix the nexus of  housing education and transportation in terms of access to better opportunities communities of act of opportunity access to jobs and to educational opportunities all kind of fit together do and where do we need to go to improve it or something different sure thank you for the question i think that law is one of the most critical laws on the books to insure fair access to safe and sound credit and one of the things i think is important in this current foreclosure crisis is to recognize that according to the federal reserve board only six percent of these high cost reckless loans that were in the center of the foreclosure crisis six percent were attributable to loans that were regulated under c r a the vast majority almost ninety five percent were non si or a regulated and so i think that speaks volumes about the power of that law to make sure that lending is done in a safe and sound way w would say however is that a major weakness with the law is actually not the legislation itself is the enforcement of the law which was very poorly enforced and and and in fact has gone beyond the poor enforcement has a lot of loopholes and exceptions an opt out and again in my testimony i go through those so for example lots of financial institutions that are covered under c r a get to choose almost like they get to choose their regulators they get to choose which products they actual report under and this makes no sense at all so it allows an established affiliates and do the same kinds of reckless things that wall street firms were doing and implode not just the credit markets but destroying the wealth of american communities so we need to eliminate those we need to bring under control of the institutions of the the full range of institutions bring under control credit unions bring investment banks bring all these institutions under at a minimum to report what and how they're doing things because one of the things we found is that when you shine a light on this behavior a lot of that misbehavior is right there so a big part of expanding is to expand the data that we're looking at so we can be able to better understand and we are disparities are occurring and so we can eliminate a lot of the debates that happened back and forth as to is discrimination occurring no your statistics are not including credit score let's eliminate the debate let's put good data in place let's regulate those institutions in law and then let's require that the financial regulatory agencies actually do their jobs which is not happening now one of the reasons i was going to say a consumer financial protection agency one of the reasons we are very strongly supportive of that and supportive of including in that incident is so that you'll have an agency focus and mission in life is to focus on making sure that consumers get products that help to promote their economic mobility it seems that the financial system should be all about promoting the economic mobility of the american public but instead it really is about and has been for now increasingly for decades making profits regardless of what the impact is on the american public and those days really must come to an end my question is going to and the final regulations were an issue until two thousand and eight it's the same kind of regulation for the community reinvestment act where lax oversight and not significant  thank you for your question i think first of all that we in maryland have really done a terrific job in focusing on the issue and putting the tools in place to homeowners to stay in their homes  we started out by funding a network of housing counseling agencies we advertised to get people who were behind in their mortgage to come forth with the hotline that they could call and through that hotline we refer them to this network of housing counseling agencies to help them provide providing an advocacy for them and working with the services and trying to get their their loan modified  think that program has been very successful we counsel over twelve thousand families over the last year and a half or so we've actually saved and can document close to seven thousand families from going into foreclosure what is happening now and certainly we're troubled by what we see is the increase in the number of foreclosures in the state but we really attribute that more to what's happening in the larger economy as opposed to  what was happening originally and that is the subprime mortgages that were just being with the payments went up and so forth but now people are losing their jobs people are getting cut back on overtime they're losing second jobs and their you know that margin is enough to make them not be able to pay their mortgage so we're starting to see that really affect and in fact the mortgage bankers data shows that prime mortgages are now the majority of the foreclosures have gone from the  four year in addition one in eight marketers are currently delinquent are in the process of foreclosure that does not include a number of old that are in the fall but have not read foreclosure possible in the well here are the loan modification programs aren't working largely because servicers incentives financial incentives are at odds with both the investors and the borrowers and so despite the fact that  making home affordable program has a number of incentives those incentives don't begin to rival the financial incentives the servicers have to taking a loan into foreclosure they are able most servicers get a fee based on the outstanding principle i mean based on the total loan volume that they're servicing so for example one of the things that is not done is lower its forgiving principal balances that is one of the major things that would create a sustainable loan but it's done in less than ten percent of all cases it's out of step with the interest of the investors because foreclosure the loss of the already now in foreclosure loans is more than sixty percent the loss is ten times greater on a loan that is goes to foreclosure versus that's modified so we need some sticks one of the sticks would be passed the reform the bankruptcy code at least on a temporary basis to allow consumers to go to bankruptcy court to deal with that problem that would serve as an incentive not just for those who actually go but it would serve as an incentive for services to understand that a third party will have an opportunity to modify the loan in a reasonable way if they choose not to so that is one of the quickest things i think could be done beyond that i would just say that a a a nuance problem with this crisis is that more than sixty percent of the foreclosures now are actually being driven by unemployment and loss of income which makes modification much more difficult and that suggest an even broader role for federal intervention thank you to well it well i think that clearly bankruptcy reform is the first step i think that's the quickest way of wielding that stick that mr karr talks about but i think we're losing a little bit side of the fact that we now have a credit quality problem and that's largely driven by what we see in the labor market and that requires us to focus on strong and good job growth and that means continuing to stimulus me extending unemployment insurance benefits but then also making sure that we make sure that the new jobs are created are good jobs either through truck job training programs through a higher minimum wage the earned income tax credits and through an easier way to joining a union thank you so much kucinich mr chairman thank you very much for holding this hearing i think it's really important to ask how a minority fairing in the economic downturn because those of us who represent constituen s of many different races and ethnic groups have seen the pervasive facts of policies on wall street which say there's a certain amount of unemployment that's necessary for the proper functioning of the economy have seen the systematic discrimination against people of color on lending issues goes back a few generations and now we're starting to see the effects of economic policies that for those who have generally been struggling at the at the lower chairman many of you will remember that specially those of you who started in politics many years ago you remember there was systematic redlining going on that all across america there were people who were forward when i was mayor of cleveland we were one of the first cities to use the community reinvestment act to force lending institutions to put money back into the communities we got the money from because communities were being strip min people would put their money in local institutions and then those local institutions would take the money not only out of the community but out of the country and people would wonder why couldn't we get money to fix up our homes or to fix the businesses this is going on so the community reinvestment act passed  a few decades later someone figured out well they could increase their community reinvestment profile which subprime loans and they shot those subprime loans in the black community in cleveland and  it in a way that was extraordinary because when the subprime loans finally came belly up you had neighborhood vast areas of neighborhoods across my community where people lost their homes now let me speak to this in a minute from a personal standpoint i grew up in a family of seven children my parents never owned a home we were renters and we kept moving as a family expanded there was a lot of discrimination against big families who are renters because you didn't own a home and you rented as a family group people would just maybe they would even have ads in newspapers that said two children only we had seven so we kept moving as a family expanded my parents couldn't afford a home we ended up living in twenty one different places by the time i was seventeen including a couple cars i understand with a dream a homeownership homeownership is about because the biggest day in my life came when i was able to have my own home and i understand what it is for people who who finally say well this is this is the biggest day in our lives as a family we're going to finally have our home then they find that dream is just pulled out from under them by somebody who is gaming the system and make it a lot of money on it and then the people lose their home as a result and then they're thrown into a rental market where they're paying more money often for substandard housing so you have a housing crisis is part of the economic crisis you have a massive unemployment crisis unemployment in inner city i would guess mr chairman that we don't even know what it is because people stop reporting you know i was i was in my sister marcia fudge district for labor day parade and her people calling from the street corners hey help me get a job i would venture to say that in some areas in inner cities the unemployment is probably over thirty percent so there's a talk about a recovery for whom who's recovering wall street jobless recovery what the jobless recovery what is i want someone to tell me what the jobless recovery we have fifteen million americans at least out of work you have a massive number of people are underemployed and it's hitting the communities of color hardest so we need to penetrate the  this is the truth of what's going on here and call it for what it is a systematic economic discrimination and if we don't address it here we can address it for anyone mr chairman we need a massive jobs program but all of america back to work and i'm still a believer that a health debate right now trying to get health insurance and take care of the american people and whenever i go to my thoughts i'm meeting where i have majority african americans and i asked them this question how many of you all have attended a funeral or know of someone who died within the last year oh you when you walk out of the future you said to yourself they should have died if they had had health insurance or if they had been treated properly they'd still be here i guarantee you i have never gotten less than seventy percent of people raise their hand ever and i ask that question all the time how important do you see this health insurance health reform debate i mean just getting health insurance for folks is interesting and let me just throw this out in the move the sicko one of the things that they said in that movie down never forget they said if you can leave some people hopeless helpless and i'm healthy you don't have to write worry about them rising up and it will always be a divide between those who have and those who have not and with that would you answer that question sure i think health care reform is critically important on many levels the first one is if you reform health care meaning you make the system more efficient you increase emergency so that's the first step the second part is it will ultimately help to create more jobs because you make the cost of health care substantially more predictable and that's one of the things that entrepreneurs are looking for the predictable costs of business into the future so by reining in the cost increases of health care i think you ultimately going to boost job creation through business creation and ultimately you free up some resources at the government level both at the state and the federal government level because you're putting the government on a path to fiscal responsibility and thereby can focus on other priorities such as wealth creation such as education and so on and so forth that the car when you had before the  the joint committee economic committee a month or two ago you spent some time talking about foreclosure and this bank issue of bankruptcy reform and you have the and painted that we've been able to help a lot of people living under a church by bringing them together with their bankers but we start running into problems when people have no job i think somebody i think of just doctor  work it's a really good question and it's a difficult sort of crisis in which we're hitting into because even though the bulk of these foreclosures now are unemployment it's worth recognizing that we have a whole new generation  problematic loans that will begin to reset next year called pay option and interest only so we're not out of the woods on the old fashioned product driven foreclosure were just sort of in some respects of like being in the eye of hurricane we're in a new phase and the old faces about to come back with yet a new generation let me go to that question the reason i say we need more them than bankruptcy is you're correct some people will lose their jobs but they will only lose their jobs for a month or two or three not everyone will be long term unemployed we need a program that actually provides some type of moratorium as a bridge for people who are temporarily unemployed rather than having them thrown out of their houses doing unemployment and rather than focus on them being reemployed the focused on what did they do about this foreclosure that's pending so we need a bridge a moratorium for foreclosure in other cases people who are long term unemployed for whom you just you can't help them well we need some type of rental intervention because one of the problems with the economy is not just the foreclosures it's the loss of the value of the home that comes as a result of using foreclosures a trigger for abandonment of that home so we need to find a way to keep people in their homes so that we're not having a two fold impact from the foreclosure of destroying home prices further because that's the real heavy hammer on this economy and on individual well and then finally we need a program that's more comprehensive that gets those toxic loans out of the bowels of financial institutions because that's why they're continuing to fail despite the fact that it's estimated that we are standing that the american taxpayers are standing behind those financial institutions with twenty three point seven trillion dollars that's the estimate by the special  inspector general and so and they're still failing so we need a way to pull those toxic assets out and and unfortunately it can't be voluntary now we need a process that literally does that so that we can modify those loans in a sustainable way because we have millions more on the horizon thank you mr chairman i see my time is up thank you i was just a follow up what you were saying do you have a vision of what that rental program would look like in the instance where you cannot say the foreclosure necessarily but you want to find a way to keep people in there as tenants yes you know years ago the homeowners loan corporation in the great depression was  d and i think that we need an entity that's very similar to that that would allow for example to potentially take over and manage or you know have a master servicing contract for rents or to allow individuals to remain in those homes until such time that they can be sold at a reasonable price and or those individuals are themselves ready to relocate and or to purchase a new home but i think the real key here i haven't thought about the details of it but the real key is to avoid that abandonment of that property i appreciate that it is the details that are always there we're always looking for on that list of well let me let me ask you a question do a lot of work on credit cards which i think the evidence shows pretty much putting the squeeze on all communities is certainly not leas communities on at i think some of the research that we're looking at here show that the average credit card interest rates are low income households and people of color around twenty two percent ten percent greater than the caucasian families many credit card interest rate but then the credit card company will layer on different fees shorten the grace period some other cost items and we took care of the last piece of legislation all they do is shift the cost over onto the interest rate so i get your drift there but think you've got close all the doors right well one thing we learn is that the credit card industry and other financial service providers are extremely innovative when it comes to making a buck off people so i think ultimately what we want to go for is simple sort of comprehensive legislation and and i think the consumer safety product commission idea is the right way to go because it is a more flexible tool to regulate credit product and actually create like that the economic mobility the credit is meant for in that role i don't get i'm going to be that i hear what you're saying and i talk to the people that are responsible for that legislation and they miss ration they're missing the boat with a lot of what you do in terms of that type of regulation they've got to make it all up on the interest rates unless you do something there i mean it looks to me and you can tell me if i'm wrong it looks to me that these credit card companies because it was similar from state to state you can probably do a number of things in particular on transparency on just before you even start a commission or something like that that just simply says like you have to say on the credit card statement as a company this is how much we hearing today welcome i apologize i was that able to be here for your full testimony but i have read it and i we thank you for your service to our people let me ask you what mechanisms or plan have you heard about or involved with that would bring justice to the american people in the situation we're facing and let me that's the big question the housing market meltdown is really at the heart of our financial crisis and as you have indicated it's going to just continue to unwind in the commercial real estate bust hasn't even hit yet that will happen next year the mega banks had a plan a massive plan to exploit the american people and they did it masterfully they made billions and billions and billions and billions of dollars a lot of the tucked away in anonymous hedge funds and offshore accounts none of those people are being brought to justice right now meanwhile they did this by raiding home equity through high risk schemes as we know are very imprudent very responsible and fraudulent in large numbers of cases they're now dumping their paper on the american people that fannie mae and freddie mac and even though they've gotten hundreds and hundreds of billions of dollars in tar funds from the people of the united states they're not doing mortgage workouts only about fifteen percent they claim of the millions and millions of mortgages that are out there and they even there you know they're biting at the edges  they don't really want to resolve it because the government big basket will be there to absorb their bad paper the workouts have been occurring those that have been the few that have been at a snail's pace purposefully because the same institutions can make more money  and profits off delinquencies and tax losses and short sales and by rigging the auction process as you've probably seen in your communities by taking a home that's worth eighty thousand dollars and then auction offered ten thousand or twenty thousand and then keeping it on their books and booking the losses in the next tax year so you know they did some of the worst things they preyed upon people's hopes and many times people without attorneys getting involved in mortgage loans that were fraudulent so my big question is are you my problem is i am worried about our country i don't see a big enough force out there that is an idea of the magnitude that they came up with to hold them accountable and bring justice and so my question to you really is are you aware of groups of mayors getting together or aggrieved parties in our country and bringing forth litigation aggressive litigation before judges and several jurisdictions are you aware civil rights cases being brought to the federal court system to to rein them in and to bring them to justice are you aware of what can be done are there ideas that are cooking out there in our state through our state attorneys general or our state department of housing community development to rein in the securitization process are you aware of ideas that are out there bubbling up across our country to force accountability and restructuring of our banking system itself in order to bring accountability and to create a system that is more prudent and more favorable to prudent home lending in the future what i'm not hearing from the country i'm not here a good idea big enough to offset what they're doing and what they've done and some kind of pushing a little bit in the questioning it isn't enough just to say well the federal government will do some more affordable housing for that i keep thinking is there any amendment we could offer to this community reinvestment act where we get dozens of attorneys general dozens of housing community development directors across this country dozens of mayors to come together and say this is what we need this isn't enough we have to bring justice to the system how do we get that justice i wish i could say i believe this institution will bring it i have my doubts maybe i'll be surprised but what is bubbling up out there on the today into approving financial reforms and so forth let me just give you one specific example you talked about lawsuits the city of baltimore is filed a lawsuit against wells fargo a sense lee alleging what you might these bad loans these subprime exotic loans in the data that the city has come up with for example shows that in two thousand and six wells fargo made a high cost loans to sixty five percent of its african american customers versus only fifteen percent of its white customers and i think you can see examples of that all over the country so this is kind forward and even though justice will be meted out slowly in the court system we need the best minds in the country we need civil rights lawyers i am so upset about the department of justice and the lack of civil rights staffing there i can tell you in a white collar financial crimes division we should have over a thousand agents we have one hundred forty over there right now i tried to get an amendment in appropriations bill i'm just putting this on the record so people know in order to increase it to a thousand we had a thousand white collar crime prosecutors over there and agents when we had the same as a loan crisis now we have one hundred forty with this level of fraud and abuse and gaming of the system that department of justice have to wake up and i'm sharing this because perhaps you'll be an audience is really going to help make this happen but i am i am very concerned that i'm hoping that the judicial  system will be able to help us get justice as we try to get it through here the legislative branch so i compliment you on that i know in our state in cleveland judge boyko has thrown out several cases because when individuals have plaintiffs to come forward the large banks cannot produce the note the mortgage note and most people are leaving their homes without even understanding that they have legal rights to that having that note produced and that they don't have to leave their houses but it's it's i mean there's a few places where this is happening but systemically it's not happening mr chairman i know my time has expired but if any of the other witnesses which to come and i would greatly appreciate it congresswoman the challenge you put before us and that question is extraordinary and it's hard to know where to start i would start by saying first of all the much of what you describe i think we should recognize while it was bad behavior on the part of the financial institutions they were allowed to do it over regulatory system that is just allowing them to do it and by allowing them to do it it's actually incenting them to misbehave on against the interest of the american public and to the extent that it's still happening the first thing i'd say is we need to act meaningful regulation of the financial system now today this afternoon we really need to do it because the misbehavior continues it's not like it's all in the past second of all it's right it's important to recognize that everything that those institutions did was not fraud as much as bad as it may have been if it's legal it's not fraudulent and that is one of the problems with a lot of the laws in that they allow for the financial institutions to exploit legally exploit the public a third thing is that to the extent that they did exploit the public illegally there's insufficient and inadequate data for individuals to partake in legal actions in any significant way i mean bringing a legal suit against a financial institution for discrimination in lending is extremely time some feedback because whatever we do they find a way to do something different and i think that we need to look at a structure that gives us information there's a board of some type that because whatever we do they just find a way to do whatever they want to do and of course and it's legal and that's the issue that we have to address because we cannot continue to let this thing move along without being checked and because people are being hurt so i want to thank the gentleman for her comments and i want to thank you for your statement and of course we look forward to continuing to work with you and making certain that money gets the word supposed to go and help the people that is supposed to be assisted pointed that seven hundred eighty seven billion dollars out there floating and we need to make certain that that money does what it's supposed to do and that is our concert i want to thank you  i would like to welcome our distinguished second panel as with the first panel it is committee policy that all witnesses are sworn in so will you please stand and raise your right hand as i administer the oath national hispanic civil rights and advocacy organization in the united states of america which serves the millions of people in education health care immigration civil rights and economic policies and services and of course prior to joining the rising as president and c e o in two thousand and five she served as the white house served in the white house one thousand nine hundred four to two thousand as deputy director of legislative affairs and ultimately became deputy assistant to the president of united states which is bill clinton at that time we welcome you janet mr marc morial is the president chief executive officer of the national urban league the nation's largest and oldest civil rights group and he's the director of course of that organization proud to becoming president of the national league in two thousand and three mr morial previously served eight years as the mayor of new orleans and was the president of the united states conference of mayors welcome ms jacqueline johnson pata is the executive director of the national congress of american indians the oldest and largest tribal representative organization coordinates with over two hundred fifty tribal governments to form the federal government and the public policy issues affecting american indians tribal community prior to joining the n c a a i miss johnson pata served as deputy assistant secretary of housing and urban development and the office of native american programs let me welcome you national organization for now many many years of course and we're delighted to have her with us as well and we look forward to your testimony today also on the panel is mr alford is the president and chief executive officer of the national black chamber of commerce which was in cooperate in washington d c and of course nineteen ninety three and of course we're delighted to have you on the panel today as well so what i will do is just go right down the line and i will start with you mr mayor and just come right down the line i think in this way down the list i'm with you thank you so much thank you very much good morning mr chairman and i want to thank you and the committee for the opportunity to testify on behalf of the national urban league this morning to talk to you about the disparate impact that this current economic crisis is having on african americans and to share with you recommendations on how to address them in the past year this nation came face to face with a real enemy an almost on president economic crisis of the likes the nation has not seen in more than half a century our economy does have a certain elasticity built into it that gives many people the room they need to survive tough times however because of decades of disparities many african americans do not have the benefit of that elasticity in plain language there is no more give to give and many of our communities across the country or at the breaking point and face desperate circumstances if we do not take swift and certain action now i do not say this to alarm or inflame i'm just stating a plain fact based on experience that includes a decade of service delivery in a hundred communities across this nation and verifiable research we see in the faces of the people who come to us for help each year the pain that this economic crisis has wrought we hear it in the voices of the men and women and families who see jobs that are just not there we feel it in the pain of those who come to us for help keeping a roof over their heads and this experience is amplified and supported by empirical research our state of black america report demonstrates that the typical black family in this nation possesses less than ten percent of the net worth of the average wife's family th almost one third of all african american families have zero or negative net worth and far far far fewer african americans and whites benefit from inherited wealth or assets this is a snapshot but what it illustrates is that african americans by and large do not have the economic cushion that protects many from cut tash their feet when times get tough in the economy goes into a freefall we do start we are starting to see some hopeful signs that indicate a turning around however even if this is the case it does not mean that the african american community is out of the woods in fact we believe in our research shows that there is a troubling trend which must be recognized and reversed so i share with you today the following median household income during the one nine hundred ninety one expansion after the recession in ninety one increased after the recession of two thousand and one even though there was an economic recovery medium household income african americans declined so what i want to emphasize is that in the in the ninety's median household income increased in the recovery of this decade medium household income decreased declined and the six year decline in unemployment for african americans during the one nine hundred ninety one expansion or rather the increase in employment of african americans during the one nine hundred ninety one expansion was six times greater than that during the two thousand post two thousand expansion two thousand and one expansion here's the point african americans made great strides in employment in the one nine hundred ninety s in the recovery of the last decade that improvement was for the most part non existant the economic downturn of today has exacerbated those circumstances so the unemployment rate in august rose to nine point seven percent across the board african americans it exceeds fifteen percent are economists believe that the real unemployment rate when you factor in those who are not looking those who may be working part time those who were recently laid off and not yet looking for a job is far higher than that we could in the black community today and we think  a real on him ploy rate of over twenty percent and in the white community exceeding ten percent in fact the current recorded unemployment rate for african americans for white americans of eight point nine percent is extremely serious but it's the same as the unemployment rate for black americans during the so called recovery of the last several years that preceded this recession when i released our home buyer a bill of rights two years ago the saw prime crisis was stripping wealth from our communities and victimizing  vulnerable citizens i'm not talking about deadbeats we're not talking about people who are trying to get something for nothing these were people who did everything they were asked to do they work hard they saved their money they bought homes and they were victimized by unscrupulous lenders who pillage their hard earned dollars miss america you summarize the time off but as unfortunately there are those who instead of focusing on solutions have tried to dip black blame off you skate the truth and delay fixing the problem by claiming that the community reinvestment that fannie mae and freddie mac were somehow solely responsible for the sub prime crisis that's flat out false and we call it a weapon of mass deception just quickly recommendations to congress to focus on the upcoming reauthorization of the workforce investment act to ensure that job training maximizes the opportunity for those who've been locked out left out to enter into the new economy of the future recommend that the discussions about the green economy and the alternative energy expansion that policies and incentives be placed in the law so that those jobs do not bypass urban communities and inner city america we also believe that the c r a the community reinvestment act needs to be strengthened its enforcement needs to be taken seriously as a mechanism and as a tool for increasing the flow of capital private capital back into urban communities and i'll be happy to share other recommendations with the committee later on or at any time in the future thank you but thank you very much janet yes thank you good morning and c l r has been committed to strengthening america by promoting the advancement of latino families for more than four decades now and i'd like to thank chairman towns and the committee for inviting me to participate in this timely and important hearing the number of americans losing their jobs homes and financial safety net is tremendously and settling circumstances for latino black asian and native american families are even more disheartening without a targeted strategy our communities are in danger of falling further behind the mainstream since the recession began more than one million latinos have lost their jobs that is the largest increase in on him climate of any group and the worst is yet to come greater than four hundred thousand latino families are predicted to lose their homes to foreclosure this year alone these are staggering figures that call for a bold response we are congress to provide relief to families in advance strategies that will help communities of color emerge from these tough economic times market forces and voluntary programs alone will not correct inequality they will not expand discrimination or close the gaps in service that minority and under commit under served communities face instead we need a targeted strategy that will close racial wealth and income gaps today i just want to discuss briefly programs that congress and the administration have put forth to improve economic conditions including hope for homeowners tarp american recovery and reinvestment act and making home affordable each of these programs has positive elements that could help  however design flaws are preventing our families from receiving the assistance they need which i will briefly summarize today in my written statement you can find detailed recommendations to improve these programs i'll start with the hope for homeowners this program offers as much as three hundred billion dollars in government guaranteed loans it was supposed to help as many as four hundred thousand families at risk of foreclosure unfortunately onerous restrictions and fees that made this program virtually unusable in fact only one person has successfully saved their home from foreclosure through this program even with proposed improvements latino families will still face barriers to accessing this program tarp tarp was established with two key goals reduce foreclosures and increase lending activity that could help the latino community from where we stand working with thousands of families every day tarp has failed these goals treasury should have required tarp recipients to implement a systemic loan modification program and use funds to increase lending to communities instead treasury lott relied on voluntary efforts that have proven ineffective later congress invest in nearly eight hundred billion dollars in the american recovery and reinvestment act one of its primary purposes is to assist those most impacted by the recession and feel are as concerned that this act is falling short of achieving this goal targeted policies are necessary to ensure assistance and jobs reach hard hit communities however the final legislation lacked any such targeting what we did was  appropriation formulas that were already out there instead of addressing some of the specific needs that we knew were being created by this downturn as a result many of the majority of funds of flow through existing channels leaving out our service providers in under served communities and finally i'll turn to president obama's making home affordable program while we applaud the comprehensive approach processing delays and insufficient force program from being as effective as possible for example the program allows services to start foreclosure on eligible flat families before their modification application has been processed those lucky enough to avoid foreclosure still end up owing thousands of dollars in legal fees however in c l r funded foreclosure counselors report that some families have been foreclosed upon while still waiting on the results of their application so we won't be able to get our economy back on track until we get the hardest hit families in a position to secure high quality jobs and mortgages it's that simple to this and i offer just the following recommendations include the needs of latino families and families of color workers and homeowners in federally funded relief programs but that will require intentional strategies to address those communities and not reliance on the same formulas that don't take account the new circumstances that we find ourselves in and the new challenges we need to support proven community based program organizations involved in recovery and foreclosure prevention efforts were in the communities we're close to these families we can engage them with as much credibility as anyone else hold federal funds federal programs publicly accountable for spending and performance we've got a time more strings to this there's got to be performance benchmarks on these programs or also there's no accountability follett restore stability to financial labor markets through consumer protections and investment in our communities we look forward to working with all of you toward this goal we think that many of these programs were well intentioned and some are having some effect but we can improve these programs and we definitely need more oversight more regulation more in force but i thank you and i would be happy to answer any question council the national urban league in particular i like to thank you chairman towns for recognizing that communities of color have been disproportionately impacted by the foreclosure crisis and the economic downturn and oftentimes  and so opt so for us it's a pleasure to be here to really talk about the disparities that some segments of our population do face my name is lisa has a gal and again i'm the executive director of the national coalition for asian american community development we go out we go by national capacity for short so when i say national capacity i'm talking about the organization and again we are dedicated to meeting the housing community academic development needs of low income asian americans across the country we have over one hundred community based organizations in our network where in seventeen states and again focusing on those that are the most vulnerable in our community we have a network of  groups that do job training programs housing counseling programs etc and what's unique about them is that they do address the needs of limited english proficiency low income and immigrant communities in particular and then also native hawaiian hawaii and i just also wanted to make sure that it was understood here today that what will help african americans latinos and native americans will also help low income americans themselves as islanders who have experienced discrimination who have been targeted by by predatory lenders and by subprime lending families are suffering from the worst recession since the great since the great depression asian americans native are no exception at the rate of unemployment among asian americans have more than doubled since the fourth quarter of two thousand and seven we believe that this is because of the really high rates of self employment in our communities and because of the broader economic face high levels of unemployment before the recession according to two thousand and five and two thousand through two thousand and seven american community survey data the rate of unemployment just as an example within cambodia and laos and most communities was around six percent which is higher than the national average and among some owens tongans and some pacific islander communities the rate of unemployment was even greater at two times the national average those are the kinds of stories that you can't you don't see when you look at the data in the aggregate we also all so many of the federal programs i used to work at the white house initiative on asian americans and the founders to really look at how federal programs needed to improve to serve particularly the needs of limited limited english proficiency communities and one of the things was that a lot of the programs like the workforce investment act that mr morial mentioned those programs before often times did not meet the needs of our community because they there wasn't a lot of support for those who for example needed to take english language classes in order to be able to successfully have a well paying job and the crisis is particularly presented challenges for again a p r s who are self employed and small businesses i wanted to also mention we talked a little bit about credit cards we are hearing from our member organizations that are working a lot with small businesses particularly in california that many times if you're a small business owner you purchased inventory based on the amount of credit that you have many of the banks now are decreasing the credit limits in their credit cards up to two thirds which is  recovery and reinvestment act and tarp and have many detailed recommendations in our testimony so i think i'm just going to basically go to some of our recommendations there was an article that just came out  from the associated press just on monday and so we were trying to pull together this testimony and it was very timely it basically stated that the rate of homeownership has dropped for asian americans in two thousand and eight higher at a higher rate than any other ethnic group now that's not usually a statistic that we see so if this is again and in the aggregate so that to us is just again a signal that things are not so good also in asia american community particularly those that are low income so just in terms of my recommendations i think that capacity building programs are very important for the vast array of nonprofit groups that have a lot of expertise working in low income communities  many of the foreclosure and housing counseling programs that were put out to assist these communities didn't find the additional support and case management you had to actually be a housing counseling organization that was certified many a p i community organizations didn't have that sort of vacation weren't eligible for the funds and now are actually turning housing counselors out away from their doors because they are going to have to do all of the translation all of the outreach without any resources so my recommendations  terms of capacity building and direct funding for community based organizations to mobilize the expertise that they do have to help with the at the moment the recovery those recommendations are listed here and i also have additional recommendations thank you and i would like to join those rest of the panel and thanking you the chairman and the members of the committee for including us in this particular hearing on behalf of our country's tribal nations the national congress american indians is pleased to offer our recommendation gleaned from the experience of the native american communities tribes offer a huge unique innovations that can make significant contributions to the policy debate regarding the economic crisis the title of this hearing is particularly relevant to our communities depression like economic conditions have been evident in our native american communities for decades and federal policy responses often been in effect of many of our recommendations directly address the fact that reliable data is not available to adequately assess the impact of economic crisis in our communities well the national unemployment rate climbs closer to ten percent on reservation unemployment rate in the two hundred two thousand census was twenty two percent just three percent less than the unemployment rate during the great depression put simply economic crisis in our community is not an occasional disaster it's a daily reality however the bureau of labor statistics does not include on reservation unemployment rate in their monthly reports rates well above fifty percent in some cases the absence of this reliable current data is significant concerns to tribal leaders and should be that of those representing their state tribal governments cancer serve as significant and debaters of economic and growth job growth in spite of this potential tribes were excluded from many job creation pro provisions in the recovery act including many of department of labor's initiatives green jobs represents an important new employment opportunity for disadvantaged communities tribal lands are potentially rich source of renewable energy department of energy estimates that tribal alternative energy could meet twenty percent of this nation's energy needs through wind energy and up to four her and fifty percent through solar energy tribes  positioned to prepare native people and other rural residents to participate in the new green economy but they have been left out of the federal efforts well the united states faces one of the most significant housing crisis in our nation's history many forget that indian housing has been a crisis for generations data related to the impact of the economic crisis on native homeownership is weak and we recommend that the federal government invest in quality data collection was there some evidence of challenges with foreclosures and native communities the real problem our communities face is not of foreclosures per se but access to homeownership opportunities in the first place something i think mr karr in the first panel discussed a little about in one thousand nine hundred ninety our total of only four hundred seventy one home mortgages  indian lands that represent only one point two percent of the households that had sufficient in income to qualify for a mortgage unmet need for mortgages on reservations that is a persistent problem there are challenges in accessing financing on t thousand one native american lending study found that eighty six percent of native communities lacked a single financial institution within their borders and fifteen percent of native americans needed to travel over one hundred miles to access a financial institution the expansion of the native c f i field has helped prepare our tribal citizens for mortgage lending opportunities and offer cutting edge financial education programs that develop financial skills for the whole community tribal governments have also played a role in regulating lending practices on tribal lands tribal jurisdiction must be protected in the same way as state government jurisdiction is protecting federal statutes regarding things like predatory lending economic revitalization in indian country is closely linked to business development that will strategies to expand access to contracting services for minority owned businesses are particularly critical in reservation communities tribal communities are generally located in rural areas with very limited economic opportun governments have a severely limited tax base tribes cannot impose property taxes on trust land and an additional income tax on community dealing with a multigenerational poverty is not feasible this means tribal citizens often have greater service needs than their non native counterparts but their governments have fewer resources to serve their citizens the federal government aid a contracting program is one way entrepreneurs and native communities build native economies by helping our people secure government contracts in a two thousand and six report the g a o found that the management training programs were common among among native owned businesses and a contracting programs are vital strategies to raise both revenue and business sophistication in indian country the program also demonstrates congress's commitment to promoting tribal self determination and self sufficiency in conclusion we look forward to working with the committee to ensure that tribes have the same access to the recovery act resources and tools as other governments unemployment data is available to measure the extent of the crisis and the recovery and opportunities to part of the tribes are not met and we were look forward to a future native people have the same opportunities for homeownership as other americans small business opportunities at the heart of our rural and reservation communities and at economies are supported and expanded through a fat effective federal investment and i thank you for the opportunity of testifying today can't have a house without a job and seventy percent obama jobs are created by small businesses so the natural by chamber of commerce feels its mission is noble when we were incorporated one nine hundred ninety three there are three hundred thousand black owned firms doing rebel as of thirty billion dollars today i'm happy to say there are over one million black owned firms doing revenue of over eighty eight billion dollars still despite that growth and numbers and dollar volume and capacity being able to do the job being ready willing and able our share of the federal procurement dollar has been dropping year by year and that also goes for hispanic businesses as well why is that one big reason a when we bring corporate it had five thousand employees with a budget over nine hundred million dollars today they have seven hundred employees with a budget less than four hundred million dollars that is not g enough emphasis to the development of small businesses in this country they are you may see it so we're happy to pick up that board with other associations section three of the head act which has been mentioned here haute does not enforce section three of the hut act it has been enforced in the state of louisiana and is sitting in new orleans because your members took it up after katrina that is the only place is being forced there may be an exception here and there but it is not being enforced in maryland it is not being enforced in baltimore it is not being enforced into your districts that is true and if that was in force we could have an additional hundred thousand jobs just for the black community alon this is a race neutral program it was written six days after the watts riot it was strength in the ninety two after rodney king right by the late jack kemp it is beautiful it will hold the test in court and it is a job creat chaining programs training programs or work you send kids to training programs they don't get jobs they never get connected jobs there's not a good training program unless there's a placement strategy this year is section three is on the job training very common law and as they get paid to drive a nail through some good to pick up trash to landscape to day care and housing to sell me it's simple stuff that for some reason we have been avoiding it the federal highway program the  volume today african americans do one point one percent of federal highway funds buying them as bank businesses do one point six percent that is twenty eight percent of the national population trying to come up with two point seven percent of the volume that twenty seven billion dollars that goes to the state programs is being abused to corruption tony soprano quote unquote does well but african americans hispanics do not and i've got volumes i've got documentation goes back to ninety five on this i have seen bid rigging with my own eyes and the state of indiana we need to clean it up and then be inclusive according to the sub rights act of ports six they cancel the report of procedures they don't even take the data the panel labor is supposed to have a hammer but construction unions who don't hire blacks and hispanics and women want this action and so the to fifty four billion when i'm getting there that and the problem with the stimulus plan is that it is more food in the trough but you've got the same pigs at the trough we're not in there so maybe from to the suppression every side which is coming later they discriminate against small business and minorities that i'm trying to figure out president barack obama's rationale to bring them back i want to know the reason for that a little late in construction yes which discriminate against minorities and women which can qualify under the executive order eleven to four six to have exclusivity in federal projects someone who discriminate should be banned from federal projects that you can get an exclusivity finally the waxman markey bill if that goes into fruition we're going to lose three point six million million jobs according to our study by c r a of that you know here's how we're going to pay the most if you take a pay and put it in nashville and draw seven hundred mile radius around nashville you have her choice includes eighty six percent of the black population coincidentally that is the same area that is going to pay the most for this waxman markey bill i suggest we go back and rewrite a bill that's going to be less painful and have some benefits i was a plan on monday and we had people for neutral and against the bill no one could identify reasonable benefits of the energy bill if we can't realize reasonable if it's why do we have it many of the top banks issued a high portion of the sub prime loans to hispanics or african americans barros is this an to make on yes here's me apple evidence that african americans in many cases were steered into sub prime or high interest loans the numbers we've looked at indicate that for the period i believe five and six or six and seven zero five and zero six and zero seven that about fifty five percent of all african americans that took out home loans ended up with saab prime loans now you have to add to that that the data shows that a large number of those that ended up with subprime loans could have qualified for prime loans and that is the issue that people who could have qualified were directed or steered by brokers servicers and banks into higher interest subprime loans certainly there may have been those in all fairness who may have taken on more house than they could afford because the lack of require months of income verification allow that to occur but fundamentally and this is what's important the majority of all subprime loans went to white americans but a disproportionate share of all blacks who got loans period ended up with prime loans and it's important to paint the picture nation to prevent this from continuing to occur and to prevent this kind of crisis from occurring in the future i would just add mr chairman that our thirty percent more likely to get high cost loans so the steering problem is one that we see dramatically affecting the latino community in particular i think we believe that the foreclosure crisis was driven by harmful sub prime loans mostly made by mortgage finance companies due to the lax oversight there and at the end of the day i think a lack of common sense regulations is what caused the foreclosure crisis and where anything to do with that lack of inability to speak the language yes i think of having homeownership counselors who are certified in the community is one of the most important ways that we can assure that individuals are getting accurate information and it's an important area that i think where we need to see more investment in in addition to regulation and oversight if funding could be directed we need to make sure that we're doing more to create that pool of credible certified trusted housing counselors who are in the community who can break down all of those barriers be trusted  from many companies that sort of started up in california that one tire business model was to target asian americans who were perceived as being affluent having a lot of cash cetera so those certainly targeting going on they were is on the streets by now so we're the sound source that receive these billions of dollars it was too fun counseling it was to address to foreclosure problem i think we need a quick audit as to who has that money and what they're doing with it because  communities i visit i can't find any counselors let me just say this because we do counseling and we do counseling in thirty five communities we're going to probably do about one hundred thousand cases this year a counselor can only get a result a lender is willing to play ball on a modification a council is an advocate for a homeowner and has to knock on the door the lender and say will you work with this buyer this purchase or this this homeowner to modify a loan i think the previous panel indicated that many servicers are reluctant to obstinant and not particularly favorable and it goes back to perhaps the tarp that the tarp could have required that those that receive an injection of cash and injection of cash out of the tarp would be required that it not be voluntary to work with homeowners when it comes to the modification of these loans many of these modifications are helping people take a high interest rate reduce it down to reduce the payments so that there four they are affordable certainly if you don't have a job you can pay a modified loan but that was the idea to give the the counselors and those of us that do counseling a working feverish really aggressively in many communities but in some cases we can achieve the result because the service or or the lender is not willing to engage in a modification that the homeowner can afford so what we see now is we now see double mobs taking place on original modified cation and a further modification being needed by the homeowner so that he that they can stay in the home i think my time is expired so let me just  pennsylvania and they wanted to implement a replicate that section three program so down the street there was a grant recipient for home builder i believe it was which is a hud program for job training where i went to them saying we want to place your graduates to do work these contractors will hire your graduates from high school and get them into the workforce they were livid that i would approach them to try to place some of their students in jobs in the end they didn't get their grant renewed but what we did was on job training and a beautiful piece of on the job training gulf rebuilding where bechtel and fluor and turner construction and a lot of associations such as ours got together we have choying eighteen pounds and people in louisiana texas mississippi and east alabama and eighth grade reading level eighth grade math level drug free you go through this course we have the graduation in one of these companies are sponsoring it so the eighteen thousand people we have trained to date eighty percent are working full time now and i'm a blanket indictment of job training programs because we do it and we do place people missed the alford is right that a good job training program has to have a placement component to it but a blanket indictment of job training programs is not fair what is fair to say is that some do not work it is fair to say that some providers may not do a good job but there are many job training programs that work that are designed to help people access jobs in a variety of sectors again you have a placement component is very important but you have a placement rate that you could in four different programs have different placement rates we have some programs with a fifty percent placement rate it depends on the population if you're working with people who have no high school diploma typically what you're trying to do is help them get a ged so that they can get a sustainable job not just a job for a month we've done those types of work if you're working with people who have a high school diploma and they're looking for some sort of most specified skill in the construction trades for example you may have a higher placement rate let me since i have very limited time here i want to get to a loan modification something that's come up here and it's coming up again and again and many of us are opposed to it and i want to get your perspective on it is a so called cram down provisions or allowing bankruptcy judges to to  more accountable programs and i want more accountability in the programs that we have i'm not talking about creating more programs necessarily government has a responsibility to ensure that accountability and when i tell you that we ought to target benchmarks and we ought to try to require report so that we can have ability and there was a big rush to respond to this economic downturn a lot of things happened very quickly and we're just merely pointing out that these these  programs can be improved and i wanted to clarify that well just the concern that a lot of us have as we we rarely if ever hear any witness say this is a bad program it should be eliminated it's always it should be better funded it should be changed and as an oversight body at some point it would be nice to hear we ought to follow the g recommendations and close this program or just not do it anymore and we just rarely hear that i'm sorry my time is up th taken and losing their homes and so we talk about gram downs and i hate that term but to have a bankruptcy judge said look through everything determine whether what happened that mr moore out talked about a moment ago with people who basically were pushed in to subprime loans when they were prime candidates and then to bring some balance particularly balance when the banks have been bailed out they're now paying banks some of the money that they they got from us from the united states of america but yet and still homeowners in your district and mine maybe your district a lot better off but in my district a lot of people who are suffering and about to be thrown out and these are not people who are looking for a handout these are people hardworking americans who pay their taxes when they were working gave their blood years to this country and because of no fault of their own now they're out of a house so that's easy to sit here in this place with our suits and live nice air condition of whatever feeling good but i'm talking about americans americans who have given everything they've got but then now they just need a bridge to be able to stay in a house i'm not talking about living in some luxury condominium i'm going to some of them have been in these houses for twenty years they've got kids and they want to stay in those houses and so i just just i get a little bit upset when i hear things like that as if it's as if it does not matter that these folks have an opportunity for example to go before a judge  i think one of the problems that we find and i just want you to comment on this some of the people that you were trying to train and i live in the inner city you know some hard some some folks did not get a decent education they in some instances  the they went to some of the worst schools i've got parts of my district mr mario on panel where in one county when i go in one county you go to a public school it looks like a private school but in baltimore city we have our problems then when they get to the twelfth way if they get to the twelfth grade people expect those kids who came under those conditions to be able to compete with kids who had computers ever since they were in three k i've got high school students who don't have we don't have computers today and so i'm just trying to figure out what will how do you all see and mr outside will view this education thing is serious and how do we how do we as i see that ample we might we have a job training program called the urban youth empowerment program it was designed with the idea that people who would come to us would be high school dropouts but they'd have seventh or eighth grade reading levels and all we'd have to do is try to take them to a twelfth grade level what we found when we tested the people on intake that a majority of them had a fourth grade reading level and so they won't one thousand nine hundred twenty one years all reading on a fourth grade level and therefore you were required to be successful to take them from a fourth grade reading level to twelfth grade for them to get their ged before they could even qualify for most basic job so how many times and how much money well you know in probably six to eight months and in many cases it's not possible you might be able to move them forth a great so many of these job training programs are functioning as education remediation programs for people in urban communities they are trying to fix the failures of thirty years of benign neglect in public education and and we've got to recognize that yes that's why we seem to be fighting a losing battle because the large numbers if you just look at a million kids dropping out of high school each year and you add to that population a million each year one two three four five a large number of people so in the economy of today where jobs require more skills and more education and more technical ability many of these folks and not going to be able to qualify that's a structural challenge with the economy of this nation that we've got to figure out a way to employ it's the thing that's sucking jobs over seas it's the thing that's promoting outsourcing to india and china and other places and it is what we're fighting in urban communities like baltimore like philadelphia like new york like birmingham like nora's like dallas where young people who are high school dropouts you know nice coming to these programs but it's difficult to them to the skill level where they can qualify for the jobs with the economy was producing before this depression took place it's a model that i think might be replicated someplace else because we are able to get the money from job training programs and partnering to us and rather than having this agency silos where you have various you know strategic narrow focus programs and so then the counselors the job trainers have to work on them we're actually able to pull the money together so that the tribal level they can be more flexible in designing a program to have longer term sustainability so given where the tribes interest and economic growth is they can challenge the econd the educational training as well as the technical training to be able to have a more comprehensive support system for the job training including you know any kind of family needs that need to be taken care of except so our success rate is higher the very small program that we've been trying to spur more growth in but it's probably one of the most successful models we've had it's pretty know high school got to complete high school we've got kids working in louisiana right now building public housing facilities making twenty to thirty dollars an hour and they couldn't fill out their application we had people thought that every literate but they know how to pick up some bricks they know how to pour cement they know how to grade a road they know how to drive nails who will lead that's a start they get educated on the side because that's what they should do but that is not a job preventer it is not a job one hundred thousand jobs in section three and we should do that in baltimore and federal highway program i'd like to sit with you congressman and show you how your district is getting exploit out of jobs through federal highway program and how we can go after and get them employed and hunt drywall in the seventh grade interest to renegotiate the interest downward on some of these loans but what i'm have a concern about is the crandon provisions that been proposed would allow them to reduce the principal amount as well and that well very negatively in the country in cleveland ohio my days in the general assembly and i can one thousand nine hundred seven when we passed this program i remember the first day the very first day mostly minority families showing up for two thousand spots case through  second grade two thousand spots the scholarship was worth twenty two hundred dollars at the time cleveland public schools were spending seven thousand dollars per pupil we only had two thousand spots and thousands of families showed up and think about what they were saying they were saying keep the extra money we want that scholarship and the ability to get our kid into school we think he or she is going to get the kind of education they deserve frankly the kind of education they need to achieve things as all of you said earlier in to achieve the american dream so let me just ask you to enlist you support school choice programs that empower parents particularly urban areas to give their kids education to know what they think what publicly finance boucher's would do support privately from an scholarships that allow kids to go to private parochial schools let  it wrong to say the money that was going to be spent on this child not be strapped on the back of that kid and follow that kid to the school his or her parents think they're going to get the best education why is that wrong as well to the servant i'm going on the line or you've got your answer we actually don't have a position on it either but we do work with charter schools i'm saying we don't have position either because most of our schools are rural a very remote there isn't choices i believe a parent has a right to a choice for their child's education and there's nothing wrong with that also right appreciate that let me just go to you mr often let me ask and somewhat related i guess it's isn't it true that most minority owned construction firms are nonunion ninety eight percent of black o are nonunion because one big thing if they got into the unions their employees couldn't get into union also because of the color of their skin let me just ask you then about your your position on project labor agreements tipper called pre hire contracts where they require the owner or the general contractor of a construction project to sign an agreement with unions representing craft that will work on the project before the actual actual work force for the project is is hired firms double the rate of unemployment in african american communities where there are significant federal jobs or federal projects it will double it and we spent a lot of time my board and i spent a lot of time talking to b when they were threatening to do this and made a very clear that goal which is a part of the labor look at the office of federal contract compliance programs data on union projects and you will see why the concern or the disproportionate impact of downturns on certain segments of our community i tell you mr chairman i i was a county supervisor of a county o three million bigger than twenty states the union came real obvious as we were trying to do work there that we had people that would even bother to fill out the practice application and it was because they couldn't read the application al the public school system and i say to the gentleman that says public school public school you look at my family the two older boys went to parochial school myself my little brother went to went to public school and let me tell you when you look at the the difference between our two careers there was no bet in the world that our public school education or a working class neighborhood matched up against a procul school where disadvantage comes from in many different forms and it's not just a color people skin that background that educational things a hot one and this whole disproportionate burden of having to bear bad education gets thrown on the working class which happens to be a high percentage of people of color just the facts of life and i founded the literacy council in san diego because i want to get to the root cause of the fact that people weren't getting jobs so we got to go back and talk about this but i just think that too often we say let the fans the establishment as we know it and not be willing to hold them accountable the fact that outcome does matter and it's just really frustrating for those of us that try to work in the system the see that the sacred cows refuse to get over in the monopoly of public education has to be held accountable i think it's absolutely essential that with public education but the outcome matters more than the facility schools are not teaching institutions they should be learning institutions they're not employment opportunity they're supposed to be education and learning opportunity and we get all of that lets us talk about green jobs though i want to get all this we talk a lot about gr the fact is that the working class community has some real opportunities here but one of the things i've run into is we talk about the green jobs be it let's say solar panels you want to do solar panels you want to  how much of our government regulation stands in the way i give an example high tech thing algae fuel new green fuel my scientists at scripps and developed an alternative that is a true gasoline not this garbage called ethanol a true environmental fuel but they will not produce it and cannot produce it in california because the government regulation will not allow them to build a facility to provide the environmental opportunity and i think on the tribal systems we have some opportunity maybe to avoid that but would you like to comment on the government obstructionism to those economic opportunities especially with the green green application so mr yes yeah two very capable businesses trying to get into the solar industry and they're finding that most of the supplies are made china to begin with and then at the federal level norful naval station had a r f p out and one  businesses doing two hundred fifty million a year went to try to compete for that and they told him that the minimum they had to pass it had to be a billion dollars so they make it difficult and then all of these projects the u s chambers website that's a part of their website is project no project where they list all of the potential solar projects and what have you that have been blocked by local regulations and files so do we want a green economy or don't we but it seems like the very people who say we want one or blocking those businesses who drive so i want in terms of green plus applications for solar panels in california yes are not permitted one one of the great advantages we've had with the tribal system is that wind generators have been able to go up because they've been all able to avoid the federal bureaucracy and the obstructionism and california a real culprit on that ms johnson exactly i'm wrong goal is a good example of wind energy in california but this couple things that have been preventing that energy development happening in the other parts of the country as one tribe don't get access that they kind of  kind of funds that the states do for development and for expanding development i have a date in my testimony can look at that we need some other things that economic tools that plays up are like depreciation accelerated depreciation tax credits that are available to other investors to be able to have transferable tax credits to our investors and our partners and you know i have no a number of things i can share with you no less that prevent us from being at par with the other folks in the arena for alternative energy development in this term and one of things i like investigate is that you've got to guess at rosebud was a good example of a aggressive nation that was trying to work with other nations at developing a resource to be able one of the big problems we have this country when build a new refinery in thirty years rosebuds looking at trying to be aggressive about that cooperative we end up having the federal government walk in and step on them in an area that is grossly deficient when it comes to economic opportunity and stead of encouraging it's like well we don't trust you with your own environment like i really find it but you know absolute of sir that anybody in a federal government could go to a native american and tell one native american they don't know what the environment is all about and i think this is one of those things that we've got to talk about what are we doing right but most importantly what are we doing wrong that are keeping people from being able how those opportunities and beate be able read be able get be able to read a blueprint so that you don't have to just pour concrete or be able to improve your neighborhood and create the economic opportunity your own sovereign territory is something that we ought to be talking about thank you very much mr chairman thank you very much and now yield to the gentleman from utah on the subject thank you mr chairman and thank you all for being here i do appreciate it mr offer m first question is for you let's talk a little bit about cap and trade in the that the burden that's going to be put on americans how do you see that playing out in the united states as i said earlier we can't find any identifiable benefit out of cap and trade other than wall street have a new toy to abuse cap and trade was invented by enron and then it was pushed down the throats of europe which is you have to still complain about it they didn't lower emissions they lost a lot of money cap and trade is a scheme derivatives and defaults and what have i mean wall street doing money we're spending all the money losing all the chops and they're still doing the same game they're doing with the tarp and how do you see that what the fact is that going to have an lower income families across the country it's going to knock us out bleed the figures about two thousand calls two thousand dollars for african american family sixty percent of which only make fifty thousand a year so another two thousand and if they have a job and people proponents of this bill are saying people in detroit and cleveland when you lose your jobs you just move out to montana and start over you know grapes of wrath it's it's scary it's very scary and very ill thought out mr offer one of my deep concerns is that we have lost our ability to manufacture in this country that we're actually as a nation going to actually have to create things and build things if we're going to be successful in this global economy specifically to cap and trade and the other factors that are happening what do you see this doing to the manufacturing base in this case it's going to export a lot of our manufacturing to other nations and and let me go back to world war two we survived world war two we were victorious in world war two because we had the manufacturing clout that is what saved us to turn on manufacturing into the tank machines in planes and  ammunition production on pearl harbor day nineteenth and in two years we were the dominant force because we had the technology the industry and the workforce well what are the impediments today i mean why are we leading the world and in manufacturing today regulation basically what's the number one thing that are offered you'd like to see do to help help us stimulate and grow the economy i mean to my in my mind it's the american entrepreneur it's the men and women who are going to create jobs in our government so i would like to see  bring the small business administration back rather like to see is put emphasis on entrepreneurship and small business that is to create or and that's the job maker and that ingenuity is what makes america great so how do we put the emphasis upon the got my twin sons back here they're university of maryland graduates and they went to all the finest tools all have their entrepreneurs they came out of college started their own businesses their freedoms many of my laid off now because of the downturn lot of their friends are tending bar they're out right now living well congratulations to you and to your two sons we appreciate it i know our time is short i yield back the balance of my time is the gentleman yield yes to be happy i thank the gentleman i want to follow up a little bit on this when you talk about the small business administration not doing its job when i came to congress in two thousand and one the small business administration was not doing their job government contracts were bundled  section three of the hud act and other set asides and programs were not being in force one can you give us any good things that happen in the last eight years i'm asking as a republican was there any shining light in the last eight years and since we inherited it from the previous one and it was broken and it's clearly broken today minus whatever shining light you put on it tell us what we need to do to change that because i don't want this to be part this to be about what we should do in the future i think go back to ninety three and i think that the late ron brown really had a handle on it and withstand a clinton administration the right way right after his death it all fell apart and it kind of went reverse and they put people over there who were getting bonuses by putting a cap on their workforce they could decrease their workforce to get a big bonus at christmas time so it  left the field units high and dry for manpower to wear our members and other up and coming entrepreneurs in seattle and different places had no technical assistance anymore there was no no reach out there i doesn't look like america you may not have a future that's all they have to say and the outreach was there so we started today and everybody does but he's gone now and i think it's gone back to his old ways you know make it's the same though in every large bureaucracy in the federal government they just can't help themselves if they've got a project to build houses on the east coast in the west coast they'll bundle them together and they'll throw in guam and the philippines and ten other places no say well we're just looking for a vendor they can do and of course then just like that navy contract you end up with two companies three com i can bond a billion dollars this committee does not directly control the small business we have a committee for that i'd hate to say it doesn't have enough authority i wish it was in energy and commerce where it really probably needs to be with a committee but we do have specific authority over how we go to bed and this committee can do a lot of reform let me ask you a question if we are not getting in force meant of existing laws what should this committee do who should we bring in who should we have before us to find out where the problem is in the bureaucracy because this committee allows the bureaucracy we own all the oversight over it yes i received a call from a intern from senator byrd office and he was frustrated that he couldn't get data on african american particular men hispanic preacherman at the department of defense they told me i didn't exist it was just one lone minority i told that was just a lie carol jenkins the deputy administrat data for the gulf region and cal they give me that data and in two days i had every contract by black contractors hispanic contractors went to contractors for the gulf rebuilding by by a i c code all the distinctions there the data's there but if this committee could say defense we want to see the data on small businesses african american hispanic native american asian s women and we want to there want you to sign to it that will expose a lot of opportunities and we go so forth all nonaligned interior energy all of the the places if you get the data  take it to where the consumer the bitter and the groups that oversee the government can see it online in real time we're trying to get to where there's a common to where to be honest we're not looking common and some kind of electronic portal i know they're working on one but it's only for the future is not we call it here usually or equivalent so that those are some of the issues that we have put together a number of recommendations about how we think that it of government contracting and signed by a number of other minority groups too for those recommendations but one of them is really the consistency of data do we have a law that would prevent contracting officers from going to work for some of these what is already codified into law which is opportunity and investment in our inner cities and in areas of high unemployment and in some cases even rural areas tribal areas and so on is it perhaps that we have a set of rules and a bureaucracy to enforce and then the very people who we need to have these opportunities tend to be small entrepreneurial companies that don't have the leverage that cannot offer a senior vice presidency to somebody when they retire is it perhaps for this committee to look at something in between the ability of companies to be formed for the specific per purpose of aggregating small business collectives if if that billion dollar company billion dollar entity if the government facilitated companies that were nothing more then in fact destined to bid against the big boys for purposes of having some high percentage maybe not one hundred but fifty sixty percent b to minority disadvantaged new companies women owned companies is that something that we should look at facilitating in the law so that we actually have some larger entity when the bureaucracy says we can't break it down and your people can't get access to it and your tribes can't get access to it and in fact a merging hispanic businesses can't get access to it and am i hearing that that we have an endemic problem over and above what we can solve from th owned firm with the proviso that he would go out and get two partners major partners and that the sub contracting level would reflect the population of indianapolis was done on time he saved the city a hundred million dollars  respond growing needs for us in the latino community let them as own businesses in the fastest growing segment of the small business community we have a great need to respond to them in terms of how can we best address  to help navigate through the system and give them the support that they need and can help convener for many of those small businesses that are struggling and facing the various challenges but many of those challenges are common challenges that we can use and leverage community based organizations to bring those folks together and to engage them more effectively into how they can have access to this assistance and grow grow their ability to succeed  think one thing that prevents what you're talking about right now is not the incentives up front because the contracts go out so quickly you don't have time to put the partnerships together that take a little bit time to the incentive up front to make that happen i think if you look at something  you know the tribal governments their ability to play that role right now have been doing some of that and that's the model that i'm aware of that asked the question of should we allow or encourage those sort of preferential organizations ultimately people have to bid and win but at least they would exist i think that technical assistance from the helpful i think a lot of the small business centers are not media i really appreciate your testimony and it points out that yes we are sending out seven hundred eighty seven billion dollars to the community but we have to make certain that that money is targeted in a way that is going to truly make a difference and we have to make certain that people who have been left out are now and to be able to do whatever we can do to keep people in their homes i think that is so important and of course i want to thank you for your work you know and thank you for your testimony i