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23–100 PDF 2005

S. HRG. 108–857

NOMINATIONS OF:

ALPHONSO R. JACKSON, LINDA MYSLIWY CONLIN,

AND RHONDA N. KEENUM

HEARING

BEFORE THE

COMMITTEE ON

BANKING, HOUSING, AND URBAN AFFAIRS

UNITED STATES SENATE

ONE HUNDRED EIGHTH CONGRESS

SECOND SESSION

ON

NOMINATIONS OF:

ALPHONSO R. JACKSON, OF TEXAS, TO BE THE SECRETARY OF THE U.S.

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

LINDA MYSLIWY CONLIN, OF NEW JERSEY, TO BE A MEMBER OF THE BOARD

OF DIRECTORS OF THE EXPORT-IMPORT BANK OF THE UNITED STATES

RHONDA N. KEENUM, OF MISSISSIPPI, TO BE ASSISTANT SECRETARY OF

COMMERCE AND DIRECTOR GENERAL OF THE UNITED STATES AND FOREIGN

COMMERCIAL SERVICE

FEBRUARY 26, 2004

Printed for the use of the Committee on Banking, Housing, and Urban Affairs

(

Available at: http://www.access.gpo.gov/congress/senate/senate05sh.html

COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

RICHARD C. SHELBY, Alabama, Chairman

ROBERT F. BENNETT, Utah

WAYNE ALLARD, Colorado

MICHAEL B. ENZI, Wyoming

CHUCK HAGEL, Nebraska

RICK SANTORUM, Pennsylvania

JIM BUNNING, Kentucky

MIKE CRAPO, Idaho

JOHN E. SUNUNU, New Hampshire

ELIZABETH DOLE, North Carolina

LINCOLN D. CHAFEE, Rhode Island

PAUL S. SARBANES, Maryland

CHRISTOPHER J. DODD, Connecticut

TIM JOHNSON, South Dakota

JACK REED, Rhode Island

CHARLES E. SCHUMER, New York

EVAN BAYH, Indiana

ZELL MILLER, Georgia

THOMAS R. CARPER, Delaware

DEBBIE STABENOW, Michigan

JON S. CORZINE, New Jersey

KATHLEEN L. CASEY, Staff Director and Counsel

STEVEN B. HARRIS, Democratic Staff Director and Chief Counsel

MAURICE A. PERKINS, Professional Staff Member

MARK A. CALABRIA, Senior Professional Staff

MARTIN J. GRUENBERG, Democratic Senior Counsel

JONATHAN MILLER, Democratic Professional Staff

JENNIFER FOGEL-BUBLICK, Democratic Counsel

PATIENCE R. SINGLETON, Counsel

JOSEPH R. KOLINSKI, Chief Clerk and Computer Systems Administrator

GEORGE E. WHITTLE, Editor

(II)

CONTENTS

THURSDAY, FEBRUARY 26, 2004

Page

Opening statement of Chairman Shelby ................................................................ 1

Opening statements, comments, or prepared statements of:

Senator Sarbanes .............................................................................................. 5

Senator Allard ................................................................................................... 7

Senator Carper ................................................................................................. 17

Senator Reed ..................................................................................................... 36

Senator Corzine ................................................................................................ 37

WITNESSES

Kit Bond, a U.S. Senator from the State of Missouri ........................................... 2

Kay Bailey Hucthison, a U.S. Senator from the State of Texas .......................... 3

John Cornyn, a U.S. Senator from the State of Texas ......................................... 4

Thad Cochran, a U.S. Senator from the State of Mississippi .............................. 4

Roger F. Wicker, a U.S. Representative in Congress from the State of

Mississippi ............................................................................................................ 5

NOMINEES

Alphonso R. Jackson, of Texas, to be Secretary of the U.S. Department of

Housing and Urban Development ....................................................................... 8

Biographical sketch of nominee ....................................................................... 39

Linda Mysliwy Conlin, of New Jersey, to be a Member of the Board of

Directors of the Export-Import Bank of the United States .............................. 24

Prepared statement .......................................................................................... 37

Biographical sketch of nominee ....................................................................... 46

Rhonda N. Keenum, of Mississippi, to be Assistant Secretary of Commerce

and Director General of the United States and Foreign Commercial Service 26

Biograhpical sketch of nominee ....................................................................... 52

ADDITIONAL MATERIAL SUPPLIED FOR THE RECORD

Letter to Chairman Richard C. Shelby from Edmund B. Rice, President,

Coalition for Employment through Exports, Inc. dated February 25, 2004 .... 55

(III)

(1)

NOMINATIONS OF:

ALPHONSO R. JACKSON, OF TEXAS,

TO BE THE SECRETARY OF THE U.S.

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

LINDA MYSLIWY CONLIN, OF NEW JERSEY,

TO BE A MEMBER OF THE BOARD OF DIRECTORS OF

THE EXPORT-IMPORT BANK OF THE UNITED STATES

RHONDA N. KEENUM, OF MISSISSIPPI,

TO BE ASSISTANT SECRETARY OF COMMERCE AND

DIRECTOR GENERAL OF THE UNITED STATES

AND FOREIGN COMMERCIAL SERVICE

THURSDAY, FEBRUARY 26, 2004

U.S. SENATE,

COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS,

Washington, DC.

The Committee met at 10:04 a.m., in room SD–538, Dirksen Senate Office Building, Senator Richard C. Shelby (Chairman of the

Committee) presiding.

OPENING STATEMENT OF CHAIRMAN RICHARD C. SHELBY

Chairman SHELBY. The hearing will come to order.

We have several nominees to consider this morning. I appreciate

the willingness of the nominees to appear before the Committee.

We will take them in two panels. First, the Committee will hear

from Alphonso Jackson. Mr. Jackson is currently serving as Acting

Secretary for the Department of Housing and Urban Development,

which is also the position he has been nominated to fill. Previously,

he served as Deputy Secretary for the Department of Housing and

Urban Development.

Mr. Jackson, if confirmed, will also be the first HUD Secretary

with a working background in public housing. He served as CEO

and President of the Dallas, Texas, Housing Authority and also as

the Director of the Department of Public and Assisted Housing

here in Washington, DC. I will also note that he served as a Member of the National Commission on Severely Distressed Public

Housing.

Our second panel will consist of Linda Mysliwy Conlin and

Rhonda Keenum. Ms. Conlin has been nominated to be a Member

of the Board of Directors of the Export-Import Bank of the United

2

States. Ms. Conlin currently serves as the Assistant Secretary for

Trade Development at the Department of Commerce.

The Ex-Im Bank is the principal U.S. Government entity for financing the export of U.S. goods and services, and at the outset I

might add this is a special month for the bank, as it celebrates its

70th year anniversary. As an independent U.S. Government agency, Ex-Im assumes credit and country risks that the private sector

is unable or unwilling to accept. Prior to her appointment at the

Department of Commerce, Ms. Conlin served as the Executive Director of the Office of Travel and Tourism for the New Jersey Commerce and Economic Growth Commission.

Also, on our second panel is Rhonda N. Keenum, nominated to

be Assistant Secretary of Commerce and Director General of the

United States and Foreign Commercial Service. Most recently, Ms.

Keenum held the position of Senior Vice President at Edelman

Public Relations.

Do you have an opening statement, Senator Sarbanes?

Senator SARBANES. Well, Mr. Chairman, being appropriately intimidate by the presence of so many of my colleagues at the witness table——

[Laughter.]

—bolstered also by Congressman Wicker. If I could give my

statement after they have finished and before——

Chairman SHELBY. We will do that. Will everybody agree to that?

Senator SARBANES. Yes.

Chairman SHELBY. We will start with Senator Bond.

STATEMENT OF KIT BOND

A U.S. SENATOR FROM THE STATE OF MISSOURI

Senator BOND. Mr. Chairman, Members of the Committee, and

with apologies to my colleagues, I appreciate your allowing me to

go first. Senator Mikulski and I are holding hearings right now on

the VA-HUD budget.

Chairman SHELBY. A Committee that I belong on, too.

Senator BOND. Well, that is all right. We will cover for you, if

you will cover for me, Mr. Chairman. But I am here for the very

special privilege of joining in the presentation for Alphonso Jackson

to the Committee as the nominee to be Secretary of Housing and

Urban Development. I was blessed with this privilege 3 years ago

when he appeared before the Committee to be Deputy Secretary,

and I am delighted that the President has made such an outstanding choice.

I do not envy Al in this job. This might be considered a hazardous duty case where his willingness to take such a job might be

evidence that should disqualify him.

[Laughter.]

But since HUD needs a brave leader, we should accept his sacrifice for the benefit of our Nation’s public. This is a department

deeply troubled with problems that plague almost every major program. Al has inherited, from OMB, a budget request for 2005 that

undermines the financial viability and integrity of a number of important housing programs, including Section 8 and FHA. As a result, I am reminded of the Greek myth of Sisyphus, who is fated

3

to continually roll a bolder to the top of the hill only to see it roll

to the bottom again.

If anyone is going to overcome the Sisyphian task of reforming

HUD, that person is Al Jackson. I should know. I have known and

worked with Al for more than 30 years, since I first ran for Governor of Missouri. Now, people in Texas claim him, but he holds

a law degree from Washington University in St. Louis and has

tackled successfully many of the toughest jobs in the City of St.

Louis, from Director of Public Safety to Executive Director of the

St. Louis Housing Authority, in addition to serving in both Washington and Dallas.

As we all know, Al has served as Deputy Secretary at HUD, and

as Chairman of the Subcommittee funding it, I have worked with

the deputy on a myriad of challenges, most of them bona fide headaches, and we need a strong leader with his experience to try to

reform this outfit and make it as efficient as possible on behalf of

those, some most desperate who need affordable housing.

Al is smart, dedicated, and creative. He represents a powerful

combination of experience, knowledge, and ability. He has taken on

the management task. As you indicated, Mr. Chairman, he knows

the headaches that comes with running a housing authority. It is

a little bit masochistic, but in Al’s case, it is because he is someone

who is deeply and profoundly committed to making all of our communities much better places to live. If anyone can make HUD work

better, it is Al. It is with great pleasure that I wholeheartedly recommend Al to you and urge his speedy confirmation by the Senate.

Chairman SHELBY. Senator Hutchison.

STATEMENT OF KAY BAILEY HUTCHINSON

A U.S. SENATOR FROM THE STATE OF TEXAS

Senator HUTCHISON. Mr. Chairman, after hearing a description

of the job, I am expecting Alphonso to walk out the back door right

about now.

Seriously, I am so pleased to be here to support Alphonso Jackson. We have a rare opportunity to confirm someone to the top job

who has served in so many of the jobs that this great responsibility

entails. He has been there on the ground floor with housing agencies at the local level. He has been the Deputy Secretary, so he

knows this agency. It will be a seamless transition to take over the

reins of the office, and he deserves to be able to do that.

He has had, also, in addition to the experience that was already

mentioned by Senator Bond, recognition for his leadership in the

community. He has served on the boards of the National Commission on America’s Urban Families, the Dallas Citizens Council, the

U.S. Chamber of Commerce and the Boy Scouts of America. He has

gotten the National Boys and Girls Clubs of America Chairman’s

Award, and he was named an Aspin Fellow by the Aspin Institute.

I worked with Alphonso when he was in Texas, both as the Head

of the Housing Authority of the City of Dallas and as President of

American Electric Power of Texas, a utility company in Austin. He

has had business experience, and he has been in public service.

I have found him to be innovative and creative. There is nothing

he will not tackle. He will put people together in the same room

who have not spoken to each other in years, and he will try to

4

make them do what is good for the bigger community interests. So,

I cannot think of a better person for this job, one who has the best

experience and also can hit the ground running, and I hope that

he will have a speedy confirmation.

Thank you.

Chairman SHELBY. Senator Cornyn.

STATEMENT OF JOHN CORNYN

A U.S. SENATOR FROM THE STATE OF TEXAS

Senator CORNYN. Thank you, Chairman Shelby. It is good to be

with you and the rest of the Committee on behalf of this good man

and his wonderful wife, Marcia. As the third Senator to speak on

behalf of his nomination, I know what I am supposed to do, but I

have just got to try to make it interesting, which is tough after you

have already heard the nitty-gritty.

But I am advised on good authority that, while you may think

that, based on what you have heard so far, Alphonso Jackson is a

candidate for canonization, he is not a very good golfer——

[Laughter.]

—but he is a good man and highly qualified for this position. He

will bring all of the great background that he has had in housing

to this job, and a big vision to tackle the big challenges that we

have already heard something about.

Like many Federal agencies, HUD’s job is to, the task he has before him is to improve the way that HUD administers its various

programs and improve the management at that agency. Of course,

owning a home is the cornerstone of the American Dream, and the

Department of Housing and Urban Development plays a crucial

role in expanding homeownership opportunities for low-income

families and many first-time homebuyers each year.

HUD, of course, encourages homeownership in a number of ways,

including rental assistance and construction grants, Section 8

vouchers, Section 32 public housing homeownership program, the

home investment partnerships, as well as ongoing efforts to end

chronic homelessness. As a result of HUD’s effort and the improving economy and low interest rates, homeownership in America is

at an all-time high of about 68 percent.

So let me just say, in conclusion, how honored I am to be here

before the Committee today, and particularly in support of a good

man like Alphonso Jackson and someone who will do an outstanding job when confirmed to this position.

Thank you.

Chairman SHELBY. Senator Cochran.

STATEMENT OF THAD COCHRAN

A U.S. SENATOR FROM THE STATE OF MISSISSIPPI

Senator COCHRAN. Mr. Chairman, thank you very much for the

opportunity to be here today. I am pleased to recommend to the

Committee for confirmation Rhonda Keenum as Assistant Secretary of Commerce and Director General of the United States and

Foreign Commercial Service.

I have known this nominee for 15 years, and in the spirit of full

disclosure, I must tell you that she is a close personal friend of

mine. In addition, her husband is my chief of staff. But I have

5

come to know her over the years as a very talented marketing and

public relations manager with skills that I know will enable her to

do a superb job in this important office. She has a strong sense of

responsibility and accountability. Her proven management capabilities will be very useful as she works to discharge the responsibilities of this office.

I can personally attest to her good moral character, and her capacity for hard work, and her willingness to expend whatever

amount of energy is required to accomplish a goal. I hope you can

approve the nomination expeditiously. The Department of Commerce will benefit greatly from her immediate assumption of the

duties of this office.

Chairman SHELBY. Thank you, Senator.

Congressman Wicker.

STATEMENT OF ROGER F. WICKER

A U.S. REPRESENTATIVE IN CONGRESS

FROM THE STATE OF MISSISSIPPI

Mr. WICKER. Thank you, Mr. Chairman, Ranking Member Sarbanes, and distinguished Members of the Committee, it is my

honor and privilege to be here today, and I appreciate you accommodating Senator Cochran and me on our schedule. I will simply

echo what Senator Cochran has said about Rhonda Keenum, and

urge her swift confirmation.

I have known Rhonda for 10 years. She served as my Administrative Assistant in the U.S. House of Representatives. And I would

simply say that she approaches every task with a great deal of energy, with a keen intellect, and perhaps just as important as anything, she is a people person. People like Rhonda Keenum. They

like to work for her. They like to work with her, and I think that

will be one of her great strengths for the Department of Commerce.

You are going to like working with her as a representative of the

Administration and in your dealings with the Department of Commerce, and I am very honored to join Senator Cochran in giving

her my highest recommendation.

Chairman SHELBY. Thank you very much, Senator Cochran.

Thank you for your appearance.

Chairman SHELBY. Senator Sarbanes, do you want to pick up

with your opening statement?

STATEMENT OF SENATOR PAUL S. SARBANES

Senator SARBANES. Mr. Chairman, I am pleased to join with you

in holding these nomination hearings today and providing a timely

consideration for the nominees. I will withhold my comments with

respect to Ms. Conlin and Ms. Keenum because they are coming on

in the second panel, as I understand it. We are going to have Mr.

Jackson in the first panel.

Let me simply say that I think that the position for which Mr.

Jackson has been nominated, Secretary of the Department of Housing and Urban Development, may well be one of the most challenging in the President’s Cabinet. The responsibilities are very

broad, overseeing the Nation’s housing assistance programs, community development initiatives, Federal Housing Administration—

to mention only a few.

6

HUD is charged with the task of providing decent and safe

homes to millions of Americans. Regrettably, over the years, it has

proven to be a very difficult department to manage. For many

years, HUD has been considered troubled by the GAO in its surveys. And the Office of Management and Budget, the OMB, recently indicated that HUD must improve its performance in order

to be considered effective. So overcoming this report card is of

course a major challenge that faces any HUD Secretary.

Through the Federal Housing Administration, the Public Housing Program, the Section 8 vouchers, the HOME program and others, HUD ensures that more Americans have affordable places to

call home. Through the Community Development Block Grant, the

HOPE VI, the Rural Housing and the Economic Development Program, HUD helps transforms neighborhoods and communities into

places of hope.

Regrettably, HUD budgets, under this administration, indeed,

under past administrations, have been inadequate, and this year is

no exception. The HUD budget submitted by the administration

originally formulated by HUD, and then of course it passes through

the Office of Management and Budget, and I want to be clear on

that point, underfunds the voucher program by over a billion dollars, a cut which could lead to the loss of housing for approximately

250,000 low-income families.

The budget terminates the highly successful HOPE VI program,

as well as Rural Housing, Economic Development and Brownfields.

The HOPE VI program, of course, has been used by many communities to transform not only specifically the housing, but neighborhoods as well, and in the judgment of many has been a very successful initiative. Once again, the public housing is underfunded,

threatening the Federal investment in the housing stock, as well

as the homes of millions of Americans.

I think as long as we have this housing stock, we need to maintain and preserve it. And so one of the tasks that I think confront

any Secretary is the fight for adequate funding for these programs.

Make sure the programs work right and then fight for funding in

order to carry the programs out. So there is this double challenge

of being both an effective manager of the operations at HUD and

also to be an advocate for adequate resources in order to carry the

programs forward.

Finally, let me just make reference to the fact that there have,

from time to time, been criticisms of the procurement and grant

competitions at HUD. It is extremely important, of course, that the

Department operate and be perceived to operate in a fair manner

outside of political considerations or calculations, and that those

who enter these competitions or seek to gain procurement contracts

are assured of the validity of the process.

I think these are all very substantial challenges, and as our colleagues at the table indicated, this is a job of major importance,

and the problems, some that I have enumerated here, are of significant dimensions. So, having set that stage, I think I will wait and

have some questions for Mr. Jackson.

Chairman SHELBY. Senator Allard.

7

STATEMENT OF SENATOR WAYNE ALLARD

Senator ALLARD. Thank you, Mr. Chairman. I appreciate you

convening this hearing to review the nominations of Mr. Jackson,

Ms. Conlin, and Ms. Keenum. I appreciate this opportunity to hear

from the nominees. In particular, I am interested to hear from Mr.

Jackson. As Chairman of the Subcommittee on Housing and Transportation, I have followed the Department of Housing and Urban

Development very closely for a number of years. And while the Department, as a whole, has been removed from the General Accounting Office’s High Risk List, the GAO still rates a number of HUD’s

programs as highly susceptible to waste, fraud, abuse, and mismanagement, and clearly this must change.

I was amused to hear that Senator Bond also had a lot of the

same observations that I just enumerated on. He was deeply troubled and was actually calling for reform. I appreciate the recent

focus at HUD on homeownership, and particularly the focus on

closing the minority homeownership gap. I am also supportive of

efforts to devolve some of HUD’s functions and eliminate layers of

bureaucracy. I am interested in learning what initiatives you, Mr.

Jackson, wish to continue and which you intend to change. Let me

be clear, though, I believe HUD must focus on its core mission to

provide decent, safe, sanitary, and affordable housing.

Good leadership involves a clear vision. The HUD Secretary must

have a clear set of performance goals in mind, as well as ways in

which the Department and Congress can measure progress in

achieving those goals. Also, it is critical to consider the long-term

sustainability of any progress made at HUD. The Government Performance and Results Act, or the Results Act, is a powerful tool toward that end. You have heard me ask questions in regard to that

from time to time of various individuals who come from HUD to

testify before the Congress.

I would encourage Mr. Jackson, as well as all of today’s nominees, to become familiar with their Agency’s strategic plan, annual

performance plans, annual accountability reports and financial

statements. If properly utilized, they can help you achieve success

in your respective agencies.

Mr. Chairman, thank you, and I want to thank the nominees for

appearing before the Committee, and I look forward to hearing

from you. I will have more during our question and answer period.

Chairman SHELBY. Mr. Jackson, before your testimony, would

you stand and be sworn. Hold up your right hand.

Do you swear or affirm that the testimony that you are about to

give is the truth, the whole truth, and nothing but the truth so

help you God?

Mr. JACKSON. I do.

Chairman SHELBY. Do you agree to appear and testify before any

duly-constituted committee of the Senate?

Mr. JACKSON. Yes, sir.

Chairman SHELBY. Thank you. Mr. Jackson, your written statement will be made part of the record. You proceed as you wish.

Welcome to the Committee. You have been here before.

[Laughter.]

But I am sure as Secretary you will be here a lot.

[Laughter.]

8

STATEMENT ALPHONSO R. JACKSON, OF TEXAS,

TO BE THE SECRETARY OF THE U.S. DEPARTMENT

OF HOUSING AND URBAN DEVELOPMENT

Mr. JACKSON. Mr. Chairman, Senator Sarbanes, and Members of

the Committee, thank you for the opportunity to appear before you

today. I would also like to thank Senator Bond, Senator Hutchison,

and Senator Cornyn for their kind introduction.

With your indulgence, Mr. Chairman, I would like to introduce

my wife, Marcia Jackson.

Chairman SHELBY. You may proceed. Welcome.

Mr. JACKSON. And I can assure you——

Chairman SHELBY. Have her stand up. The others did not see

her.

[Laughter.]

Thank you.

[Applause.]

Mr. JACKSON. And I can assure you I would not be here without

her support and especially her enduring patience.

Let me begin by expressing my profound gratitude to President

Bush for his friendship and for his confidence in nominating me as

the next Secretary of Housing and Urban Development. In my

mind, the highest honor that can be bestowed upon an individual

is to be asked to serve their country.

I am delighted that President Bush has asked me to continue my

service to a Department to which I have great pride and great expectations. HUD’s mission calls upon us to provide new opportunities and new tools for every American who seeks a better quality

of life. With help and encouragement from the Department family

across the Nation, we can lift them toward prosperity. And I will

tell you today that I understand the journey in a very personal way

because it is my own.

I come from a family of very humble means. I am the last of 12

children born to Arthur and Henrietta Jackson. We never had a lot

of money growing up in Texas, and my father juggled three jobs to

keep food on the table. But our household was never short on love.

My siblings and I were blessed with devoted parents who made certain their children were well-prepared to face the world. They

stressed again and again that with education and strong work ethics, we could accomplish anything we chose to tackle. If my mother

and my father were with us today, they would no doubt be proud

of the path that I have chosen.

I have been guided through my life by the belief that the best

way to serve our neighbors in need is to empower them to pursue

their dreams. As a college student in 1965, I traveled to Alabama

to help register black voters during the defining days of the civil

rights movement. These were violent times, and I witnessed vicious

acts of inhumanity. But I also saw the hope of a better tomorrow

which was a strong and motivating force for me.

Before coming to HUD, as you have heard, I ran Public Housing

Authorities in St. Louis, Washington, DC, and Dallas. We faced the

same problems that your community deals with today. This gave

me insight in to the needs of Public Housing Authorities and how

HUD related to them. Through my chairmanship of two community

development block grant agencies, I gained the practical underVerDate 11-MAY-2000 10:02 Sep 02, 2005 Jkt 000000 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 23100.TXT SBANK4 PsN: SBANK4
9

standing of ways in which HUD works in partnership with State

and local Governments to rejuvenate American cities. I emerged

with a strong idea about how HUD could work better for families

and communities.

My experiences as a public servant are balanced by my work in

the private sector. There, I learned the importance of effective

management and a successful enterprise. Whether in Government

or in business, sound management and excellent program performance are critical to an organization’s success.

Committee Members, as you have just stated, I am acutely aware

of HUD’s troubled past. Through its history, the Department has

been plagued by management challenges that left it vulnerable to

waste, fraud, and abuse. Early in the Administration, the President

made it clear that restoring credibility and accountability to HUD

must be our top priority. And so I worked alongside of Secretary

Mel Martinez to instill a new commitment to real results in HUD’s

program areas and a new commitment to the highest ethical standards in our workforce.

I have visited 30 of HUD’s field offices in virtually every State

represented by the Committee. At each office, I met with employees

to get their thoughts on how HUD’s leadership could help them

better serve the communities in which they work. After hearing

their suggestions, I undertook a strategic realignment of HUD’s entire field office structure. Decisions that used to be made in Washington have been delegated to our regional and local offices. Today,

they are making decisions for themselves that used to get lost in

a layer of bureaucracy at headquarters.

We are striving to make HUD work better and smarter than it

has in years. I am personally proud that we are helping more people than ever realize the American Dream. Homeownership last

year climbed to an all-time high of 68.3 percent, and now, for the

first time ever, more than half of all minority households owned a

home in their community.

As you know, increasing the number of homeowners, and minority homeowners in particular, is one of President Bush’s domestic

priorities and a personal priority of mine.

I want to thank the Chairman and the Committee Members for

their leadership in enacting the American Dream Downpayment

Act last year. Our shared commitment will help 40,000 families annually become homeowners. HUD continues its work to simplify

the process of buying a home and making it less costly for consumers. The President has proposed a tax credit that would spur

the creation of affordable homes in communities where they are

desperately needed today. And we offer families new opportunity to

become self-sufficient by helping them make the move from assisted housing to homeownership.

With your support, and the support of HUD partners at the

grassroots level in the industry, I want to build upon these achievements. It is within our power to solve the challenges of housing affordability, availability, and community renewal.

Mr. Chairman, as you can see, I feel very passionate about the

issues of housing and community development. It lies at the heart

of HUD’s mission, but more importantly, I am passionate about the

people that our program touches, the young families taking out

10

their first mortgage, the homeless person climbing the ladder of

self-sufficiency, the single mother moving out of public housing into

her own home, the senior citizen living in dignity in retirement,

and the child playing safely in a home free of toxic lead.

If confirmed, I intend to remain a forceful advocate for those who

turn to HUD for help.

The Department of Housing and Urban Development holds tremendous promise as an agency of empowerment. I look forward to

working with Members on both sides of the aisle to meet the challenges ahead of us, as we strengthen HUD’s ability to carry out its

mission and to help fulfill the Nation’s housing agency’s promise to

all of Americans.

Thank you, Mr. Chairman and Committee Members.

Chairman SHELBY. Thank you.

Mr. Jackson, one of your responsibilities as the Deputy Secretary, which you are currently or have been, is to oversee personnel and hiring practices. In 2000, Congress specifically exempted HUD’s Manufacturing Housing Program from the Department’s

employee ceiling. This was done because we felt that staff reductions had been damaging to the Manufactured Housing Program.

Can you tell the Committee this morning what has been done to

implement this separate hiring procedure for the Manufactured

Housing Program, how many additional staff have been hired since

the passage of the 2000 Act?

Mr. JACKSON. The latter part first, Mr. Chairman.

Chairman SHELBY. Go ahead.

Mr. JACKSON. I cannot tell you the number now, but I will surely

get you that.

Chairman SHELBY. Will you furnish this for the record.

Mr. JACKSON. Yes, I will.

I can tell you that as of the last year we have made a tremendous progress to fulfill the commitment that was made by Congress

to do that. Initially, I must tell you we had so many problems facing us to correct many of the audits, many of the things that had

not been done that Secretary Martinez and I concentrated on trying to resolve some of the serious issues that was just delineated

by Senator Bond and Senator Allard to cure those problems.

I think we have done a very excellent job of doing those, and I

can assure you right now that regarding Manufactured Housing, it

is absolutely imperative that we get that started to the point that

you wanted it, both for myself and for Assistant Secretary Weicher

because I informed him almost 2 months ago that we must begin

to do that in a very systematic manner. I will not sit here and tell

you that 2 years ago we did everything we could because that, in

essence, would not be the truth, but it is a top priority with us at

this time, and I can assure that 2 months from the day I appear

before you it will be done.

Chairman SHELBY. One of the very important insights I believe

you bring to the position of Secretary is your service on the Commission for Severely Distressed Public Housing. Out of this Commission’s report came the HOPE VI Public Housing Revitalization

program. Do you believe the HOPE VI program has fulfilled its

mission in addressing the most severely distressed public housing?

11

Mr. JACKSON. I am in a very unique situation, and I have to confess to the Senators today that I have a bias in the sense that I

was one of the four people who spent one night and basically

helped write up the legislation that eventually became the HOPE

VI legislation as we know it. I must tell you that I think we have

to have levity to this, that after a second glass of wine, I came to

name it Housing Opportunity for People Everywhere is what

HOPE stands for.

I believe that when we were empowered as a commission, we

came to the conclusion that we had about 89,000 severely distressed public housing units in this country. It really had to be addressed, and we could no longer permit people to live in the squalor

or in those huge monstrosity of buildings that they had done for

almost 30 or 40 years.

What we said would be the ideal circumstances would be to integrate low- and moderate-income people, both socially and economically into the fabric of this country, and that is what we wanted

to do with the HOPE VI program. I believe that the HOPE VI program, as stated a few minutes ago by Senator Bond, is a great program. My concern with the program is that we have allocated to

date, $5 billion. Today in the pipeline, we still have over $3 billion

unspent. The program has been in effect now for almost 10 years.

But the other thing that I think is so important, Mr. Chairman,

is that we have only had about 21 successful HOPE VI projects

completed out of almost 200 that have been funded in the last 10

years.

Chairman SHELBY. What is the problem?

Mr. JACKSON. The problem has been, in many cases, the Housing

Authorities have not necessarily fulfilled their obligations. We have

given them money, through the HOPE VI grants, with the understanding that they would leverage those monies to develop both socially and economically viable communities.

Chairman SHELBY. How do you square that? How are you going

to make that work?

Mr. JACKSON. Well, we are trying right now. We have sent out,

and we are getting great response in the last year and a half telling them that we were going to recapture the money if they did not

start moving very quickly on those projects.

And I must tell you today we have a number of projects that are

6 to 7 years old that the cities have begun to move on very quickly,

but that is what it took. And I thought, when we created this program, and I still feel today, that those 20 or 21 HOPE VI programs

that have been done, they have been done very well, and they are

the model around the country, whether it is in Charlotte, whether

it is in Dallas, whether it is in Philadelphia. They are models.

But the key becomes do we continue to fund a program that has

not operated very effectively and very efficiently, and I think I have

heard on a number of occasions, and even just a few minutes ago

Senator Allard, when he was talking about HUD, alluded to the

point, that we have to be very efficient and effective because we do

not want waste, fraud, and abuse. In this case, I think that clearly

the program has not operated as we expected it, and that does not

mean that the program is not good. My position is, if the program

12

demonstrates the commitment, I think it would be well worth looking at it again.

Chairman SHELBY. President Truman always reminded us the

buck stopped here. It will stop with you as HUD’s Secretary, would

it not?

Mr. JACKSON. Yes, sir.

Chairman SHELBY. Operation of the FHA General Insurance and

Special Risk Insurance Fund had been stopped several times last

year. At least on one occasion, this was relayed to Congress too late

to do anything about it.

Do you have any thoughts on avoiding this situation from reoccurring?

Mr. JACKSON. Yes. During my conversations with you and a

number of your colleagues, this question was brought up, and I assured you that we will never be in that situation again. We have

allocated $35 million. But what I will assure you and a number of

your colleagues, and I will assure you today, that by May, if we see

there are serious problems in the 2005 budget, we will let you

know.

We will not wait until June or July to come before you to tell you

that at this point we are spending at a faster rate than we expected. That has been the problem with us, and I take full responsibility at HUD for not informing you much quicker and much earlier in this process. You have my word today that we will not put

the Senate in a bind again to come to the situation that you have

to fund us on a very quick basis. We will give you ample notice.

Chairman SHELBY. Senator Sarbanes.

Senator SARBANES. Thank you, Mr. Chairman.

Mr. Jackson, in mid-2002, HUD reinterpreted its Section 8 contracts to allow owners of property which had been refinanced to opt

out of their longstanding affordability restrictions. This really was

an unexpected decision, given that these properties had been refinanced for over 20 years with HUD approval. And strong opposition was registered with Secretary Martinez, and while he did not

retract the decision, HUD did not move actively to implement the

policy.

We now understand that HUD is planning to send out guidance

to field offices asking them to contact all Section 8 owners with refinanced properties and underscoring to them their option to opt

out of the affordability restrictions. The National Council of State

Housing Finance Agency estimates that 100,000 affordable units

could be affected. It seems to me this has very severe implications.

Could you undertake to review this policy decision and not to

take actions to implement this reinterpretation until the review is

fully complete? I think there is a need to do that.

Mr. JACKSON. Senator Sarbanes, I will not comment on the actions of Secretary Martinez, but I will say to you today that I share

your view, and the National Low-Income Housing view, that we

cannot afford to permit these Section 8 developments on a projectbased subsidy to be lost because it creates a serious problem for us.

My position is that we will do everything in our power to keep

those persons and those landlords within the program.

Senator SARBANES. Thank you.

13

An issue regarding the use of disability funds by HUD has come

to my attention. Up to 25-percent of the funds provided for in the

Section 811 program, which provides for housing for people with

disabilities, may be used for tenant-based rental assistance, but we

understand that HUD has not issued guidance on the use of these

funds for this purpose nor monitored this aspect of the program.

Are you aware of these concerns, and what plans are there to

monitor the use of these funds?

Mr. JACKSON. Senator Sarbanes, I am not aware of that specific

area, but I will get back to you very quickly with an answer as to

the approach. My position is, if it has been allocated for that purpose, it should be used, but I just cannot give you an answer pro

or con at this point.

Senator SARBANES. Well, if you could look into it and get back

to us, I would appreciate that.

Now, I want to call to your attention the views and estimates

with respect to the fiscal year 2005 budget adopted yesterday over

on the House side by the Financial Services Committee of the

House of Representatives. I am going to take a moment just to

quote from that.

The fiscal 2005 budget request for Section 8 is $1.6 billion below the HUD projects

are needed to renew all Section 8 assistance. This could result in the elimination

of funding for up to 250,000 vouchers. The budget includes legislation of block grant,

the Section 8 voucher program.

I am now quoting from the House Committee.

The main feature of this proposal is elimination of the right which Housing Authorities now have to rent to a specified number of families and to receive funding

to cover the full cost of such assistance. Instead, Congress would block grant each

Housing Authority into a lump-sum amount, which in the first year alone is $1.6

billion less than is necessary to serve the same number of families now being served

nationwide.

The block grant feature would let funding spiral downwards in future years. The

result is that Housing Authorities would have to make either major reductions in

the number of families they assist or in the subsidy provided to each family or more

likely a combination of the two.

The proposal also eliminated most of the current statutory tenant protections, offering Housing Authorities other flexible options to implement these deep cuts.

Housing Authorities could simply cut the subsidy level, an option made possible by

the Administration’s proposal to end the current rules under which each voucher

holder pays no more than 30 percent of net income for a fair market rental unit

in their community.

Housing Authorities could also implement the cuts by moving out poor people

from the program and replacing them with families that are not as poor. This option

is made possible by the Administration’s proposal to eliminate the targeting of

scarce voucher resources for the most in need.

Now, this was language the Financial Services Committee on the

House side adopted, and it obviously is a response to what is perceived as potentially or perhaps very substantial changes in the

voucher program. It seems to me there has been a lot of effort in

the Congress to move toward vouchers. A lot of my colleagues have

been very supportive of that. We have moved away from a direct

provision of governmental housing toward vouchers and an effort

to interrelate with the private housing market. What is your response to this statement?

What can we do about it? Obviously, we are facing quite a pressing problem here. Last year, we had a shortfall on vouchers, and

we were able in the Congress to come up with additional money in

14

order to try to deal with that voucher situation, but we are facing

it seems here an even more pressing situation.

Mr. JACKSON. Senator, three-fourths of our budget basically is for

assisted housing. If we take the Section 8 program over the last 2

years, it has increased by 22 to 23 percent. I want to assure you

that anyone that is on a Section 8 certificate today will not be removed from that Section 8 certificate, but we have a turnover of

about 8 or 9 percent a year in our certificates program. What we

have suggested and what we believe today is that in that turnover,

the process, those vouchers and certificates can better be used in

a strategic manner by addressing what we call today the working

poor family, and in the process giving them an opportunity.

From our perspective, the Section 8 program initially was created

as a transitional program between public housing and self-sufficiency or market-rate rental units. I do not believe that we can sustain our present increase if we continue as we have done over the

last 2 years at 23 percent. We had to look at ways of addressing

the situation. I can tell you, yes, I do not think we will ever resolve

the problem of having enough certificates or vouchers for everyone

to use, but I believe that the program that we are trying to institute by giving the Housing Authorities the flexibility to use the

vouchers as they so see will increase the utility, rather than decrease the utility of the process.

Let me give you an example of what I mean. Even if we today

have a family of four in San Francisco, and we go up to 150 percent

of median, it is almost impossible for them to find a decent, safe,

and sanitary place to live in San Francisco.

I think with the flexibility that we will give the Housing Authorities, it will give them the option to decide whether they will go to

160 or 170 percent of median to address the need of the family of

four, and I think they should have that opportunity. I can tell that

when I ran the Dallas Housing Authority, even with the other two,

I would have loved to have had the flexibility to utilize the certificates and vouchers to best address the needs because I can remember, on a number of occasions, the average outstanding voucher

was 13 to 14 months in Dallas before a person found a place, and

in some cases they still did not find a decent, safe, and sanitary

place to live.

So, I do think that we are trying to work with the industry, and

I look forward to working with the industry and getting their input

to try to best serve those persons most in need.

Senator SARBANES. Mr. Chairman, I see my time is up. I do not

want to impose on Senator Allard.

Chairman SHELBY. Thank you.

Senator SARBANES. There will be another round. Just let me note

that the Housing Authority people are telling us across the country, aside from the problem of going to a block grant and no longer

guaranteeing the vouchers, that they are $1.6 billion short of what

they need to sustain existing vouchers. They regard it as a shell

game. In other words, this responsibility is being thrown on them,

and there is an immediate shortfall in the resources with which to

meet this responsibility.

I mean, you have a separate argument, and we may be on opposite sides of that one, as a matter of fact, but you would have a

15

separate argument if the funding level was completely adequate to

the existing program, and then you just had to address the blockgranting aspects of it, but this is compounded here because of the

shortfall.

Mr. JACKSON. May I answer?

Chairman SHELBY. Yes, sir.

Mr. JACKSON. Senator, I think you are aware, and I am aware,

that yearly we have returned somewhere between $1.2 billion and

$1.8 billion in Section 8 unused funds to the Senate. I think what

we are seeing is those unused funds in many cases is what we are

speaking, in my mind, reference today. I think we are funding the

Section 8 program at a level that I think will address the needs.

I do believe that it is clear to me that the new proposal that you

put in place that we funded at a certain level will have an effect,

and I think we are addressing that at this point in time. I do not

see, from HUD’s perspective, where we are anyway denigrating the

existing program, the existing vouchers and certificates we have already allocated to the Housing Authorities around the country.

Senator SARBANES. I will pursue it later.

Chairman SHELBY. Thank you. We will have another round.

Senator Allard, thank you for your patience.

Senator ALLARD. Thank you, Mr. Chairman.

You have heard a lot of discussion this morning about accountability with HUD. In fact, accountability has been a word that has

come up frequently in our hearings in the Congress on housing

issues and HUD. And I would just like to hear, just briefly, what

you view as the relationship between the Congress and HUD, for

example, or the executive branch and what you feel are the proper

roles for each.

Mr. JACKSON. Senator, I have a very simple answer for that. I

believe that Article 1, Section 7 says that Congress is the appropriators, and our relationship with them is that they appropriate the

funds that are necessary for us to carry out the responsibility that

you have given us to carry out, and that it is the mission at HUD

is to provide decent, safe, and sanitary housing. And if we do not

carry out that mission, we are not carrying out the edicts that you

have set us to do.

Senator ALLARD. Well, as you know, I agree with your efforts. I

support getting more people into homeownership, and I have carried legislation to see that happen, but I do have some concerns

about HUD’s responsiveness to Members of Congress. The most

controversial thing that we have facing us right now, and I think

you are well aware of it, is HUD’s RESPA proposal, and it has garnered a great deal of attention and discussion from Members of

Congress. I have a few questions about the extent to which you

have heard from the public and from Members of Congress. If you

could answer those briefly, I would appreciate it.

How many comment letters did HUD receive during the comment period, and then how many letters did they receive during

the current OMB review period? Do you have any figures on that?

Mr. JACKSON. We received about 40,000 either letters or e-mails

during the initial period, and since being over at OMB, I think we

received about 1,200.

16

Senator ALLARD. And then as a part of the regular comment period or as other correspondence, how many House and Senate

Members have contacted HUD regarding the RESPA proposal?

Mr. JACKSON. That, Senator, I could not answer how many have

contacted.

Senator ALLARD. Would it be safe to say a surprisingly large

number?

Mr. JACKSON. I would say quite a number, yes.

Senator ALLARD. And of these comments——

Senator SARBANES. Surprisingly, maybe not.

[Laughter.]

Senator ALLARD. And of those comments, were any supportive of

HUD’s specific proposal that is before us now?

Mr. JACKSON. Not to my memory.

Senator ALLARD. And how many phone calls and meetings have

occurred with Members expressing concern about HUD’s specific

proposal?

Mr. JACKSON. I cannot speak in reference to Secretary Martinez,

but I can speak in reference to me, and I think I have had eight

or nine.

Senator ALLARD. And then the previous Secretary had a fairly

numerous amount of meetings, I would assume.

Mr. JACKSON. I cannot really answer that. I really cannot answer

that. I can really answer for myself.

Senator ALLARD. Now, since HUD issued its proposed rule, how

many Congressional hearings have been convened regarding

RESPA?

Mr. JACKSON. I think one has been convened since—no, no, I am

sorry. Do you mean since——

Senator ALLARD. Yes, since this proposed rule. We have had a lot

of hearings on RESPA.

Mr. JACKSON. Yes.

Senator ALLARD. But since HUD issued its proposed rule, how

many Congressional hearings have been convened on RESPA in

both the House and the Senate?

Mr. JACKSON. I am not sure. I think five or six.

Senator ALLARD. A number of them at least.

Mr. JACKSON. Right. Yes.

Senator ALLARD. And during those hearings, has HUD received

any feedback from Members in support of its specific proposal?

Mr. JACKSON. Not to my knowledge.

Senator ALLARD. Additionally, would it be fair to say that very

serious concerns have been raised by key authorizers in both the

House and the Senate?

Mr. JACKSON. Yes.

Senator ALLARD. And, would you be able to can you cite any instances in which Congressional Members have offered support for

HUD’s specific proposal?

Mr. JACKSON. Not to my knowledge.

Senator ALLARD. Yes, I cannot recall any either. I, for one, find

this situation incredible. In taking on RESPA reform, HUD managed to come up with a proposal that was unanimously opposed by

industry and consumer groups. I could possibly understand,

17

though, if HUD believed that there were factors which outweighed

these concerns and explained its reasoning to Congress.

What I cannot fathom, though, is the arrogance of an agency that

yet again is blatantly disregarding clear Congressional direction.

As evidenced by the responses to my question, there is no room for

ambiguity and Congressional opinion of the direction in which

HUD is headed. So why does HUD persist? Do you believe that

HUD is not accountable to the Congress or do you somehow believe

that HUD has judgment superior to that of Congress?

As Chairman of the Housing Subcommittee, I take responsibilities as an authorizer very seriously, and I fail to understand why

you would believe it appropriate for me or any of my colleagues to

concede that power to the Department. HUD is a troubled agency

and merits very careful scrutiny and an extremely high threshold

of Congressional accountability.

Unfortunately, I have not seen any evidence of such an understanding and, in fact, quite the opposite. HUD continues to press

forward with a RESPA proposal and thumb its nose at Congress.

At a very minimum, HUD must have leadership that clearly understands the constitutional framework in which it is charged with implementing the laws written by Congress, not in implementing its

own version.

There is no uncertainty in this, and in continuing to move forward, HUD has demeaned the Congress as an institution and belittled the constitutional process. As a result of the concerns I have

raised here today and the answers I have received on those concerns, I will be unable to support this nomination at this time, Mr.

Chairman, and I would hope that HUD would listen more closely

to what the Members of the Congress and the American people are

saying as far as RESPA is concerned.

Thank you, Mr. Chairman, and perhaps, Mr. Jackson, you would

like to respond.

Mr. JACKSON. Thank you. I understand.

Chairman SHELBY. I think Mr. Jackson got the message.

Mr. Jackson, while you have been in an acting—oh, excuse me,

Senator Carper. Senator Carper is recognized. I was getting ahead

of him, and should not have. I apologize to you.

STATEMENT OF SENATOR THOMAS R. CARPER

Senator CARPER. Thank you.

Mr. Jackson, welcome today.

Mr. JACKSON. Thank you, Senator.

Senator CARPER. It is good of you to come before us. We appreciate the spirit of service that you bring to your responsibilities.

I was here when I think you introduced a number of members

of your family. I was just outside the door when I heard the applause. I do not know if that was for you or for the members of

your family.

Mr. JACKSON. Actually, it was for my beautiful wife, not me.

[Laughter.]

Senator CARPER. Would Mrs. Jackson raise your hand.

How are you? Nice to see you. Thank you for sharing your husband with the rest of us.

18

You were good to visit with me within the last week. I just want

to follow up. I had promised you there were a couple of things I

wanted to explore with you, and what I would like to do is just to

touch on a few of those now.

One of those is Section 8 housing vouchers. As I mentioned to

you before, I was elected to serve in the Senate. I served as Governor of Delaware for 8 years. And one of the things that I focused

on a whole lot was self-sufficiency. I know that is of interest to you,

and how do we foster self-sufficiency on behalf of people who have

not been self-sufficient for much of their lives.

I was involved, as a lead Democratic governor in the National

Governors Association in 1995 and 1996 as we worked with the

Clinton Administration and the Congress to fashion welfare reform

as we know it today. And I am sure you recall, and others in the

room will recall, how welfare used to be an entitlement program,

Aid to Families with Dependent Children, and if a person walked

into a welfare office in any State they could sign up for AFDC if

they met the particular requirements. It was an entitlement program. They could be entitled to welfare for a really long time.

What we did, under welfare reform, was we changed the nature

of the program so that a person walks into a welfare office in Delaware, instead of saying, ‘‘How would you like to go on welfare?’’ we

say, ‘‘How would you like to go to work?’’ And we say, ‘‘What can

we do to help you find a job, get to a job, meet your health care

needs, your child care needs, and become actually better off than

you otherwise would be on welfare?’’

I have heard some people saying, in trying to block grant the

Section 8 voucher program, we are actually building on the success

that we have enjoyed in welfare. We have seen the welfare rolls cut

by about half. I want us to focus on whether or not that is a good

basis of comparison or not today.

We are also in the throes of considering whether or not to authorize the successor to Aid to Families with Dependent Children,

AFDC, something called TANF, T–A–N–F, Temporary Assistance

for Needy Families. What we did about, oh, gosh, over a half-dozen

years ago, was we block granted AFDC, and we renamed it TANF.

We asked the States how much money they thought they would

need, and they have been pretty much provided with that amount

of money, and we are about to reauthorize, hopefully, reauthorize

TANF.

And even though the welfare rolls are down by half, we are not

going to cut the block grant. It is going to stay the same, and the

reason why, as I am sure you know, is we use, States use, local

governments use a lot of the TANF money not for cash welfare payments. In fact, I think maybe only half of the block grant is now

used for cash welfare payments. The rolls are down by half. But

what we used to do was we used a lot of the monies, to wrap

around, and to help support those who have gone to work, help

them to get to work, to provide for their child care needs and other

things so that they will actually be better off and be more likely

to succeed.

Let us just talk a little bit about how block granting Section 8

housing vouchers is similar or dissimilar to what we have gone

19

through with respect to AFDC, TANF, and the block grant approach there.

One last thing, one last ‘‘P.S. ’’ I used to say, when I was Governor and testifying before the Congress on this block granting proposal for welfare, I would say, you know, we need to create a rainy

day fund. When Congress authorized the creation of TANF, they

actually do have a rainy fund that was created. It is not really a

rainy day fund. It is really what I call a ‘‘rainy month’’ fund because if the economy runs into trouble, and we end up with a whole

lot more people on welfare, there is enough to carry a higher caseload for a couple of months.

But let me stop talking and just ask you to share some of your

thoughts with us, reflect on similarities or dissimilarities to what

we have done with TANF.

Mr. JACKSON. Let me say, Senator Carper, I do believe that the

Section 8 program, from my years running three major Housing

Authorities, that the program was supposed to be transitional, to

help people, from my perspective, from St. Louis all the way to Dallas, by helping families move from public housing or from substandard housing into self-sufficiency.

When I was at the Dallas Housing Authority, I tried to use the

certificates and vouchers that way, rather than as a sustained substitute in many ways for public housing. I do not think that should

be the case for the certificates and vouchers. Am I sensitive that

we have many persons that are underserved or that will go

unserved? Yes. I think there is no question. Even if you and your

colleagues allocated 40 more billion dollars today, we would still

have a serious problem in this country.

But I do think that it is our responsibility to try to negate that

problem as much as possible, and I also think it is our responsibility not only to serve the neediest of the needy, but also to serve

the working poor in this country. These are persons who pay 50 to

55 percent, not of their adjusted gross income, but of their income,

for rent. So, clearly, if we could give them a helping hand, and we

are doing that through your support to the American Dream Downpayment and other programs, like HOME. But if we can continue

to give them, as well as the lowest of the lowest, the chance to

move out of poverty to other areas, I am going to support it.

Now, if you notice, Mr. Senator, I do not ever use the term ‘‘poor’’

because my mother and father told me that poor was a state of

mind, not a condition. I said low-income people. And even they are

30 percent or less of median, they are still low income, but if they

are 50 percent, they are low income, if they are 60 percent, they

are low income. And I think that we need to look at the stratum

of low-income people in this country and where they are within

that stratum and say how can we help them, first, get into conventional rental housing; and second, to get into homeownership. That

should be our task, not to keep them consolidated in public housing

developments or on 10 or 12 years on Section 8 certificates and

vouchers.

I think, again, to give accolades to the Senate and to the Congress, you all did a great job with TANF. You see people are beginning to move, and they work. I think if we demand this, people will

take the responsibility.

20

Let me close with a story because I think it is very important.

I appeared some years ago, when I first went back home to Dallas

to run the Housing Authority, and I made a suggestion that public

housing residents should have the opportunity to pay rent. Many

of my colleagues that I serve with now said, ‘‘No, it is not going

to happen.’’

Well, I got a chance, through the Congress, through HUD, to do

a pilot program. The strangest thing happened. Everybody paid

$25 a month for their rent, and there was no mass exodus from

public housing.

What I am saying to you is that I have confidence in low- and

moderate-income people. And I think if you ask people that I have

served for—and notice I did not say people that have worked for

me because I think that when you get in these jobs, you service—

ask people that I have served, whether it is in St. Louis or Washington, DC, and some of them are here today, I believe in their

sense of worth.

My father said something that I keep in mind; that every human

being has the same sense of worth as every human being, and if

you do not perceive them that way, they will never act that way.

So, I believe that our task is to help every low-income person to

try to transform themselves from total dependency to self-sufficiency, and that means everybody—not the people who can do it

like the people who are sitting in this room, but those who are less

fortunate.

Senator CARPER. Mr. Jackson, that is I think an eloquent statement. I am not sure it was an answer to my question.

Mr. Chairman, my time has expired, and I want to be mindful

of, but can I just dwell on this just for a moment?

Chairman SHELBY. Go ahead, Senator.

Senator CARPER. What I am getting at is this: An amount of

money was allocated in a program that used to be an entitlement

program which became a block grant. What you are proposing to

do is to turn the Section 8 voucher program into a block grant to

say to the State and local governments, to Housing Authorities,

this is how much money you have to work with. There are those,

when we attempted to block grant AFDC, who said, ‘‘This is never

going to work. We are not going to have enough money. What if

we have a recession?’’

And what I am asking you to do is, based on the experience that

we have gone through with TANF, to come back and explain to us

why is this going to work. And you have heard from Senator Sarbanes. He just raised I think very serious concerns about the adequacy of the funding, and the fact that we know that there are a

lot of people out there that are going to be needed to be served. We

know the rents are going to go up, and he was contending, and I

think others would contend, there is not enough money already

available. You suggest that there is.

What I am asking you is, looking back, help us to look forward.

Looking back at TANF and AFDC, look forward with what you are

proposing and do so briefly.

Mr. JACKSON. I think the block grant program will work, and we

are not block granting it to the States. I think we got a clear ‘‘no,’’

on that last term. The block grant would be to the Housing AuVerDate 11-MAY-2000 10:02 Sep 02, 2005 Jkt 000000 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 23100.TXT SBANK4 PsN: SBANK4
21

thorities. And basically the block grants will be in the amount that

the Housing Authority have been allocated for certificates and

vouchers. And I think if they utilize those certificates and vouchers

as they have in the past, we are not going to be short.

So, I believe that it will work. Will there be a substantial increase? No. I think we have seen a 23-percent increase the last 2

years. I do not think we can sustain that. It is three-fourths of our

budgets, and I think we have to look at that like we look at everything. What is the best approach to address the needs?

And I think, from my perspective, we can do one of two things,

Senator, and I would say the same thing to Senator Sarbanes. We

can either continue at the current rate, which is 10- or 12-percent

a year increase in the Section 8 program, or we can try to bring

the Section 8 program within and make sure still it serves the

same persons that we are so interested in serving. I think we have

tried to do that in a very efficient and effective way without in any

way hurting any present certificate holder or voucher holder.

Senator CARPER. Did you say, just 30 more seconds here, if I

could, did you say earlier that the people that are graduating out

or are leaving Section 8 vouchers, roughly 8 percent? Did I hear

you say that about 8 percent of the people who are currently are

leaving?

Mr. JACKSON. It vacillates. Some years it is 12 percent. Some

years it is 8 percent.

Senator CARPER. Well, let’s say it is 10 percent.

Mr. JACKSON. Yes.

Senator CARPER. Are you saying that if, in year one, we are going

to serve everybody that is being served now, after year one 10 percent of the people—let us say we start with 100 people, make it

easy, 100 people that we are serving. After the first year, we end

up with 10 fewer people. We have 90 people. After the second year,

we end up 9 fewer people. We have 81. After the third year, we

end up with 8 fewer people. We have 73.

It does not take very long until you are not serving a whole lot

of people through this program, if I understood what you said correctly.

Mr. JACKSON. That is not necessarily true. I am saying to you

that——

Senator CARPER. And we have not added anybody new, but

simply——

Mr. JACKSON. Oh, no, I am saying to you, yes, when people move

off of the program, we are adding people new into the program.

And these persons might not meet the 30-percent adjusted gross income requirement. They might only require 50 percent of adjusted

gross income.

Now, as you know, we have two sets of rules how we put it. The

vouchers and certificates, you cannot go with 30 percent of adjusted

income—I mean certificates—but vouchers you can go up to 50 percent. So, clearly, we will be saving money, from our perspective,

and addressing the needs because everyone might not be as critical

in need. Even today—let me say this to you—we have people, when

they are homeless, that clearly jump over other people on the waiting list. That has been the case. Even though the other people are

in dire need of certificates or vouchers.

22

So my position is, yes, we will be saving money, and I would be

happy, Senator Carper, to sit with you in your office and go over

the analysis.

Senator CARPER. Good, I will bring my calculator.

Mr. JACKSON. All right.

Senator CARPER. You bring yours.

[Laughter.]

Mr. Chairman, thank you.

Chairman SHELBY. Thank you.

Senator Sarbanes.

Senator SARBANES. I want to follow up with what Senator Carper

was asking you. This growth in that budget has, in part, been stimulated by HUD, and I approve of what HUD did. The utilization

was low on the part of the PHA’s. HUD made the point to them

that you are getting authorized these vouchers, but you are not utilizing them. What is wrong? You have people needing housing, and

you are not delivering on it, and the PHA’s went out, and they

made a real effort, and they have now boosted their utilization rate

up to about 97 percent, which is quite, historically, quite high.

And I think that accounts for this upsweep that you see. So, I

do not see you projecting out the same increase in costs in future

years, unless there is an increase in the number of vouchers that

are authorized, but at the moment, we are just looking at what has

been authorized, and how you meet that and the fact that people

are holding these vouchers. You do not get in the situation Senator

Carper indicated, in which they come empty, you do not renew

them, and the amount of available housing is diminishing instead

of increasing.

Your own budget documents from HUD indicate reduction in program cost with respect to the tenant-based and moderate rehab

vouchers, $1.633 billion. That is your own document. So we are

not—I mean, you may give us documents. We may disagree with

them and cite a different figure. At the moment, I am using your

figure in terms of the shortfall. I think this issue obviously needs

to be revisited.

I have to tell you I think we are confronting a budget cut that

has been imposed from somewhere, and we are in search of a policy

rationale for it, and I do not think that policy rationale is there.

Now, we have a vote. I want to put one other question to you before we break.

Mr. JACKSON. Yes, sir.

Senator SARBANES. I mentioned, in my opening statement, the

importance of the procurement and grant competitions that HUD

has to conduct. Over the years, I have stayed out of efforts so, you

know, people are bidding for a contract or from HUD you have a

competitive bidding process, and it seems to me you do not want

people weighing in trying to get that bidding process decided by political weight as opposed to the merits of the bid. Otherwise, how

do you make policy and how do you run Government under that

circumstance? But I do feel strongly that the bid process must be

fair, and people must understand that it is fair.

Now, you had a situation where the losing bidder—and we know

this because they are a corporate citizen in our State—protested

the award and went to the GAO under the established procedures.

23

The GAO found that there was disparate treatment in evaluating

the proposals, that the two companies were not—the competing

companies—were not treated fairly, that the record did not support

the Agency’s conclusion, and they went on to say that the Agency

seemed to have adopted a double standard, and the GAO recommended that HUD reopen the acquisition and engage in discussions, obtain revised proposals, evaluate those proposals, consistent

with the GAO findings, and make a new award determination.

Now, my understanding is that HUD is undertaking to do this,

but we are getting reports which greatly concern me, that, first of

all, not enough time is being provided for the resubmission of the

bids, and I had been led to believe that enough time would be provided which I think is of elemental fairness and that requests have

been made about clarifying the new bids and responses have not

been coming to that request.

Now, both of those concerns seem to me to involve matters of elementary fairness. I also think, and I do not know what you are

doing on this, that the second bid process should be determined by

a group different from the ones who did the first bid process and

who were so sharply criticized by the GAO.

This does not seem to me to be a difficult problem. All we need

is to be assured of the fairness of the rebidding process, which the

GAO has pointed out. Of course, you have taken the first major

steps because you are engaged in that process. Can you take care

of these other aspects of this situation?

Mr. JACKSON. Surely, Senator. I agree with you totally in your

assessment. The only thing I guess I would say is that we perceive

that the persons who carried out the first process are fair. There

might have been some mistakes made. But I have absolutely instructed them to make sure that in this process of reopening the

concerns that were raised by GAO, that we do this in a very, very

fair manner.

The second part of your response, when you say that some of the

information that was requested by this company, we have made

sure that that information is forthcoming, and I can assure you

that we will give them substantial time to respond to that. We are

not going to, in any way, cut short—if they have not received any

information that they have asked for, and they have not received

it in a timely manner, we will take that into consideration.

As I told you before, we are not going to in any way rush this

process. We are going to give them every opportunity to respond.

Senator SARBANES. Well, they need the information, and then

they need adequate time in order to consider it.

Mr. JACKSON. That is correct.

Chairman SHELBY. Mr. Jackson, I have three questions I am

going to submit to you for the record because we have go to vote,

Senator Sarbanes and I, and then we will come back and we will

get to the second panel.

The first question—and you do not have to answer it now—but

this deals with HUD’s lack of a chief financial officer. You know

the problem. Will this Committee see a nominee for the chief financial officer in the near future? What are your plans in the interim

to ensure that HUD maintains adequate internal controls and accounting systems?

24

Personnel management at HUD. Second, a significant share of

HUD employees will be eligible for retirement over the next several

years. In addition, HUD has historically had difficulty attracting

talented people. This issue is one of your primary responsibilities,

and what have you done to keep knowledgeable staff and attract

talented new staff? We would like to know that, for the record.

Subprime loans, FHA subprime loans. For several years running,

the Administration has proposed a new subprime loan product

within FHA. We have yet to see legislative language. Can you provide some information and details on this proposal, if you would,

for the record. We appreciate this. We are going to let you go now.

We await the answer to that.

Chairman SHELBY. Thank you for appearing here today, and the

Committee is going to be in recess for the next 10 to 15 minutes.

[Recess.]

Chairman SHELBY. The Committee will come to order.

First of all, I think all of you know how the legislative process

works, and we have been voting and so forth.

I know that the first panel, the nominee to be the HUD Secretary, took a while.

If I could, I would like to swear you both in. Please stand and

raise your right hand.

Do you swear or affirm that the testimony that you are about to

give is the truth, the whole truth, and nothing but the truth, so

help you, God?

Ms. CONLIN. I do.

Ms. KEENUM. I do.

Chairman SHELBY. Do you agree to appear and testify before any

duly-constituted committee of the Senate?

Ms. CONLIN. I will.

Ms. KEENUM. I will.

Chairman SHELBY. Thank you.

Your written testimony will be made part of the record.

Ms. Conlin, we will start with you and go from there.

STATEMENT OF LINDA MYSLIWY CONLIN, OF NEW JERSEY,

TO BE A MEMBER OF THE BOARD OF DIRECTORS OF

THE EXPORT-IMPORT BANK OF THE UNITED STATES

Ms. CONLIN. Thank you, Mr. Chairman.

It is indeed an honor and a privilege to appear before you today

as the President’s nominee to become a Director at the Export-Import Bank of the United States.

I appreciate the confidence that the President has placed in me,

and I am deeply grateful to President Bush for giving me another

opportunity to serve my country. If confirmed, I look forward to

working with the Members and staff of this Committee.

I would like to recognize my husband, Joe, who is with me here

today——

Chairman SHELBY. Joe, please stand up so we can see you.

Ms. CONLIN. He is easy to see—and my 87-year-old mother,

Helen Mysliwy.

Chairman SHELBY. She is more important.

Ms. CONLIN. Yes, and I know she joins me, Senator, in thanking

you for pronouncing my maiden name and her name correctly.

25

Chairman SHELBY. I had to work on it. Thank you.

Ms. CONLIN. You did a great job.

I would also like to recognize, Mr. Chairman, the colleagues from

the Department of Commerce and the fine team from the Ex-Im

Bank who have provided me with such great support.

I know the Committee has my biographical information, so I will

not go into detail about my qualifications; I would ask that they

be submitted with this oral statement.

Chairman SHELBY. They will be made a part of the record.

Ms. CONLIN. Thank you, Mr. Chairman.

Mr. Chairman, today, exports of goods and services in this country support more than 12 million jobs. They are good jobs, paying

as much as 18 percent more than the average. If confirmed, I will

be committed to helping American exporters and workers succeed

in what has become an increasingly competitive global economy.

At the same time, I am mindful of what Secretary of Commerce

Don Evans often says, ‘‘that governments do not create wealth and

prosperity—people do. It is government’s role to create the right

conditions in which America’s workers and businesses will flourish.’’

Creating the right conditions to grow export-related jobs means

providing exporters with the tools to compete in today’s global

economy. During my 19 years in Federal and State government, including my current position as Assistant Secretary of Commerce for

Trade Development, I have helped companies, both large and

small, gain access to world markets by providing the support that

they need to reach those markets.

Representing Secretary Evans as an ex officio member of Ex-Im

Bank’s Board of Directors, I have come to appreciate the critical

role that access to export and project financing plays in enabling

our companies to compete.

I also know, Mr. Chairman, that today’s small and medium-size

businesses represent 97 percent of exporters, yet generate 30 percent of all exports. I am pleased to see that Ex-Im Bank has placed

a priority on cooperation among the 19 members of the Trade Promotion Coordinating Committee to leverage Federal resources in

reaching this important community of potential exporters.

I also look forward to helping Chairman Merrill implement his

broad vision of providing competitive products to the new knowledge-based service economy as well as traditional industries, if confirmed.

I look forward to working with the Committee Members as well

as Chairman Merrill, Vice Chair Foley, Directors Grandmaison and

Cleland, the career professionals at Ex-Im Bank, the trade team of

the Administration and the exporting community in meeting these

challenges.

Mr. Chairman, I respectfully ask for the Committee’s favorable

consideration of my nomination and will be pleased to respond to

your questions.

Chairman SHELBY. Thank you. I will assure you that we will

move your nomination as expeditiously as possible and also Ms.

Keenum; I think you both have broad support here.

Chairman SHELBY. Ms. Keenum.

26

STATEMENT OF RHONDA N. KEENUM, OF MISSISSIPPI,

TO BE ASSISTANT SECRETARY OF COMMERCE AND

DIRECTOR GENERAL OF THE UNITED STATES

AND FOREIGN COMMERCIAL SERVICE

Ms. KEENUM. Thank you, Mr. Chairman.

It is a privilege to come before you as the nominee for the position of Assistant Secretary and Director General of the United

States and Foreign Commercial Service.

I am humbled and honored that President Bush would nominate

me for this role. And I am eager to take on the challenge.

I would first like to thank Senator Thad Cochran and Congressman Roger Wicker for their kind remarks. Both of these distinguished leaders mean a tremendous amount to me and my family,

personally and professionally.

I would also like to express my sincere thanks to Secretary of

Commerce Donald Evans, former Deputy Secretary Samuel

Bodman and Under Secretary Grant Aldonas for their support of

me personally and of my nomination.

And I would be remiss if I did not thank my spouse of 20 years,

over my left shoulder, Mark Keenum—do you want to stand,

honey—

Chairman SHELBY. We see a lot of him in the Senate.

Ms. KEENUM. What makes America the greatest Nation in the

world is the entrepreneurial spirit of the American people no matter what their background.

Growing up in Mississippi, I was a first-hand observer of the

power of that entrepreneurial spirit. My father, James Newman,

left public service after almost a quarter of a century to pursue his

dream of starting his own business, and pursue it he did—risking

limited family savings, stable employment and my mom’s sanity in

the process. His risk and investment some 25 years ago continue

to generate precious dividends in the tangible evidence of community jobs, interstate commerce and income that even now, some 4

years after his death, provides a financial safety net that my family

would not have otherwise had.

This story—my story—illustrates the power of small businesses

all over this great country. Small businesses create more than two

out of every three new jobs and generate about 50 percent of our

Nation’s gross domestic product.

In this time of great change in our domestic and international

economies, it is imperative for our Government to assist American

businesses to obtain access for their products and services in the

international marketplace. This is not only the mandate of the U.S.

and Foreign Commercial Service, but it is also the dedicated focus

of its programs and employees.

The Commercial Service’s worldwide network achieves this goal

every day by linking American suppliers with international buyers,

advocating for their best interests with foreign governments, and

ensuring a level playing field. The programs and expertise provided

by the Commercial Service are critical to the success of American

companies in competing and winning in global markets. I have observed the efforts of Commercial Service employees to assist American companies in often difficult circumstances, and have been impressed with their skills, dedication, and pride in public service.

27

If confirmed, I commit to a continuous assessment of, and investment in, both the development of innovative trade programs and

the complex network that delivers them. My goal will be to ensure

that the Commercial Service not only continues to meet the high

expectations that our clients have of us, but also that we exceed

those expectations.

I will look to maximize the synergies we have with State partners, as well as local partners, industry associations, and sister

Federal partners to provide companies in all States with access to

the tremendous opportunities available to them through exporting.

If confirmed, I welcome the challenge to lead the trade promotion

arm of the Federal Government. My two decades of work experience have been driven exclusively by client, constituent, and consumer accountability. Those years of managing public relations

campaigns, leading field-based organizations, developing and adhering to complex budgets, building coalitions, and motivating and

mentoring staff have prepared me for the myriad of opportunities

ahead.

If confirmed, I pledge to conduct myself with unwavering commitment, taking ownership of every action, standing up for entrepreneurial ideas, like those of my father, and standing by the over

1,600 dedicated public servants that have long made the Commercial Service an organization that leads rather than follows.

If confirmed, I will pursue the stewardship of the Service with

energy, integrity, accountability, and a diligent awareness that we

are here to serve our clients—American businesses.

Mr. Chairman, thank you for the opportunity to be here today.

I also want to say thank you and appreciation to family and

friends.

I will be happy to answer any of your questions and welcome

your comments.

Chairman SHELBY. Thank you very much.

I will start with Ms. Conlin. We understand, Ms. Conlin, from

your testimony and your background that you bring a lot of experience and understanding from your 21⁄2 years at the Department of

Commerce working with Secretary Evans on trade development

issues.

Maybe you could go into a little more detail regarding what trade

development is and what that really entails. How do you feel this

Government initiative has helped create the right conditions to promote U.S. exports and develop new markets for U.S. products,

which is crucial to us in this economy? What measures would you

recommend be taken in this area?

Ms. CONLIN. Mr. Chairman, I had the privilege of working with

some 370 industry sector and trade specialists at Trade Development who cover major sectors of the U.S. economy. Our focus has

always been to strengthen the global competitiveness of U.S. businesses, to expand exports and the jobs they create, to address any

barriers that may exist to trade, and to advocate on behalf of U.S.

businesses seeking large foreign government contracts. In all of

those ways, I believe that our trade development team has been

very, very successful.

In fact in advocating on behalf of business, I have worked very

closely with Ex-Im Bank’s Board.

28

Chairman SHELBY. I am sure you are aware of a hearing that we

held at this Banking Committee last year regarding the Trade Promotion Coordinating Committee or TPCC which allowed us on the

Committee to take a closer look and hopefully get a better understanding of our national export strategy.

Ms. CONLIN. Yes.

Seeing that the Ex-Im Bank is an integral member of the TPCC,

what steps would you like to see taken in identifying ways to expand coordination among the TPCC agencies and enable our trade

policy to optimize and take advantage of all the resources we have?

Ms. CONLIN. Mr. Chairman, if confirmed, I would look forward

to the opportunity of working with Chairman Merrill and the

Board on helping to really leverage Federal resources in the best

way possible and coordinate Federal resources to reach that large

universe of potential exporters that I talked about earlier.

I think it is really incumbent upon all the agencies of the Federal

Government to continue to work together through an organization

like the TPCC. Working through the TPCC will enable us to really

reach this large universe of small and medium-size businesses that

may be unaware of the services that the Federal Government provides so that we can bundle and package these services together.

Chairman SHELBY. I know you are aware of the Export-Import Bank decision in December to formally establish a $500 million

short-term loan facility to support the Trade Bank of Iraq. This

measure was part of a broader, 16-nation agreement to provide $2

billion in such support. This is in addition to the $13 billion

pledged during the Madrid donors’ conference in October.

What are your thoughts, if you have some, regarding the Ex-Im

Bank’s future role in Iraq and this outstanding loan, especially as

Iraq makes the transition to a sovereign government?

Ms. CONLIN. It is my understanding, Mr. Chairman, that the

Bank has not approved any transactions to date.

Chairman SHELBY. Okay.

Ms. CONLIN. That is at least my understanding. But having said

that, let me say that establishing democracy in Iraq and restoring

economic freedom is critical to the future of Iraq. In that regard,

Ex-Im Bank in supporting our U.S. exporters and providing goods

and services critical to the reconstruction of Iraq is absolutely essential. And if confirmed, I look forward to working with the provisional Iraqi Government, with the Coalition Provisional Authority,

and other U.S. agencies to ensure that our exporters will continue

to play a role.

Chairman SHELBY. Thank you.

Ms. Keenum, the Office of Management and Budget’s Program

Assessment Rating Tool gave the United States and Foreign Commercial Service a rating of ‘‘Adequate.’’ This rating was critical of

the Service in a number of areas, including its practical utility

when compared with alternative means of executing key parts of

its mission, its failure to achieve or even adequately measure its

annual performance goals and, most important, its failure to adequately measure its cost of doing business and consequently to

budget accordingly.

I do not expect you this morning to address the PART’s rating

here today, but I would appreciate it if you could respond a little

29

bit and give us an overview—how could you address this rating

criticism, for the record? If you want to do it for the record, you

can do that.

Ms. KEENUM. If confirmed, as I stated in my earlier statement,

one of the first things that I will look to do is assess the existing

products and services and the entire delivery system of the Commercial Service to ensure maximum impact for positive benefit for

small and medium-size businesses.

I cannot speak to the OMB rating specifically, but we would be

glad to provide something in writing for you.

Chairman SHELBY. All right, if you could do that for the record.

Ms. KEENUM. I would be glad to.

Chairman SHELBY. Ms. Keenum, the position to which you have

been nominated is a key component, as you well know, in the execution of this country’s national export strategy. By overseeing

1,700 United States and foreign-based commercial officers whose

responsibility it is to assist American companies to identify new opportunities for business in foreign countries and to navigate the bureaucratic mazes that often stand between them and the sale of

their goods and services abroad, you are in a sense, to borrow from

the military, ‘‘at the tip of the spear,’’ or you will be.

I would not expect you to say anything that contradicts your support for the Administration’s budget request for export promotion

activities, including the mission, for the International Trade Administration, for which an additional $11 million was included in

the 2005 budget. Could you share with the Committee your

thoughts on whether the resources the Administration allocates for

export promotion activities is adequate to keep pace with the growing number of bi- and multi-lateral trade agreements that the Administration is currently negotiating? In other words, this seems

like a little bit of money to tackle a big, big job.

Do you foresee a need for additional resources as market opening

agreements continue to be concluded as you get into the job?

Ms. KEENUM. Mr. Chairman, I will never say that I will never

come and ask for money, but if confirmed, again, adhering to my

earlier point about assessing the delivery system and the products

to ensure maximum impact for small and medium-size businesses

and also within the jurisdiction of the Commercial Service—as you

know, it is the trade promotion arm of the Federal Government—

so within the jurisdictional powers that I will have, diligence and

stewardship will be key; I can assure you of that.

Chairman SHELBY. Ms. Keenum, you will be assuming this position during an unusual time, as you know. The U.S. dollar has

weakened considerably against major foreign currencies, especially

the euro. Only through currency pegs and manipulation have the

Chinese and Japanese currencies not grown relative to the dollar.

The up side to the weaker dollar, as we all know, is increased exports. Unfortunately, the job growth that would normally accompany such an increase has failed to materialize. We are all hoping

and praying.

While there are no doubt macroeconomic explanations for the

failure of the economy to generate more jobs consistent with the

economic revitalization we are witnessing and the growth in exports, many of us in Congress are viewing the situation with conVerDate 11-MAY-2000 10:02 Sep 02, 2005 Jkt 000000 PO 00000 Frm 00033 Fmt 6633 Sfmt 6633 23100.TXT SBANK4 PsN: SBANK4
30

cern. The U.S. Commercial Service touts its mission as creating

economic prosperity and, ‘‘more and better jobs for all Americans.’’

I like that.

Clearly, this is an issue that transcends the position for which

you have been nominated; it is macroeconomics. I would like to ask

you, however, how do you envision yourself in your new position

approaching the current problems with respect to job creation? I

know you cannot do it all, but you will have a bit of it.

Ms. KEENUM. Yes, sir. If confirmed, I do recognize the measure

of responsibility as it relates to, frankly, promoting the awareness

of the United States and Foreign Commercial Service. A lot of people just do not realize that it is out there. I often wonder what my

dad would have done if he had known about the United States and

Foreign Commercial Service 15 years ago.

Chairman SHELBY. What business was he in? A lot of it?

Ms. KEENUM. Excuse me?

Chairman SHELBY. Was he in a lot of business?

Ms. KEENUM. He actually was in one. He salvaged airbags for

used automobiles. If an automobile is wrecked, and the passenger

airbag does not inflate, for example, my father saw a market in

that about 20 years ago and created a warehouse so that at any

point in time, you could go in, and if you had a 1997 Nissan, whatever it might be, or a Honda Accord, he could provide either a driver’s side or a passenger side airbag for you.

Chairman SHELBY. He sounds like a resourceful man.

Ms. KEENUM. He was, he absolutely was.

But getting back to your point——

Senator SARBANES. Where is that warehouse located?

Chairman SHELBY. Not in Maryland.

Senator SARBANES. I assume in Mississippi.

Ms. KEENUM. It is. It is in northeast Mississippi.

Because I have been a witness to the power of that entrepreneurial spirit—promoting the awareness of the Service and its

products and its services will be a key objective of mine.

Chairman SHELBY. Thank you.

Are U.S. exports, especially those enjoying the benefits of the

weakened dollar, representative of a shift in the U.S. economy toward goods and services that do not bring with them increased employment? Some of our economists have spoken to that.

Ms. KEENUM. Mr. Chairman, a lot of economists have gotten in

trouble, I think, in the last several weeks for speaking, so I am not

even going to try to speak to that. But the currency issue, again,

I understand—I know it is an issue—and in assessing the products

and services and the global environments in which we operate, that

is certainly key.

Chairman SHELBY. Ms. Keenum, you will be the lead office in

trade promotion for the Federal Government. The Committee has

a large interest in the activities of the Trade Promotion Coordinating Committee. I have mentioned this earlier. In the past, the

position to which you have been nominated worked closely with the

TPCC. If confirmed, you will now essentially be the principal office

overseeing the Trade Promotion Coordinating Committee.

Do you believe that the current structure of the Federal Government for trade promotion is optimal; are there areas for improveVerDate 11-MAY-2000 10:02 Sep 02, 2005 Jkt 000000 PO 00000 Frm 00034 Fmt 6633 Sfmt 6633 23100.TXT SBANK4 PsN: SBANK4
31

ment, or will you need to get into the job and have a little time

before you can answer that?

To the extent that there are areas where the structure and process could be streamlined or improved, could you provide the Committee some sense of how you would go about that? And if you feel

like you need to get into the job before you answer that, that would

be fine, too. You may proceed as you wish.

Ms. KEENUM. Yes, Mr. Chairman, I would ask that if I could submit those for the record in writing to you at a later time.

Chairman SHELBY. Fine.

Ms. KEENUM. But if I might add that the TPCC is one of the

most amazing uses of our Government’s dollars, and sitting to your

right and to my left, the architect of TPCC, and the understanding

that with limited resources, there has to be collaboration and coordination. I would certainly look to, again, assess how we can contribute to its continuing success.

Chairman SHELBY. Thank you.

[Written responses of Ms. Keenum follow:]

Chairman SHELBY. Senator Sarbanes.

Senator SARBANES. Thank you very much, Mr. Chairman.

I am pleased to join you in welcoming before the Banking Committee this—I was going to say this morning—this afternoon——

Chairman SHELBY. Yes, it is afternoon now.

Senator SARBANES. —these two nominees, and I have just a few

questions to ask them.

Ms. Conlin, you of course have been the Assistant Secretary of

Commerce for Trade Development and by all accounts have done

a good job there and actually have had quite extensive responsibilities. You also oversee the Advocacy Center, as I understand it, at

Commerce——

Ms. CONLIN. I do.

Senator SARBANES. —which assists U.S. companies in competing

for contracts for major capital projects abroad.

Tell us a bit about why you are moving over to the Ex-Im Bank.

Ms. CONLIN. Senator, Mr. Chairman, the President has given me

another opportunity to serve I think in an important capacity. It

is one in which it allows me to take all the experience that I have

gained in trade development and helping companies access international markets and to use that experience hopefully in the service of the Bank, where I do understand that for many of our exporters, access to capital and access to financing, is a critical ingredient

in their ability to compete.

It is a very competitive environment out there. Not only am I

grateful to the TPCC and to its architect for bringing together Government agencies so that companies can have an easier time of accessing resources, but I also know that because of the support that

foreign governments give to their businesses, it is absolutely paramount that all agencies of the Government work together.

So it is my hope that I would bring experience from Commerce

to the Ex-Im Bank and put it to good use.

Senator SARBANES. You have been Secretary Evans’ designated

representative over at the Export-Import Bank.

Ms. CONLIN. Yes, Senator.

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Senator SARBANES. He is an ex officio member of its Board. So

I guess you have formed some opinions about its operation; I mean,

you have seen them from the inside, so to speak.

Do you think the Bank could be more aggressive in providing financial assistance to U.S. exporters and in particular in responding

to export subsidies that are provided by foreign nations to foreign

competitors?

Ms. CONLIN. Well, Senator, I have been very impressed with

what I have seen with the work of the Bank—the work of the career professionals there, the rigorous analysis that they give to

transactions.

I also know that we live in a very competitive environment. I

would say that if confirmed, I would look forward to working with

Chairman Merrill and the members of the board to make sure the

products and services that Ex-Im Bank provides continue to meet

the challenges that we see with foreign government competition.

Senator SARBANES. When we did the reauthorization last year in

this very Committee, we authorized the Ex-Im Bank charter

through 2006. But we are watching the Ex-Im Bank closely even

though they do not have to come back for their charter for a while.

That legislation significantly strengthened the authority of the

Ex-Im Bank over the Tied Aid Credit War Chest, and it also gave

the Ex-Im Bank explicit authority to match market window financing provided by other governments.

I think the Congress sent a very clear signal that while the most

preferred situation would be where no one was underwriting, and

the companies competed on the basis of price and quality—and we

are very frank to say we think if our people have a level playing

field in that regard, they will do okay for themselves—but the real

concern, of course, is when they get on a playing field that is not

level, because other governments are providing significant support

to their companies in bidding for these export opportunities.

I just underscore that to you, because I do think that the Congress in the course of reauthorizing the Bank’s charter sent a very

clear message that we wanted these resources that are being provided to the Bank to be used to help create a level playing field

for our exporters.

We also in that measure increased the percentage of Ex-Im Bank

financing that must go to small business from 15 to 20 percent. I

think that represents a challenge for the Bank. I wonder if you

have any feel for how that is proceeding.

Ms. CONLIN. I agree with you, Senator, that we in the U.S. Government should do everything we can to address trade-distorting

measures and to eliminate them, and as I understand it, Ex-Im

Bank has been working very vigorously within the OECD to do exactly that.

I think at the same time, if confirmed, I would be prepared to

address foreign competition with all the tools necessary to meet

that competition.

And last, let me just say that as a former small business owner—

and I am proud that I had a wonderful father who gave me the

best business lessons and life lessons of my lifetime—I look forward

to working with small and medium-size businesses and seeing that,

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if confirmed, I can work with the Bank in continuing to meet and

surpass that 20 percent goal.

Senator SARBANES. Yes, I think that was an initiative initially

put forward by Senator Allard.

Chairman SHELBY. Yes, that is right.

Senator SARBANES. And it is one that commanded support on the

Committee, and we want to keep developing that small business dimension, recognizing nevertheless the interests that our very large

companies also have in the Ex-Im Bank.

I know that as Assistant Secretary of Commerce for Trade Development, you have been involved in the work of the TPCC, and I

appreciate the kind remarks about the Committee. Do you have

any perception about how the Coordinating Committee is functioning?

Ms. CONLIN. Senator, I think it is functioning very well. I think

it has many opportunities for even greater cooperation among

agencies and departments. Let me just give you an example.

Through the TPCC, our Advocacy Center worked very closely

with Ex-Im Bank in creating a letter of interest whereby a company or an interested business can come forward to the Advocacy

Center and at the same time get a letter of interest for preliminary

financing from Ex-Im Bank, bundle that together, and have a much

more competitive bid going forward. They have just started that

process, but I think that bodes well.

That is just a small example of what is possible through working

within the TPCC. So, I am encouraged by what has taken place,

and I look forward to continuing to work within the TPCC.

Senator SARBANES. That is a very good example, because on the

ground where these businesses are trying to compete, that really

counts, I would think, yes.

Ms. Keenum, if I could ask you just a few questions. When we

passed the Export Enhancement Act in 1992 which came out of

this Committee, where we set up the TPCC, we also directed the

Commerce Department’s United States and Foreign Commercial

Service to promote exports by utilizing district and foreign offices

as one-stop shops for U.S. exporters to provide exporters with information on all export promotion and export financing activities of

the Government and to assist them in identifying what programs

could be helpful to them and assist them in making contacts with

the Federal program. This was a place that exporters could go—

again, small and medium. The extremely large companies have

their own shop, and they are pretty well plugged into the system,

but we need to provide this information for medium and smaller

companies.

The Commerce Department, pursuant to that requirement, developed a network of one-stop shops across the country—the so-called

U.S. Export Assistance Centers. The first one was established in

Baltimore, I am pleased to say, in 1994, and by all accounts has

been doing a pretty good job. Recently, the rumor surfaced that

they were thinking of moving the shop out of Baltimore—I guess

I should say out of the Port of Baltimore, so to speak.

Do you know the status of that location with respect to that Export Assistance Center?

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Ms. KEENUM. Senator, my understanding of the status is that it

is being resolved with your capable staff’s assistance in securing

some GSA-approved locations, and it is being resolved to your satisfaction and our mutual benefit.

If confirmed, please know that if there is no resolution, I will

diligently work to have immediate resolution to your satisfaction.

Senator SARBANES. All right. I think it is important when you locate these Export Assistance Centers that their location command

the support of State and local people and the local businesses and

so forth, and that its location is not simply a matter totally within

the discretion of whoever is heading the office at the particular

time. There are broader and objective considerations that go into

the location. They were involved in locating it there in the first

place, and to my view are still valid, and just because it might

serve a particular personal preference of the director of the office

is not adequate grounds for determining its location.

You do not have to answer that. I will just leave that with you.

The other is the Commercial Service I think has an important

role to play working through the Commerce Department in the

TPCC. Of course, the Secretary of Commerce is the Chair of the

TPCC—actually, the Chairman of the Ex-Im Bank is the Vice

Chair. So, I would anticipate the Commercial Service—it has been

playing that role—I am sure you anticipate that it would continue

to do so.

Ms. KEENUM. Absolutely, yes, sir.

Senator SARBANES. How many people work for the United States

Foreign and Commercial Service?

Ms. KEENUM. We have about 1,600 dedicated public servants. We

have about 335 domestically, and we have an additional 150 or so,

if you will, in headquarters in Washington DC who provide the

support to our domestic and global field team. And then we have

approximately 1,100 people posted in 80 countries internationally.

Of those, 300 are foreign service officers. That should come to

about 1,600, Senator.

Senator SARBANES. Are the other 800 foreign hires?

Ms. KEENUM. Yes, sir, foreign service nationals.

Senator SARBANES. And how are they picked, the foreign hires?

Presumably, the offices overseas are headed up by a foreign service

officer—is that right——

Ms. KEENUM. My understanding, yes, sir, correct.

Senator SARBANES. —or by a U.S. career person.

Ms. KEENUM. Yes, sir.

Senator SARBANES. Okay. Now, the foreign hires in those offices,

these would be presumably citizens of the country in which the office is located; is that right?

Ms. KEENUM. Yes, sir. My understanding is that is correct.

Senator SARBANES. And how are they selected; do you know?

Ms. KEENUM. Senator, in my earlier statement, I had expressed

that if confirmed, one of the first things that I want to do is to assess the inventory of not only the Commercial Service’s products

and services but also the entire delivery system.

I would be glad in my assessment in a more immediate form, if

you should require, to provide that confirmation to you in writing

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in terms of the exact hiring process for foreign service nationals at

our international posts.

Senator SARBANES. You do not need to do it for purposes of this

enterprise, but I am encouraged to hear that you have that on your

agenda, because I think it might benefit us for you to take a careful

look at how that—I mean, you would be a new person, so you

would have a new, fresh look at things, and I think I would encourage you to do that.

Mr. Chairman, I must say that I think this area of our activity

has been working pretty well, both the Commerce Department and

the Ex-Im Bank, and I think the degree of professionalism has increased and improved. I think it is important that that be the case.

After all, they are there to serve all of our citizens without regard

to their politics, and there is an important national interest involved in these companies being well-served, so I am pleased to join

with you in welcoming these nominees.

I have no further questions.

Chairman SHELBY. Senator Sarbanes, we know on the Banking

Committee that you, as a Member and also when you were Chairman, took a lot of interest in international trade and export, and

I want to note that for the record.

Ms. Conlin, Ms. Keenum, we look forward to supporting your

nominations. We want you to do a good job because these are important jobs in America.

Thank you for appearing before the Committee. Thank you for

your patience in waiting.

Ms. CONLIN. Thank you, Mr. Chairman. Thank you, Senator.

Ms. KEENUM. Thank you, Mr. Chairman, Senator Sarbanes.

Chairman SHELBY. The hearing is adjourned.

[Whereupon, at 12:20 p.m., the hearing was adjourned.]

[Prepared statements, biographical sketches of the nominee, and

response to written questions supplied for the record follow:]

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PREPARED STATEMENT OF SENATOR JACK REED

I would like to thank Chairman Shelby and Senator Sarbanes for scheduling this

nomination hearing. This is an important process, and I appreciate the willingness

of all of our nominees to become public servants.

However, I would like to focus my statement this morning on Mr. Jackson’s nomination.

Mr. Jackson, you have been nominated for a position that requires you to manage

an agency that has responsibility for some of the most vulnerable families in this

country. Many of these people are elderly or disabled or just plain out of luck. As

a result, if confirmed, you often will be in the position of being their primary champion.

One of your chief responsibilities in this area is going to be advocating within the

Administration for appropriate resources for our Nation’s housing programs. Given

the current budget environment and Administration proposals like the $1.6 billion

cut in the Section 8 voucher program, this part of your job will be extremely tough,

but vitally important to working families across the country who are finding it more

and more difficult to afford housing.

Unfortunately, the very strength of the housing sector in our economy has been

causing rental and homeownership costs to go up dramatically, yet wages have not

kept pace, making housing less affordable for many working families.

Only 131 of the single-family homes currently for sale in my own State of Rhode

Island are considered affordable by our State housing finance agency—meaning a

family earning $47,280 or 80 percent of our State’s median family income can afford

them. This represents only 5.5 percent of the homes on the market. Rhode Island’s

homeownership rate fell for the second year in a row to just 59.6 percent in 2002.

This is 8.3 percentage points below the 2002 national homeownership rate of 67.9

percent. Not surprisingly, the number of apartments working families can afford to

rent in my State has also declined significantly. Only one in every two renter households in Rhode Island is able to afford the standard rent for a two-bedroom apartment.

Rhode Island is not an anomaly. For the fifth year in a row, the National Low

Income Housing Coalition, in its ‘‘Out of Reach’’ report shows that there is no place

in the United States, urban or rural, where the minimum wage is enough to afford

the standard rent for a two-bedroom apartment.

Working hard and playing by the rules is increasingly not enough to afford housing for many families.

We also have seen an increase in homelessness during the past several years. According to the latest U.S. Conference of Mayors (USCM) Report on Homelessness,

homelessness has increased nationwide. The report states that ‘‘requests for emergency shelter assistance increased by an average of 13 percent.’’ As USCM President

and Hempstead, New York Mayor James A. Garner said in the press release announcing the report: ‘‘This survey underscores the impact the economy has had on

everyday Americans. The face of homelessness has changed and now reflects who

we least suspect.’’ Working families and children are a part of the changing face of

homelessness.

Although I appreciate and support the Administration’s commitment to ending

chronic homelessness in 10 years and proposals like the Samaritan Initiative, the

Administration’s budget does not contain adequate resources for the 150,000 housing units needed each year for the next 10 years to end chronic homelessness, let

alone the budget resources to renew the rent subsidies of those disabled homeless

people who used to be chronically homeless. Nonetheless, if you are confirmed as

Secretary of HUD, I hope that we can work together to adequately fund these commitments, in addition to reauthorizing the housing titles of the McKinney-Vento

Act.

Even if all the HUD voucher programs are adequately funded, they are of little

use if there is no housing to use them on. As I mentioned to you when we met a

few weeks ago, I believe that the Federal Government can and should do more to

incentivize the private market to build mixed-income housing for working families.

I plan on introducing a bill shortly that I think will help remedy this problem.

I must also express my disappointment in the Administration’s $35 million cut

to the HUD Office of Lead Hazard Control. Despite Congress’ bipartisan commitment to increase funding for this program so that we can eliminate childhood lead

poisoning in our nation’s housing stock, the Administration continues to ask for substantially less money than Congress has appropriated.

Finally, if you are confirmed, you will also be responsible for continuing improvements in HUD’s management and operations. HUD has made modest progress during the past several years, yet as GAO’s latest management report reflects, two sigVerDate 11-MAY-2000 10:02 Sep 02, 2005 Jkt 000000 PO 00000 Frm 00040 Fmt 6633 Sfmt 6621 23100.TXT SBANK4 PsN: SBANK4
37

nificant HUD programs still remain on the high risk list. This report also cites serious management deficiencies, especially in human capital management. I hope that,

if you are confirmed, you will promptly fix these management deficiencies.

I look forward to the testimony of all of our nominees today.

—————

PREPARED STATEMENT OF SENATOR JON S. CORZINE

Thank you, Mr. Chairman.

I had the pleasure of meeting with Acting Secretary Jackson just a couple of

weeks ago. There is no doubt in my mind that he clearly possesses the credentials

and expertise necessary to lead the Department of Housing and Urban Development.

His long tenure at the Housing Authority of Dallas and his work as Deputy Secretary of HUD are only two examples of his qualifications for this job.

Mr. Chairman, I am concerned, however, the Mr. Jackson has, alongside Former

Secretary Martinez, presided over some of the largest cuts to our Nation’s housing

programs.

This includes elimination of the Public Housing Drug Elimination Program

(PHDEP), proposals to eliminate the HOPE VI and the Empowerment Zones program, and significant reductions in the public housing operating fund and capital

fund. And, now, HUD and the President have a proposal on the table that grossly

underfunds the Section 8 program, one of the most critical low-income housing programs in this country, by $1.6 billion.

The Administration has justified these cuts to the Section 8 program by arguing

that, as it is structured currently, the program is underutilized.

The truth is, however, that according to HUD’s own data and CBO’s data, almost

97 percent of Section 8 vouchers are likely to be used in fiscal year 2004.

A 97 percent utilization rate is very high, particularly given the fact that you

have so many people moving in and out of the program.

The Center on Budget and Policy Priorities has estimated that in the next 5 years

New Jersey alone 25,000 families would lose their vouchers under this proposal.

This is a raw deal for New Jersey and a raw deal for the country’s low-income

working families, too many of whom struggle to find an affordable place to live.

Mr. Chairman, Mr. Jackson has told me that he is committed to preserving HUD’s

commitment to affordable housing and community development. And, while I think

he is committed to this mission, he should know that this Senator plans to hold his

feet to the fire.

—————

PREPARED STATEMENT OF LINDA MYSLIWY CONLIN

MEMBER-DESIGNATE, BOARD OF DIRECTOR

EXPORT-IMPORT BANK OF THE UNITED STATES

FEBRUARY 26, 2004

Mr. Chairman, Senator Sarbanes, distinguished Members of the Committee, it is

an honor and a privilege to appear before you today as the President’s nominee to

become a Director at the Export-Import Bank of the United States.

I appreciate the confidence that President Bush has placed in me and am deeply

grateful to the President for giving me another opportunity to serve my country. If

confirmed, I look forward to working with the Members and staff of this Committee.

I would like to recognize my husband, Joe, and my 87-year-old mother, Helen

Mysliwy, who are both here with me today. I would also like to recognize my colleagues from the Department of Commerce and the fine team from the Ex-Im Bank

who have provided me with enormous support.

I know the Committee has my biographical information, so I will not go into the

details of my qualifications but ask that they be submitted with this oral statement.

Two years and 7 months to the day, I had the honor of appearing before the Members of this Committee to ask for your consideration of my nomination to serve as

Assistant Secretary of Commerce for Trade Development. My commitment today remains the same as it was then: If confirmed, to help American exporters and workers succeed in an increasingly competitive global economy. Exports of goods and

services in this country support more than 12 million jobs, good jobs, paying as

much as 18 percent more than the average.

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I am, however, mindful of what Secretary of Commerce Don Evans, whom I have

been very proud to serve, often says, ‘‘that governments do not create wealth and

prosperity: People do. It is government’s role to create the right conditions in which

America’s workers and businesses will flourish.’’

Creating the right conditions to grow export-related jobs means providing exporters with tools to compete in today’s global marketplace. During my 19 years in Federal and State Government, I have helped companies, both large and small, gain

access to world markets by providing the support to reach those markets.

In trade development, I work alongside a group of over 370 dedicated professionals, including trade and industry specialists whose mission is to help strengthen

the export competitiveness of diverse sectors of the U.S. economy, from traditional

manufacturing to information technologies and service exports. These specialists

provide data and analysis critical to the development and monitoring of the impact

of our trade agreements, ensure that industry perspectives are taken into consideration in trade negotiations through an advisory committee system, and offer general

export assistance as well as advocacy for companies competing for large foreign government tenders.

Representing Secretary Evans as an ex officio member of Ex-Im Bank’s Board of

Directors, I also have come to appreciate the critical role that access to export and

project financing plays in enabling our companies to compete.

I know that today’s small and medium-sized businesses represent 97 percent of

all exporters, yet generate 30 percent of this country’s exports. Two-thirds of these

companies export to just one market. I am pleased to see that the Ex-Im Bank has

placed a priority on cooperation among the 19-members of the Trade Promotion Coordinating Committee to leverage Federal resources in reaching this important community of potential exporters.

If confirmed, I look forward to helping Chairman Merrill implement his broad vision in providing competitive products to the new knowledge-based service economy

as well as traditional industries.

I look forward to working with Committee Members, Chairman Merrill, Vice

Chair Foley, Directors Grandmaison and Cleland, the career professionals at the ExIm Bank, the Administration’s trade team and the exporting community in meeting

this challenge.

Mr. Chairman, Senator Sarbanes, Members of the Committee, I respectfully ask

for your favorable consideration of my nomination and will be pleased to respond

to your questions.

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