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30–173 PDF 2006

THE U.S. DEPARTMENT OF HOUSING

AND URBAN DEVELOPMENT’S (HUD)

FISCAL YEAR 2007 BUDGET

HEARING

BEFORE THE

COMMITTEE ON FINANCIAL SERVICES

U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

MARCH 30, 2006

Printed for the use of the Committee on Financial Services

Serial No. 109–81

(

(II)

HOUSE COMMITTEE ON FINANCIAL SERVICES 

MICHAEL G. OXLEY, Ohio, Chairman

JAMES A. LEACH, Iowa 

RICHARD H. BAKER, Louisiana 

DEBORAH PRYCE, Ohio 

SPENCER BACHUS, Alabama 

MICHAEL N. CASTLE, Delaware 

EDWARD R. ROYCE, California 

FRANK D. LUCAS, Oklahoma 

ROBERT W. NEY, Ohio 

SUE W. KELLY, New York, Vice Chair 

RON PAUL, Texas 

PAUL E. GILLMOR, Ohio 

JIM RYUN, Kansas 

STEVEN C. LATOURETTE, Ohio 

DONALD A. MANZULLO, Illinois 

WALTER B. JONES, JR., North Carolina 

JUDY BIGGERT, Illinois 

CHRISTOPHER SHAYS, Connecticut 

VITO FOSSELLA, New York 

GARY G. MILLER, California 

PATRICK J. TIBERI, Ohio 

MARK R. KENNEDY, Minnesota 

TOM FEENEY, Florida 

JEB HENSARLING, Texas 

SCOTT GARRETT, New Jersey 

GINNY BROWN-WAITE, Florida 

J. GRESHAM BARRETT, South Carolina 

KATHERINE HARRIS, Florida 

RICK RENZI, Arizona 

JIM GERLACH, Pennsylvania 

STEVAN PEARCE, New Mexico 

RANDY NEUGEBAUER, Texas 

TOM PRICE, Georgia 

MICHAEL G. FITZPATRICK, Pennsylvania 

GEOFF DAVIS, Kentucky 

PATRICK T. MCHENRY, North Carolina 

JOHN CAMPBELL, California 

BARNEY FRANK, Massachusetts 

PAUL E. KANJORSKI, Pennsylvania 

MAXINE WATERS, California 

CAROLYN B. MALONEY, New York 

LUIS V. GUTIERREZ, Illinois 

NYDIA M. VELA ́ ZQUEZ, New York 

MELVIN L. WATT, North Carolina 

GARY L. ACKERMAN, New York 

DARLENE HOOLEY, Oregon 

JULIA CARSON, Indiana 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

BARBARA LEE, California 

DENNIS MOORE, Kansas 

MICHAEL E. CAPUANO, Massachusetts 

HAROLD E. FORD, JR., Tennessee 

RUBE ́ N HINOJOSA, Texas 

JOSEPH CROWLEY, New York 

WM. LACY CLAY, Missouri 

STEVE ISRAEL, New York 

CAROLYN MCCARTHY, New York 

JOE BACA, California 

JIM MATHESON, Utah 

STEPHEN F. LYNCH, Massachusetts 

BRAD MILLER, North Carolina 

DAVID SCOTT, Georgia 

ARTUR DAVIS, Alabama 

AL GREEN, Texas 

EMANUEL CLEAVER, Missouri 

MELISSA L. BEAN, Illinois 

DEBBIE WASSERMAN SCHULTZ, Florida 

GWEN MOORE, Wisconsin, 

BERNARD SANDERS, Vermont

ROBERT U. FOSTER, III, Staff Director 

(III)

C O N T E N T S 

Page 

Hearing held on: 

March 30, 2006 ................................................................................................. 1

Appendix: 

March 30, 2006 ................................................................................................. 49

WITNESSES 

THURSDAY, MARCH 30, 2006

Jackson, Alphonso, Secretary, U.S. Department of Housing and Urban Development .................................................................................................................. 6

APPENDIX 

Prepared statements: 

Brown-Waite, Hon. Ginny ................................................................................ 50

Sanders, Hon. Bernard ..................................................................................... 51

Jackson, Alphonso ............................................................................................ 55

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

Frank, Hon. Barney: 

PHADA Letter to Secretary Jackson .............................................................. 65

Hinojosa, Hon. Ruben: 

HUD letter to OMB .......................................................................................... 67

OMB letter to HUD .......................................................................................... 68

Letter to OMB from Members of Congress .................................................... 69

Additional letter to OMB from Members of Congress ................................... 87

Letters to Committee on Appropriations ........................................................ 89

Letters to House Budget Committee ............................................................... 100

Letter to Committee on Appropriations .......................................................... 119

Letter to HUD ................................................................................................... 122

Letter to Chairman Lewis and Ranking Member Obey ................................ 125

Tiberi, Hon. Patrick: 

Statement of Homes on the Hill ...................................................................... 131

(1)

THE U.S. DEPARTMENT OF HOUSING 

AND URBAN DEVELOPMENT’S (HUD) 

FISCAL YEAR 2007 BUDGET 

Thursday, March 30, 2006

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON FINANCIAL SERVICES, 

Washington, D.C. 

The committee met, pursuant to notice, at 9:05 a.m., in room 

2128, Rayburn House Office Building, Hon. Michael G. Oxley 

[chairman of the committee] presiding. 

Present: Representatives Oxley, Baker, Pryce, Bachus, Ney, 

Kelly, Gillmor, Ryun, Miller of California, Tiberi, Hensarling, 

Pearce, Neugebauer, Fitzpatrick, Frank, Waters, Velazquez, Watt, 

Carson, Lee, Moore of Kansas, Hinojosa, Crowley, Israel, McCarthy, Baca, Miller of North Carolina, Scott, Davis of Alabama, 

Green, Cleaver, Wasserman-Schultz, and Moore of Wisconsin. 

The CHAIRMAN. The committee will come to order. Pursuant to 

Rule 3(f)(2) of the Rules of the Committee on Financial Services for 

the 109th Congress, the Chair recognizes—announces, I’m sorry—

that he will limit recognition for opening statements to the Chair 

and ranking minority member of the Full Committee, the Chair 

and ranking minority member of the Subcommittee on Housing 

and Community Development or their respective designees, to a period not to exceed 16 minutes equally divided between the majority 

and minority. Prepared statements of all members will be included 

in the record. And the Chair recognizes himself for an opening 

statement. 

Secretary Jackson, it’s good to have you back before the committee. We appreciate particularly your flexibility in the scheduling, given our markup schedules and your hectic schedule, we appreciate you being in a relatively unprecedented 9:00 a.m. hearing. 

With over 1 million Americans affected by the emergency housing and community crisis in the Gulf, the Federal Government’s response in coordination with local and State governments, and nonprofit and faith-based organizations will be critical in the ensuing 

years. As a result, the committee places increased importance on 

the Administration’s proposed housing and community development budgets that include the Department of Housing and Urban 

Development, the Rural Housing Service administered by the U.S. 

Department of Agriculture, the National Reinvestment Corporation, and the National Flood Insurance Program administered by 

FEMA. 

2

The President is to be applauded because the proposal includes 

a number of initiatives to continue narrowing the home ownership 

gap, such as continued funding for both the American Dream 

downpayment program and housing counseling services. 

This year, the Administration proposed a flexible FHA product 

that would increase home ownership in very low income communities. However, we see a significant decrease in funding for the 

Community Development Block Grant program at approximately 

27 percent. Ohio’s 2006 CDBG program will receive approximately 

$49 million. In Mansfield, in my district, which is one of our largest 

cities, the local government will receive $988,972 this year. 

In addition to these overall reductions, the Administration’s proposal would reform the allocation formula to focus community development funds to the neediest areas of our country. 

I would also like to mention my support for HUD’s brownfields 

economic development initiative. I was involved in writing the first 

brownfields legislation almost 10 years ago across the hall at a 

time when people were just starting to focus on what redevelopment of these could mean for jobs and cleaning up the environment. 

Aside from the contamination at these sites, we found that there 

were legal and financial obstacles to redevelopment. Unlike 

brownfield programs in other agencies, the main focus of the HUD 

program is economic development. It gives local communities a valuable tool to address blight, create new jobs, and expand their tax 

base. Last year the House passed H.R. 280, the Brownfields Redevelopment Enhancement Act, to provide greater access to this program. That was a bill that was sponsored by our friend Gary Miller 

from California. 

There are some 450,000 brownfield sites located in every State 

in the Nation. By redeveloping these properties, we also reduce the 

stress being put on pristine greenfields and farmland, something 

particularly important to my home State. 

And finally, I note that you have included in your budget summary the Department’s intention to increase the affordable housing 

goal for Fannie Mae and Freddie Mac. This committee in the 

House passed H.R. 1461, which creates a world class regulator to 

provide stronger oversight of Fannie Mae, Freddie Mac, and the 

Federal home loan banks. In this legislation, we have rewritten the 

goals to realign the enterprise’s affordable housing focus to match 

that of lending institutions that are meeting the requirements of 

the Community Reinvestment Act. It’s my belief that when these 

goals are enacted, we will have made strides toward greater liquidity for making loans to low and very low income American families. 

Once again, Mr. Secretary, welcome. And I now yield to the gentleman from Massachusetts. 

Mr. FRANK. Thank you, Mr. Chairman. Mr. Secretary, I share 

the chairman’s appreciation of your accommodating us in this hearing. 

I am very troubled by—with regard to housing, and I think we 

have a serious problem regarding housing in this country. The 

HUD study, I think 2003, it goes through 2003, on worst case housing needs, which is mandated by Congress, and that is a study of 

the people who have the worst housing problems. 

3

According to that study, these are HUD’s figures at the end of 

2003, the number of people who have worst case housing situations, that is, unassisted renters—unassisted renters, not Section 8 

voucher recipients, etc.—with very low incomes who pay more than 

half of those incomes for housing or live in substandard housing. 

We’re talking about people who are below 50 percent of the local 

area median and have to pay half or more of that already inadequate income for rent, or they live in terrible housing. And the 

number of people in that situation—households, not people—it 

went from 4.86 million to 5.18 million. So we have 5.18 million 

households, that’s got to be 8, 9, maybe 10 million people, maybe 

it’s 7, living in these terrible situations. And those are people to 

whom we should be addressing our efforts in part, as well as trying 

to help communities, and this budget unfortunately doesn’t do that. 

Some examples. The chairman has mentioned the Community 

Development Block Grant cuts. Now I know the Administration has 

again proposed revising the formula to cut out some of the communities that are wealthier. I don’t believe that the amount you would 

save under that comes close to the $700 million you’re proposing 

to cut in CDBG, and I think that’s a very grave error. 

I would also say that proposing to cut the upper income communities continues what seems to me an unfortunate trend. When 

HUD sent up its language to change the Section 8 voucher program, inexplicably to me, it said that with regard to people getting 

a Section 8 and traveling to another area, the area that had the 

Section 8 could decide, and that, of course, is the case. They have 

to decide whether they want to let someone take their Section 8 

and travel and how much it will cost. But it would allow the recipient community to veto people coming in. Other than perpetuating 

economic and/or racial segregation, I can’t think of a single good 

reason for that, and I said a good reason. 

So if you give the receiving community the right to veto people 

coming with their Section 8’s, if you say that CDBG will only go 

to the poorest communities, then to the extent that wealthy communities, the way to deal with this is not, it seems to me, to say 

that CDBG doesn’t go to communities that may have a higher income level, but to make sure that they spend it on lower income 

people. Because if you say that CDBG only goes to the lowest income communities, then any effort to press upper income communities to accommodate lower income people becomes harder. 

You also have, I think, with the refusal to make Hope Six work 

well with its notion of integration, rather than simply, as this Administration is now proposing, put an end to it as of now. 

And so, I see a pattern here in which we are going counter to 

what I would have hoped would be our program of trying to integrate the communities economically and therefore racially, since income and race are somewhat correlated in this society. 

And there’s some other troubling areas. Just a year ago, this 

Congress met to talk about the painful case of Terri Schiavo. And 

there were a lot of assertions about the importance of protecting 

the disabled. And while we differed among ourselves on the fate of 

Terri Schiavo legislatively, we also wanted to help the disabled. We 

now have a budget which for the second year in a row proposes to 

4

reduce by 50 percent from one year to the next the amount we 

spend on building housing for the disabled. 

I understand the power of the free market. I think the free market is very important. I don’t know anybody who thinks that 

unaided, the free market is going to be able to build housing for 

severely disabled people. And I do not understand why the richest 

country in the history of the world has to cut by 50 percent, a relatively small amount, from $350 million to $175 million, that we 

can only spend $175 million according to this Administration in the 

next year building housing for severely disabled people. 

People who are disabled should be entitled to do more than 

breathe. They ought to be able to live somewhere, and you’re making that, with this budget, extremely difficult. 

Finally, I lament the absence of more funding for production of 

housing in general, cuts in elderly housing from one year to the 

next, cuts in housing for the disabled, a failure to help preserve 

units, not individual tenants, but units that were originally subsidized. 

Here’s the problem. I think the Section 8 voucher program is a 

good program. It does add some equity. But all we do is year-byyear vouchers, and we continue to shrink programs that either protect existing affordable units or construct new units, whether in 

public housing or assisted housing with private sector cooperation, 

housing for the elderly, the disabled—that’s the current Administration’s plan. 

Do more and more with Section 8, and Section 8 looks bigger and 

bigger, everything else looks smaller and smaller, and don’t do any 

construction. Here’s the problem. It does produce some equity, but 

let’s use some good, conservative free market economics. Our housing policy is increasingly to increase the demand for rental housing 

in a way that does not add to the supply. And when you increase 

demand and freeze supply, what you get are higher prices. 

So I want to keep the Section 8 voucher program, but it needs 

to be accompanied, I believe, by some construction, because otherwise, these 5.18 million families that you document as being in 

worst case situations, will be even worse. 

Thank you, Mr. Chairman. 

The CHAIRMAN. The gentleman’s time has expired. The gentleman from Ohio, Mr. Ney, chairman of the subcommittee. 

Mr. NEY. Thank you, Mr. Chairman. I’ll be very brief because I 

know that everybody wants to hear from the Secretary. 

Last week the Housing Subcommittee held hearings, 2 days of 

them. I want to thank Congressman Barney Frank; Jeff Riley came 

in from his staff. We had Clinton Jones, Cindy Chetti, and Tallman 

Johnson. They spent a lot of time listening to local officials, Republicans, Democrats, county commissioners, and township trustees. 

There was a great, of course, outpouring of concern with those 

hearings. We’re going to have one more, too, in Los Angeles with 

Ranking Member Maxine Waters. 

Also, the Administration proposed the FHA housing product. I 

think that is something that’s very interesting, and I look forward 

to working with you on it. 

I saw about RESPA, so that’s a real simple one, I’m sure, to determine at the end of the day. 

5

The last comment, I do want to continue to work with the Department because there has been, I think, some concerns at least 

expressed to us about the Manufactured Housing Improvement Act 

of 2000. I think the manufacture of housing is important for so 

many reasons in the country. We look forward to working with you. 

Thank you, Mr. Chairman. 

The CHAIRMAN. I thank the gentleman. The gentlelady from New 

York, Ms. Velazquez. 

Ms. VELAZQUEZ. Thank you, Mr. Chairman. Mr. Secretary, affordable housing represents a way out of poverty and despair for 

families and individuals. Moreover, it is a basic human right. And 

it is unthinkable and immoral that the President slashes spending 

for the Housing and Urban Development budget again this year. 

These cuts are especially troubling since HUD, itself, reports that 

5 million very low income families face critical housing problems. 

And the Gulf Coast is in the midst of a housing crisis, one of the 

worst in our Nation’s history. 

The President’s proposal makes painful cuts and wrong choices, 

leaving the Nation’s neediest families and individuals out in the 

cold. For the fifth straight year, the Bush Administration’s Fiscal 

Year 2007 budget proposes harmful funding cuts amounting to 4 

percent of $1.5 billion when adjusted for inflation. These cuts jeopardize the housing of low income elderly and disabled families and 

individuals across the country, and they represent yet another 

wrong priority for America’s working families. 

Year after year, this Administration has left our Nation’s vital 

housing programs with limited resources and gaping budget shortfalls, forcing them to scramble to serve families. Although this 

year’s budget spares Section 8 from dangerous proposals of block 

granting the program, public housing agencies are still recouping 

from the uncertainty and instability these proposals caused. The 

Fiscal Year 2007 proposals allows current voucher levels to be 

maintained but falls far short of providing vouchers to all those 

families and budgets who need them. 

What we need is not band-aid solutions that attempt to fix past 

failures, but comprehensive policies that meet the housing needs of 

low income families nationwide. 

The President’s budget proposes a deep cut of $261 million to the 

public housing capital fund, and comes at a time when PHA’s already face an $18 million backlog in capital improvement needs. As 

a result, the overall number of units in the affordable housing inventory will be drastically cut. This will leave millions without decent, safe, and affordable housing and with no place to turn, since 

other housing programs are subject to the same type of irresponsible cuts. 

Another troubling cut is that to the Office of Healthy Homes and 

Lead Hazard Control, which faces a reduction of 23 percent, or $35 

million, despite bipartisan support. We put it back last year, and 

we’re going to fight again to put it back. 

This budget puts America’s housing programs on life support. 

Not one program received enough funding to fulfill the needs of 

those it serves. And a cut to one program amounts to a cut for 

every program, because they are interconnected, relying on one anVerDate 0ct 09 2002 16:26 Nov 09, 2006 Jkt 030173 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 F:\DOCS\HBA089.000 HFIN PsN: TERRIE
6

other to fulfill the housing needs of communities, families and individuals. 

The President’s inability to recognize that the Nation needs integrated, fully funded housing policies illustrates his failure to understand the needs of those trying to climb the ladder of opportunity toward economic and personal independence and stability. 

Mr. Secretary, quite a recipe in compassionate conservatism. 

Thank you, Mr. Chairman. 

The CHAIRMAN. The gentlelady’s time has expired. We now will 

turn to the distinguished Secretary of Housing and Urban Development, Alphonso Jackson. Secretary Jackson, it’s good to have you 

back before the committee, and you may begin. 

STATEMENT OF ALPHONSO JACKSON, SECRETARY, U.S. 

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 

Mr. JACKSON. Thank you very much, Mr. Chairman, and good 

morning to you and to the ranking member, and to the other members of the committee. I want to thank you for the opportunity to 

present HUD’s budget for 2007. 

The President is very concerned about helping all Americans 

have access to decent, affordable housing, and his $33.6 billion 

budget request for HUD demonstrates that concern. At the same 

time, the President understands that fiscal restraints are necessary 

if we want to reduce the deficit and keep the economy growing and 

create more jobs and higher wages. 

I want to highlight how the President’s budget would help HUD 

achieve the mission Congress has assigned to us, particularly in 

three areas: Housing more Americans who own their own home, 

helping those not ready or willing to own their homes to find decent rental housing in the market, and reforming the way the Federal Government supports community development by developing 

and focusing resources toward the neediest, by beginning to consolidate the community development programs under one umbrella 

at HUD. 

First, Mr. Chairman, is helping more Americans achieve the 

dream of home ownership. If Congress will enact HUD’s proposed 

changes to the National Housing Act, the FHA will make its mortgage insurance more flexible, so that more Americans can qualify 

for mortgages without paying sub-prime rates. This will help more 

low income families own and keep their own home. 

Speaking of FHA, I am pleased to say that HUD has recently announced a further extension of the FHA foreclosure moratorium for 

victims of Hurricane Katrina. Borrowers with FHA loans now have 

until March 31st to show us that they have made long-term payment arrangements with their banks. If they do, they will have 

foreclosure protection until the end of June. And this is in addition 

to what HUD has agreed to—to make interest free loans for hurricane-affected families to pay the FHA insurance mortgage for a 

year. The President’s budget is $1.9 billion for the HOME investment 

partnership program. In the past, every HOME dollar has attracted $3.60 in private sector investment. Under that program, 

the President proposed that the American Dream Downpayment 

Initiative, or ADDI as we call it, be funded at $100 million. Though 

7

it is a new program, ADDI funds have already assisted 14,000 low 

income families become first time home buyers. 

Another young but important program helping low income families become home owners is the housing choice home voucher program, which allows families on Section 8 rental assistance to use 

their vouchers to pay the mortgage on their homes for up to 10 

years. This program has already helped 5,000 low income families 

own a home in the last 4 years, and we expect to help 3,000 more 

by the end of Fiscal Year 2007. The President has also proposed $45 million for housing counseling. This is a proven method for helping low income families prepare themselves for responsible home ownership, avoid predatory 

lending practices, and avoid foreclosure. This program would be 

able to assist approximately 600,000 families in 2007 if the President’s proposal is adopted. 

Second, Mr. Chairman, is helping other low income families find decent, affordable rental housing. HUD’s largest program, at $16 

billion, is the housing choice rental assistance program. 

Because of the unsustainable cost increase, Congress wisely 

changed this dollar-based system. But for the new system to work 

better, Congress needs to pass legislation to allow the local PHA’s 

to design their own rent policies. That is why the Administration 

is asking Congress to pass Representative Gary Miller’s State and 

Local Housing Flexibility Act, House Bill 1999. And I want to 

thank the Congressman for his leadership on this important issue. 

And also Representatives Tom Feeney, Katherine Harris, and Rick 

Renzi for co-sponsoring the bill. 

The 2007 budget also proposed funding an additional 3,000 housing units for the elderly or persons with disabilities. All expired 

rental assistance contracts are being renewed. In order to help 

more Native Americans become home owners, President Bush has 

proposed increasing the Section 184 loan guarantee program by 

100 percent, to $251 million. He also wants to increase funding to 

support housing for persons with HIV AIDS to $300 million, 

enough to provide assistance to an estimated 75,000 households. 

Our budget request includes a provision that will allow us to allocate these funds more fairly, based on housing cost differences 

across the country. The Administration also remains committed to 

helping the homeless. HUD has aggressively pursued policies to 

move the homeless into permanent housing. This budget proposed 

to increase the homeless assistance to $1.5 billion, enough to house 

more than 160,000 individuals. 

Third, Mr. Chairman, is laying the groundwork for reform of the 

Federal resources that are used to support community development. A key part of HUD’s mission is to strengthen communities 

so that they can be better places to live, work, and raise families. 

HUD is committed to developing a better performance measure 

for the block grant program. But we need a better way to target 

the block grant funds to those most in need. So HUD will propose 

a new formula for the block grant allocation very soon to Congress. 

Also, since the block grant is staying at HUD, the President’s budget consolidates three similar programs in HUD into the block grant 

program, laying the groundwork for further government-wide consolidation later, after HUD proves that the reforms will work. 

8

The Administration has just asked for a supplement of $4.2 billion. The $6.2 billion already allocated to Louisiana from the previous supplement still leaves another $5.9 billion to mitigate needs 

for Louisiana, $4.8 billion for housing that was severely damaged 

or destroyed, and $1.1 billion for other infrastructures. We estimate 

that FEMA can provide $1.7 billion of the $5.9 million for mitigation. Thus, Louisiana still needs $4.2 billion to mitigate, and that’s 

why President Bush is requesting the amount. 

In conclusion, Mr. Chairman and Mr. Ranking Member, the Administration’s budget provides ample resources for promoting home 

ownership, fair affordable housing, and community development—

the key elements of the mission that Congress has assigned to 

HUD. 

This is a good budget, Mr. Chairman, and I respectfully urge 

Congress to adopt it. And I thank you for the opportunity to speak. 

I also want to take this opportunity to thank Congressman Rick 

Renzi for introducing the President’s consolidated homeless bill 

yesterday. We appreciate your leadership in the fight against 

homelessness, and I am now available for questions. 

[The prepared statement of Mr. Jackson can be found on page 55 

of the appendix.] 

The CHAIRMAN. Thank you, Mr. Secretary. And let me begin. I 

know you stated publicly last week that HUD is starting to look 

again at RESPA reform, and obviously there have been some fits 

and starts, mostly fits, with that issue, despite the fact that it’s incredibly important to consumers; it’s very important to the housing 

market. 

Could you give us some idea about the goals and the ways that 

you would propose this particular effort? 

Mr. JACKSON. As you know, Mr. Chairman, just about 8 months 

ago I called for a moratorium on RESPA reform. And I did that because, clearly, there was so much concern about how we address 

that issue. 

I gave an analysis the other day when I was speaking to mortgage brokers, and I’m sure that Congressman Ryun would understand this. I was a sprinter in college, an All American. And it’s 

like having a 400 meter relay. If there’s no one to hand the baton 

off to, you can’t be there for the people, and that was the case with 

RESPA. And I looked around. We had no support period for 

RESPA. And I said let’s go back to the drawing board, and let us 

listen to you, to the industry, and come up with a solution. 

I think we are very close to coming up with that solution. And 

as I said to the mortgage brokers yesterday—day before yesterday—I think that you will be very pleased. We have taken the good 

advice, the bad advice, and sometimes the ugly advice, from the industry, and from Congress, to try to come up with a proposal that 

will address the issues that are most important to RESPA reform. 

And we think we’ve done that. And hopefully within the next 60 

to 90 days, we will have a proposal before you. 

The CHAIRMAN. I appreciate that. And you were clearly in the 

belly of the beast there with the mortgage brokers, given the past 

history of RESPA reform. So my congratulations for your bravery 

and courage. 

9

Let me ask you also whether you see any link between RESPA 

reform and efforts on this end to deal with predatory lending practices? 

Mr. JACKSON. Absolutely. I think it’s very important, and that’s 

one of the reasons we’re asking you to look at the FHA legislation, 

H.R. 1999, because clearly there’s a group of people right in the 

middle. They’re not truly low income, but they’re not truly high income. And in the subprime market, they’re being eaten up. The interest rates are entirely too high. And that’s predatory lending in 

many ways. 

So if we can pass H.R. 1999, that would put HUD and FHA in 

a position to address that large group—and it’s not a small group 

of buyers—that large group of buyers, to make sure that they have 

the opportunity to be home owners. And I say that because we 

would not in any way do this risk based. If you had good credit, 

your interest rate would be lower. If your credit was not so good, 

it would be higher. But after you demonstrate a period of time of 

paying your house note, then we could reduce the interest rate. 

Now I must tell you this, Mr. Chairman. We have not been at 

our best at Housing or FHA. That’s why today that I am very 

pleased that Brian Montgomery chose to come and be the Assistant 

Secretary for FHA in the commissioning, because we need an innovative man to try to gain back our share of the market. We’ve lost 

a great deal. But not only gain back our share of the market, but 

address the needs of low and moderate income Americans who 

want to become home owners. 

The CHAIRMAN. Thank you, Mr. Secretary. Let me finally ask you 

a question regarding H.R. 1461. As you know, the committee 

passed that legislation, GSE reform, on a large bipartisan basis 

and indeed, it passed the House with almost 400 votes, and we 

were quite proud of that. And a part of that legislation, as you 

know, was to set affordable housing goals for Fannie Mae and 

Freddie Mac. 

And I’m just wondering if you could comment as to how it might 

enable Fannie Mae and Freddie Mac to better meet their objectives, their housing objectives, and in particular the affordable 

housing goals as approved by our committee. We want to work with 

you obviously in that regard and obviously be helpful. 

And hopefully, the Senate will take up their legislation on the 

Floor so we can get to conference and not only create a world class 

regulator, but also start towards achieving those affordable housing 

goals. 

Mr. JACKSON. First of all, I think that we really need a world 

class regulator, a first rate regulator, to make sure that Fannie 

Mae and Freddie Mac addresses their charter mandate. 

I must say that over the last year dealing with both Fannie Mae 

and Freddie Mac, and the leadership of the organization, I think 

they clearly are making an effort to address the affordable housing 

goals for the first time, from my perspective. They might not get 

there, but it’s a true effort at this point in time. And I must commend both persons leading each individual organization. 

It is imperative that we provide low and moderate income not 

only rental housing but home ownership. Fannie Mae and Freddie 

Mac were chartered to do that, and we’re going to work with them 

10

to do that. But at the same time, the argument that they’ve made 

in the past that if they serve this market they can’t, in essence, 

serve the high end of the market has no validity at all. 

It is my belief that they can serve both markets, and I must tell 

you I think that we’re working towards that, and I’ve seen great 

progress and strides. But I do think still, Mr. Chairman, that we 

need a first class regulator to make sure that they continue to do 

what they should. 

The CHAIRMAN. Let me ask you, does HUD, and do you personally, support the goals of the specific language in our bill in regard 

to the housing goals? 

Mr. JACKSON. I can’t remember the specific language today. I’ll 

have to go back and review it. 

The CHAIRMAN. I guess the effort was to—the committee’s effort 

was to try to simplify the process to make it more understandable. 

And I would appreciate maybe a response at a later time in writing. 

Mr. JACKSON. I will do that. 

The CHAIRMAN. Thank you. The gentleman from Massachusetts. 

Mr. FRANK. Mr. Secretary, thank you for those words. I appreciate this effort of cooperation between Fannie Mae and Freddie 

Mac. I agree with you that the new leadership, Mr. Mudd and Mr. 

Syron, are trying to hard to move forward. So I appreciate your 

doing that. 

And while I’m in the complimentary mode, let me tell you how 

much I appreciate—I mean this very seriously. On the bottom of 

page 3 of your statement to the top of page 4, there’s a very important statement here that too often gets unsaid, and I want to read 

it and thank you in your leadership position for saying it. ‘‘While 

home ownership is one of President Bush’s top priorities, the President realizes that it is not a viable option for everyone. The largest 

component of HUD’s budget promises decent, safe and affordable 

housing for families and individuals who may not want to become 

home owners or who may not yet be ready to purchase a home.’’ 

We’re in the business of trying to help people get homes. Home 

ownership is a very desirable piece of that. But I appreciate this, 

because too often it just becomes home ownership without any understanding that this is for most people, we hope, but not for everybody. 

I did want to go back now to the Fannie Mae and Freddie Mac, 

because I appreciate what you’re saying, but first of all, let me ask 

you, on March 7th, there was an article by James Tyson, whom I 

have found to be a reliable reporter at Bloomberg, and he quotes 

you, indirectly—he says Fannie Mae and Freddie Mac shouldn’t be 

ordered by Congress to cut their combined mortgage portfolios, the 

head of HUD said today. Quote, ‘‘the regulators should decide,’’ unquote, the appropriate size. Quote, ‘‘we will have faith and confidence in the regulators to look at the issue and come up with a 

conclusion,’’ end quote, that Fannie Mae and Freddie Mac, quote, 

‘‘can live with.’’ Unquote. 

That appeared to have been—from the record, that appeared to 

have been your position for about an hour. Because about an hour 

later, we had a statement—I was about to call you up and congratulate you for it—when you beat me to the punch by retracting 

11

it. Did you change your position? Were you asked to change your 

position? Or did the reporter just get it completely wrong? 

Mr. JACKSON. Honestly, Mr. Ranking Member, he got it wrong. 

That is not what I said. And I was a little baffled when I saw all 

of that in quotes. 

Mr. FRANK. Well, I appreciate you—let me just say, I check with 

Mr. Bloomberg. You say that. I have no way to doubt it, but it disappoints me. 

Let me then say with regard to affordable housing; I believe that 

goals are very important. But precisely, and the goals would particularly help us with home ownership, because the goals tend to 

be in the home ownership area to some extent, although there’s 

rental housing. 

But we also in this committee added overwhelmingly a requirement that was sort of based on the Federal Home Loan Bank 

model, that 5 percent of the after-tax profits of Fannie Mae and 

Freddie Mac go for affordable housing for people who would be at 

the level below the goals. 

Leaving aside other differences on the bill, what’s the Administration’s position and your position on that particular provision? 

Mr. JACKSON. First of all, I think, Mr. Ranking Member, we 

shouldn’t have to do that. 

Mr. FRANK. Well, I didn’t ask you whether we should or shouldn’t 

have to. What’s your position on it? 

Mr. JACKSON. I don’t think we need it. Their charter mandates— 

Mr. FRANK. No, you’re quite wrong about that. Their charter does 

not mandate that they make grants for people who are in low and 

very low income. Their charter mandates and we have increased 

their lending activity should not just be at the high end, but nothing in the charter mandates grants. And if you think that Mr. Secretary, you better go re-read the charter. 

The charter does not mandate a grant program for the construction of affordable housing. Where in the charter is that? 

Mr. JACKSON. No, that is not what I said, Mr. Ranking Member. 

I said that their charter mandates that they serve needs of low and 

moderate income families. 

Let me say this— 

Mr. FRANK. No, excuse me, Secretary, because you’re evading my 

question. What about families in the rental—in their mortgage, 

secondary mortgage business? That—we’re talking about not low 

and moderate, but low and very low. And there is no way without 

this 5 percent requirement that they’re going to achieve a significant improvement in the affordable housing start for the lowest income people. But I— 

Mr. JACKSON. Let me say this to you, Mr. Ranking Member, I’m 

not questioning. You have the authority. You’re Congress, not me. 

If you— 

Mr. FRANK. I understand that, Mr. Secretary. But you’re wasting 

my time when you say that. I know we have the authority. The 

question is whether you support it or don’t support it. 

Mr. JACKSON. I don’t think it’s necessary. 

Mr. FRANK. So you don’t support it? 

Mr. JACKSON. No, I don’t. 

12

Mr. FRANK. Okay. I’m very disappointed in that, and I think it’s 

inconsistent with your professed concern about low income housing. 

The other question I had was this. I know on CDBG, you pro- posed a $736 million cut, and you say that’s not something the Administration wanted—you fully support that. You said you got 

every penny, you told the appropriators, that you asked for the 

budget. You proposed cutting back on some of the upper income 

amounts. We listed like about 70 or 80 communities. Does the 

amount you would save by your formula change equal the $736 

million you would reduce in CDBG? 

Mr. JACKSON. Yes, I do. 

Mr. FRANK. Would you give me that chart? Because we haven’t 

seen the formula change, so I don’t know how you can say that. 

But would you give us a chart that gives that? 

Mr. JACKSON. Well, we’ll be happy to give that to you. We’ll be 

happy to submit it. 

Mr. FRANK. Okay. Last point. The reduction in the amount we 

would spend from one year to the next in construction for housing 

for the elderly and housing for the disabled. Is it your view that 

those programs have not been good programs, or that the private 

market would meet the need, or that we don’t need the housing? 

What’s the justification for reducing by 50 percent the amount we 

would spend from one year to the next to build housing for the elderly and housing for the disabled? 

Mr. JACKSON. Because I have to make very, very difficult choices, 

and we have a Section 8 program that is absolutely eating at the 

heart of our Agency. And those programs, as difficult as it was, I 

had to make those choices. 

Mr. FRANK. So you don’t justify those on the grounds that they’re 

bad programs? It’s just there wasn’t enough money available to 

you? 

Mr. JACKSON. No, sir. 

Mr. FRANK. Okay. I agree. Because what that shows is that if we 

weren’t doing a level of tax cuts we were doing, if we weren’t planning to send a manned mission to Mars, and we didn’t have the 

war in Iraq, we wouldn’t have that problem. 

I would also say I think you have exaggerated the Section 8 

issue. But you do make this point. One reason the percentage of 

the Section 8, the budget that Section 8 is increasing, although by 

our calculations, only to 54 percent from 50 percent, not as much 

as you say, is that you’re shrinking everything else. 

So the notion of this Federal budget with these tax cuts and this war in Iraq, etc., that we have to cut $300 million approximately 

out of housing for the disabled and the elderly, which you admit 

are good programs, because we have to make, quote, ‘‘tough 

choices,’’ unquote, the problem is that the tough choices that have 

been made, essentially is choosing to spend the money elsewhere, 

and saying ‘‘tough’’ to the people at HUD. 

The CHAIRMAN. Mr. Ney. 

Mr. NEY. I want to thank the gentleman. Mr. Secretary, I just 

had a few questions. One is on the manufactured housing to follow 

up on my statement when we opened up. The consensus committee, 

and I wondered how you envision the role of the consensus committee because—this is on manufactured housing, because I think 

13

a lot of people feel that the consensus committee, that it would be 

feasible for all the policy decisions on manufactured housing, their 

general applicability, could go through the census committee. Do 

you believe that, or do you think there’s— 

Mr. JACKSON. I share your concerns. 

Mr. NEY. So you do think— 

Mr. JACKSON. Yes. 

Mr. NEY.—it could all go through the consensus committee? 

Mr. JACKSON. Yes. 

Mr. NEY. The Federal preemption on the installation standards 

for manufactured housing, some people are arguing to us that the 

language in Section 604(d) of that 2000 Act is broad enough to 

cover installation standards. Do you have any thoughts on that? 

Mr. JACKSON. You have me. I can’t answer you right now on that 

one. 

Mr. NEY. The other thing I wanted to ask you was about—you 

will follow back up— 

Mr. JACKSON. I will get that information to you. 

Mr. NEY. The other question I wanted to ask you was on Hurricane Katrina. We had just, in the last couple of weeks, found out 

the housing authority had gotten a Section 8 voucher, and they 

gave it, you know, obviously to some people who were forced to 

move out of there and move into Ohio. Now that family was already receiving—and this is something you can’t know about. I understand that. 

Mr. JACKSON. Okay. 

Mr. NEY. But in theory. The family is already receiving a voucher. They took one of their vouchers they had in Ohio and they applied it to the family. Now along the line, is that housing authority 

going to be able to capture that original voucher that was applied 

to that family in New Orleans? 

Mr. JACKSON. Yes. After we go through the disaster period, the 

voucher that the person had in New Orleans will go with that person whether they’re in Ohio, Pennsylvania, wherever they are, that 

voucher will stay with them. 

Mr. NEY. But the housing authority used one of its own. Does it 

then go through a formal process to say we used one of our own, 

can they recapture that voucher back? See, that’s what they did. 

Mr. JACKSON. Well, actually, Mr. Chairman, they shouldn’t have 

used their own, because we have the Katrina fund and we have the 

disaster voucher fund. And the moment that those run out, they 

will capture their voucher from New Orleans. So the housing authority shouldn’t have had to use those, because we’ve allocated 

funds to follow the family. 

Mr. NEY. Probably I’m guessing that it happened in September, 

probably happened right away, you know, they headed up to Ohio. 

So maybe everything wasn’t in place yet. But they should probably 

then contact HUD, I assume? 

Mr. JACKSON. Absolutely. 

Mr. NEY. I’ve heard this in just scattered parts, you know, 

around the country. 

Mr. JACKSON. Right. 

Mr. NEY. Some housing authorities have said that. One other 

question on the Katrina situation, too. There were some emergency 

14

vouchers created, and I think that was FEMA money I believe that 

went over. 

Mr. JACKSON. That’s correct. 

Mr. NEY. Are those vouchers in addition to the vouchers that 

people already had down there, or were there any new vouchers 

created for people who didn’t have vouchers before but were in 

emergency situations? 

Mr. JACKSON. Actually, since the tragedy, they were Katrina disaster vouchers, we had an interagency agreement with FEMA to 

serve those persons who were either in public housing, on Sections 

8, 202, or 811. And many of those persons did not have any means 

of being housed. So they used the Katrina money to house them. 

But we had not at any time shifted the vouchers from New Orleans 

to follow them at that point. And those vouchers are now beginning 

to be shifted to people who are coming off of the Katrina fund. 

Mr. NEY. Mm-hmm. Because I just always wonder if there was 

a future problem in the fact that there was money taken from 

FEMA to pay for, quote, ‘‘emergency vouchers.’’ And then down the 

line, all of a sudden, you know the Congresses in the future, of 

course, it’s a Congressional question, but maybe also the Executive 

Branch would come back and say, well, you know, we put the 

money to FEMA, but now HUD’s going to have a squeezed budget. 

In other words, I always thought that the FEMA money used for 

vouchers should always, eventually at the end of the day, I felt 

should apply to HUD, so that HUD’s not penalized. 

Mr. JACKSON. Absolutely. We will not be penalized. 

Mr. NEY. That’s what I thought. One question I had on the new 

operating subsidy rule for the housing authorities. Some housing 

authorities, you know, are complaining it’s micromanaging. For example, some of the smaller ones say that with this, they’ve given 

some additional amount of money, but they’re told to hire ‘‘X’’ 

amount of people that in some cases they don’t need, and they have 

no way out of it. Have you looked at or heard concerns about some 

of those? 

Mr. JACKSON. Well, that’s new to me. When we talk about the 

operating subsidy changing, we’re giving great flexibility to the 

housing authorities. I can tell you when I ran three housing authorities, I would have loved to have had the flexibility. Because 

my position is, sitting here as Secretary, we do exercise too much 

control over the housing authorities. You know, Mr. Chairman, I’d 

love to see the expansion of the Move to Work Act. That is, to give 

housing authorities more latitude to run their budget. Because I 

think the Move to Work program, and it’s been in a demonstration 

stage, has been absolutely wonderful. Because if the housing authorities tell us what they want to do and do it, I don’t think we 

should on a day-to-day basis be interfering with them. 

Mr. NEY. [presiding] I have a couple of other questions real 

quick, because I want to go on generally. Stop loss. Do you have 

a comment on stop loss? 

Mr. JACKSON. Stop loss is in the operating subsidy agreement, 

but it was—we agreed to do it, and it’s there. And that was because 

clearly we heard the voice of Congress, but also we—it was only 

fair. We had proposed that to the industry, and I don’t think you 

should backtrack once you— 

15

Mr. NEY. So you think stop loss is fair. Because of the votes, I’m 

going to move on to the gentlelady from California. 

Ms. WATERS. Thank you very much, Mr. Chairman, thank you 

for the hearing. Thank you, Mr. Secretary, for being here. I come 

to this hearing this morning a bit disgusted, really. Because I am 

watching what is happening in this country to poor people, and we 

should all be a little bit ashamed about what we’re not doing to assist the poor. 

I am really sick and tired of going into these dysfunctional housing developments, commonly referred to as housing projects, where 

people are jobless, where there’s little being done to deal with drug 

prevention, where there are not adequate programs for the children. And on top of that, in cities like Los Angeles, the homeless 

population is growing. We have a great need for our nonprofits to 

be involved with providing services and supporting the city, and 

the President’s budget is cutting the CDBG and striking altogether 

Section 108 that could go a long way toward community development. 

In addition to that, you know, this budget attacks the disabled 

and the elderly. What are you doing? What is your vision for dealing with all of these programs, individuals that come under your 

mandate to help? What do you agree with? What do you disagree 

with in the President’s budget? I mean, what—what can you do to 

give some direction to this Administration about dealing with the 

needs of all of those poor people, poor working people and others 

who depend on the resources that come under the HUD budget? 

Mr. JACKSON. Congresswoman, I think that’s absolutely a fair 

question. But let me say that I clearly think that President Bush 

and the Administration takes my advice. 

Ms. WATERS. They do? 

Mr. JACKSON. And I’ve said—yes. 

Ms. WATERS. This budget is your advice? 

Mr. JACKSON. This budget is my advice. 

Ms. WATERS. Well, then I’m going to stop being nice to you. 

Mr. JACKSON. All right. I won’t stop being nice to you. 

Ms. WATERS. Yeah, you go ahead. Tell me. If this is what you advise the President, then you come on in here and get what’s coming 

to you. Go ahead. 

[Laughter] 

Mr. JACKSON. I’m prepared. Let me say this to you. I think the 

budget addresses the needs. We’re in a very difficult time, and I 

have to make choices. The Section 8 budget, as I said before, is eating at the core of HUD’s budget. I think that we must have the 

flexibility to allocate monies the way it was pre-1998 and stop the 

growth of the Section 8 program. And I think in stopping the 

growth of the Section 8 program, we can address other programs. 

Ms. WATERS. Let me just interrupt you. I hate to do this, we just 

have such limited time. How do you stop the growth of the Section 

8 voucher program when the need is there? 

Mr. JACKSON. Well, first of all, the need is there, but the point 

is, is that many of the housing authorities are not doing what they 

should be doing by purging their rolls. Now, you don’t have to believe this. I ran a housing—I ran three of them. 

Ms. WATERS. Yes, you’ve said that a hundred times. 

16

Mr. JACKSON. No, it’s okay. And that puts me in a different position where I know that they might come to you and tell you one 

thing, but I know they’re not doing what they should be doing. 

Ms. WATERS. All I know is that we have a growing waiting list 

for Section 8 all over the country. There is a great need. 

Mr. JACKSON. You’re right about that. 

Ms. WATERS. What do we do to try to meet the need of desperate 

people who have nowhere to live? 

Mr. JACKSON. I’ll tell you what we do is we start, if housing authorities will start purging their rolls and getting people off of Section 8 that don’t belong, then we will be able to turn over the certificates. Second of all, if we can have a gradation of people being 

able to use the Section 8 program, it will flip—it will turn over 

much quicker. 

Ms. WATERS. Do you have proof that housing authorities have 

people on Section 8 who don’t belong in the program? 

Mr. JACKSON. Yes. It is clear that they are, because every year 

I purge the rolls, and it was somewhere between 18 and 20 percent 

of the people shouldn’t have been receiving. They declared no income, but they all had income. And we found that. But there’s no 

incentives for housing authorities to do that today because they get 

the Administration— 

Ms. WATERS. Would you supply to this committee—Mr. Chairman, your evidence of Section 8 participants that you have discovered are on the rolls, who should not be on the rolls. I would say 

it should be done for every city, but I certainly want to see it for 

Los Angeles. I want to see your documentation for that. 

Mr. JACKSON. What I said to you, Congresswoman, is that when 

I ran housing authorities, I purged the rolls. Eighteen to 20 percent 

of the people who were on the rolls didn’t deserve to be there, and 

I don’t think that’s changed. If you ask me have I— 

Ms. WATERS. Do you have the proof of that? 

Mr. JACKSON. Not today. 

Ms. WATERS. Well, look. If you don’t have the proof of that, 

don’t—please don’t tell us that the same thing is going on that 

went on when you— 

Mr. JACKSON. It still is. 

Ms. WATERS.—managed—but you don’t have any proof. 

Mr. JACKSON. It still is. 

Ms. WATERS. You don’t have the proof. 

Mr. JACKSON. I’ll tell you this. You need to go ask your executive 

director if— 

Ms. WATERS. No, no, no. I’m asking you. You said— 

Mr. JACKSON. I think if you asked him— 

Ms. WATERS. No. You said it in this committee, and I want to 

ask you for the proof. 

Mr. JACKSON. Congresswoman, I stand by it. 

Ms. WATERS. Great. Provide us with the proof. Go ahead. 

Mr. JACKSON. I stand by it. 

Ms. WATERS. Provide us with the proof. What about Section 108? 

You advised the President to cut that, too? 

Mr. JACKSON. Yes, because it was highly not being used. 

Ms. WATERS. Provide us with that proof also. 

Mr. JACKSON. I’ll be happy to— 

17

Ms. WATERS. What about the elderly? Did you advise the President to cut that, too? 

Mr. JACKSON. Yes I did, because the Section 8 budget is eating 

at the core of our budget, and I had to make some tough decisions. 

Ms. WATERS. And so many how many people are left without 

support, the elderly in that program? 

Mr. JACKSON. Well, at the present stage, for the Fiscal Year 2006 

budget, we’re funding 7,000 new units. And in the 2007 budget, 

we’re funding 3,000 additional units. 

Ms. WATERS. What about the disabled? Did you advise the President on that, too? 

Mr. JACKSON. We’re funding 3,000 units. 

Ms. WATERS. I beg your pardon? 

Mr. JACKSON. We’re funding in the 2007 budget 3,000 units, and 

we’re not taking away any of the existing contracts from any of the 

202 or 811’s. 

Mr. NEY. The time has expired. 

Ms. WATERS. Thank you, Mr. Chairman. I just want to make 

sure that it’s in the record that I’ve asked for documentation and 

proof on Section 8 in the way that we discussed it, and particularly 

for Los Angeles. I want to see if the Secretary knows what he’s 

talking about, okay? 

Mr. NEY. The gentlelady has requested that to be entered into 

the record. 

Mr. JACKSON. That’s fine with me. 

Mr. NEY. And entered into the record is fine with the Secretary. 

Mr. Baker? And it’s fine with us. Thank you. 

[Laughter] 

Mr. BAKER. Thank you, Mr. Chairman. Mr. Secretary, I hope you 

know something’s up when I have a Secretary of HUD before the 

committee and I don’t ask a question about GSE’s. Secondly, something is up when I’m not going to mention that the LSU men’s and 

women’s team have made it to the Final Four. I’m not going to 

bring it up. 

The reason for my focus, of course, is the response to Hurricanes 

Rita and Katrina, and I wish to express appreciation for the actual 

and proposed CDBG funds available to the State for resolution. I 

know you are aware, but members might not be, that before the 

State can expend those funds, they must submit to you for approval a plan that outlines how they intend to utilize those important resources. 

You are probably aware that this committee passed by large 

margin a proposal H.R. 4100 some time ago that would have created a Federal resolution corporation to assist in the recovery to 

which the President expressed some concerns after its passage 

from committee. 

My belief is that, and I may stand to be corrected here, that the 

standards or rules or procedures by which the State will be judged 

have not yet officially been promulgated and made public. And the 

State legislature convened in regular session this week. So they 

have a clock running on them to be able to put together a package. 

And so this morning, I want to outline a suggested potential remedy and get from you a perspective as to it being likely or unlikely 

that such a plan would gain your approval at the end of the day. 

18

The plan would be subject to, of course, the Governor’s support, the 

legislature having adopted it, and in essence would create at the 

State level a very similar structure to what was proposed in H.R. 

4100 at the Federal level, in that it would be a State-chartered corporation to make some partial resolution with home owners as to 

pre-Katrina equity, make some partial payout of mortgage obligation to the lenders, would enable the restoration of large tracts of 

land to be sold back into the private market for development, 

would utilize to great extent a lot of free enterprise management 

resources, would enable the restoration of all essential emergency 

service, would enable the ability up to some dollar limit of restoration of small business function. 

As you know, particularly in the urban area of Orleans, we are 

a community of innumerable small business, and the likely recovery of those enterprises at this point is in question. If—it would 

provide also for significant environmental remediation. If the plan 

described achieved those goals, achieved local political acceptability, are the elements we’ve outlined within the scope of what 

you intend to look for? And if not, could you outline for me the 

items that you think are important before Louisiana can spend 

those funds? 

Mr. JACKSON. I think, Congressman, you’ve addressed a number 

of the issues that are important to us. And what I said to the Governor and to Dr. Norman Francis, who chairs the committee, is to 

come back with a plan that addresses the needs of many of the 

things you just said; housing, making sure people are paid for their 

homes, decide how the money will be used in the respective communities for infrastructure. And if you come back with that, you all 

have told us to be extremely flexible in listening to the Governor 

and the Louisiana Recovery Commission, and we’re going to do 

that. 

So I think that with a number of the things that you just said, 

if the Governor comes back with a plan that’s addressed those 

issues, especially issues of housing and infrastructure, yes, we are 

very open to listening to that and working with Louisiana. 

Mr. BAKER. I thank you, Mr. Secretary. I yield back my time, Mr. 

Chairman. I yield back, Mr. Chairman. 

Mr. NEY. The gentlelady from New York, Ms. Velazquez. 

Ms. VELAZQUEZ. Thank you, Mr. Chairman. Mr. Secretary, it has 

been 6 months since Katrina hit the Gulf Coast, and FEMA still 

has not issued guidelines for continued eligibility for rent assistance. And this is in defiance of a Congressional directive. 

Efforts to provide temporary trailers have been ineffective. They 

have been marked by delays. Further, mismanagement of the housing crisis has been seen in FEMA’s erratic and careless effort to 

kick families out of motel and hotels on short notice and with no 

back-up housing options. 

Can you tell us what is the Administration’s comprehensive plan 

to rebuild and restore housing in New Orleans? And can you outline how this plan will be implemented? 

Mr. JACKSON. Congresswoman, what you just stated absolutely 

in many cases are correct. And if you look at the lesson learned 

that was just done by the Administration, it says that clearly we 

should be the agency for intermediate and long-term housing. But 

19

that requires you to change the Stafford Act, which says that 

FEMA has the responsibility. Once that Act is changed, then clearly, we take responsibility. But right now, I can’t comment on why 

FEMA has not done certain things. 

Ms. VELAZQUEZ. But isn’t it true that FEMA and HUD should be 

working together? 

Mr. JACKSON. We are working— 

Ms. VELAZQUEZ. Putting together a plan? 

Mr. JACKSON. And I don’t disagree. 

Ms. VELAZQUEZ. Are you working on a plan? 

Mr. JACKSON. We are working together on assisting residents 

who were in public housing on Sections 8, 202, and 811, not those 

who are not. 

Ms. VELAZQUEZ. I’m not talking about the assistance you’re providing now, I’m talking about a comprehensive plan. 

Mr. JACKSON. But the comprehensive plan can— 

Ms. VELAZQUEZ. To rebuild and restore housing. 

Mr. JACKSON. We’re working to rebuild, but in order for us to 

work, we’re going to have—it’s going to be required that we change 

the Stafford Act. 

The Stafford Act makes clear that FEMA is the housing of immediate resort, not us. That’s your language. That’s your bill, I mean, 

your Congressional mandate. 

Ms. VELAZQUEZ. So you’re going to come back to us and you’re 

going to ask for more money in the supplemental, and you’re not 

going to provide us with a plan for us to say this is the right way 

to do? 

Mr. JACKSON. I think, Congresswoman, I’ve tried to answer you 

honestly. It’s not— 

Ms. VELAZQUEZ. Let’s go to the next question. 

Mr. JACKSON. Okay. 

Ms. VELAZQUEZ. Because—it’s the rule and the trend here for you 

not to answer the questions. You have recently released new rules 

that will require housing authorities to convert to an asset-based 

management system or suffer financial penalties. I understand that 

HUD will punish the New York City Housing Authority with a 24 

percent cut in the first year alone if it does not comply. These are 

understandable actions. 

However, I am troubled that HUD will withhold funding for up 

to 6 months while it checks to see if NYCHA is compliant. That is 

not fair, and to presume guilt instead of innocence. So will you 

agree to a more reasonable implementation and forbear cuts until 

HUD can accurately and definitively determine compliance? 

Mr. JACKSON. We’ve already done that with the stop loss provided in the regulation. We’ve given them time to transition. So, 

I’m not sure what they’re telling you, but— 

Ms. VELAZQUEZ. So you’re not going to withhold any funding 

now? 

Mr. JACKSON. They have time to transition. We’ve given them 

time. And I can’t answer that question because I’m not— 

Ms. VELAZQUEZ. Well, they are taking steps and they’re working 

on that. 

20

Mr. JACKSON. But I’m not sure what you’re asking. We have a 

transition period which we call the stop loss rule within the regulations. 

Ms. VELAZQUEZ. The proposed increase in the housing counseling 

program does not keep pace with the proposed increase in American Dream downpayment grants, American Dream downpayment 

is quadrupled, while housing counseling is only increased by 7 percent. What is HUD doing to ensure these families will have access 

to housing counseling, and that the counselors and programs will 

have the skills and resources to equip the families with tools they 

need to stay in their homes? 

Mr. JACKSON. When we came first under Secretary Martinez, and 

I was Deputy Secretary then, the housing counseling program was 

$20 million. It’s $45 million today, because President Bush believes 

that in order to help people in the American Dream Downpayment, 

they must know what they’re getting into. So we’ve increased the 

counseling program multifold compared to what it was in 2001 

when we came in. And it’s serving about 600,000 people, while before it was serving about 300,000 people. So I think that speaks for 

itself. 

Ms. VELAZQUEZ. Well, I don’t think that it speaks for itself. I’m 

talking to you about an increase of 7 percent while you are quadrupling the grants for downpayment. So what it means that a lot 

of the people in this country are not going to be ready. They might 

be ready to purchase a home, but they’ll not be ready to keep their 

homes. 

Mr. JACKSON. Well, I think, Congresswoman, we’ve demonstrated 

our commitment, because as I said before, 2001 — 

Mr. NEY. The time has expired. 

Mr. JACKSON.—it was $20 million. Today it’s $45 million. 

Mr. NEY. The time has expired. The gentlelady from New York, 

Ms. Kelly. 

Ms. KELLY. Thank you, Mr. Chairman. Secretary Jackson, this 

year you proposed to reform the CDBG program by cutting it by 

more than $1.1 billion, even as the total discretionary budget authority and outlays increase for the Department. 

Would it be fair to say that the CDBG program is paying the 

price for HUD’s inability to control costs in its core programs? And 

if not, how else can you explain that your budget—your budget has 

increased, but community development, senior housing and housing 

for the disabled all have double-digit cuts? I think that’s unacceptable. I’d like an explanation. 

Mr. JACKSON. I will tell you, Congresswoman, it is a very difficult 

decision to make. The Section 8 program is eating at the core of 

HUD’s budget. I disagree with the congresswoman who said that 

it hasn’t. The case is, it’s 64 percent of our budget now, and I have 

to make very difficult decisions. 

Ms. KELLY. Sir, we have to make very difficult decisions about 

funding as well. But certainly, cutting senior housing, housing for 

the disabled, and the CDBG grants, those are the things that put 

our people into housing. 

Mr. JACKSON. I will say this to you, again. I have to make some 

very, very difficult decisions because Section 8 is eating at the core 

of our budget. And unless we— 

21

Ms. KELLY. Well, then why would you want— 

Mr. JACKSON.—have flexibility rules, it’s going to continue to do 

that. 

Ms. KELLY. Why would you cut your budget if you obviously need 

more money? 

Mr. JACKSON. I think that clearly we can live within the budget. 

And let me say this about Community Development Block Grant 

programs. I think that if we reform the program and address the 

issues of the cities that are most in need, where poverty exists for 

economic development, we have enough money to do that. But if we 

continue the path that we’re going on, the best example I can give 

you is Palm Beach doesn’t need block grant funds. Or the city that 

I am from, Dallas, in many cases, used the block grant fund for 

housing inspection. That should be the city taking that responsibility. 

So if we use the money properly, yes, we have enough money to 

address the needs. 

Ms. KELLY. Well, you’re trying to shove off your responsibility, I 

think, on having the cities pay for it rather than talking to us. You 

administer programs. In theory, you ought to be able to administer 

these programs in a way that will help the people that they’re intended to help. What you’ve just said to me is that you are cutting—we know that you’re cutting the budget by $1.1 billion, and 

yet you’re simply—you’re sitting there saying, well, I have to make 

hard decisions. Why would you cut your budget if you have to make 

such hard decisions that it’s falling on our seniors, falling on our 

disabled, falling on our cities who have to also provide housing? 

The budget you submitted for this year recommends a 26 percent decrease in funds for senior housing. It goes from $735 million to 

$545 million. I want to know if you’re aware that the Census Bureau has reported that growth for the senior population is faster 

than any other population group. In a city that I represent, Beacon, 

New York, the small public housing authority there is going to see 

a $300 million cut; it’s going to make a difference to the seniors 

there between paying their fuel bills and keeping the units safe 

and in good repair. 

These are tough choices that local small authorities have to 

make. But you’re not here asking us for more money. You’re asking 

us to cut your budget. That is an oxymoron in my mind. I don’t understand that. 

Mr. JACKSON. Well, let me say this to you, Congresswoman. It 

might seem as if it’s an oxymoron. I think the budget addresses the 

needs that I think we should address. It’s very difficult times, and 

I think I said that in my opening statements. We have to make 

very difficult decisions. But I stand by my position that in the 2006 

budget, we have 7,000 units. In the 2007 budget, we have 3,000 

units, and we’re not taking one contract from any of the elderly or 

disabled programs today. We’re funding every one of those contracts. Community development, I go back to what I said to you before. I think that we have permitted cities to use the money for 

things that they should be doing and should continue to do. And 

I don’t think we should continue to fund those. I think we should 

look to those cities. And you might have one of those cities in Beacon that actually needs more Community Development Block Grant 

22

fund and address those needs, rather than addressing the needs of 

some of the cities that don’t. 

Mr. FRANK. Will the gentlelady yield for 10 seconds? 

Ms. KELLY. Yes. 

Mr. FRANK. Because I would just like to remind her that the last 

time we saw this same proposal for changes, as I remember, most 

of the communities in her district were going to be eliminated altogether. 

Ms. KELLY. That’s correct. That is correct. Thank you for pointing that out. 

Mr. NEY. I thank the lady. 

Ms. KELLY. I wanted to ask one more—one more—going back to 

reclaiming my time—you said that you would look into the high energy costs on public housing. Did you look into it? 

Mr. JACKSON. Yes I did. 

Ms. KELLY. And what are we talking about here with regard to 

high energy prices? 

Mr. JACKSON. Last year we allocated energy monies, and I think 

that clearly most housing authorities can address the needs. 

Secondly, during this transition period of the operating subsidies, 

there are reserves in many of the housing authorities to address 

the needs. And we really feel at this point that there is no need 

to ask for any more money for that. 

Mr. NEY. Thank you, Mr. Secretary. Mr. Watt. 

Mr. WATT. Good morning, Mr. Secretary. 

Mr. JACKSON. Good morning. 

Mr. WATT. I welcome you here and just have one line of questioning to pursue with you. I’m looking—I guess I should anticipate 

your response to all of this as these are difficult times and, you 

know. So that’s the response I guess. So if that’s going to be your 

response to every question, I guess I shouldn’t even bother. 

But I’m looking at your testimony before the Senate. Senator 

Murray asked you about a cut of what she says was $1.15 billion 

from CDBG. You disputed that and said it was actually $635 million from CDBG. But in that response, this is what you are quoted 

as saying. This is from the transcript. ‘‘When I look at the block 

grant program’’—and this is your quote—‘‘I think we should zero 

in on those communities that have been in distressed conditions, 

that really need our help both economically, housing, infrastructure-wise, and gear our money toward those programs to help them 

move forward, and if they’re moving forward, continue to help them 

until they come to the level that they don’t need our help.’’ Which 

I—was consistent with what you’ve been saying and what we’ve 

been saying about what the Hope Six program does. 

The thing that’s troubling is, I’m having trouble reconciling that 

with no request for Hope Six funds this year, and I’m having even 

more trouble reconciling it with your request to rescind $99 million 

in Hope funds from last year. And I’m having trouble reconciling 

that recision with what you just told Mr. Frank, that it’s 

Congress’s decision. We ought to have the authority to tell you 

what to do. We told you what to do and appropriated $99 million 

worth of money last year for Hope Six. 

23

Now, somewhere in this I’m losing—I’m losing how to reconcile 

this, you know, so help me, please. I mean, I don’t want to get in 

a shouting match with you today. 

Mr. JACKSON. I refuse to get into a shouting match with you. 

Mr. WATT. Okay. All right. 

Mr. JACKSON. Let me say this, Congressman. 

Mr. WATT. Help me reconcile those three things. You say that 

there are still distressed communities. We’ve been saying that in 

Hope Six. You say that Congress should tell you what to do. We 

told you what to do last year. We appropriated money for it. And 

yet you’re here saying we should rescind the $99 million we did for 

Hope Six last year, and we should reduce CDBG money this year. 

So, I mean, I just can’t put that together in my head. 

Mr. JACKSON. Let me say this to you, Congressman. I made a— 

Mr. WATT. These are difficult times. 

[Laughter] 

Mr. JACKSON. No. I’m not— 

Mr. WATT. Oh, okay. All right. Okay. I’m sorry. I thought I was 

going to get it out there ahead of you. 

Mr. JACKSON. No. I will try to answer your questions. 

Mr. WATT. Okay. Thank you. 

Mr. JACKSON. I made a request to rescind the $100 million. I 

think when I was in the Senate, and it’s been made clear to me 

here today that that request is not going to be granted, so we’re 

going to send out the NOFA for the Hope Six. I still believe— 

Mr. WATT. Hallelujah. 

Mr. JACKSON. I still believe this today, that with over $3 billion 

still in the pipeline unspent, we’ve only had 54 projects completed 

out of 235 that we have issued. 

Mr. WATT.—committed, though. 

Mr. JACKSON. That is not a great track record. 

Mr. WATT. They’re committed to good plans. Have you gone back 

to review the plans? I mean, you know, you can’t build a community overnight. We’ve recognized that for a long time. I mean, you 

know, you can’t commit one day to spend money to revitalize a 

community and have it spent the next day. It takes a while to build 

a vibrant community. You acknowledge that? 

Mr. JACKSON. I agree with that, but— 

Mr. WATT. Okay. 

Mr. JACKSON. Congressman, it doesn’t take 8 or 10 years to do 

it. It might take 3 or 4 years to do it. But every place where they 

had not had a developer who could leverage the money, the monies 

are sitting there. And I don’t want to name any specific cities. But 

the key to it is, is that in place—and I will name these cities—

places like Dallas, Atlanta, Charlotte, where they’ve had developers, they’ve spent their money and they’ve created beautiful communities. But that’s only 54 out of 235. 

Mr. WATT. One of those communities I represent, and if we do 

a good job and revitalize communities and then you turn around 

and tell us that this isn’t a worthy program and we got other communities, why don’t you take the monies to where the people aren’t 

responding and transfer it to the places where they are? 

Mr. MILLER OF CALIFORNIA. [presiding] The gentleman’s time has 

expired. 

24

Mr. JACKSON. And I think that’s an excellent question. We can’t 

take the money. You can take the money back and tell us to reallocate it, but we can’t take the money back once it’s allocated. 

Mr. MILLER OF CALIFORNIA. The gentleman’s time has expired. 

Mr. Ryun from Kansas is recognized for 5 minutes. 

Mr. RYUN. Mr. Secretary, thank you for being here today, and 

knowing your interest in running after this meeting, you might 

want to take a run to work through some of these tensions and 

these tense moments. I want to engage you in an issue that I believe deserves prompt attention both by your Agency and this committee. Your Agency has the responsibility to institute proper 

guidelines for Federal housing the way—I think it should be consistent in the way Congress wanted it and intended it to be. 

I want to specifically address one such guideline that I believe 

is unintentionally hurting our men and women in our uniform that 

are serving, standing harm’s way for us, even as we speak. Currently, when an individual applies for residency in an affordable 

housing property, they are considered based on their income requirements, as they should be. However, not all income is treated 

the same. Many civilian applicants are in possession of a Section 

8 voucher. This voucher is not counted as income for the purposes 

of qualifying. Service members are not eligible for Section 8 housing, but they do receive a basic allowance for housing in the military, BAH. The problem is that HUD currently views this assistance as income, eliminating virtually every service member from 

being eligible. 

Mr. Secretary, this affordable housing program should benefit 

those who need them most, regardless of whether or not the applicant happens to wear a military uniform. And I’m not proposing 

anything other than an equitable treatment to the men and women 

who voluntarily put their life on the line for us. 

I firmly believe that we must act now to correct this inequity. A 

BAH held by a service member should be treated the same I think 

as a Section 8 voucher held by a civilian. And I know the gentleman from Texas, Mr. Green, is working with me on a legislative 

fix to this. I would actually prefer that HUD would correct it 

through some change in its regulation, but it doesn’t appear that 

at this point you’re willing to do that. 

In fact, my question is this. Do you believe that a soldier’s Basic 

Allowance for Housing should be treated the same as Section 8 

voucher when applying for affordable housing property? 

Mr. JACKSON. Congressman, I’m in agreement with you. We don’t 

have—but we don’t have the power to change it. That’s what we’re 

doing with the State and Local Housing Flexibility Act. 

Mr. RYUN. It’s my understanding you actually do have the power. 

Mr. JACKSON. No, we do not. 

Mr. RYUN. You can actually make that language change. 

Mr. JACKSON. No, we do not. That’s why we are asking you to 

pass the State and Local Housing Flexibility Act, because we’re 

seeing that clearly the way Section 8 is designed today, 30 percent 

of median is where all of the vouchers are. Well, many of the personnel in the armed forces might be at 50 or might be at 60 percent. 

25

I agree with you. They should not be excluded. But at the 

present time, we don’t have it. If we did, I’d do it tomorrow. 

Mr. RYUN. Well, I know we have approximately 50 bases as we’re 

going through global realignment right now that are in the process 

of some enormous growth, and some of those members coming back 

will have an opportunity, if we can get this passed—I’m taking 

what you’re saying is that you can’t fix it and you would prefer 

that Congress would fix it? 

Mr. JACKSON. Yes. And all we have to do, Congressman— 

Mr. RYUN. And that’s exactly where I’d like for it to be, and I 

appreciate your statement. Thank you very much for your time. 

Mr. MILLER OF CALIFORNIA. Ms. Carson, you’re recognized for 5 

minutes. Mrs. Lee? Are you ready? We’ll get Ms. Carson afterwards. 

Ms. LEE. Okay. Thank you, Mr. Chairman. Well, Mr. Secretary, 

I really can’t say I’m glad to see you today based on your testimony. 

Mr. JACKSON. Well, I’m pleased to see you. 

Ms. LEE. You know, it’s really amazing that here you are at the 

helm of an agency that’s the only agency primarily for the poor and 

the most vulnerable, and you’re advising the President on this 

budget that really lacks any sense of morality. It is awful, Mr. Secretary, what you said today. What you proposed is awful, and I’m 

very sorry to see you in this position. 

Now let me ask you with regard to this Section 8 issue. You 

know, going back now to your testimony at the House Appropriations Committee, you said something like 20, 25 percent, 30 percent of the people on Section 8 really don’t need to be there. Okay. 

Yet, in response to Congresswoman Waters’ question, you really 

didn’t have any empirical evidence. It was kind of like based on 

your experience running housing authorities, based on your instincts, your gut, what you see out there, really kind of vague. 

But it’s my understanding now—I’m looking at a report with regard to GAO in 2005. And they’re indicating that about 2 percent, 

which is $377 million, that’s about what it was in net overpayments. Now that’s 2 percent of the entire voucher spending. Now 

that’s about the only factual information that we’ve been able to 

come up with. And so how in the world do you continue to justify 

this? I know just in my own district there are 7,000 people on the 

waiting list. 

Mr. JACKSON. Right. 

Ms. LEE. And where there are bad actors at housing authorities 

that are allowing what you say to go on that’s taking place, then 

you know how to deal with those individuals. But, you know, come 

on, you can’t just decimate this housing initiative that’s for the 

least of these, for those who don’t have a lot of money. How do you 

justify that? Again— 

Mr. JACKSON. First of all, I don’t want to decimate any housing 

needs for those who are in need. 

Ms. LEE. Well, you’re decimating a lot of housing programs for 

those in need. 

Mr. JACKSON. But you asked me a question. I do not want to 

decimate housing for those that are in need. And we do—we know 

that there is a clear disparity when we check the figures on the 

26

zero income claim versus that of the Internal Revenue Service. And 

I will get that to the ranking member. There’s a great disparity. 

And I’m not wrong on that. 

But the key becomes, what you asked me, Congresswoman, is 

that housing authorities, from my perspective, are not doing what 

they should be doing, that is, consistently purging their rolls— 

Ms. LEE. Well, Mr. Secretary, if you know where these housing 

authorities are, they’re three people, four people, ten people, you 

know how to deal with that. 

Mr. JACKSON. But I can’t deal with that Congresswoman. That’s 

their right. 

Ms. LEE. Oh, Mr. Secretary, come on. 

Mr. JACKSON. No, I cannot. 

Ms. LEE. What are you going to do, just throw people out on the 

streets? You’re not going to allow for the—I mean this budget is—

that’s what you’re doing with this budget. 

Mr. JACKSON. No, we’re not. 

Ms. LEE. Yes, you are. 

Mr. JACKSON. No, we’re not. 

Ms. LEE. Mr. Chairman—Mr. Secretary—Section 8, when you 

look at what you’re doing with Section 8 alone, you’re throwing 

people out on the streets. 

Mr. JACKSON. No, we’re not. We’re not. I mean, we increased Section 8 in this budget by $1.1 billion. And it keeps eating at the 

heart of our budget. But no one—but no one is coming of the rolls 

pre-1998. 

Ms. LEE. But people—7,000 people just in my own district need 

it. 

Mr. JACKSON. I believe that, Congresswoman. 

Ms. LEE. People all over the country need it. 

Mr. JACKSON. But then your housing authority should be doing 

their job. 

Ms. LEE. They’re doing their job, like the majority of housing authorities— 

Mr. JACKSON. I seriously doubt— 

Ms. LEE.—are doing. 

Mr. JACKSON. I seriously doubt that. I seriously doubt that. 

Ms. LEE. Mr. Secretary, how do you say you seriously doubt that 

when we know— 

Mr. JACKSON. Because I was in this industry and I know the caliber of people who are running these housing authorities. 

Ms. LEE. When were you in this industry? A couple of years ago, 

3 or 4 years ago? 

Mr. JACKSON. I was in it for about 10 years, and I know the caliber of people who are running it. 

Ms. LEE. And what about the caliber of people? What’s happening there? How do you see their caliber? 

Mr. JACKSON. Well, I don’t think they’re doing their job, many of 

them. 

Ms. LEE. You don’t think they’re doing their job? 

Mr. JACKSON. No I don’t. 

Ms. LEE. And so people who need, the 7,000 people, the 10,000 

people, the people who need Section 8 vouchers are being penalized 

27

because these housing authority people who you know aren’t doing 

their job because of their caliber? 

Mr. JACKSON. Well, I think that— 

Ms. LEE. That’s a doggone shame, Mr. Secretary, and I don’t see 

how you can tell the President that he needs to do this. It is about 

as awful and as low as any agency can get. 

On discrimination, when you look at what’s happening now, the 

National Fair Housing Alliance, they looked at housing discrimination. Sixty-six percent against African Americans. Housing discrimination. Look at what’s happening in the Gulf region. You 

know, what are you all doing about that? 

Mr. JACKSON. The moment we thought that there was discrimination going on, we had a team of people from Fair Housing and 

Equal Opportunity go down, and it was a team of seven people, and 

they’re still there. And anytime we find discrimination, it’s not—

we can’t tolerate that, period. And we’ve been working tirelessly to 

make sure that people are not discriminated against, not only in 

the Gulf Coast, but for those people who went to other places, because we’ve had other— 

Mr. MILLER OF CALIFORNIA. The gentlelady’s time has expired. 

Mr. JACKSON.—we’ve had other incidents in other— 

Ms. LEE. Well, you’re not asking for more money in this budget 

for housing discrimination? 

Mr. JACKSON. We have money in the budget for housing discrimination. 

Ms. LEE. More money? 

Mr. JACKSON. No. 

Ms. LEE. More money? 

Mr. MILLER OF CALIFORNIA. The gentlelady’s time has expired. 

Secretary Jackson, welcome. Have you turned into a racist since we 

talked last time? I’m kind of shocked at you, sir. 

Mr. JACKSON. Well, I think I woke up this morning black and 

bald-headed, and I’m still black and bald-headed. 

Mr. MILLER OF CALIFORNIA. You look like the same man I respected last year when we talked about turning more authority 

over to public housing agencies, and we got beat to death, as you 

recall, because nobody trusted them. 

Mr. JACKSON. Right. 

Mr. MILLER OF CALIFORNIA. Now all of a sudden they’re walking 

on clouds and nobody trusts you. So it’s amazing how this has 

changed. But if you look back in about 1998, only 36 percent of 

your budget went to Section 8. Now you have, what, 53 percent? 

Mr. JACKSON. About 63 percent. 

Mr. MILLER OF CALIFORNIA. Sixty-three now? I’m sorry. I’m going 

to correct my numbers. Fifty-three to 63. The goal we have is moving people out of Section 8 into their own homes. Therefore, opening up more Section 8 housing for the people who need it out there, 

nobody better than housing authorities to do that. 

Mr. JACKSON. That’s correct. 

Mr. MILLER OF CALIFORNIA. And the best way to do it is to turn 

more authority over to housing authorities as we sit here with a 

panel of housing authority agencies saying trust us, we can do it. 

We can work with you if you give us the authority, but nobody 

wanted to give them the authority. 

28

Mr. JACKSON. Let me say this to you, Congressman, that’s an excellent point. They’ve been asking for authority to be able to do 

what they think is best with the authorities. We have 30 agencies 

in the country to date because of the move to work legislation that 

was passed and the demonstration program. 

Here we are trying to give them more authority, and they’re saying, in the process of giving them more authority, we’re putting on 

more restrictions. To me, that is the oxymoron. 

Mr. MILLER OF CALIFORNIA. They’re guidelines. They’re guidelines. These are the guidelines you must work within, and you have 

the authority to do your job. But I’ve attended numerous events 

with you with housing agencies begging you for the authority to do 

their job, to have discretion to determine how to get people into 

government housing and get them out of government housing, 

thereby opening up the whole process. You’ve worked with them 

talking about new voucher programs, using the money for downpayment assistance. Would you respond to some of that, please? 

Mr. JACKSON. Well— 

Mr. CROWLEY. Mr. Chairman? Mr. Chairman, would you yield for 

a moment? Is it possible to have the first part of your question— 

Mr. MILLER OF CALIFORNIA. I’ll be happy to let you talk when it’s 

your turn, but right now— 

Mr. CROWLEY. I’d like to hear the first part of your question. 

Mr. MILLER OF CALIFORNIA.—Mr. Jackson. We’re having a good 

dialogue here, so I’m very happy— 

Mr. CROWLEY. For purposes of objecting to your question— 

Mr. MILLER OF CALIFORNIA. I resume the point of order that it’s 

my time, not yours, so I ask you to turn the microphone off. 

Mr. CROWLEY.—the chairman’s words be taken down. 

Mr. MILLER OF CALIFORNIA. Well, he can take my words down, 

but I’ll let you speak when it’s your turn, please. 

Ms. WATERS. Unanimous consent—Mr. Chairman? Mr. Chairman? 

Mr. MILLER OF CALIFORNIA. Yes. 

Ms. WATERS. I request unanimous consent to ask you why you 

asked Mr. Secretary if he had turned into a racist? Is that what 

your question was? 

Mr. MILLER OF CALIFORNIA. Certainly. 

Ms. WATERS. Is that what your question was? 

Mr. MILLER OF CALIFORNIA. I was responding to the comment 

that he is a racist. And I said have you turned into one since I last 

saw you? 

Ms. WATERS. Why did you ask that question? 

Mr. MILLER OF CALIFORNIA. It was kind of a rhetorical comment 

that I thought was kind of funny. 

Ms. WATERS. Mr. Chairman, nobody’s been discussing race here 

this morning. Why did you ask that question? 

Mr. MILLER OF CALIFORNIA. Well, Ms. Lee, you asked him if he’s 

a racist. 

Ms. WATERS. Mr. Chairman— 

Mr. MILLER OF CALIFORNIA. You were laughing at the comment. 

Ms. WATERS.—I ask for unanimous consent, please, sir. 

Mr. MILLER OF CALIFORNIA. Yes. 

29

Ms. LEE. I asked the Secretary with regard to housing discrimination and their fair housing compliance efforts and if in fact there 

were any additional funds that he requested to enforce fair housing. 

Mr. MILLER OF CALIFORNIA. Let’s move on. Let’s move on with 

the conversation. 

Ms. WATERS. No, let’s just stop this committee right now, Mr. 

Chairman. You interjected race into this discussion, and I want to 

know why, and all of us want to know why. Why did you do that? 

Mr. MILLER OF CALIFORNIA. Because of the comments made 

against Mr. Jackson. I know him to be a fair, above-board individual. 

Mr. CLEAVER. Mr. Chairman, may I inquire—may I inquire, Mr. 

Chairman? Mr. Chairman, may I inquire? Mr. Chairman? 

Mr. MILLER OF CALIFORNIA. We’re going to move on, and you’ll 

be recognized in a moment. Mr. Jackson and I are personal friends. 

I know him to be a fine man, and I know him to be an honorable 

man, and my comments were based on that. But would you continue with your response to the issue in Section 8? 

Mr. JACKSON. I think that unless we stifle— 

Ms. WATERS. Mr. Cleaver, don’t leave. 

Mr. MILLER OF CALIFORNIA. Mr. Jackson, you may continue. 

Ms. WATERS. We’ll deal with it. 

Mr. MILLER OF CALIFORNIA. Please turn the microphones off. 

Mr. JACKSON. Unless we—unless we stop the growth of the Section 8 program in its present form, it’s going to eat at the heart 

of all of HUD’s budget. 

Mr. MILLER OF CALIFORNIA. I agree. And I think that it’s very 

important that people who are in need, as the Congresswoman 

said, from California, get the vouchers. If you—pre-1998, Mr. 

Chairman, people spent about three-and-a-half years on a voucher. 

Mr. JACKSON. Today they’re spending about 8 years on a voucher. And that means that those persons who the Congresswoman alluded to a few minutes ago—our budget has increased from 42 percent up to 63 percent, but we’re not serving any more people. The 

budget has gone, mushroomed out of control. 

Mr. MILLER OF CALIFORNIA. Thank you, sir. I’ll recognize Mr. 

Carson. Ms. Carson? You’re recognized for 5 minutes, Ms. Carson. 

You can turn the microphone on, ma’am. 

Ms. CARSON. Welcome, Mr. Secretary. 

Mr. JACKSON. Thank you. 

Ms. CARSON. I’m Julia Carson from Indianapolis, Indiana. The 

Indianapolis housing authority has a special unit called the Office 

of Special Investigations. It helps root out fraud, corruption, and 

misuse of Federal funds. This unit has prevented over $1 million 

of Federal funds going to fraudulent schemes, and has found and 

arrested over 180 people who have stolen Federal funds. 

However, this special unit does not receive nearly enough funding. Last year, it received a grant of $42,000, but more realistically 

needs close to $400,000 a year to continue its great success. 

In your testimony to the Appropriations Committee earlier this 

year—earlier this month, you claimed that housing authorities do 

not do enough to check on where or who the Federal dollars are 

going to, supporting an inspector corps. OSI basically acts as this 

30

type of corps you spoke of. However, the OSI in Indianapolis is underfunded. If you support a way for public housing authorities to 

investigate and stop fraud, as you claim to have done in the past, 

do you plan on finding a way to fund an investigatory division in 

public housing authorities? 

In your testimony to the—I’m just going to run through these 

quickly. You can answer them. In your testimony to the Appropriations Committee earlier this month, you stated that you support 

the idea that would allow housing vouchers to go to families that 

make up 60 percent of the local median income, thus eliminating 

or making it very hard for the extremely lower income families to 

benefit from a housing voucher. 

According to the National Committee for Lower Income Housing 

in the City of Indianapolis, in order for a person who makes minimum wage, which is $5.15 an hour, they’d have to work 2.5 jobs, 

100 hours a week, to afford a two-bedroom apartment at $673 a 

month. Can you explain to me how you would justify removing that 

person who is working two minimum wage jobs from the housing 

voucher program, or even removing a person who is working for the 

median income hourly wage, which is $12.94 an hour in one job, 

going to be removed from the housing voucher program? 

And finally, the brownfields redevelopment program is a vital 

program in this country. And in my district in Indianapolis, Indiana, however, the Administration feels that the program is not necessary, because CDBG funds can be used for such projects. 

Can you explain to the committee why the Administration completely eliminates a project and then underfunds the program, 

CDBG, that’s supposed to support brownfields redevelopment? 

The budget being proposed eliminates Section 4 capacity building 

programs, a program that supports a public-private partnership in 

order to revitalize communities by stimulating private investment. 

GAO study cites the program’s success in 783 cities and in 990 

counties. It’s been proven to work, yet the Administration is eliminating it. Mr. Secretary, please provide some insight as to why the 

Administration would end a program that is a proven success in redevelopment and spurring private investments in affordable housing markets. 

Mr. JACKSON. Congresswoman, first of all, I applaud Indianapolis 

if they are doing what you said by inspections. But that should be 

an intrinsic part of their budget already, as it’s an intrinsic part 

of all housing authorities’ budgets to make sure that they have an 

inspector corps to make—to purge the list to make sure only the 

people who should be on the program are on the program. 

Secondly, I do believe that the Community Development Block 

Grant program should be targeted to those communities, as I said 

earlier, that are most in need. An example, maybe 33 years ago 

when the program was created, Palm Beach needed funds. I don’t 

think Palm Beach needs funds today. Or maybe Dallas needed certain funds for housing inspectors. But I think that’s something that 

the city of Dallas should take care of itself. It should not be based 

on Community Development Block Grant programs. They should be 

used to create housing infrastructure and economic development. 

Mr. MILLER OF CALIFORNIA. The gentlelady’s time has expired. 

31

Mr. JACKSON. So I do believe that clearly we can target the 

money to those cities most in need. 

Mr. MILLER OF CALIFORNIA. Mr. Hensarling, you’re recognized for 

5 minutes. 

Mr. HENSARLING. Thank you, Mr. Chairman. Mr. Secretary, let 

me be one of the few to both welcome you and actually mean it. 

Apparently there’s at least two of us here. If I did my homework 

correctly, is it true that under President Bush’s leadership and 

yours that we now have historic high rates of home ownership in 

our country? 

Mr. JACKSON. It is true. Not only just high home ownership 

rates, we have the highest ever for minority populations, specifically Hispanic and Black Americans. 

Mr. HENSARLING. So if you’re in the housing mission business 

and you head up HUD, I would think perhaps one of the most important milestones you could achieve is a historic rate of home 

ownership in our country. It sounds as if you have achieved that, 

and I want to be one to congratulate you for that achievement. 

And I know that it is not necessarily within your responsibility, 

but since we passed President Bush’s economic growth program, 

over 5 million new jobs have been created in this economy. So there 

are millions who have gone from welfare checks to paychecks. And 

there seem to be some in this committee who believe that the only 

housing that ever takes place in America is that with a government 

check. Isn’t a paycheck a better way? Isn’t that a better housing 

program? 

Mr. JACKSON. I think so. And as I’ve said before, and I’m on 

record, that if you live in public housing or have a Section 8 voucher and you’re physically capable of working, you should be working. 

And we have a lot of people living in public housing and on Section 

8 vouchers who are physically able to work who are not working. 

And I believe they should be working. And I don’t back off of that. 

Mr. HENSARLING. Mr. Secretary, there’s been a consistent theme 

here among some, and it’s not a four-letter word, a three-letter 

word, cut. As I look at the OMB historic tables for housing functions, since President Bush became president, it appears that housing certificate and rental assistance is up 39 percent, public housing operating fund up 14 percent. This is still the full—the last full 

budget year. Home investment partnership program up 21 percent. 

Homeless assistance grants up 33 percent. Housing opportunities 

for persons with AIDS up 16 percent. In total, it appears that we’ve 

gone from roughly 30 billion to roughly 38 billion, a 26 percent increase in housing assistance, not all of which is under HUD. But 

that is at least two-and-a-half times the rate of inflation. So I know 

people are entitled to their own opinions. I’m not sure they’re entitled to their own facts. And I know certain programs have been decreased. But in total, it appears that under President Bush, if we 

believe that spending, Federal spending is the answer to all of our 

housing challenges, is up considerably. I mean, why—the question 

I might have is, if we had kept the programs as we had under 

President Clinton and we merely adjusted them for inflation, it 

looks like you’re spending two-and-a-half times the amount that 

otherwise you would have had to have spent. 

32

Mr. JACKSON. Let me say this, Congressman. When we came in, our budget was almost $30 billion. It got up to about $36.8 billion. 

This is the first time since I’ve been here either as Deputy Secretary or Secretary, because of these difficult budgetary times, that 

our budget has been decreased. In fact, until this year, there were 

only three areas that had a decrease since President Bush has been 

president. That was Homeland Security, Defense and HUD. 

So I think that when asked do I think that the cut in the community development block program if we target the cities most in 

need, we can make it work, yes, I do. So I agree with you. We have 

had a steady flow, an increase in this budget every year since I 

have been here either as Deputy Secretary or Secretary. 

Mr. HENSARLING. I see my time is beginning to run out. Let me 

turn your attention to the hurricane relief. Congress has provided 

$11.2 billion in CDBG disaster assistance for the Gulf Coast recovery. Recently the House passed another $4.2 billion in additional 

CDBG funding. Can you tell me how these funds are being used? 

I know that FEMA is required to provide obligation reports to the 

Appropriations Committee. Does HUD make similar information 

available on who’s receiving these funds, how are these funds being 

used? 

Mr. JACKSON. Absolutely. We will have to go in and audit all of 

these funds. As of today, none of the funds have been distributed. 

We’ve gotten the plans in from Mississippi, but we are awaiting the 

plans in from Louisiana, and I think they’re supposed to be in very, 

very soon. 

Once the plans are submitted to us, we will evaluate to make 

sure— 

Mr. MILLER OF CALIFORNIA. The gentleman’s time has expired. 

Mr. JACKSON.—that those plans address the needs that you all 

have allocated the monies for. And once that’s done, we will begun 

to fund the project. But we will also do audits on a consistent basis 

to make sure the money is spent according to what you said. 

Mr. HENSARLING. Thank you. 

Mr. MILLER OF CALIFORNIA. Secretary Jackson, we’ve talked in 

the past about FHA multi-family mortgage and increasing the 

amounts allowed. But in the new proposal I see that we’re also 

talking about doubling mortgage insurance premiums. And in the 

past, FHA has always made money for the Federal Government. 

Don’t you think that’s a disincentive to people using the program? 

Mr. JACKSON. No, I really don’t. I think that we had it in—we’ve 

always had that part of our business in private hands. We’re bringing it in house. But I don’t think it’s going to hurt the program. 

Mr. MILLER OF CALIFORNIA. It won’t— 

Mr. JACKSON. No I don’t. Not if we pass—give us the flexibility 

to be able to go out and deal with that middle market group of people who are now in the subprime market and make them offers. 

Mr. MILLER OF CALIFORNIA. Okay. Great. Mr. Moore is recognized. 

Ms. WATERS. Will the gentleman yield for a second? 

Mr. MILLER OF CALIFORNIA. Mr. Moore yields time. 

Ms. WATERS. Not on his time, because the Secretary said the budget is $36.8 billion? 

Mr. JACKSON. It’s $33.6 billion. 

33

Ms. WATERS. That’s different than what you said. 

Mr. JACKSON. I said— 

Ms. WATERS. That doesn’t increase— 

Mr. JACKSON. No, I said it got up to, at one point it was up to 

about $36.8 billion. 

Ms. WATERS. Well, your budget now is $33.6 billion? 

Mr. JACKSON. That’s correct. 

Ms. WATERS. So that is a decrease of how much or an increase 

of how much? 

Mr. JACKSON. That’s a decrease of about, I think it was $34.2 billion last year. 

Mr. MILLER OF CALIFORNIA. Mr. Moore is recognized for 5 minutes. Mr. Moore? You’re recognized. 

Mr. MOORE OF KANSAS. Mr. Secretary, what is the total proposed 

budget cut in your Agency? 

Mr. JACKSON. From last year I think it’s about $600 million. 

Mr. MOORE OF KANSAS. I’m sorry? 

Mr. JACKSON. About $600 million. 

Mr. MOORE OF KANSAS. Six hundred million dollars. In these 

times when we’re dealing with problems like Hurricane Katrina 

and other problems around our country, do you think it’s appropriate to be making cuts in your Agency? 

Mr. JACKSON. Mr. Congressman, I think you’ve allocated supplemental money to address Hurricanes Katrina, Rita, and all of 

those. So that has no effect on our Agency. 

Mr. MOORE OF KANSAS. All right. Was there a cut or a proposed 

cut in the Administration’s budget for supportive housing for persons with disabilities? 

Mr. JACKSON. Yes. Yes, there’s a reduction. 

Mr. MOORE OF KANSAS. All right. And in fact it’s about a 50 percent reduction. Isn’t that correct? 

Mr. JACKSON. That’s correct. 

Mr. MOORE OF KANSAS. Is it appropriate, do you think, for us to 

be cutting back on people who really need our help the very most? 

Mr. JACKSON. I think that in these budgetary times, it’s very difficult, and I go back to what I said before, to the Congresswoman, 

the Section 8 budget is eating at the core of HUD’s budget. I think 

that right now in 2006 we have 7,000 units for elderly disabled in 

the budget. In 2007, we have 3,000 units for elderly disabled, and 

we’re not taking any of the contracts that already exist for the elderly. And I think it’s enough to address the needs. 

Mr. MOORE OF KANSAS. Is the aging population in this country 

growing or shrinking? 

Mr. JACKSON. I think it’s growing. 

Mr. MOORE OF KANSAS. I think it is, too. And so it makes me 

concerned when we start cutting back in that area, especially for 

people with disabilities. 

Mr. JACKSON. I can’t say I don’t share your concern, but I had 

to make some very hard budgetary decisions. And I think if you 

will work with me and help me pass the State and Local Housing 

Flexibility Act for the Section 8 program, where it will stop eating 

at the core of our budget, I’ll be able to address many of the issues 

you said. 

34

Mr. MOORE OF KANSAS. Mr. Secretary, what concerns me, I’m on 

the Budget Committee. I believe—I believe strongly in a balanced 

budget and fiscal responsibility. We have an $8.2 trillion national 

debt the Senate just voted last—2 weeks ago to increase the debt 

limit to $9 trillion. I got seven grandkids, and I’m very concerned 

that we’re putting our kids—the grandkids in a hole so deep they’ll 

never be able to climb out. But I don’t think we should be balancing the budget on the backs of people who desperately need our 

help, and I don’t think we should be doing that just so we can have 

bigger and better tax cuts. That’s my concern. 

Mr. JACKSON. My position is, is I don’t think I’m balancing the 

budget on anyone’s back. I think this budget addresses the needs 

of low and moderate income Americans. 

Mr. MOORE OF KANSAS. Well, we’re cutting back, sir, on people 

with disabilities. Right here, this program. We’re cutting back on 

child support enforcement. We’re cutting back on Medicaid for children who live in poverty. We’re cutting back, we’re imposing a veterans tax on people who want health care by increasing the co-pay. 

That disturbs me, and I— 

Mr. JACKSON. Well, Congressman, my answer is that Congress is 

the authorizer and the appropriator, not HUD. 

Mr. MOORE OF KANSAS. And I’ll do my best. Thank you, sir. 

Mr. MILLER OF CALIFORNIA. Mr. Neugebauer, you’re recognized 

for 5 minutes. 

Mr. NEUGEBAUER. Thank you, Mr. Chairman. Mr. Secretary, it’s 

good to have you here, a fellow Texan. How about we talk about 

something besides the budget for a few minutes? First of all, I do 

want to, in reference to that, is I appreciate the fact that you’ve 

taken a good fiscal stand on this. 

There are tough choices. And one of the things that we do know 

is that some of these mandatory programs are eating away at all 

of our discretionary money, and this is another example of that. 

I had—you talked about the mortgage brokers. I’ve been in the 

housing business nearly 32 years in one form or fashion or the 

other, and I’ve watched a lot of innovation in the mortgage area 

and change during that period. But one of the things that FHA has 

not really changed a lot in some of their core programs, so I’m looking forward to working with you on coming up with some ways to 

make FHA more creative and innovative and competitive. Because 

as you know, your originations are down. 

But one of the issues that was brought up by the mortgage brokers was the fact that coming up with a program, and they’re now 

I think originating over 60 percent maybe of the loans in America. 

But many of them are ineligible to originate FHA loans, and some 

of these are small brokers, that would like to work out a plan 

where they could put up bonds rather than going to the expense 

of a very expensive financial, annual financial audit. 

What would be your response to that? These are folks that originate a lot of loans. We need them on our team. 

Mr. JACKSON. I would say this. They are free to come and discuss 

it with Commissioner Montgomery, and I think he would be very 

receptive to looking at new and innovative ways of doing things. 

In fact, as I said earlier, Mr. Congressman, that’s why I’m really 

pleased that he’s on the staff, because he has been innovative, and 

35

that’s the deal that we’re proposing, would give him flexibility so 

we could address those people who are being addressed now in the 

subprime market, and if we can find quicker, easier ways to do it, 

we will work with anyone. He’s very open, and I’m very open. 

Mr. NEUGEBAUER. And also I would hope that some of the reform 

that we look at is that we’ve done a good job of standardization of 

mortgage documents, and I know that, you know, was pleased to 

hear some of the things that you’re saying about RESPA. 

I would hope that, you know, we could make that documentation 

process and origination process really very similar across ways that 

are already accepted by the marketplace. I think that ought to be 

a part of that. 

Mr. JACKSON. I think that the process we had before and we’re 

trying to negate at this point was extremely cumbersome. And I 

think that’s why a lot of persons didn’t want to deal with, or brokers didn’t want to deal with HUD. And we accept that full responsibility. And again, Brian is working with the industry to try to 

change that. Because if we’re going to be competitive in the market, we’ve got to be very flexible. 

Mr. NEUGEBAUER. And then finally, and I’ll yield back the balance of my time, but I also want to thank you. I was here last year 

when you came and talked about RESPA, and I had some concerns 

about that process. I felt like that train was loaded up with nobody 

but was headed down the path, and I appreciate the fact that you 

stopped that process, brought the industry into—and listened to 

them, and I’m looking forward obviously to seeing what the final 

product of that is. 

But that’s what I think government’s about. We ought to be partners and not regulators. And I think the fact that you’re trying to 

forge partnerships is—you are to be commended for that, and I appreciate that. 

Mr. JACKSON. Thank you very much, Congressman. 

Mr. NEUGEBAUER. I yield back the balance of my time. 

Mr. MILLER OF CALIFORNIA. Mr. Hinojosa, you’re recognized for 

5 minutes. 

Mr. HINOJOSA. Thank you, Mr. Chairman. I want to say welcome, Mr. Secretary. I am glad that we’re having this hearing. I 

also wish to express my ire in what you had to say in your testimony about HUD’s budget for 2007. Mr. Secretary, I want to thank 

you for working with me in the past on RESPA, and I look forward 

to continuing to work with you as you move forward with RESPA 

reform, especially the yield spread premium. I want to work with 

you to find ways to enable mortgage brokers to provide loans at 

lower rates than the current system allows. That is very important 

to my Congressional district. 

I want to note that I will submit questions in writing to you, Mr. 

Secretary, and the committee, for the hearing record on such subjects as the recommendations I recently received that might lower 

mortgage rates to the low income, especially to minorities in South 

Texas. 

The proposal would allow the mortgage brokers to access the 

FHA loan program and employ surety bonds to reduce the rates 

they charge. Mr. Secretary, I have in my hands several important 

and critical letters from constituents. All these letters indicate that 

36

my constituents aren’t happy with HUD’s budget propsals, particularly cuts to CDBG. I’ve had to write or co-sign and send to my colleagues on the Appropriations and Budget Committee these many 

letters requesting that they counter the ill-conceived, poorly crafted, and in places, hollow budget that you, Mr. Secretary submitted 

to Congress. Chairman Miller, I ask, respectfully ask that these letters be included in the record. 

Mr. MILLER OF CALIFORNIA. Without objection, so ordered. 

Mr. HINOJOSA. They request that the appropriators level fund 

the USDA Section 515 rural rental housing program at its fiscal 

year appropriation of $99 million in one of the letters. 

Another is a letter from the entire Texas delegation, both sides 

of the aisle, expressing dissatisfaction with HUD’s allocation of the 

CDBG funds to Texas for Hurricanes Rita and Katrina. The first 

one is signed by Senator Kay Bailey Hutchison and Senator John 

Cornyn, in addition to the entire Texas Delegation in the House. 

Mr. Secretary, I want to emphasize that the proposed budget 

would harm public housing authorities. It would eliminate the 

Housing Assistance Council program. It would eliminate the Rural 

Housing Economic Development program. It harms the program for 

National Council of La Raza, championed by the Congressional 

Hispanic Caucus members. 

And the most egregious proposal is the reduction in funding for 

the Community Development Block Grant that so many communities across the country rely on for funding. Numerous constituents have come to visit me in my office to express their concerns 

about CDBG reductions. They have asked me to express to you 

their anger that you would attempt to cut CDBG funds and pit the 

CDBG program against others for funding. I want to note that I 

have co-signed many letters to ensure that the programs are funded at an adequate and appropriate level. 

Mr. Secretary, as the chairman of the Congressional Rural Housing Caucus, I can’t believe that you, as our Secretary of HUD, 

would launch an all-out attack on rural America by proposing to 

zero out housing programs and grants that benefit those areas and 

the people in them, particularly the low income and minorities, including the African Americans and Hispanic Americans and Asian 

Americans. 

In conclusion, Mr. Secretary, I want to ask—I want to ask you 

that you knowing that the budget is going to harm those in need, 

as I expressed, especially the low income minorities and those in 

rural America— 

Mr. MILLER OF CALIFORNIA. The gentleman’s time has expired. 

Mr. HINOJOSA.—which constitutes the majority of my district, 

can I count on you to change directions and encourages Congress 

to fight and restore the cuts to HUD? 

Mr. MILLER OF CALIFORNIA. You can respond to the question, Mr. 

Secretary, if you want to. 

Mr. JACKSON. Congressman, as I said before, I think that we 

have an appropriate budget level to address the needs of those low 

and moderate income people in the country. 

Mr. MILLER OF CALIFORNIA. Mr. Bachus, you’re recognized for 5 

minutes. 

37

Mr. BACHUS. Thank you. Mr. Chairman—I appreciate that. Mr. 

Secretary, last week in Tuesday’s Washington Post I saw a very 

nice article about you, and the fact that you’re mentoring college 

students, and I appreciate that. 

Mr. JACKSON. Thank you very much. 

Mr. BACHUS. It was a good personal insight into what kind of 

person you are. It also said in that article that you were very successful in heading public housing for the city of St. Louis. Washington hired you because you had done such a good job, and then 

Dallas hired you because you had done such a good job in Washington. 

And your record has been that you come in and you do things 

more effectively. 

Mr. JACKSON. I try. 

Mr. BACHUS. And that you get results. And we’ve heard a lot 

about cuts in this program or that program. I think what we’ve not 

heard today that’s part of the true story is there are several programs that you’ve instituted that are working phenomenally well 

and have resulted in tremendous increases of home ownership for 

fewer dollars. 

One such program is the prison reentry program. We have over 

a half million prisoners leaving prison every year, and the prison 

reentry program is a success in decreasing the number of ex-prisoners going back into our prisons, and instead, getting jobs and actually getting into homes. 

Let me ask you, and you can answer this as a result of your experiences, or let me give you mine. I don’t know how many of the 

members have owned Section 8 housing, but I actually own several 

of them. And I always wondered why my tenants, who were paying 

their rent every month, didn’t contact me and say that they want 

to buy the house. I’ve never had one do that. 

And I finally wrote them. I decided I would just give them an opportunity to do that. I almost felt guilty getting, you know, rent 

every month. And about three of them responded, but I talked to 

all of them, and they basically said that they don’t know how to 

do it. 

Mr. JACKSON. That’s right. 

Mr. BACHUS. Which shocked me. Almost every one of them said, 

‘‘I want to, but I don’t know how to do it.’’ One of them had gone 

and talked to somebody who said that it was going to cost all this 

money. 

You have a counseling program that has resulted in a lot of 

Americans owning homes, part of the total picture of a record number of minorities and others owning their homes. And I know with 

me, they received counseling. I referred them to counseling, and 

five of them bought those homes. 

But would you talk about some of the programs that have been 

a success? 

Mr. JACKSON. Let me say this to you, Congressman. When we came into office, we allocated about $7 million for housing counseling. When the President made the declaration in Atlanta in 

June of 2002 that he wanted to close the home ownership gap that 

existed between whites and minorities, specifically blacks and Hispanics, and wanted to increase home ownership by 5.5 million new 

38

black and Hispanic home owners by 2010, one of the things that 

I advised him on is that if we’re going to do that, we must have 

more money for housing counseling. 

So we went from $10 million to $45 million. We went from serving about 20 million people—I mean, about 300,000 to 600,000 a 

year. So in that process, we said, if you’re going to own a home, 

we’re going to tell you what to expect so you won’t lose that home. 

We don’t want to put you in a home and then you lose it. 

And we’ve been very successful. Today we’ve launched 2.6 million 

new minority home owners. And many of these people are still in 

their homes. But many of them didn’t have a clue, like Pearl 

Cardaden, who was a lady in Philadelphia. They had told her she 

would never own a home. But when she went through our counseling program with her kids, she now owns a home, and we check 

periodically on Pearl, and she is doing very well with the home 

ownership. But it took us about 9 months to get her ready to go 

in and be prepared to buy a home. 

I think that’s very important. I will say this to you, too, Congressman. I’ve never seen anybody who wanted to stay in public 

housing on a Section 8 voucher. Whenever you talk to people, they 

want something better. And my perspective is, is to try to give 

them something better. But if they have no incentives to get anything better, then they’re going to accept what they have. 

And I guess I’m concerned because a lot of times when I talk to 

people, they look at low income people as an object, something to 

be very paternalistic and patronizing to. 

Mr. MILLER OF CALIFORNIA. The gentleman’s time has expired. 

Mr. JACKSON. I see low income people as human beings with the 

same sense of worth as me, who should be given an opportunity to 

do better. 

Mr. BACHUS. I would just like to say that I appreciate the fact 

that we have a Secretary who sees people out there and families 

and wants them—doesn’t want to keep them in these programs if, 

you know, when they can own a home and reach financial security. 

And I appreciate the work you’ve done. 

Mr. JACKSON. Thank you very much. 

Mr. MILLER OF CALIFORNIA. Just to remind the committee, we 

have votes in approximately 15 minutes. So if we can move forward. Mr. Crowley, you’re acknowledged for 5 minutes. 

Mr. CROWLEY. Thank you, Mr. Chairman. Mr. Secretary, I welcome you as well. 

Mr. JACKSON. Thank you. 

Mr. CROWLEY. And I welcome you here to grill you as well, because that’s part of the job we have— 

Mr. JACKSON. I understand. 

Mr. CROWLEY. So, this is not personal. But let me just say, I 

want to follow up on Ms. Velazquez’s questions regarding asset 

based management. I understand from the New York City Housing 

Authority that HUD will begin withholding funds, a punishment, 

of the $30 million, if NYCHA, starting in January 2007, if they do 

not comply with your asset based plan by January of 2007. But 

HUD will not actually approve of NYCHA’s assets-based plan until 

6 months later, June of 2007, after penalties are slated to begin. 

39

My question is, would you pledge to hold off making any cuts 

until HUD actually approves of each PHA’s asset-based conversion 

plan, and if a PHA fails, would you then give them an opportunity, 

a window of a few months to revise their conversion plan before 

cuts actually begin? 

Mr. JACKSON. Let me say this, Congressman, I am willing to 

work with them to make sure they go to the asset-based model. I’m 

not out, and I mean this sincerely, to hurt any housing authority, 

because I know it’s very difficult to run housing authorities. So 

we’re going to work with NYCHA. We’re going to work with every 

housing authority to make sure they need. I believe as long as they 

make a good faith effort, and the effort’s in good faith, we’re going 

to work with them. 

Mr. CROWLEY. Thank you. I appreciate that answer. I had another question, but I’m going to in a moment yield to the gentlelady 

from California. Before I do that, this is a very sensitive discussion 

and topic we’re having today, a very serious one, and that is of 

housing. 

And much of this—there’s an underlying sense of race in terms 

of separation of the quality of housing in this country to begin 

with. And I appreciate the chairman when he said that he meant 

this in a humorous way. But I don’t think injecting race even in 

a humorous way is productive here in this committee. And it took 

me a while to understand what the questioning was, because I was, 

quite frankly, stunned when the question was first asked, and I did 

not object in time to have the words taken down. 

Having said that, what my mother always said, if it’s not something we can all laugh at, it ain’t that funny. And I appreciate the 

attempt to inject some humor into this, and I always look for it to 

be funny, and I can laugh just like anyone else. 

I didn’t on that question, and that’s why I injected, Mr. Chairman. With that, I will yield the balance of my time to the 

gentlelady from California. 

Ms. WATERS. Thank you. 

Mr. JACKSON. Just a second. Congressman, Mr. Chairman— 

Mr. CROWLEY. This is not against you. 

Mr. JACKSON. Let me say this to you. I think I must— 

Mr. CROWLEY. My time is limited. I would like the gentlelady to 

first— 

Mr. JACKSON. Mr. Chairman? 

Mr. CROWLEY. And you’ll have an opportunity—I didn’t ask you 

a question. 

Ms. WATERS. I thank the gentleman for yielding, and I just want 

to say to the chairman, I’m going back to this, as you said, humorous comment that you made. I thought it was kind of strange and 

off the wall and fairly weird. When I was talking with the Secretary, I wanted to make this point again, that in September of 

2000, the National Fair Housing Alliance conducted an investigation of housing discrimination among Katrina evacuees and found 

that 60 percent were African American and Latino evacuees. And 

they found that about 66 percent of those evacuees who were African Americans were discriminated against. 

And so the question I was asking you once again had to do with 

your fair housing enforcement and why in fact given what we see 

40

now as an upsurge in housing discrimination, why you’re not asking for additional funds for fair housing enforcement efforts. 

The chairman’s—I guess, humorous, as he saw it, remarks 

weren’t very humorous to me, because so many times people are accused of playing the race card. And when everyone is accused of 

that, I think we need to deal with it. I think it’s very unfortunate, 

because I don’t think this discussion with regard to the poor, with 

regard to those who need HUD’s assistance, has been addressed in 

a way that warranted that type of humor. 

And so, thank you, Mr. Crowley, for yielding, and I hope the Secretary understands what we’re concerned about, and that’s discrimination, housing discrimination, and fair housing efforts on behalf of your Agency. Your Agency is the only agency that can look 

out for these persons who need help. 

Mr. JACKSON. And I agree with you, Congresswoman. And we’re 

going to look out to make sure that there’s no discrimination. But 

I would like to add this. I know Chairman Miller very well. I was 

not offended, and I took it as humor, because he has been extremely fair and open with me. And so I’m not disturbed at all. 

Ms. WATERS. I know you’re not disturbed, but I’m disturbed, because it wasn’t funny. 

Mr. MILLER OF CALIFORNIA. The time has expired. Mr. Tiberi is 

recognized for 5 minutes. None of my comments were meant to impugn anybody’s integrity at all on this committee. 

Mr. TIBERI. Thank you, Mr. Chairman. Mr. Secretary, thank you 

for being here today. It’s been a real honor and privilege to work 

with you and your staff. Thank you for your leadership in home 

ownership opportunities. 

Mr. JACKSON. Thank you. 

Mr. TIBERI. As a former realtor, I think you’ve done more for 

home ownership opportunities in America than any Secretary in 

the past, and I look forward to working with you and Commissioner Montgomery to not only increase home ownership among all 

Americans, but also reform our FHA program to help the private 

sector as well. 

As you know, FHA’s Title I program provides insurance for home 

only manufactured home transactions. 

Mr. JACKSON. Right. 

Mr. TIBERI. I was a State legislator and was involved in that program from the State’s perspective, and it truly is an affordable 

housing program. Oftentimes these home buyers can only afford 

the home and must lease the land on which the home sits. 

The program has fallen into disrepair, as you and your colleagues 

know. For instance, in 1992, over 30,000 manufactured housing 

loans were insured under Title I, compared to the past 3 years 

when less than 2,000 manufactured housing loans were insured. 

Congressman Frank and I have introduced legislation, H.R. 4804, 

which would make statutory changes intended to restore the program to what it once was. 

We’re both serious about the legislation and want to pass the legislation with the Department’s help. And I’d like you to give the 

committee and us at least the assurance that you and the Department are committed to Title I reform and will work with us to 

make those changes this year. 

41

Mr. JACKSON. I can assure you that we share your concerns, and 

we’re going to work with you. 

Mr. TIBERI. I appreciate that, and I hope that the Department 

continues to work with us on making home ownership available to 

every American who’d like home ownership. 

Mr. JACKSON. Thank you so much. 

Mr. TIBERI. Thank you for your work. 

Mr. MILLER OF CALIFORNIA. Mr. Baca or Mr. Scott? Mr. Baca, do 

you yield to Mr. Scott? 

Mr. BACA. Yes, I do, right after just I make additional comments. 

I think this is— 

Mr. MILLER OF CALIFORNIA. You’re recognized for 5 minutes. 

Mr. BACA. Thank you very much, Mr. Chairman. This is a very 

important hearing, and I appreciate the Secretary being out here. 

As we look at a lot of our areas, like in my immediate area where 

housing becomes very important, affordable housing, and especially 

as we look at Section 8 as well as the ability for Section 8 vouchers 

to be available, and having this kind of hearing and having you 

here and to make sure that we do not discriminate against an individual, but provide an opportunity to individuals to own a home for 

the very first time. 

As we look at housing continues to go up, and many individuals 

within our communities, especially the Hispanic, African Americans and poor disadvantaged don’t have the same kind of opportunity because they don’t obtain the same kind of wealth, and it’s 

important that we continue to provide an opportunity to own a 

home for the very first time. 

And I know what it’s like to own a home for the very first time, 

because coming from a large family of 15 as I did, I know when 

we were able to finally have a home and have stability, became 

very important for my family and for myself in terms of not only 

my attitude and behavior within that area, and I hope that we can 

continue to have HUD provide service, especially to the low income 

individuals to make sure that they could afford to buy a home, 

whether it’s through Section 8 or through the CDBG that’s important to a lot of us. 

And I hope that you look at urban communities like San 

Bernardino or the Empire where we have everybody moving from 

LA and Orange County, because homes are a lot less, but not 

—they’re still not affordable for a lot of us, even though they say 

the average is $345,000, that’s still a lot for someone on an income 

of maybe, you know, $10,000, $20,000 a year and you have two parents who are working trying to buy a home for the very first time. 

So I appreciate that. 

And I appreciate the services that you’ve done for our area too 

as well in the homes that have been available through TALECO 

and others for seniors to obtain a home as well. 

Mr. JACKSON. Thank you very much. 

Mr. MILLER OF CALIFORNIA. Secretary Jackson, you and I have 

talked about brownfields in recent years. And in the recent budget, 

that wasn’t included. And I think we have a real opportunity for 

probably half a million sites in this country, also bringing up 

CDBG for other purposes. And I—what’s the chances of getting you 

42

back in line or the Administration back in line on the CDBG issue 

as far as it applies to brownfields? 

Mr. JACKSON. Mr. Chairman, I am open to any advice that you 

all give me. 

Mr. MILLER OF CALIFORNIA. I think it’s an important tool for us. 

Mr. JACKSON. Right. And I think that in the present form of it 

we do the reforms of Community Development Block Grant, we will 

also be able to clearly clean up brownfields. 

Mr. MILLER OF CALIFORNIA. Great. Thank you, sir. Mr. Scott, 

you’re recognized for 5 minutes. 

Mr. SCOTT. Thank you very much, Mr. Chairman. Mr. Jackson, 

I can’t begin to adequately express again my range of disappointment and discouragement on behalf of the American people in 

terms of the incompetence and the lack of sensitivity that this Administration, and particularly HUD, has towards its basic constituency, the very people that you are referring to as ‘‘those people,’’ 

your reference to ‘‘my budget,’’ there seems to be a very personalized effort here on your part. 

But let me just remind you on two important points. First of all, 

it is Congress’s duty to appropriate this money. Second, this money 

that Congress is appropriating is the people’s money. It’s not yours. 

It’s not mine. And the people in this country now are hurting. 

They are needing this country to respond to these hurts. They’re 

hurting from Katrina. They’re hurting because of an Administration, and most expressly, the key agency in that Administration 

being HUD, not responding as they should. There are families that 

have been devastated because of that failure. And instead of this 

Administration talking about ‘‘my budget’’ and these restraints and 

this and that, cutting aid to disability with housing or disabilities 

by 50 percent, cutting CDBG grants by 20 and 25 percent, cutting 

HUD and just trying to completely eliminate that is not what the 

American people want. And I’m here to tell you, they’ve had 

enough. 

And quite honestly, I’ve had enough. I can’t wait till the day that 

in all due respect to you, I can’t wait until you’re gone, until you’re 

away from HUD. I like you as a person. This is not a personal attack on you. But when you sit there and say what you say in the 

manner in which you say it, you are hurting an awful lot of people. 

You are killing the hope in a lot of people, seniors who need these 

programs. 

Now that I have said that, and I wanted to say that on behalf 

of my constituency, a constituency that is suffering this day with 

great angst because you’re proposing to cut the CDBG, Community 

Development Block Grants, based on some formula that completely 

negates my district. When you talk about— 

[Interruption to the proceedings] 

Mr. SCOTT. When you talk about developing and changing the 

formula for Community Development Block Grants, for example, 

and you talk about emphasizing the need in the cities, you take out 

of the consideration the dramatic demographic changes in America. 

I represent a metropolitan district in Atlanta that is around Atlanta, Clayton County, Cobb County, Douglas County, with great 

needs. And these communities are highly dependent on their life 

43

blood for the Community Development Block Grants. So that formula is not a cookie cutter represents all. 

I have repeatedly begged and pleaded before this committee on 

Hope Six. Why in good faith in Atlanta and Fulton County Hope 

Six programs, which have been the best examples of success, why 

would your policy be to throw the baby out with the bath water? 

If there are specific areas, and you’ve pointed to them, question 

after question was asked, and you would come out, well, I know 

these people, or these are bad performing people in HUD. Why 

should the people suffer who we’re targeting who need these programs because of some bad personnel or people who are not doing 

their jobs? Get rid of the people who are not doing their jobs. Or 

if there’s some Hope Six programs that are not working, get rid of 

them, but don’t punish the programs that are being effective. 

We’re going to fight tooth and nail, and I believe there is strong 

bipartisan support on this committee and in Congress to make sure 

that we keep the Community Development Block Grants— 

Mr. MILLER OF CALIFORNIA. The gentleman’s time has expired. 

Mr. SCOTT.—and we keep the Hope Six program. 

Mr. MILLER OF CALIFORNIA. I’m going to ask you to respond to 

this question in writing. We’re going to give everybody 2 minutes. 

I understand you have to leave. We have votes. This way, everybody has 2 minutes, we have time to complete our process here and 

not have to come back after the vote. 

So, Mr. Fitzpatrick, you’re recognized for 2 minutes. 

Mr. FITZPATRICK. Thank you, Mr. Chairman. Mr. Secretary, 

thanks for your service to our Nation. 

Mr. JACKSON. Thank you. 

Mr. FITZPATRICK. And your testimony here today. Congratulations also on the outstanding home ownership numbers. I represent 

a district in southeastern Pennsylvania, Philadelphia, Bucks County, Montgomery County, where housing prices are very high. 

Mr. JACKSON. Right. 

Mr. FITZPATRICK. We’re especially interested in the first time 

home buyer programs, housing prices being high. Once the home 

owner gets into their first home, they’re pretty much okay. I was 

a county commissioner in Bucks County for 10 years, and I also 

want to put in a positive plug for the Community Development 

Block Grant program. I’ve written to the budget chairman. I’ll 

make sure that your office gets a copy. 

We’ve done some great things in Pennsylvania with Community 

Development Block Grants. We appreciate the flexibility at the 

local level, especially to leverage other resources to match the Federal dollars and do some pretty good things. But I want to talk specifically on a different issue; it has to do with reverse mortgages. 

I introduced a bill in the House, it’s a bipartisan bill endorsed 

by AARP, that would remove the volume cap on what HUD refers 

to as the home equity conversion mortgage program. So it’s passed 

the House. There’s a bill pending in the Senate, that identical bill. 

We’re going to try to have a hearing up in southeastern Pennsylvania in mid-May. It would be great, Mr. Secretary, if you could 

find the time to either come up or have one of your senior staff 

come up and testify with regard to that bill. But if you could maybe 

give our office in response or in writing HUD’s position on how this 

44

bill may or may not help seniors. We think it would be a great help 

for seniors and how it may impact the mortgage market, the second—reverse mortgage program. 

Mr. JACKSON. Thank you. We will. And we’re in agreement with 

you. I truly believe that it will help. 

Mr. FITZPATRICK. Okay. 

Mr. JACKSON. And we will give you a response, though. 

Mr. FITZPATRICK. Thank you. 

Mr. MILLER OF CALIFORNIA. The gentleman’s time has expired. 

Mr. Davis, you’re recognized for 2 minutes. 

Mr. DAVIS. Thank you, Mr. Chairman. Let me, since I missed a 

lot of the fun, Mr. Jackson, I’ll try to get you out of here as quickly 

as I can. What I will do is just ask one question in these few minutes. 

This is the fourth time, as you know, that the Administration 

has wanted to do away with Hope Six. It’s the fourth time or the 

fifth time the Administration has tried to make cuts to CDBG. 

We’ve established that. What I’m always curious about is, as you 

know, Congress had a vote last year on Hope Six. In fact, Ms. Harris from Florida and I sponsored an amendment on the floor restoring funding. The Senate followed suit. We had 60 Republicans vote 

for our amendment. 

Mr. JACKSON. Right. 

Mr. DAVIS. You know there’s been a strong bipartisan support for 

CDBG’s. What’s curious to me and my one question to you is, does 

the Administration make any effort to in any way factor in the 

opinion of the Republicans in Congress who disagree with you and 

the many Republican mayors around the country who disagree 

with you? 

Mr. JACKSON. Of course we take into consideration. I take advice 

and— 

Mr. DAVIS. Do you ever follow it? 

[Laughter] 

Mr. JACKSON. Sometimes. 

Mr. DAVIS. Sometimes? Just not on Hope Six and CDBG’s? 

Mr. JACKSON. No, because I think that Hope Six, out of the 230 

or so projects that we’ve allocated, only 54 have been completed in 

15 years. 

Mr. DAVIS. I don’t want you to repeat yourself. But since this is 

my last 10 seconds— 

Mr. JACKSON. All right. 

Mr. DAVIS.—I just want to make this point. A lot of people on 

the other side of the aisle disagree with you. You know how rare 

it is to get 60 Republicans to vote with Democrats on anything. So 

I would just ask you to take note of that rare cosmic event around 

here. 

Mr. JACKSON. Believe me, I take note of it. 

Mr. MILLER OF CALIFORNIA. Thank you, sir. Mr. Green, you’re 

recognized for 2 minutes. 

Mr. GREEN. Thank you, Mr. Chairman. And I thank the ranking 

member in her absence or his absence, excuse me. And I will try 

to be brief as I can. What I’d like to do is revisit something that 

Congresswoman Davis spoke about, and that is discrimination in 

housing. 

45

I, too, have the statistical information, and will tell you that I 

was very appreciative that you came to Houston to announce an 

initiative to fight discrimination in housing. I understand her passion on this issue because she and I worked together to add an additional $7.7 million— 

Mr. JACKSON. That’s correct. 

Mr. DAVIS.—to fight discrimination in housing, and we had the 

assistance of the ranking member. We had Congresswoman Waters. They were on the point to help us to get it done. And the passion runs deep on the issue. 

And what I’d like to do is ask a question that will give you an 

opportunity to tell us what we may do to get additional funding in 

that area, because there is so much passion. What can we do, given 

that that was—that was passed, by the way, with bipartisan support, that $7.7 million. What can we do to get additional funds in 

an area where it is clearly needed, the discrimination is clearly 

there? 

And by the way, for edification purposes, we’re not just talking 

about racial discrimination; there are other forms of discrimination. 

What can we do to get the additional funds? 

Mr. JACKSON. Congressman, Congress is the authorizer and the 

appropriator. I mean, you—if you allocate the funds, they will be 

used. But I am—I’m going to say this—I am as concerned as you 

are, as Congresswoman Waters is. I think that you were with me 

when I made the announcement. 

As a Black American sitting as the HUD Secretary, I have to be 

concerned with discrimination. I was brought up in a discriminatory fashion. I didn’t go to white schools. I went to segregated 

schools until I got to college. I did not go to school with whites, Hispanics, or anyone else. So I am very concerned. And today, discrimination still exists in many places. So I am very, very concerned. And that’s why I sent a team of people to Mississippi and 

to Louisiana once I found—I was informed that discrimination was 

taking place, because I will not tolerate that, not as long as— 

Mr. MILLER OF CALIFORNIA. Mr. Cleaver, you’re recognized for 5 

minutes. 

Mr. JACKSON.—as long as God gives me breath. 

Mr. MILLER OF CALIFORNIA. Thank you, Mr. Secretary. 

Mr. CLEAVER. Mr. Secretary, thank you. This really doesn’t impact you. I did get quite angry earlier, Mr. Chairman, at your joke, 

and tragically, our Nation is not where we hoped to arrive with regard to race, and so some things at this point probably should not 

become a joke. I didn’t respond to something a few months ago 

when someone made a joke about slavery. Mr. Watts responded to 

that. And so it’s unfortunate. I don’t like being there, and I don’t 

like the—I was told when I was sworn in by many people how 

much—about the acrimony and the acerbic dialogue here, and I 

pledged never to participate in it. And I want at this time, I’ve expressed myself, I think Mr. Crowley was articulate enough on the 

issue. 

Mr. Secretary, thank you. The pin-up and the pop up was very 

good. I have it here. You did a study in 2005 on discrimination 

against persons with disabilities. 

Mr. JACKSON. That’s correct. 

46

Mr. CLEAVER. And one of the findings was that there is in fact 

widespread discrimination against persons with disabilities. What 

is the follow-up of the studies, a HUD plan? 

Mr. JACKSON. Yes it is. And with the new Assistant Secretary, 

she is working very hard. I wish I could tell you that I was surprised, but I wasn’t surprised. I was surprised by the magnitude, 

but not surprised that there was discrimination based on disabilities. And we’re doing everything in our power to correct that. And 

I have great faith in our Assistant Secretary for— 

Mr. MILLER OF CALIFORNIA. The gentleman’s time has expired. 

Ms. Wasserman-Schultz, you’re recognized for 2 minutes. 

Ms. WASSERMAN-SCHULTZ. Thank you, Mr. Chairman. Mr. Secretary, I can appreciate that your time is valuable, as is ours. This 

is a 70-member committee. 

And in the future, given the shorter tenure and less significant 

seniority on this committee of the members on the front row, I’d 

appreciate it if you would afford the time in your schedule to make 

sure that we could get through without having to rush our questions and not get adequate answers from you. So, I’m appreciative 

of the time limit since we have to vote, but I did want to add that. 

I’m from Florida, as you know. We’re 62 days from the 2006 hurricane season, and I want to follow up on what I know Congresswoman Velazquez asked you about is there a tangible that I can 

see and hold, plan in place, related to the upcoming hurricane season and the previous hurricane season in terms of getting people 

the housing that they need as a result of the damage and ensuring 

that we have fewer problems than we had in the previous hurricane season? And can I have it? 

Mr. JACKSON. First of all, you would have to get that from 

FEMA, from Homeland Security. They’re the first resort for this. 

Ms. WASSERMAN-SCHULTZ. No, Mr. Secretary, they’re responsible 

for short term. They’re not responsible for long-term housing 

issues. 

Mr. JACKSON. They’re responsible for all of the natural disaster 

that occurs in this country, not HUD. 

Ms. WASSERMAN-SCHULTZ. When there are housing shortages— 

Mr. JACKSON. That’s not what you asked me. You asked me— 

Ms. WASSERMAN-SCHULTZ.—accountability. 

Mr. JACKSON. Well— 

Ms. WASSERMAN-SCHULTZ. Are not working with FEMA? 

Mr. JACKSON. Yes we are. But that is FEMA’s responsibility and 

I’m not going to address this issue for another cabinet member. 

They’re the first responders, not HUD. 

Ms. WASSERMAN-SCHULTZ. So you don’t have any plan? You have 

not been working with FEMA on— 

Mr. JACKSON. We have been working with FEMA. 

Ms. WASSERMAN-SCHULTZ. Is there a plan that I can see? 

Mr. JACKSON. I say you have to talk to FEMA. I am not the Secretary of Homeland Security. I’m the Secretary of Housing and 

Urban Development. And that is within their purview. Secondly, I 

accommodated the committee. You rescheduled the meeting, not 

me. I was available. 

Ms. WASSERMAN-SCHULTZ. I did nothing of the kind. As you can 

see, I’m— 

47

Mr. MILLER OF CALIFORNIA. Your time has expired. 

Mr. JACKSON. Then I would suggest that you understand— 

Mr. MILLER OF CALIFORNIA. I’m going to recognize Mrs. Moore. 

Ms. WASSERMAN-SCHULTZ. I don’t have a lot of control over the 

meetings in this room. 

Mr. MILLER OF CALIFORNIA. I’m going to turn the microphone 

over to Mrs. Pryce to continue the hearing. 

Ms. MOORE OF WISCONSIN. Thank you, Madam Chairwoman, and 

good morning, Mr. Secretary. 

Mr. JACKSON. Good morning. 

Ms. MOORE OF WISCONSIN. My questions are very brief. I just 

want to explore for a second your notion that Section 8 really promotes a culture of dependency. And of course it’s a $14.4 billion 

program that serves about 3 million people, and of course the—you 

say that there are people who report zero income, and of course, 

the minimum wage has not been increased for 8 years, and it 

should be about $15.78. Now the home mortgage interest deduction 

that both you and I are going to claim on our April 15th tax return— 

Mr. JACKSON. Right. 

Ms. MOORE OF WISCONSIN.—serves about 35 million people, and $325 billion, which is 23 times the amount that is spent on the Section 8 program, I’m wondering, there’s been some rumors floating 

around that perhaps the President is looking at cutting this program. Just yes or no? Do you support ending the $325 billion home 

mortgage interest deduction, which is not means tested, the richest 

people in America can claim it? You’ve talked about the 8 years dependency that people on Section 8 have, and so would that be a 

good way to sort of recoup some dollars for the treasury, and for 

core programs at HUD? 

Mr. JACKSON. I’m not an economist, Congresswoman. And I don’t 

see the comparison between the Section 8 program and— 

Ms. MOORE OF WISCONSIN. The dependency on the housing subsidy for 3 million people. It’s a housing subsidy just like the home 

mortgage interest deduction is. You don’t see the comparison? 

Mr. JACKSON. I’m sorry. I don’t see the comparison. 

Ms. MOORE OF WISCONSIN. Oh, I see. All right. Why don’t we 

move on. I’m a new member, so you say that Section 8 eats at the 

core of HUD’s programs, and of course people went on and on 

about the cuts in CDBG, Section 8. You’ve talked about your home 

ownership initiatives, but yet and still there are proposals to raise 

premiums dramatically. 

Ms. PRYCE. [presiding] The gentlelady’s time has expired, and 

there is a vote on, so if you could wrap up your question. 

Ms. MOORE OF WISCONSIN. Thank you. Thank you, Ms. Chairman. I just want to know, what is HUD’s mission? 

Mr. JACKSON. HUD’s mission is to provide decent, safe, and sanitary housing to low and moderate income people. And I’ll be happy 

to get you the information on FHA raising of the limits so you can 

understand it better. I think it will not hurt us. 

Ms. MOORE OF WISCONSIN. And Ginnie Mae, too. 

Mr. JACKSON. Yes. I’ll be happy to do that. 

Ms. MOORE OF WISCONSIN. Thank you. Thank you, Madam 

Chairwoman. 

48

Ms. PRYCE. Thank you. All right, Mr. Secretary, welcome, and I 

know you’ve had a long morning, and I want to personally thank 

you very much and your staff for working with me to find a solution to the new rule on Section 8 income eligibility for students 

that may adversely have been impacted by the low income disabled 

students ruling, or the legislation from the Senate. Your help is 

greatly appreciated. Your prompt response to my inquiry was terrific. We now have legislative language to fix this. All we need is 

a vehicle, but the rest of the work is ours to complete, so thank 

you. 

Mr. JACKSON. Thank you. 

Ms. PRYCE. I’d like to echo the concern of many of my colleagues 

regarding the proposed funding cuts to the Community Development Block Grant programs. CDBG is a proven program that delivers results everywhere, and in my home town of Columbus, Ohio. 

So, that noted, I also want to inquire about the Fiscal Year 2007 

budget calls for formula changes to the program, and the creation 

of new bonus funds for communities expanding home ownership. 

Mr. Secretary, while I welcome the opportunity to discuss reform 

proposals that seek to improve the efficiency of the government 

programs, I just want to ask you when we might learn more about 

your proposed changes and so we can start determining how they’ll 

affect our communities? 

Mr. JACKSON. They should be—we finalized them. They should 

be to you all fairly soon, I would hope by the end of next week. 

Ms. PRYCE. Great. That’s wonderful. All right. Well, with that, 

Mr. Secretary, once again, my thanks. 

Mr. JACKSON. Thank you. 

Ms. PRYCE. The Chair notes that some members may have additional questions for this panel, and I’d submit those in writing. 

Without objection, the hearing record will remain open for 30 days 

to submit those written requests and to place their responses in the 

record. 

Mr. JACKSON. Thank you very much, Madam Chairwoman. 

Ms. PRYCE. Thank you, Mr. Secretary. This hearing is adjourned. 

[Whereupon, at 11:31 a.m., the committee was adjourned.] 

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