Date: 1982-03-09
Speaker: ST GERMAIN (democrat)
Chamber: H

Mr. Speaker. it seems fair to state that most societies can be judged by the manner in which they choose to use their capitalfinancial as well as human. The combination of both makes up production and they are critical to determining what that society will reflect as to the wellbeing of its citizens. and the strength of its economic and social system. Today. if we look back over the past year for judgment of whether we. as a Nation. have chosen wisely in the manner of how we have used this capital. the consensus is that we have misused it badly. and the net result is a recession that by any other definition. may turn into a depression. I By rights. the American economy should not be in a recession. After all. we were told so just last year. In fact. we were told we would be or should be zooming along at breakneck speed with investment plans for all manner of economic activity. and particularly for our pivotal housing industryfor housing as we know. is the activity to which businessmen and economists look to lead this Nation out of economic doldrums. When housing begins to moveso do lumber and metals. and so do the refrigerators. home appliances. furniture. and even doorknobs. The housing industry is a $63 billion industry. Currently. it is in such deep trouble as to boggle the mind and imagination of even the most incurable optimist. Bankruptcies among homebuilders are up over 50 percent of their figure of 1981. and 1981 set a record for the moment. Business failure among thousandsI repeatthousands of housing subcontractors. has compounded the documented misery of small business in this country. What has happened over the past 12 months is a travesty beyond description. Hundreds of thousands of unsold housing units stand vacant in thousands of subdivisions throughout our land. while the malignancy of increased high unemployment in the building trades. the national catastro. phe of high and rising interest rates. and the growing loss of consumer confidence eat away at our national expectations. I speak of the expectations of millions of Americans raised to believe they have the right to individual homeownership. A right we are being asked to postpone. Mr. Speaker. there is no better indication of the depth of the national malaise besetting this most important element in the American economy than that provided by a review of the Reagan HUD budget proposals for fiscal year 1983. I urge my colleagues to examine them with care. for they portray a keen sense of governmental indifference to the meaning of home and hearth to the American people. They reflect a sense of indifference in particularly harsh terms: In the area of assisted housingthe only remaining hope for millions of lowincome familiesthe total of funds made available through 1982 by this Congress was $27.6 billion. But what does the Reagan HUD budget proposal suggest in its place? It proposes the rescission of $9.4 billion for 1982. thus lowering our figures to $18.26 for 1982. Beyond that it would drop the total to $7.5 billion for 1983. by seeking no new authorizations and by further rescissions. In essence. this is a reduction in excess of 350 percent concerning funds appropriated and available. It is aimed directly at an industry and at a population on the brink of disaster. It is targeted for the poor. the aged. and the young. And if we approve of these tacticswe are going to be damned by generations of Americans to come for denying them the opportunity and right. to homeownership. If you were to translate these dollar amounts of cutback in our housing programs. what do they really mean in terms of direct impact: We will lose 20.000 public housing units. We will lose 34.000 section 8 new construction units. We will lose 2.000 section 202 unitsfor our elderly. We will lose at least 8.000 other units. We will lose a total of 64.000 unitsfor 1982 alone. The grim meaning of these figures are even more frightening when you move on to their predicted effects by the end of 1983. By then. We will lose an additional 40.000 units of public housing. We will lose an additional 16.000 units of section 8 new construction. For moderate rehabilitationwe will lose 30.000 units. As for our elderly populationwL will lose an additional 61.000 unitsso necessary for their prospective needs. To this you can add 1.000 other cancellationsall of which gives you a total of 148.000 units canceled for fiscal year 1983if we approve these budgetary plans. Mr. Speaker. I would also like to direct attention to what can best be described as a budgetary anomaly. for it is a prime example of how you can do much less. while appearing to be doing much more. I am speaking particularly about the apparent large increase in the number of units assistedso displayed in the proposed HUD budgetdespite the rescissions I have just listed. How can this be done? Easilythrough the simple device of shifting the mix between new construction and existing housing. and thus from a ratio of 45 to 55 percentas it is nowto a ratio of 10 to 90 percentunder the new proposal. So it is. that while you thus appear to be more thai generous in your support of housing. you actually provide less than enough to succeed. and you count on the factor of existing housing as being your ultimate aceinthehole for the sake of the industrys and the publics salvation. In the litany of injustices pending against the American people. through the proposed HUD budget cutbacks. no greater evidence of hardship can be assembled than that documented through the plight of our housing industry. Last year. new starts dipped below 1.1 million for the first time since the end of World War II. and 36 years of almost uninterrupted progress began to unravel. Today. a year later. "new starts" are down to 894.000showing only slight improvement over even lower figures posted for the OctoberDecember 1981 period. The January 1982 rate is 44 percent less than a year ado. The major question facing all of us today ishas this decline progressed to the point that structural damage has been done to an industry upoli which so much of our economic recovery is dependent? Perhaps the answer can be provided by the now 960.000 buildingtrades workers now out of work. Their numbers have increased by 250.000 during the past 12 months. and more may be j.ining their lists in the weeks and months ahead. Perhaps the answer can be provided by a thrift industry. which has seen its net worth eroded by 15 percent or a staggering $9.4 billion during the past 12 months. An industry now averaging one a week in Governmentassisted merger simply to staunch the flow albeittemporarily. Perhaps the answer will be provided by the many living in our Nations rural areas for this segment of our population will be especially hard hit by the proposed 1983 HUD figures: For example. with regard to section 502 homeownership loans. though the 1982 figure Is $2.7 billion. the 1983 proposed budget figure for such loans is reduced to $900.000.000. and Rural rental housing loans. under section 515 programs. would be dropped from a 1982 total of $940.000.000 to a 1983 proposed dollar amount of only $200.000.000. In essence. this means homeownership loans will be reduced from 83.000 to 20.000. and rental housing loans reduced from 30.000 to an incredibly low figure of only 5.740. Mr. Speaker. this is no "rouge et noir"-a system of red and blackto be played out as if It were a game of chance. yet that is what we are being asked to consider. We are being asked to gamble awaynobetter I should say hammer away at the very foundation of national housing policies adopted because that is what these proposals really means. and unless you have a rich Aunt Agathawilling and able to cosIgn your very shortterm note for a mortgage. you may never be able to build or buy that firstand sometimes onlyhome. Thats the way it was once upon more recent times for many Americans. Only since the 1930s and with the adoption of our commitment to a housing national policy has it been possible for all of us regardless of our station in life to realize that most important part of our dream of individual homeownership. Before that timefar too many of our people were left with no choice but to rent what they could find. Well.- Mr. Speaker. in the words of one observer of todays conditions. "we are creating a whole new class of Americans who will be permanent renters. And at some time. they are going to want to break into homeownership. The question iswill they ever ministrations housing policies are my remarks be followed by a summary be able to do so." adopted by this Congress. and with It. prepared for me setting forth the conThis countrys tradition for home- almost any chance for this society to tent of the Presidents budget propos. ownership has distinguished us from maintain its claim that it has used Its als for HUD for fiscal year 1982 and much of the rest of the world for capitalfinancial and human. in Its fiscal year 1983 and again. I urge my many years. That traditions chance most productive manner. colleagues to examine these proposabs mr.iskratns tha houing tis are itthyd for survival will be crippled if the ad- for wh not reflect in fact. In impact. and in the name of equity.