Opening Statement by Ranking Member Reed at THUD Hearing to Review FY2020 Budget Request
Thank you, Chairman Collins.
We have worked together for many years now – through many budget cycles and sometimes challenging climates. Despite these challenges, we have been able to advance our nation’s transportation and housing infrastructure under your leadership.
Since the passage of the Bipartisan Budget Act of 2018, we have provided nearly $15 billion for housing and related infrastructure programs, including:
- $2.6 billion in new resources for affordable housing construction through the HOME program;
- $6.6 billion for the popular, bipartisan Community Development Block Grant (or CDBG) program; and
- More than $5.5 billion for capital reinvestment in our nation’s public housing stock.
These combined investments get us closer to the goal of providing safe, decent affordable housing for our country’s most economically vulnerable. They also signal to the private sector, which is a key partner in the development of affordable housing, that the federal government remains committed to furthering opportunities for those most in need.
As I mentioned in our hearing last week, we face yet another year where we are constrained by the caps established in the Budget Control Act, which makes our job of achieving these goals that much harder. We have to work across the aisle to get common sense relief from these arbitrary, one-size-fits-all, spending limits.
Chairman Collins, despite the difficulties ahead of us, I continue to believe in your leadership and am committed to working with you in a bipartisan fashion toward a resolution that will satisfy the needs of our country.
Mr. Secretary, I want to welcome you back to the Subcommittee – now for the third time.
Today, you are here to discuss the fiscal year 2020 budget request for the Department of Housing and Urban Development (HUD).
As with the prior two budget requests, the Administration makes minimal investments to preserve our nation’s affordable housing or ensure protections for the more than 5 million low-income households served through HUD’s rental assistance programs and the additional 550,000 individuals experiencing homelessness.
The Administration’s budget request for HUD is $44 billion - an astounding $9.7 billion cut in discretionary funding from fiscal year 2019.
Much of this decrease is a result of a flawed attempt to shift existing public housing units to the private sector.
The budget request incentivizes public housing agencies to demolish this much-needed affordable housing without a requirement to rebuild or replace. Any proposal that exacerbates our affordable housing crisis is a nonstarter.
These unrealistically harsh funding levels are also accomplished by eliminating the very same programs local governments leverage to meet their unique housing and local infrastructure needs – the CBDG and HOME programs.
It even eliminates housing opportunities for some of our most vulnerable neighbors by getting rid of mandatory funding for the Housing Trust Fund, which I authored in the bipartisan Housing and Economic Recovery Act, which the Senate passed 72-13.
This budget also reflects a less than healthy FHA fund and a shrinking share of GNMA receipts and collections – both of which are fundamental to the funding of HUD’s core mission programs. I think these projections are questionable and nowhere near the Congressional Budget Office’s estimates.
This is particularly concerning in light of the fact that the Administration announced last week its intention to pursue Housing Finance Reform, which would require your agency to submit a plan to reform the critical roles played by FHA and GNMA in helping our neighbors, including veterans and farmers, to responsibly own their homes.
While the Administration claims that “sustainable homeownership is the benchmark of success for comprehensive reforms to Government housing programs,” questionable FHA and GNMA projections appear to suggest that even these hopeful words may ring hollow. I hope this is not the case.
At a minimum, Housing Finance Reform must responsibly meet the needs of working families, small lenders, consumers, and the civil rights communities while also ensuring that FHA and GNMA responsibly continue to support HUD’s ability to meet its core mission in both the rental and homeownership markets.
While I am pleased that the budget includes a modest amount to sustain the funding for homeless assistance through the Continuum of Care program, it unfortunately decreases targeted resources for emergency solutions grants, and overlooks necessary investments for youth and veterans experiencing homelessness, as well as victims of domestic violence.
Instead, it continues to impose rent reforms and proposes to institute mandatory work requirements for “work-abled” households. These rent reforms have been proposed and rejected by the authorizing Committees multiple times. Further, work requirements have proven to be costly and ineffective.
Overall, what we have in front of us today is a request that lacks compassion and true understanding of the needs of this country.
- Cuts corners to reduce the footprint of affordable housing;
- Compromises the physical condition and safety of our existing housing stock; and
- Places unreasonable financial burdens on the already working poor.
Mr. Secretary, you are here today to explain how this request actually furthers HUD’s mission without reversing the strategic progress we have been able to make through our work on this Subcommittee.
I look forward to hearing through your testimony.
Thank you, Chairman Collins.