Message from the Secretary
The booklet you are holding in your hands tells two
stories: one a story of hope for the upcoming year, another a
story of progress from the past year. To understand the significance
of the resources proposed in this budget, it's important to understand
the chapter of reinvention and renewal written in 1997 by the
dedicated men and women of the Department of Housing and Urban
President Clinton's second-term urban agenda began
with the understanding that while the mission of HUD was more
vital than ever, the Department itself faced a competence gap
that compromised its ability to fulfill its mission. Decades
of neglect left HUD with the dubious distinction of being the
only federal agency designated as "high risk" by the
General Accounting Office. One of HUD's Congressional chairmen
called the Department "dysfunctional." HUD's own Inspector
General reported that "prospects for further improvement
(at HUD) were dim." What's more, HUD's main rent subsidy
program for the poor, known as Section 8, was on the brink of
becoming the next savings and loan scandal, with grave consequences
for more than four million low-income Americans who depended on
the program for a place to live.
At the President's direction, and with the Vice President's
guidance, we didn't set out to defend the problems, we set out
to fix them. Our efforts focused on closing the competence gap
by eliminating waste, fraud, and abuse. We partnered with the
Justice Department to crack down on bad landlords. We partnered
with the FBI to create a new Enforcement Center. We created an
Assessment Center that will inspect all HUD properties nationwide
for the first time. And drawing on the lessons of the private
sector, we consulted with reinvention gurus James Champy and David
Osborne to implement the most sweeping reform plan in HUD's history.
In conjunction with our unions, we enacted a plan that clarifies
HUD's mission, streamlines its operations, improves customer service,
harnesses new technology, and infuses a new generation of talent
called "community builders." In the process, the plan
sets a glide path to integrate 89 separate financial management
systems that can't talk to each other into one, and downsize the
HUD workforce to 7,500 employees by the year 2002. As a result
of these efforts, by year's end, the competence gap was replaced
by legislative success - Congress passed the first major housing
bill in five years, voting to fundamentally reform the Section
With this budget, HUD turns the corner. The 1999
HUD budget is the smartest and strongest HUD budget in ten years
and reflects the President's belief that HUD today is smaller,
faster, and better than it was a year ago. Building on the theme
of reinvention undertaken in 1997, this budget includes no new
programs or new bureaucracies. Instead, the $1.8 billion program
increase proposed in this budget enhances existing programs that
have been retooled and improved for the 21st century. Individually,
this budget reflects increases to 20 different programs. Taken
as a whole, it reflects two very clear themes that reinforce the
twin missions of the Department of Housing and Urban Development.
The first theme is jobs and economic opportunity.
Why? Because nothing empowers an individual,
develops a community, or builds a stable tax base like a job.
The challenges of the global economy combined with the implementation
of welfare reform have placed new demands on communities across
America, and made HUD's economic development mission more vital
than ever. This budget reinvents several HUD programs to meet
that challenge in an innovative way, proposing vouchers to help
people move from welfare to work, a Community Empowerment Fund
to get businesses the start-up capital they need to create jobs,
and funding for a second round of Empowerment Zones to bring opportunity
back into the inner city. It also builds on successful core programs,
doubling funding to convert old brownfields into thriving businesses,
and streamlining the Community Development Block Grant program
to provide communities with more resources and more flexibility
to turn their plans into reality.
The second theme is housing and homeownership.
Why? Because housing is the foundation
on which everything else is built. For the past two years, tight
budgets have reduced America's net increase of rental assistance
to zero. The 1999 HUD budget gets America back into the housing
business, not by creating new programs but reinventing and investing
in old ones. It proposes new vouchers to help people find affordable
housing, a new "bank" to allow communities to leverage
up to five times their HOME allocations to build housing, and
the largest level of funding ever to end the tragedy of homelessness.
It also makes clear that all of HUD's separate housing roads
should ultimately lead to one place: homeownership. Our goal
is to help more people become homeowners, and this budget does
so in innovative ways: by raising the FHA loan limits to help
more middle class families buy homes, and by increasing HUD's
campaign to weed out housing discrimination once and for all.
All told, the 1999 HUD budget represents not just
a shift in policy, but a shift in philosophy. This budget seeks
to change HUD's role from Washington dictates to community empowerment.
Not with federal mandates, but with a federal menu of opportunity.
Not with solutions driven from the top-down, but from the bottom-up.
Not with a one-size-fits-all mentality, but with action plans
written by and tailored to local communities. HUD's goal is not
to tell communities what to do, but to help communities do what
they want to do. In the process, it takes partnership to a new
level - by setting aside part of the CDBG program to encourage
cities and counties to work together on a regional level to solve
In the end, this budget is critical not just because
HUD has closed its competence gap, but because America still has
an opportunity gap. Our nation has created over 14 million new
jobs, but only 13 percent are in cities. We have more homeowners
than ever, but over five million Americans either live in substandard
housing or pay 50 percent or more of their income in rent. We
have more millionaires than any time in our history, but an estimated
600,000 Americans still sleep on our streets every night. That's
why HUD's mission is more vital than ever. We closed the competence
gap so we could close the opportunity gap. That is both our challenge
and our continuing commitment today. This budget says we can
do it - but only if we work together.
Content Archived: January 20, 2009