Mr. Chairman, last year we were able to accomplish great things together. Under your leadership, we were able to reach bipartisan agreement on many fronts -- public housing, economic development, homeownership, and rental housing. Our ability to work together will be the key to making HUD's mission of empowering communities a reality. I look forward to another year of cooperation and results.

HUD's FY 2001 budget continues our efforts to restore the public's trust in this Department, and to open new doors of opportunity for people who are not yet benefiting from the current wave of national prosperity. This year, HUD's budget request is $32 billion -- a $6 billion increase over last year. It offers opportunity and security for millions of Americans. It builds on the strong foundation that we have built at the Department over the past three years, both on the budget side and the management side.

In many ways, this is a landmark budget proposal. It represents the President's confidence that HUD is better positioned than ever to help communities take on the new challenges of the 21st century.

This budget is a direct outcome of the management reforms we have put in place over the past three years. I am convinced that we now have the tools, the resources, and the capacity to wisely and responsibly spend the funds we have requested.

Our management reforms have succeeded in transforming HUD into an agency that puts communities first. Fighting fraud, waste, and abuse, our Public Trust Officers are cracking down on those who misuse taxpayer dollars. Renewing our commitment to first-class customer service, our Community Builders are connecting people to the full range of HUD resources. As a result, HUD today is back in business -- back in the housing business, in the economic development business, and in the community empowerment business.

This past year, especially, has been a banner year for HUD. President Clinton kicked off his New Markets Initiative with historic visits to the Pine Ridge Indian Reservation, East St. Louis, Los Angeles, the Mississippi Delta, Central Appalachia, and other inner-city and rural communities. The message? These are the emerging markets of the new century. They are the places that will provide the consumer and labor markets needed to fuel economic growth in the future.

We have also broken the gridlock on affordable housing. After a four-year break, Congress approved new housing vouchers in each of the past two years. This year's budget builds on this progress, with important advances for affordable and special needs housing, including 120,000 new housing vouchers to help meet the "worst case" housing needs of low-income families struggling with rising rents. We are seeking increased funding to continue the transformation of public housing. And increased funding for Fair Housing will help ensure that all Americans have equal access to decent and affordable housing.

The budget also proposes to expand the successful Continuum of Care program for homeless assistance and prevention -- a winner this past year of the prestigious Innovations in Government Award from Harvard University and the Ford Foundation. The national survey of homelessness in America, conducted by the Census Bureau, showed that we are on the right track with the Continuum -- but with 600,000 Americans still homeless each night, there is still much more to do.

In the past year, we launched a major commitment to address one of the key challenges facing us in the new millennium -- the graying of America. Our budget requests increased funding for HUD's new Housing Security Plan for Older Americans -- helping seniors stay in their own homes as long as possible, increasing funding for the successful Section 202 elderly housing, converting existing elderly housing to assisted living facilities, and in 200, building new assisted living facilities.

We have seen historic, across-the-board gains on the homeownership front -- more American families own their homes today than at any time in our history. With higher loan limits and through internal reforms, a revitalized FHA is now on the leading edge of the homeownership boom, serving minorities, first-time home buyers, and cities in unprecedented numbers. This year's budget request positions the FHA to do even more. And we are investing more than ever in our Native American programs to boost homeownership in Indian Country.

This year we are also proposing to tap the capacity -- and the commitment to social justice -- of the faith-based community. Through our Center for Nonprofit and Interfaith Partnerships, a new $20-million initiative, we will expand access of community and interfaith partnerships to HUD programs and help build new public-private partnerships at the local level.

Finally, we are more committed than ever to building safe, secure communities. The dramatic reduction in violent crime has been one of the great success stories of this past decade. Our budget contains several initiatives to further reduce the scourge of gun and other types of violence, both in public housing and elsewhere. Without safety there can be no prosperity.

Overall, this new budget affirms our progress. HUD, clearly, is back in business. These initiatives will allow America's communities to make the most of this unique moment in our nation's history. Together, they will put this record prosperity to work for everyone, everywhere.

HUD's FY 2001 budget addresses four major challenges: (1) economic revitalization of our nation's communities by investing in new markets; (2) increasing affordable housing and boosting homeownership; (3) ending discrimination in housing through enforcement of our Fair Housing laws; and (4) creating safe and livable communities.

As we enter the 108th month of sustained economic expansion -- the longest our nation has ever known -- we have much to celebrate: the lowest peacetime unemployment and inflation rates in decades; the fastest and longest real wage growth in 20 years; and an all-time high homeownership rate, which reflects both economic strength and consumer confidence.

But there is another side to this success. Statistics show that the members of our society with the lowest incomes have actually grown poorer over the same time period. Though most cities are doing well, one in six still has unacceptably high levels of unemployment; in older suburbs, crime, poverty, and homelessness have become more prevalent; and in some parts of rural America, areas persist that are virtually untouched by the economic boom.

In his State of the Union message earlier this year, the President addressed these people and places when he said: `To keep our historic expansion going, we need a 21st century revolution to open new markets, start new business and hire new workers right here in America -- our inner cities, poor rural areas, and on Indian reservations."

With this FY 2001 budget, HUD is on the front lines of this 21st century revolution, building on HUD's successful track record of promoting business investment and job creation in underserved communities. Over the past seven years, we have retooled our job creation and business investment programs, creating hundreds of thousands of jobs in both urban and rural communities across the United States.

HUD's economic development initiatives will not only help spur the economic revitalization of distressed communities, they will contribute to the continued economic growth of the nation as a whole. The goal of these initiatives is straightforward: extend the national prosperity to people and places left behind.

CDBG.Last year we celebrated the 25th anniversary of the Community Development Block Program. A pioneer of devolution, CDBG has developed a proven record as the most flexible federal aid to both cities and smaller rural communities. This year's budget request builds on 25 years of success, with a request for $4.9 billion, up $119 million over last year, and $195 million over the past three years. However, the real increase for this program is larger than these totals imply. By reducing set-asides, we will increase the effective amount of formula funding that goes directly to communities by $250 million, for uses they themselves designate.

America's Private Investment Companies (APIC). Last year, Congress appropriated $20 million as an initial credit subsidy for the cornerstone of the President's New Markets Initiative -- for-profit investment funds known as America's Private Investment Companies (APIC). APIC will make sorely-needed private capital available to larger businesses that are expanding, relocating, or joint venturing in inner cities and rural areas.

As we did last year, HUD is requesting $37 million to fully fund APIC. These funds will subsidize and secure $1 billion in privately issued, federally-guaranteed loans, along with $500 million in private equity commitments, for a total of $1.5 billion in new private sector funds that will create an estimated 200,000 jobs. We have submitted authorizing legislation for this initiative, which must be authorized by June 30, 2000.

Community Empowerment Fund and EDI. The Community Empowerment Fund streamlines two existing HUD programs that are important tools for local communities to create jobs and attract business investment: our Economic Development Initiative (EDI) grants and Section 108 guaranteed loans. Overall, our budget seeks $1.2 billion in loan guarantee authority under Section 108 of the Housing and Community Development Act.

This year, HUD is requesting $100 million in EDI grant funds. The $100 million in EDI grant funds is expected to leverage $500 million of the Section 108 guaranteed loan funds, and create an estimated 73,000 jobs. These grants and guaranteed loan will leverage substantial additional private sector commitments. Together, they will be used to create revolving loan funds for small businesses, to build inner-city shopping centers, retain or expand industrial facilities, expand and modernize businesses, and to support other job creation/welfare-to-work initiatives.

Empowerment Zones. Over the past 5 years, HUD has helped create Empowerment Zones and Enterprise Communities (EZ/ECs) in more than 75 urban communities. In almost all of these places, the EZ/ECs have achieved success in leveraging private dollars and expanding job creation. We estimate that more than 40,000 people have been placed in jobs as a result of EZ/EC programs, some $10 billion in public and private sector investments have been committed to these places, and more than 30,000 businesses have received assistance.

In short, EZs and ECs have successfully combined tax credits with federal grants and loans along with local resources to attract billions of dollars private sector investments. Accordingly, we are requesting $150 million in mandatory funding for the fifteen recently selected Round II Empowerment Zones, under Title XX of the Social Services Block Grant program. We are also proposing to designate ten additional Empowerment Zones (eight urban and two rural). In addition, the President has proposed significant extensions of the wage tax credits and other tax incentives for business investment that were such an important part of the success of the first Empowerment Zones.

Other Economic Development Initiatives. HUD will participate in the fourth phase of the National Community Development Initiative (NCDI), to be funded at $24 million. This highly successful public/private partnership will help build the capacity of CDCs and other community-based organizations, allowing them to continue their impressive track record as engines of economic growth in low-income areas.

In 1998, the Rural Housing and Economic Development Program was created to fund innovative strategies for rural housing and economic growth. The FY 2001 Budget requests $27 million for this program, an increase of $2 million over last year. We will continue to work closely with other Federal departments, including Agriculture, Commerce, and the Appalachian Regional Commission, to design effective responses to the needs of our nation's rural communities.

In addition, new authorizing legislation will be submitted in support of the President's Mississippi Delta Economic Development initiative, with proposed HUD funding at $22 million. This is a government-wide effort to jumpstart the economy of a significant region of the country that has been left behind by the economic boom of the past decade. HUD will work in partnership with other Federal agencies to capitalize on our special expertise in housing and economic development to help revitalize the region's economy.

We are also requesting an increase in the highly successful Youthbuild program from $42.5 million to $75 million. Youthbuild provides help to young people with training in the building trades, as well as assistance in securing high school diplomas. We estimate that the program will help over 5,000 disadvantaged youth rebuild their communities at the same time as they learn vital job skills.

At the core of HUD's mission is the charge to provide housing that is decent, safe and affordable to all. Despite the longest peacetime economic expansion in the nation's history, it is actually becoming more and more difficult for low-income American families to afford a decent place to live. Rents have soared in many regions with strong economies. In fact, worst case housing needs remain at an all-time high of 5.3 households, growing especially fast among working families. As a result, there is a greater need than ever for HUD's programs.

Our FY 2001 initiatives build on recent efforts to reform and restore public trust in HUD's housing programs. Historic legislation created the Mark-to-Market program, which preserves project-based Section 8 housing while bringing costs in line with the private market. We have cracked down on program abuses. Our Real Estate Assessment Center is on track towards meeting our goal of inspecting, for the first time, all 40,000 properties in HUD's inventory of public housing and multifamily insured or assisted housing. And more than 600 troubled properties have been referred to the new Enforcement Center, with 45% of the cases resolved and revenues from fines imposed in FY 99 up five times over the previous year.

Section 8 renewals and incremental vouchers. HUD is requesting $13.0 billion in new budget authority to renew existing Section 8 contracts -- covering 2.6 million rental units. In addition, we are requesting $690 million for 120,000 new vouchers, the largest increase since 1981. Two years ago, HUD got back into the housing business with 50,000 new vouchers focused on families moving from welfare to work. We topped that last year with 60,000. With this year's request, we are taking the next step. These new vouchers will be targeted as follows: one half, or 60,000 vouchers, will be "Fair Share" vouchers, to be used by public housing authorities to reduce their waiting lists; 32,000 will be targeted to those moving from welfare to work; 18,000 will be for homeless persons; and 10,000 will stimulate new housing production for very low-income individuals.

New housing production vouchers. Our proposal for new vouchers includes the first Section 8 housing production vouchers in 17 years. For decades, national housing policy has shifted back and forth between production-oriented programs that focus on expanding the supply of affordable housing, and income-based initiatives that provide cash assistance that enables lower-income families to afford decent rental housing. As we enter the 21st century, it is clear that both approaches are needed if America is to realize the goal of decent housing for all. We are proposing 10,000 housing production vouchers that, in tandem with the Low Income Housing Tax Credit and FHA insurance, will leverage 40,000 total units (subsidized and unsubsidized).