Testimony of The Honorable Mel Martinez
May 23, 2001
before the VA, HUD, and
Independent Agencies Subcommittee
of the House Appropriations Committee
Chairman Walsh, Ranking Member Mollohan and distinguished Members
of the Committee, thank you for this opportunity to discuss the
Department of Housing and Urban Development's budget for fiscal
year 2002. If the Members are agreeable, I will submit my entire
statement for the Record, and devote the bulk of my time this afternoon
to summarizing the budget and answering any questions the Committee
The Department of Housing and Urban Development faces great challenges
as we work to improve the Nation's housing and expand opportunities
for America's families. President Bush and I are committed to restoring
the confidence of the Congress and the American people in the operation
of this Agency. Our fiscal year 2002 budget is the first step toward
restoring that confidence.
Let me say this at the start. Even though we are focused today
on the budget, our ultimate success will not be measured by how
much money we spend. I want this Department to be judged on numbers
that are far more important: how many families get the chance to
buy their first house, and how many children grow up in the kinds
of neighborhoods we all want to grow up in.
The Administration has set the overall growth of Federal discretionary
spending at 4 percent, a level that is responsible and appropriate.
But the President recognizes that this Department's mission of improving
housing and community development opportunities brings with it special
obligations. That is why the Department of Housing and Urban Development's
proposed budget increases nearly 7 percent for fiscal year 2002.
I am very pleased that President Bush has made increasing homeownership,
and the freedom that comes with it, a top priority of his Administration.
Homeownership plays a vital role in creating strong communities
by giving families a stake in their neighborhoods, while helping
them to build wealth. Yet even though almost 70 percent of all families
have realized the American Dream of owning their own home, minorities
and low-income families lag far behind. That must change, and this
Department is firmly committed to reducing the gap.
The cost of downpayments remains the biggest single barrier to
homeownership. The American Dream Downpayment Fund provides $200
million in matching assistance to help more than 130,000 low-income
families purchase homes. And under soon-to-be-published regulations,
voucher-holders will be able to use up to one year's worth of Section
8 assistance for the downpayment on a home because of the good work
of Congress - this committee - in passing the American Homeownership
and Economic Opportunity Act.
Another of our proposals is the $1.7 billion Renewing the Dream
Tax Credit that will support the rehabilitation or new construction
of some 100,000 homes for purchase in low-income neighborhoods.
A fourth initiative will expand access to homeownership by reducing
payments in the first years of a mortgage.
Each of these efforts will complement HUD's existing homeownership
Of course, we recognize that homeownership is not an option for
everyone. Today, more than 4 million households rely on a variety
of HUD programs to help them meet the high costs of rental housing.
This budget preserves - and expands - our commitment to every American
seeking the "freedom" to live decently and affordably.
I want to specifically note the President's proposal to increase
the limits for FHA multi-family insurance by 25 percent. We need
to spur the construction and rehabilitation of affordable rental
housing in high-cost areas, and increasing the limits is a critical
Building stronger communities means helping low-income working
families increase their skills and earnings... helping families
become self-sufficient. The Community Technology Centers program
delivers on both counts. For fiscal year 2002, HUD will provide
$80 million in competitive grants to help communities create or
expand computer technology centers in low-income areas.
Unfortunately, too many Americans looking for a home instead find
themselves victimized by housing discrimination and outright fraud.
The people of HUD are committed to vigorously enforcing our fair-housing
laws to help ensure that all Americans have equal access to rental
housing and homeownership opportunities. For the coming fiscal year,
the Department plans to increase - by 16 percent over current levels
- the amount of funding available for fair-housing enforcement and
We are also taking additional steps to crack down on predatory
lending...for example, the abusive practice of "property flipping"
that destroys neighborhoods and the dreams of American families.
We intend to eliminate this practice so far as HUD is concerned
by denying FHA insurance on properties resold within a certain period
I have not touched on many of our other notable efforts - among
them our work to improve the quality of life for the elderly, assist
those with disabilities, reduce lead-based paint hazards, and aid
the homeless. But perhaps we will have the chance to discuss them
during your questions.
As you know, last year's HUD budget increased 16 percent, and we
cannot continue at that rate of growth. If we did, our budget would
be over $180 billion by 2010. While most of our programs are being
funded at last year's record high - or even slightly higher - levels,
I will mention two important reductions.
This budget provides nearly $2.3 billion for the Public Housing
Capital Fund. Let me make this clear - the Capital Fund will still
have over a year's funding in reserve to address backlog needs,
and this budget funds 100 percent of the money necessary to cover
the modernization and maintenance needs for fiscal year 2002. The
PHAs have over $8 billion in backlog funding if you include those
funds already released for FY 2001.
HUD has proposed terminating the Public Housing Drug Elimination
Grant Program. While a well-intentioned effort, it ultimately suffered
from a large number of abuses... duplicated the efforts of many
other Cabinet Departments... and required the Department of Housing
and Urban Development to take on a law enforcement role that is
clearly outside its core mission.
I have met with Attorney General Ashcroft to determine how federal
law enforcement resources can be used to fight crime in public housing.
I have spoken often, and quite candidly, about the need to resolve
HUD's serious management challenges. Throughout the years, Congress
has repeatedly told the Department to improve its management and
restore its focus - in other words, get its own house in order.
This Administration is listening, and we have dedicated ourselves
during this first year to righting the ship.
We cannot do this alone, however, and so I want to work with the
Nation's mayors and encourage them to take on a greater oversight
role. No one is in a better position to help us identify housing
problems in their communities... and work with us to better their
This Administration is strongly committed to focused programs and
an efficient government that works. And my approach to the task
will focus on four governing principles.
First, our mission will be to serve people, not programs.
Second, we will have the discipline to stick to our mission. Mission
creep is mission death.
Third, we will be good stewards of our resources.
Fourth, we will observe the highest ethical standards. This means
more than prosecuting graft. It means rejecting the subtler corruption
of settling for good appearances rather than insisting on good results.
As we seek to fulfill our mission, this Department is committed
to continuing a strong relationship with Congress so that together
we can make the Department of Housing and Urban Development an efficient
and effective fighter on behalf of America's housing and community
Full text version of testimony
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