Secretary Carson testifies before Congress on FY19 Budget
Following last week’s enactment of the FY18 Appropriations bill, lawmakers continue their pivot to FY19. HUD Secretary Ben Carson testified on FY19 spending levels before the House Appropriations Committee last Tuesday, followed by his testimony before the Senate Banking Committee later in the week. USDA Secretary Sonny Perdue’s scheduled testimony on USDA’s FY19 budget was postponed due to weather.
During the House Appropriations Committee
hearing, Secretary Carson navigated questions from lawmakers regarding fiscal scandals plaguing his Department. In response to pressure, Carson pointed to his new “financial controls” initiative aimed at enhancing HUD’s fiscal strength and integrity.
“We simply need to do better. An updated system of internal controls will provide our agency with greater certainty that the dollars we spend are spent in a manner that satisfies all laws and regulations, and most importantly, the American people,” said Secretary Carson.
The
financial controls initiative, unveiled just days before the House Committee hearing, consists of the following:
- Agency-wide Governance: Implementing an Agency-wide governance structure that allows for more oversight, transparency, monitoring and accountability;
- Finance Transformation: Developing a plan to restore discipline and accountability in the financial and reporting systems across the Agency;
- Grant Modernization: Developing a holistic grant modernization plan to improve grant processes and reporting, including improved IT systems; and
- Process Improvement: Promoting a HUD culture focused on documented and repeatable process with a focus on transparency and cost reasonableness.
During the hearing, Secretary Carson also defended the President’s FY19 Budget Request and suggested that the new “Opportunity Zones” program could make up for the cuts proposed by the Administration. The program leverages private infrastructure and housing investment through tax-preferred treatment of capital gains that are reinvested in certain low-income census tracts.
Originally introduced as stand-alone legislation by Senator Tim Scott (R-SC), the “Opportunity Zones” bill provisions were enacted as part of tax reform late last year. The IRS published guidance earlier this year on the process for Governors to designate the “Opportunity Zones” by last week’s deadline.
During a separate
hearing titled “Oversight of HUD,” Senate Banking Committee Members from both parties questioned Secretary Carson on the Administration’s proposals to increase rents, cut funding, and delay enforcing fair housing laws: Ranking Member Sherrod Brown (D-OH) criticized the administration’s proposal to cut HUD’s budget while imposing rent increases on tenants. Senators Doug Jones (D-AL) and Chris Van Hollen (D-MD) expressed concerns regarding the President’s request to eliminate Community Development Block Grant (CDBG) funds. Senator Thom Tillis (R-NC) called the funding reductions “premature” and recommended Secretary Carson to make additional efforts to assess the effectiveness of programs before cutting them. Senator Bob Menendez (D-NJ) and Senator Elizabeth Warren (D-MA) criticized Secretary Carson on his decision to suspend the Affirmatively Furthering Fair Housing (AFFH) rule and delayed enforcement of fair housing laws. Senator Tim Scott (R-SC) highlighted that the recent “furniture scandal” was not helpful. Secretary Carson remained poised throughout the hearing, even in the face of heated criticism.
Legislation introduced to preserve rural housing
Senators Shaheen (D-NH) and Smith (D-MN) and Representatives Kuster (D-NH), Shea-Porter (D-NH), and Nolan (D-MN) re-introduced legislation in both Chambers last week to ensure rural low-income tenants are able to maintain access to safe and affordable housing.
The “Rural Housing Preservation Act” provides rural housing vouchers to residents who live in properties with prepaid or maturing loans, while ensuring the values of housing vouchers are flexible so they can provide assistance to beneficiaries in higher cost areas. The
House and
Senate bills also decouple rental assistance from the term of a mortgage, allowing USDA to renew rental assistance for a property regardless of the length of the mortgage, and make it easier for non-profit entities to acquire Section 515 properties. The bills also permanently authorize the Multifamily Preservation and Revitalization Restructuring Program to operate in the future.
