« PreviousContinue »
other vital national programs, as well. In essence, the administration has rejected congressionally enacted housing programs and has said that all new housing activity will be halted, while a “period of searching evaluation" is completed and a nation's housing needs go unmet.
Impounded funds in the fields of housing and community development, during fiscal year (FY) 1973, will amount to $991 million and constitute approximately 16 percent of the Department of Housing and Urban Development's total available budget authority. In FY 1974, impoundments will exceed $1 billion and rise to at least 21 percent of total HUD funds available for new commitments. Almost $400 million of the total monies which will be impounded in FY 1974 involving some 450,500 housing units for lower income families— relates to the Section 235 home ownership program, and the Section 236 rental assistance program.
It has been estimated that the economic impact of impounding funds for these two programs alone will exceed $19 billion and result in an estimated loss of 2.2 million man-years of employment (See Attachment 2). These figures are staggering; however, it must be realized that they do not include an assessment of the economic or employment impact relating to the impoundment of funds for rent supplements, water and sewer facilities, rehabilitation loans, college housing, nonprofit sponsor assistance, public housing modernization, model cities, neighborhood facilities, urban renewal, community development training and fellowships, supplementary grants for new communities, open space land, or public facility loans. The impoundment of funds in the latter areas of activity far exceeds the level for the two programs mentioned above; and therefore the moratorium's total impact on our economy in terms of dollars and jobs lost will be multiples of the $19 billion cost figure and the 2.2 million job figure.
The recent housing moratorium's consequences become even more apparent when one realizes that the level of new commitments for HUD-assisted housing programs will drop from 426,924 units in the FY 1972 to 29,800 units in FY 1974 a reduction of 93 percent in new activity. At the same time, requested appropriations for the Department of Housing and Urban Development will drop from $4,291,508,000 in FY 1973 to an estimated $2,684,303,000 in FY 1974. Rural America's potential loss in dollars over the next 18 months is equally staggering: nearly $1.6 billion. But, dollars tell only part of the story; potential employment losses are estimated at 133,120 man-years.
It is also important to note that by the end of FY 1974, the January 5th moratorium on new commitments (when coupled with an already diminished pace of new activity) will place HUD-assisted housing programs 45 per cent behind goals set forth in the Housing and Urban Development Act of 1968 (See Attachment 3). Thus, by the end of that fiscal year--the sixth year of the ten year period during which six million new or rehabilitated units were to have been produced for low and moderate income families—slightly over half of the three million units anticipated will actually be ready. The most serious gaps exist in the public housing program where existing activity will lag 55 per cent behind projected goals; and the rent supplement program where the lag approaches 72 per cent. Both of these programs, interestingly enough, were designed to serve the lowest income families. It must also be emphasized that only four years remain to make up these deficits, if this nation sincerely hopes to honor its commitment to a decent home and a suitable living environment for every American family.
As a result of the moratorium, builders, lenders and others who have cooperated in producing housing under these programs will turn their efforts and investments in other directions. Substantial numbers of workmen and contractors, many of them members of minority groups, will be forced to seek other employment. Vast public and private resources and skills will be lost and cannot be replaced easily in the event that new housing programs are initiated at some future date.
In addition, housing costs will be left almost exclusively in the control of a very imperfect market. Average costs for both single-family and multifamily units inay rise; and the impact produced by the absence of lower priced housing will remain with the nation for many years. Rents on conventional apartments may also rise faster than if they had been constrained by the competitive effects of additional subsidized rental projects. Rehabilitation of existing housing in many neighborhoods can also be expected to grind to a virtual standstill in the absence of sudsidy funds. The revitalization of salvageable inner-city neighborhoods which inight have occurred with large-scale rehabilitation or clearance will not take place.
In short, the effect on substantial sectors of our economy will be disastrous; however, the foregoing analysis does not begin to describe the costs in human terms. It is important, therefore, that the hopes and aspirations of vast numbers of elderly persons, workers, homeowners, and others are not dashed beneath the pens of socially disinterested budget cutters. With the committee's permission, at this point in the record we would like to introduce concrete examples of the housing moratorium's impact on various areas of the country.
CONSTITUTIONAL CRISIS It is clear from the information set forth above that a constitutional crisis of staggering proportions is indeed at hand. This crisis becomes even more apparent when one considers the impoundment of funds in other areas of domestic concern. Similar social needs affected by the impoundment process include welfare for those low-income and elderly persons who are desperately in need of timely assistance; education and manpower training programs for those who have been socially disadvantaged and who have only recently been given the hope and opportunity to better themselves; water pollution treatment funds; highway funds; assistance programs for farmers; and other domestic programs which can foster improved conditions in our cities, rural areas and our environment generally, and eliminate those conditions which contribute to crime and despair.
We believe that S. 373 and the goals which it seeks to achieve are extremely important at this point in America's history. The Administration is asserting the power to impound authorized and appropriated funds where such action makes impossible the fulfillment of domestic programs that Congress has enacted into law. Other Administrations have certainly frustrated programs, but never under claim of right to do so. It is undoubtedly true that a major portion of responsibility for the existence of the present impoundment crisis rests with Congress. In many instances, Congress has enacted statutes which leave open to the Executive Branch entire areas of discretion not policed by carefully drawn standards; incautious drafting and reliance upon the good faith of an incumbent President are poor shields for a legislative program when the Executive is not sympathetic to the purpose and goals of the law.
To be sure, the very structure of constitutional government may be altered by the President's assertion of the power to impound. Practically speaking, the initiative for establishing national priorities is shifted from Congress to the President. By impounding the funds that Congress has approved, the President is in essence exercising the item veto which Presidents have often sought by legislation or Constitutional amendment, but have repeatedly been denied. Such a power clearly is prohibited by the Constitution which empowers the President to veto entire bills only. The lack of constitutional authority for the President to act in the area of impoundment was recognized as recently as December 19, 1969, when then Assistant Attorney General William H. Rehnquist advised that "With respect to the suggestion that the President has a constitutional power to decline to spend appropriated funds, we must conclude that existence of such a broad power is supported by neither reason nor precedent."
DRASTIC ACTION TAKEN, BUT NO SOLUTIONS OFFERED
In the fields of housing and community development, there is also reason to be concerned about the manner in which the Administration has chosen to alter drastically longstanding national housing policies and programs. Neither Congress, interested public and private groups, elected government officials, organized labor nor housing consumers in general were consulted in the process.
While a full four years were required to alter this nation's course of action in Southeast Asia, our nation's housing policies were drastically altered overnight without the benefit of careful or systematic study. Furthermore, con
structive and workable alternatives have not been forthcoming from the Administration to refine or replace existing programs.
It is no solution to say that the private conventional housing market has demonstrated its basic capacity to meet this nation's housing needs, when vast numbers of low and moderate-income families desire but cannot obtain decent shelter within their means. It is no solution to institute a holding action on new commitments for water and sewer grants, open space grants, and public facility loans until these activities are folded into Special Revenue Sharing; this constitutes Executive Branch coercion of Congress, the needy and the public-at-large. It is no solution to speak of the current pipeline of approved applications as assuring a substantial level of production well into the future, for the pipeline has been allowed to shrivel up for months and, indeed, may drop up completely before national needs are met, if the moratorium is allowed to remain in effect.
We too believe there is room for improvement; and that present programs must be refined further to insure that scattered abuses do not persist and color public thinking on vital social needs. We do not believe, however, that the American people gave the President a mandate last November to terminate federal housing programs; nor do we believe that the impoundment process should be used to frustrate effectively the will of Congress, as expressed in some thirty years of housing laws.
SENATE BILL 373
It is for these reasons that we testify before this distinguished subcommittee today. We have reviewed Senate Bill 373 and commend the Chairman of this subcommittee for his leadership on this matter and for his continuing dedication to the Constitutional processes. While we stand ready to support Senate Bill 373 as presently drafted, we respectively urge that consideration be given to the elimination of a 60-day "grace period" for Presidential impoundments. It appears to us that Congressional approval should be obtained by the President prior to any impoundment of funds for domestic programs; however, we would defer to the Chairman's thinking on this matter. We also respectfully urge that the Bill be amended to specifically cover the impoundment of funds by any cabinet officer, the Director of the Office of Management and Budget (OMB), and any other federal employee; and to specifically cover the withholding of subsidized housing funds, as well. As presently drafted, there is some question as to whether these individuals and programs are covered. We know that a great deal of time and effort has already gone into the preparation of this Bill; and, therefore, we offer these comments merely as suggestions, in the event that further refinements are made by the committee.
Finally, we concur wholeheartedly with the statements made by Chairman Ervin on the Senate floor when S. 373 was introduced, to the effect that the impoundment of funds does not constitute a cure for our nation's fiscal or economic woes. We too believe that impoundment does not save anybody any money, nor does it lead to lower taxes. As Chairman Ervin stated, “It is merely a means whereby the White House can give effect to the social goals of its own choosing by reallocating national resources in contravention of congressional dictates."
In conclusion, we call upon Congress to reassert control over its own programs. This Administration and previous Administrations have sought to influence these programs while under consideration by Congress and, in many instances, they were successful in their efforts. Now, the present Administration is seeking to undo years of cooperation between Congress, private interest groups and consumers alike, by ignoring Congressional directives in the process. Such actions have grave implications for our country as a whole, and therefore, we earnestly hope that this subcommittee and other committees of Congress will see fit to alter the course of events before permanent inroads are made in our constitutional process.
Mr. Chairman, we thank you for the time which you have afforded us today and commend you for your efforts. We are prepared to respond to any and all questions, in the time remaining. We are also prepared to provide this committee with any additional information which might prove helpful to your deliberations.
ORGANIZATIONS PARTICIPATING IN THE NATIONAL AD HOC HOUSING COALITION
Association of Retired Persons
ORGANIZATIONS PARTICIPATING IN THE NATIONAL Ad Hoc HOUSING COALITION_Con.
Opportunity Funding Corporation
ECONOMIC IMPACT OF THE SUSPENSION OF NEW ACTIVITY IN HUD "HOUSING ASSISTANCE PROGRAMS, FISCAL
YEARS 1973 AND 1974 1
II. Community facilities to support housing:
Sec. 235 (single family).
Total community facilities..
Real estate taxes:
Total related services.
168 2, 562
260, 000 190, 500 260,000 260,000 260,000 190, 500
410.3 258.5 15.6 93.6 43.7 488.1
V. Impact on employment:
Based on a factor of 115 workers employed for 1 year for each $1,000,000 spent on all construction
and related facilities and services:
Total man years lost
Total dollar impact ($19,298.0 X 115)
1 Based on factors supplied by Dr. Michael Sumichrast, National Association of Home Builders.
2 Part of the economic impact from unutilized authority will come in fiscal year ending June 30, 1973, because of cut. backs in projected construction starts in fiscal year 1973.
The sec. 235 construction starts were reduced by 105,500 units over the original fiscal year 1973
budget; the sec. 236 starts were reduced by 87,800 units over the original budget. Public housing starts were reduced 20,000 units over the original projections in fiscal year 1973, but will be placed under contract in fiscal year 1974,