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HUD's Section 8 Voucher Reimbursement Crisis

Location: Washington, DC


Mr. KENNEDY. Mr. President, I take this opportunity to warn my colleagues about the potential low-income housing crisis that could jeopardize hundreds, if not thousands of people in their States as a result of an irresponsible, punitive, and unnecessarily harsh action taken last week by the Department of Housing and Urban Development.

For the first time in the 30-year history of the Section 8 Voucher Choice Program, there is the very real possibility that tens of thousands of low-income Americans will lose their housing vouchers this summer and fall and be left with nowhere to turn but homeless shelters and the streets. The mere possibility of this is shocking and it's something my colleagues need to be aware of immediately.

Congress did not intend for this to happen, and the appropriators pushed HUD to make sure it would not happen, but that is the course we are on. And it's all because of HUD's callous indifference to the plight of the most vulnerable and this administration's unrelenting drive to destroy the safety net.

Using the most narrow possible interpretation of the appropriations bill, HUD issued a notification on Thursday that would retroactively abandon the long-standing practice of reimbursing public housing agencies for the actual costs of assisting the poor, the disabled, and the elderly through the section 8 voucher program. Instead, the new HUD policy will reimburse them on an inflation factor concocted by HUD's budgeteers that has absolutely no bearing on the actual operating costs of the Section 8 housing voucher program.

As a result, public housing agencies across the country are about to be blindsided by a rule change they did not anticipate and could not have prepared for.

The National Association of Housing and Redevelopment Officials-NAHRO-is conducting a complete national survey of the potential effects of this change, which should be available later this week. But early analysis is already available, and it is not reassuring. As a result of this change, the association thinks that maybe 60,000 families may be at risk of losing their vouchers in the coming year. 60,000.

The notification does inform public housing agencies that they can appeal the decision by July 15, but offers no information about just how to do that. The notification also points out that HUD may not have any funds by then to adjust reimbursements that were appealed. So, go ahead and send the appeal letter, but just don't expect HUD to do anything about it.

If my colleagues harbor any doubts that this HUD notification will have severe consequences, they need only look at what is happening in Massachusetts now. The State has directed public housing agencies to notify 600 families that their vouchers will be terminated effective June 1 as a result of HUD's abrupt funding change. Barring an 11 hour temporary reprieve, those notices go out tomorrow. And that is just the tip of the iceberg in Massachusetts, some thousands more may be in jeopardy.

The State is being hit now because it must reconcile HUD's funding cuts within its existing fiscal year, which ends June 30,
and there is no other way to do that other than withholding assistance from those currency receiving it.

Who are these 600 families? More than 60 percent of them are disabled, a significant portion are elderly, and all are low-income.

They are people like Mr. Milton Servis II. At the age of 15, he was hit by a speeding car while he walked. As a result of the collision, he sustained a serious head injury that has left himself disabled, with impairments of his vision, balance, and ability to walk.

Then, just last year, Mr. Servis II, sustained third degree burns on his hands in the Station Nightclub fire in Rhode Island. He lost his two best friends there as well, on that horrific and tragic night.

Despite these hardships, he continues to work to lead an independent and dignified life. His only source of income is his monthly $698 SSI check, but he is able to make ends meet because of his section 8 voucher, which covers $394 of his $550 rent.

Because of HUD's abrupt change, he may have to stretch his Social Security check all the more, because he is currently scheduled to receive a termination notice tomorrow, informing him he has 1 month before he is tossed out on the street.

This doesn't have to be this way. People like Milton Servis II, who have struggled hard to overcome misfortunes that few others can relate to, don't need to be terrified by the prospect of homelessness.

It should never have come to this. Last year, when the administration sent its budget to Congress, we didn't believe they were being accurate with the numbers.

As our colleague, Senator MIKULSKI, the ranking member of the VA-HUD Appropriations Subcommittee, wrote last week to HUD Secretary Alphonso Jackson, ". . . the fiscal year 2004 appropriations bill provides $17.6 billion to renew expiring section 8 contracts. This amount was $1.4 billion above the amount requested by the Administration to renew existing vouchers."

Congress went out of its way to make sure that adequate funding was available to renew all vouchers, even adding an additional $1.4 billion in these difficult budget times to make sure no one would lose their section 8 voucher. What is HUD done with this money?

But the administration doesn't care what Congress intended with regard to this program. They remain committed to their ideological goal of ending the section 8 voucher program, and shredding the safety net.

Last year, the administration proposed block granting the section 8 program so they could shift more of the responsibility for housing the elderly, the disabled, and the poor onto the State and local governments and reduce Federal spending on this critically important program.

On a bipartisan basis, Congress rejected that radical proposal, because it would have provided fewer resources and contained perverse incentives.

It would have actually rewarded housing agencies for terminating assistance for the poorest citizens and replacing it with assistance to people in less need. These "compassionate conservatives" described this new ability to ignore the truly neediest as a type of "flexibility."

The flexibility to abandon people, I guess.

But despite Congress's complete rejection of the proposal, the administration is not about to concede defeat.

If Congress will not accede to its demand to dismantle the 30-year-old section 8 program, HUD will do its best to ruin it administratively. And with this notification, HUD is attempting to do just that.

They can't win the battle of ideas in an open and full debate. So they are trying to win it deviously by simply undermining the program's integrity.

We know a Trojan Horse when we see it.

Here is how they are using it on section 8 vouchers.

First, HUD changes the rules in the middle of the fiscal year so that public housing agencies have to take drastic and truly brutal measures to comply, such as throwing people off public housing.

Then HUD blames the public housing agencies for being mismanaged.

In other words, HUD claims that public housing agencies are at fault for not having budgeted the resources to comply with HUD's unexpected policy change.

HUD has already begun condemning the public housing agencies for not maintaining adequate reserves to offset this most recent HUD-manufactured financial crisis. HUD does this event though it knows that over 800 public housing agencies serving 690,000 people have already depleted their reserves to address other HUD policy changes or funding shortfalls in the past 2 years.

HUD intends to use this funding crisis to claim that public housing agencies can't manage their programs effectively, compassionately, and efficiently.

Once the horror stories start about people losing their vouchers and landlords leaving the program, HUD can then declare the existing program a failure and revive its block grant proposal that Congress has already flatly rejected before.

This is not an academic issue.

Real people are about to suffer for HUD's actions. Many are elderly, many are disabled. They deserve to be treated with respect and compassion, which is in short supply in this administration.

HUD is about to impose these immense hardships on those of our constituents who need our help the most.

The administration may not care that low-income, elderly, and disabled Americans are being needlessly hurt, but this Senate does, and we need to join together to fight these changes before this crisis gets any worse.

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