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HRG. 112–454 TRANSPORTATION AND HOUSING AND URBAN DEVELOPMENT, AND RELATED AGENCIES AP- PROPRIATIONS FOR FISCAL YEAR 2012 HEARINGS BEFORE A SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE ONE HUNDRED TWELTH CONGRESS FIRST SESSION ON S. 1596 AN ACT MAKING APPROPRIATIONS FOR THE DEPARTMENTS OF TRANS- PORTATION AND HOUSING AND URBAN DEVELOPMENT, AND RE- LATED AGENCIES FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2012, AND FOR OTHER PURPOSES Department of Housing and Urban Development Department of Transportation National Railroad Passenger Corporation (Amtrak) Nondepartmental witnesses Printed for the use of the Committee on Appropriations ( Available via the World Wide Web: http://www.gpo.gov/fdsys/browse/ committee.action?chamber=senate&committee=appropriations U.S. GOVERNMENT PRINTING OFFICE 64–621 PDF WASHINGTON : 2012 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 COMMITTEE ON APPROPRIATIONS DANIEL K. INOUYE, Hawaii, Chairman PATRICK J. LEAHY, Vermont THAD COCHRAN, Mississippi TOM HARKIN, Iowa MITCH MCCONNELL, Kentucky BARBARA A. MIKULSKI, Maryland RICHARD C. SHELBY, Alabama HERB KOHL, Wisconsin KAY BAILEY HUTCHISON, Texas PATTY MURRAY, Washington LAMAR ALEXANDER, Tennessee DIANNE FEINSTEIN, California SUSAN COLLINS, Maine RICHARD J. DURBIN, Illinois LISA MURKOWSKI, Alaska TIM JOHNSON, South Dakota LINDSEY GRAHAM, South Carolina MARY L. LANDRIEU, Louisiana MARK KIRK, Illinois JACK REED, Rhode Island DANIEL COATS, Indiana FRANK R. LAUTENBERG, New Jersey ROY BLUNT, Missouri BEN NELSON, Nebraska JERRY MORAN, Kansas MARK PRYOR, Arkansas JOHN HOEVEN, North Dakota JON TESTER, Montana RON JOHNSON, Wisconsin SHERROD BROWN, Ohio CHARLES J. HOUY, Staff Director BRUCE EVANS, Minority Staff Director SUBCOMMITTEE ON TRANSPORTATION AND HOUSING AND URBAN DEVELOPMENT, AND RELATED AGENCIES PATTY MURRAY, Washington, Chairman BARBARA A. MIKULSKI, Maryland SUSAN COLLINS, Maine HERB KOHL, Wisconsin RICHARD C. SHELBY, Alabama RICHARD J. DURBIN, Illinois KAY BAILEY HUTCHISON, Texas PATRICK J. LEAHY, Vermont LAMAR ALEXANDER, Tennessee TOM HARKIN, Iowa MARK KIRK, Illinois DIANNE FEINSTEIN, California DANIEL COATS, Indiana TIM JOHNSON, South Dakota JERRY MORAN, Kansas FRANK R. LAUTENBERG, New Jersey ROY BLUNT, Missouri MARK PRYOR, Arkansas RON JOHNSON, Wisconsin DANIEL K. INOUYE, Hawaii (ex officio) THAD COCHRAN, Mississippi (ex officio) Professional Staff ALEX KEENAN MEAGHAN L. MCCARTHY RACHEL MILBERG DABNEY HEGG HEIDEH SHAHMORADI (Minority) BROOKE HAYES STRINGER (Minority) CARL BARRICK (Minority) Administrative Support MOLLY O’ROURKE (II) CONTENTS THURSDAY, MARCH 3, 2011 Page Department of Housing and Urban Development: Office of the Secretary ......... 1 THURSDAY, MARCH 10, 2011 Department of Transportation: Office of the Secretary ........................................ 79 THURSDAY, APRIL 7, 2011 Department of Housing and Urban Development: Federal Housing Adminis- tration ................................................................................................................... 125 THURSDAY, MAY 12, 2011 Department of Transportation: Federal Aviation Administration ....................... 157 TUESDAY, MAY 17, 2011 Department of Transportation: Federal Railroad Administration ...................... 209 National Railroad Passenger Corporation (Amtrak) ............................................. 224 Nondepartmental witnesses .................................................................................... 245 (III) TRANSPORTATION AND HOUSING AND URBAN DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 2012 THURSDAY, MARCH 3, 2011 U.S. SENATE, SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, Washington, DC. The subcommittee met at 10:01 a.m., in room SD–138, Dirksen Senate Office Building, Hon. Patty Murray (chairman) presiding. Present: Senators Murray, Pryor, Collins, and Blunt. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT OFFICE OF THE SECRETARY STATEMENT OF HON. SHAUN DONOVAN, SECRETARY OPENING STATEMENT OF SENATOR PATTY MURRAY Senator MURRAY. Good morning. This subcommittee will come to order. Good morning, Mr. Secretary, and we are delighted to have you here. We are holding our first hearing this year on the Department of Housing and Urban Development’s (HUD) budget for the fiscal year 2012. Today is also the first hearing with our new ranking member, Senator Collins. She and I have worked together over the years on many issues from women’s health to veterans and particularly on the critical issue of port security. So she is a great partner. I know she works very hard to get results and demonstrates dedication to both her State and to very good policy for this country. So it is a delight to have you join us. Senator COLLINS. Thank you. Senator MURRAY. I also want to recognize one of our new mem- bers, Senator Blunt, who is with us as well. We have got a number of new members on this subcommittee, and we look forward to working with all of them. And Secretary Donovan, I want to welcome you back to this sub- committee as well to talk about your Department’s budget request and housing policy and the condition of the housing market. The subject of today is HUD’s budget for fiscal year 2012. Yet, even as we sit here, about halfway through the fiscal year, the Fed- eral Government still lacks a final budget for fiscal year 2011. We are continuing to debate the budget as millions of families and (1) 2 communities across our country are waiting anxiously to hear about the fate of the programs that they really depend on. There is a lot of discussion in the country today about the deficit and the fiscal health of our Nation, and that debate is very critical. We have got to tackle the deficit and we have got to make sure our children and our grandchildren are not forced to bear the burden of overwhelming debt. So we are going to have to make some very tough decisions. And as we work to cut that spending, we have got to make sure we do not do anything that will impact our economic recovery at the same time, and make sure that as a country we are continuing to make the investments that are necessary to strength- en our communities and remain competitive. And finally, I just want to say that we cannot continue to focus all of our attention on this one small part of the budget, the discre- tionary domestic spending. It is, I think, a very short-sighted ap- proach and will not get us to where we need to be in correcting our Nation’s fiscal imbalance. I am concerned about the House budget that was passed. For ex- ample, they eliminated the new HUD-Veterans Affairs Supportive Housing (VASH) vouchers, something that I am very passionate about that provides housing and case management to our homeless veterans, and it has literally taken veterans off our street that I have talked to. I know that this makes a huge impact in putting them into permanent housing. It really is a model program, bring- ing together two big agencies, HUD and the Department of Vet- erans Affairs (VA), to use their resources effectively together. And I am impressed that research has proven that permanent sup- portive housing like this really saves taxpayers money, because it reduces the prevalence of more expensive outcomes like emergency rooms or the judicial system. So we have to make our decisions wisely as we move forward on the fiscal year 2012 budget, and I look forward to working with this subcommittee to do that. The topic of housing is a fitting way to begin our discussion on the budget for fiscal year 2012 since it is critical to the financial security of families and our Nation’s economy. We learned these lessons all too well during the housing boom and bust. The overcon- fidence of lenders and investors, and the perpetual appreciation of home prices coupled with inadequate regulatory oversight really fueled that boom, and that market’s fall has devastated families and neighborhoods and, of course, our economy. Millions of Ameri- cans have lost their homes and many more who did not participate directly in the market run-up have seen their wealth eroded as their home values have declined. I recently held a roundtable discussion in Seattle and heard story after story after story from families who had been devastated by foreclosure. They had done the right thing. They found themselves in trouble, were trying to work within the system and the pro- grams that we have put out there to modify their home loans, and again and again they were getting the run-around from everyone. That is not right, and the sloppiness and incapacity of some of our servicers are now today causing some even greater strain on fami- lies as they try to recover. 3 We also recently learned that military families have been over- charged fees and even foreclosed upon despite the protections that we do have in place for them through the Servicemembers Civil Re- lief Act. I know that banks are now trying to step up to the plate and do this right, and I appreciate them doing that. But a lot has to change and we have got a lot of work ahead of us. So I want to take some time to talk with you about the steps that can be taken today to make sure that our families are getting through this process and treated fairly. As we work to solve these problems for our families, we also need to think about the future of the housing finance system and make sure we avoid another situation that would require taxpayer dol- lars to cover private-sector losses, as has been the case with the Federal National Mortgage Association (Fannie Mae) and the Fed- eral Home Loan Mortgage Corporation (Freddie Mac). The Dodd- Frank Wall Street Reform and Consumer Protection Act addressed many of the failures of our system and the regulatory structure, but that was just the beginning. We have to address Fannie Mae and Freddie Mac so we no longer promote a system of private prof- its and public loss.
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