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John Sununu Cabinet Agencies Files
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Originally Processed With FOIA(s):
FOIA Number:
1998-0004-F[1]; 2015-1533-F
S
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the George Bush Presidential
Library Staff.
Record Group/Collection:
George H.W. Bush Presidential Records
Collection/Office of Origin: Chief of Staff, White House Office of
Series:
Sununu, John, Files
Subseries:
Cabinet Agencies Files
OA/ID Number:
29188
Folder ID Number:
29188-007
Folder Title:
Kemp (HUD - - 1989) [1]
Stack:
Row:
Section:
Shelf:
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G
15
25
6
5
Withdrawal/Redaction Sheet
(George Bush Library)
Document No.
Subject/Title of Document
Date
Restriction
Class.
and Type
01. Memo
Re: Homeless: Vouchers and Other Options (9 pp.)
10/28/89
Collection:
Record Group:
Bush Presidential Records
Office:
Chief of Staff, White House Office of
Open on Expiration of PRA
Series:
Sununu, John, Files
(Document Follows)
Subseries:
Cabinet Agencies Files
By
(NLGB) on 5/12/05
WHORM Cat.:
File Location:
Kemp (HUD - 1989) [1]
Date Closed:
12/2/2004
OA/ID Number:
29188-007
FOIA/SYS Case #:
1998-0004-F[1]
Appeal Case #:
Re-review Case #:
2005-0426-S
Appeal Disposition:
P-2/P-5 Review Case #:
Disposition Date:
AR Case #:
MR Case #:
AR Disposition:
MR Disposition:
AR Disposition Date:
MR Disposition Date:
RESTRICTION CODES
Presidential Records Act - [44 U.S.C. 2204(a)]
Freedom of Information Act - [5 U.S.C. 552(b)]
P-1 National Security Classified Information [(a)(1) of the PRA]
(b)(1) National security classified information [(b)(1) of the FOIA]
P-2 Relating to the appointment to Federal office [(a)(2) of the PRA]
(b)(2) Release would disclose internal personnel rules and practices of an
P-3 Release would violate a Federal statute [(a)(3) of the PRA]
agency [(b)(2) of the FOIA]
P-4 Release would disclose trade secrets or confidential commercial or
(b)(3) Release would violate a Federal statute [(b)(3) of the FOIA]
financial information [(a)(4) of the PRA]
(b)(4) Release would disclose trade secrets or confidential or financial
P-5 Release would disclose confidential advice between the President
information [(b)(4) of the FOIA]
and his advisors, or between such advisors [a)(5) of the PRA]
(b)(6) Release would constitute a clearly unwarranted invasion of
P-6 Release would constitute a clearly unwarranted invasion of
personal privacy [(b)(6) of the FOIA]
personal privacy [(a)(6) of the PRA]
(b)(7) Release would disclose information compiled for law enforcement
purposes [(b)(7) of the FOIA]
C. Closed in accordance with restrictions contained in donor's deed of
(b)(8) Release would disclose information concerning the regulation of
gift.
financial institutions [(b)(8) of the FOIA]
(b)(9) Release would disclose geological or geophysical information
PRM. Removed as a personal record misfile.
HUD
October 28, 1989
MEMORANDUM
SUBJECT:
Homeless: Vouchers and Other Options
This memorandum provides:
O
an analysis of one-night vouchers to provide emergency
shelter to the homeless;
an analysis of another voucher model to provide
services to the homeless; and
O
a menu of ideas for addressing homelessness.
I.
One-night vouchers
APPROACH: Homeless individuals would be able to obtain vouchers
of a fixed amount redeemable at any provider of
overnight accommodation. Each voucher would be dated
and valid only for that night.
A.
Design issues:
O
Vouchers could be issued either on a demand basis, where
anyone who wants one gets one, or, alternatively, along the
lines of traditional income maintenance programs, with
careful measures taken to assure that only the "truly needy"
are assisted.
-
Vouchers-on-demand would have to be issued at
designated points by someone who was not in the
business of providing overnight shelter (otherwise
there would be the potential for self-dealing as
providers issued vouchers for non-existent homeless in
order to get vouchers.)
-
If the program an overnight-shelter voucher program
sought to assure that only the truly homeless were
helped, some sort of eligibility determination process
would be required. Eligibility determination costs
could be made less by deeming eligible for vouchers all
receiving presenting Food Stamp cards or similar
identification. (The program could still help all who
sought help by offering an initial presumptive
eligibility period during which eligibility was
determined. )
-
There is a trade-off between fraud and the choice
implied by the voucher. The best way to minimize
fraud is to make the voucher pick-up point the same
2
point as check-in for shelter. No fraud, but what
choice has the voucher created? In a no-fraud
arrangement, one would have to say that the choice is
not the voucher itself but the increased potential for
choice in the voucherized system (e.g., the fact that
you can choose to show up at the Marriott rather than
the DC Armory).
Any distance between pick-up and redemption creates the
potential for a black market. To the incorrigible
homeless, such as alcoholics, drug addicts and the most
socially alienated, overnight shelter may not be very
valuable compared to the black market price being paid
for shelter vouchers. This incentive would be
strengthened by the continued existence of "free"
shelters. If Mitch Snyder continues to make the doors
of his shelter open whether or not you have a voucher,
the "rational" thing to do if you don't put much of a
premium on living conditions is to sell your voucher
for at whatever price is being offered (say, a flask of
alcohol) and to go to Mitch Snyder's free shelter.
The one-night shelter voucher program could be operational
only on those nights when being outside at night would be
life-threatening. (The rule of thumb followed by shelter
administrators is that nights with temperatures below 32
degrees Fahrenheit pose life threatening conditions; there
are on average 71 such nights per year in DC.) The
potential for fraud would be limited by the on-again, off-
again nature of the market, making it harder for would-be
defrauders to set up shop.
Minimum criteria for shelter providers and certification
programs for potential providers would limit scandal
potential (otherwise there is the strong potential for,
"This is 'Live at Five' Action News. Tonight, coverage from
a hell hole that has been redeeming Overnight Shelter
Vouchers. ")
-
Some action (either moral suasion or legislative
coercion) may be needed to require "public
accommodations" to accept the vouchers, otherwise the
vouchers may wind up all being redeemed at facilities
that currently call themselves "homeless shelters."
-
Limits on occupants per unit, for example, would have
to be bent if homeless persons were to pool
successfully their voucher amounts to pay the market
rate at the J. W. Marriott.
3
O
Unless there was some federal coercion, vouchers would only
happen where there was a willing buyer-willing seller
arrangement between the federal government and the local
government.
-
Mayors would probably have to see fiscal advantage to a
one-night voucher system. Comparatively low amounts of
additional federal assistance would be required for
cities like Washington and New York which have
comparatively high costs paid for with city-only
dollars ($51 in city costs per city resident per year
in Washington), while cities which have been more
successful at keeping overnight shelter the province of
voluntary agencies have lower levels of public
financing ($5 in city costs per resident per year in
Chicago; near zero in a city like Houston which has no
municipal shelter program) and would require stronger
inducements to participate.
Accepting the District's estimate of 15,000 homeless in
DC, the cost of providing shelter to all DC homeless on
nights of life threatening temperatures at the
District's average per night cost is $46.9 million.
1
The current DC program providing shelter on 365 days
per year costs $32 million. From the District's point
of view, it would want new federal funds equal to or
more than the increment between whatever portion of the
$32 million is spent on the 71 coldest nights and $46.9
million before it would be rational to accept the one-
night voucher program.
B.
One-night vouchers and the situation in Washington, DC
As in so many other ways, patterns of providing shelter are
different in Washington and New York from the rest of America.
In most of America, overnight shelters get most of their
financial support from the private sector, around 90% from the
private sector according to HUD. Not so in Washington and New
York, where most shelter spaces are run municipally.
Washington's situation changed significantly in 1984. DC
voters adopted a Mitch Snyder-inspired ballot initiative
115,000 homeless X 71 nights X $44 per night average cost in
the District's emergency shelter program. Of course, the
District government's estimate of the number of homeless, not
being the product of rigorous study, is in dispute. A voucher-
driven competitive approach would tend to reduce the cost per
night. At the same time, it would tend to increase the number of
homeless. The net effect is difficult to estimate.
4
guaranteeing anyone who wants it shelter that is "accessible,
safe and sanitary and has an atmosphere of reasonable dignity,"
thus becoming the first electorate in the country to make such a
guarantee.
Because of the initiative, there can legally be no shortage
of spaces since the District government is obliged to provide
whatever supply is demanded. As a practical matter there has
been and continues to be a shortage; a recent judicial order has
required the District to add 200 additional shelter beds (see
Washington Times story, attachment #1). As the Times story
points out, the District's financial situation has turned
homelessness funds into a zero-sum game, with additional
emergency shelter costs being met by taking funds away from
programs that seek to do more for the homeless that provide a bed
for the night.
Costs to the District government for emergency shelter have
skyrocketed from $6.5 million in 1984 to $32 million last year.
The $32 million purchased 724,000 shelter nights at an average
cost of $44 per shelter night. Costs vary significantly; at the
high end is the Capitol City Inn where the District government's
contract pays $99 per family per night and includes meals.
Some part of the federal contribution could come from within
funds already flowing to the District. FY 89 funds from the
federal government provided $19.8 million to the District of
Columbia for homelessness-related purposes. The largest amount,
$12 million, was emergency assistance under the AFDC program.
(Because of poor documentation, HHS allowed less than $1 million
of the $12 million claimed.) AFDC emergency assistance pays back
rent and other activities to keep housed families from becoming
homeless. Comparatively little of the $12 million, about $1
million, was claimed for overnight shelters of the type being
funded by one-night vouchers. Thus Federal financial
participation in one-night vouchers would require either new
federal funds or Congressional cooperation in re-directing
existing funds to this purpose. (A table showing a breakdown of
the $19.8 million appears as attachment #2.)
C.
Pros and Cons of the One-Night Voucher Plan
Pros
O
This would demonstrate that everyone sleeping outdoors is
there because they want to be; if they didn't want to be
there, they would have utilized vouchers.
O
Vouchers have the ability to create casual participants in
the shelter market who could provide valuable surge capacity
when weather is worst.
5
Create incentives for higher quality city services; rather
than having no choice but to accept what the District
government offers, homeless persons could actually go
elsewhere.
Cons
Easily available one-night vouchers, at the margin, would
increase the "demand" for shelter and thus increase total
cost. If the J. W. Marriott became a provider, more
individuals might decide they are better off becoming
homeless than living with a sibling, etc. Also, what would
keep associates at a law firm, stranded in town by snow,
from trudging over to the voucher distribution point and
pooling their voucher for a room at the J. W. Marriott?
The effect of the vouchers might more easily be created
without extensive administrative apparatus by putting
pressure on the District to diversify shelter providers,
either by signing standby capacity agreements with non-
traditional providers like hotels or a procurement process
that seeks to obtain a more diverse provider base.
Getting the new shelter opportunities created by the one-
night vouchers requires allowing those who currently receive
nothing or an amount less than the voucher amount to paid
for something they are already doing.
Financing the program requires new funds or redirecting
current funds. (For the consequences of redirecting funds,
see the attached Washington Times story. At the anecdotal
level, redirecting means providing a place to sleep to the
person evicted from public housing for drug use at the
expense of the pregnant woman trying to get her life in
order.)
II. Voucher for housing and services
A. Overview
As a concept, a voucher useable at facilities providing
social services and housing seeks to provide the missing link
that advocates of emptying mental hospitals forgot: housing. The
deinstitutionalized were sent from a world that provided housing
and mental health services in a highly integrated fashion to a
world that offered mental health services on a catch-as-catch-can
basis. Those who have become mentally ill since the wave of
deinstitutionalization of two decades ago have often gone
6
straight to marginal housing (often SROs -- single room occupancy
-- or boarding houses.) Urban renewal, gentrification, and
capital investment in new buildings in the inner city during the
current economic upturn have deprived the mentally ill of many of
the marginal housing units they once occupied.
The integrated voucher provides housing and services, but
without the element of confinement of the old large-scale mental
hospitals. The kinds of housing to be used are either extant or
newly-constructed SROs. The voucher would serve as the glue to
create the extra purchasing power needed to piece together a
place to stay, Supplemental Security Income (SSI), Food Stamps,
and someone who, at worst, lets the psychiatrist know when pills
are not being taken and, at best, links residents with a job and
other tools for re-entry into the mainstream.
Both the New York Times (editorial, October 26, attachment
#3) and the Department of Housing and Urban Development have come
out for vouchers redeemable for combined housing/social service
packages, targeted at the "innocent" homeless who can not care
for themselves on their own, principally the mentally ill. (The
HUD proposal is in Secretary Kemp's most recent Housing
Opportunity for People Everywhere - HOPE - package.)
This voucher is different from one-night shelter vouchers
in that:
1.
These vouchers are for getting the homeless out of
shelters to stay, not for putting them up for the
night.
2.
These vouchers are for a segment of the homeless
population, primarily the chronically mentally ill,
not just those who don't have a place to stay tonight.
3.
The vouchers proceed from the assumption that the first
problem of this segment of the homeless is not a lack
of housing but mental illness.
4.
They are not made available on a "meet whatever the
demand is" basis.
5.
They can be used only at facilities that offer some
form of supervision along with a room.
6.
Their fraud potential is much lower because a voucher
that lasts for a year is a lot easier to check on than
one that lasts for a night.
The Federal government already has available to it resources
that could be mobilized immediately for this purpose, largely the
programs of the Department of Housing and Urban Development.
7
Putting them to work to serve the needs of those with
difficulties in caring for themselves is largely a matter of
turning around old-line program managers and entrenched interest
groups who don't want "their" program turned into a program for
the homeless.
B.
Pros and Cons of Combined Housing/Social Service Vouchers
Pro
O
Focusing on this population makes the point that many
homeless are without fixed address because they are in some
way dysfunctional, either mentally ill, addicted to alcohol
or drugs, or suffering personality disorders, not because
of budget cuts and the workings of a capitalist economy.
Focusing on this population makes the distinction between
those who are homeless because of illness and other factors
beyond their control and those who could probably put their
lives together on their own (young, unattached males who do
day labor and crash at a homeless shelter at night.)
This is the population the typical city dweller thinks of
when thinking of the homeless.
Con
Doesn't do anything to build surge capacity to get people
off the street on the coldest winter nights.
Has the potential from turning HUD into the Department of
Housing and Housing-based Social Services.
Has the potential for succumbing to the permanent client-
helper relationship social service providers tend to create.
III.
TWELVE IDEAS TO MOVE US FORWARD ON HOMELESSNESS
1.
Declare "ending homelessness" a national goal.
This implies reorienting federal programs away from giving a
bed tonight to helping those who will never figure out how
to put together a stable life of a job and home. Federal
programs should help you make the transition to a more
normal life, not keep you where you are. We should invest
in the transition, hoping to reduce the long-term need for
emergency shelters. (This is a parallel to our use of the
word "mainstreaming" in talking about the disabled. We seek
to mainstream the homeless, not keep them in a permanent
state of dependence on overnight shelters.)
8
2.
Call on each American psychiatrist, psychologist, and
private practice-social worker to take on two homeless
individuals/families as pro bono clients.
E. Fuller Torrey, a noted psychiatrist with ties to Ralph
Nader has recently written a book on the ironic impact of
federal programs of the '60s and '70s to train more people
for the counseling professions. Federal programs subsidized
many who wound up practicing in upper middle class
communities or well-insured individuals, not providing
services in the community to people who were being released
from mental institutions.
3.
Direct GSA to make inner-city federal buildings available as
emergency shelters on nights of life-threatening cold.
Consider making a high-profile building like the NEOB or the
Federal Courts building on Lafayette Place one of them.
Have the President visit the first night the shelter is
open.
4.
Move aggressively to redeploy and make available assets
taken over from dead S&Ls for use to assist the homeless.
Apparently several thousand mobile homes in Texas are now
the property of the federal government; make a Presidential
visit to a holding yard and announce they will be made
available to any city that wants them to provide emergency
shelter.
5.
Highlight the troubled nature of some homeless through a
Presidential visit to a drug addiction treatment facility
that serves homeless people. This can help draw out the
point that most homeless people aren't people like you and
me who had some bad luck and then got hurt by budget cuts.
6.
Propose waiver authority that allows state or local
governments that want to take responsibility the ability to
have all the dollars they receive for different aspects of
homelessness to receive those funds as a lump sum to be used
as they see best.
7.
Revise the requirements in the Medicare and Medicaid
programs to require hospitals and institutions to arrange
transitional or permanent housing before discharging the
mentally ill or addict.
8.
Tell Jack Kemp that he needs to make homeless populations a
higher priority in each of his programs, revise SES
performance plans to include this point.
9.
Revise the proportion of units going to the chronically
mentally ill in the Section 202 housing program
9
(aged/disabled) from 1,000 out of 8,000 units last year to
4,000 out of 9,000 units this year and 7,000 out of 9,000
next year.
10. Invite people to the White House for a Cabinet Room meeting
with the President and senior Administration officials
(Secretary Kemp, Gregg Petersmeyer, etc.) to discuss how the
country can do a better job serving the homeless.
11. As follow up to the meeting, Gov. Sununu or Secretary Kemp
could make some highly publicized calls to governors and
mayors giving them some very concrete suggestions about what
is lacking in their efforts.
12. Encourage Jack Kemp to voice his thinking that the ACLU, in
fighting paternalism everywhere, is wrong when it defends
the right of the mentally ill to remain in the streets.
Accept the premise that we should be more aggressive with
some in offering the "offered hand" (a phrase from the
resident's Inaugural Address).
Other "bad cop" roles for Jack Kemp:
-
Cajole public housing authorities into making the
elements of the homeless who can't care for themselves
(the mentally ill, etc.) a higher priority. Name those
doing the worst job.
-
Attack rent control as an evil that has hurt most those
in the most marginal housing to help the middle class.
Float the idea of cutting off homelessness funds to
cities that refuse to help themselves by easing their
rent control regimes.
#
#2
McKinney Act and Related Federal Funds for the Homeless
Allocated to Washington, D.C. -- 1989
Type of grant
Amount
Grantee
HUD
O Transitional Hsing
$ 181,368
Green Door, Inc. mentally ill
($4,419,592)
548,659
Community Family Life Services
70,000
Mary House, Inc.
366,615
Community Connections ment. ill
2,699,786
House of Ruth - women's shelters
553,165
So Others Might Eat
Emergency Shelter
261,000
Permanent Hsing
for Handicapped
266,284
Woodley House
38,214
United Planning Organization
Subtotal, HUD
$4,985,090
0
FEMA - Emergency
Food & Shelter
$ 375,680
multiple local recipients;
$110,980 meals
$122,020 rent/mortgage
$ 34,390 mass shelter
HHS
O
Emerg Community Svcs
$ 318,615
United Planning Organization
Ment Health Blk Grnt
267,944
Health Care for Hmls
773,429
multiple providers
Runaway & Hmls Youth
45,692
Sasha Bruce Youth Works
29,308
American Youth Work Center
AFDC/EA
12,200,000
(approx. total appropriation -
D.C. does use some of these
funds for the homeless)
Subtotal, HHS
$13,634,988
Job Training for Hmls $ 414,415
Arch Training Center
250,359
Jobs for Hmls People, Inc.
Education for Hmls
Children & Youth
$ 50,000
State Dept of Education
Adult Education
75,000
Total, D.C. Funds
$19,785,532
#3
A26
THURSDAY, OCTOBER 26, 1989
THE NEW YORK TIMES,
ARTHUR OCHS SULZBERGER, Publisher
ARTHUR OCHS SULZBERGER JR., Deputy Publisher
MAX FRANKEL. Executive Editor
ARTHUR GELB, Managing Editor
JOSEPH LELYVELD, Deputy Managing Editor
WARREN HOGE, Assistant Managing Editor
The New York Times
DAVID R. JONES, Assistant Managing Editor
JOHN M. LEE, Assistant Managing Editor
ALLAN M. SIEGAL, Assistant Managing Editor
Founded in 1851
JACK ROSENTHAL, Editorial Page Editor
LESLIE H. GELB, Deputy Editorial Page Editor
ADOLPH S. OCHS, Publisher 1896-1935
ARTHUR HAYS SULZBERGER, Publisher 1935-1961
LANCE R. PRIMIS, President
ORVIL E. DRYFOOS, Publisher 1961-1963
HOWARD BISHOW, Sr. V.P., Operations
RUSSELL T. LEWIS, Sr. V.P., Production
ERICH G. LINKER JR., Sr. V.P., Advertising
JOHN M. O'BRIEN, Sr. V.P., Finance/Human Resources
ELISE J. ROSS, Sr. V.P., Systems
WILLIAM L. POLLAK, V.P., Circulation
How to House the Mentally Ill
Here's a way for the Department of Housing
now qualifies for some form of public assistance
and Urban Development, lately known for scandal,
(see chart). These benefits now often go unclaimed,
to gain some positive notice and give some real re-
and the amounts are not usually enough to finance
lief to the nation's cities: Create a new housing
housing along with other basic needs.
voucher for the homeless mentally ill.
Washington could augment the revenue with a
new housing voucher. It would provide anyone who
Help the Homeless Off the Street
qualifies for treatment as mentally ill with, say,
$500 per month. The money could be used only for
New Calcutta: An occasional series
housing in a supervised S.R.O. room.
Nonprofit groups in New York are already uti-
Across the nation, the mentally ill living on the
lizing existing benefits of the homeless to help fi-
streets number in the hundreds of thousands. Many
nance small S.R.O.'s. A Federal voucher would pro-
of them fear the public shelters now available but
vide more reliable income to pay off state bonds and
are too dysfunctional to take advantage of new
even private bank loans and thus make possible a
cheap housing on their own. Their public suffering
considerable construction program.
symbolizes a gross failure of policy and insults the
civility of their communities.
Mental health workers know how to get them
Ready Money
off the street. There are already models of what
A mentally disabled, single adult in S.R.O. housing
needs to be done: outreach, transitional sites for
now may qualify for one or more of the following
diagnosis and initial treatment, and permanent
monthiy benefits.
housing with social services on the premises.
New York City now operates an outreach pro-
Supplemental Security Income
$368
gram empowered to hospitalize the homeless men-
tally ill, even against their will. New York State pro-
Veterans benefits*
539
vides them with mental health evaluation and treat-
H.U.D. rental subsidies
380
ment. Then it assigns each patient a case manager
New York State Home Relief
335
responsible for helping find a permanent place to
live and for monitoring progress.
For veterans with limited income, honorable discharge and
This process works: Case managers now point
non- war related disabilities.
to dozens of the homeless removed from the street
who are decently and permanently housed with so-
cial service supports. But the scope of the effort re-
mains severely limited for lack of resources - most
H.U.D. and Congress are preparing legislation
crucially for permanent housing. For the most part,
to extend the McKinney Act, which this year pro-
the homeless mentally ill need clean, safe versions
vides nearly $700 million in housing and health care
of the city's old single-room-occupancy hotels,
services for the homeless. The extension is a sensi-
staffed with resident social workers.
ble place to test an idea that could help the most
Society also knows how to create more such
fragile of the homeless - and all the communities
places. Virtually every mental patient on the street
that have come to look like new Calcuttas.
Withdrawal/Redaction Sheet
(George Bush Library)
Document No.
Subject/Title of Document
Date
Restriction
Class.
and Type
02. Letter
From Jack Kemp to John Sununu
10/26/89
PS
Re: Capital Gains Tax Reduction (2 pp.)
Collection:
Record Group:
Bush Presidential Records
Office:
Chief of Staff, White House Office of
Open on Expiration of PRA
Series:
Sununu, John, Files
(Document Follows)
Subseries:
Cabinet Agencies Files
By If (NLGB) on 5/12/05
WHORM Cat.:
File Location:
Kemp (HUD - 1989) [1]
Date Closed:
12/2/2004
OA/ID Number:
29188-007
FOIA/SYS Case #:
1998-0004-F[1]
Appeal Case #:
Re-review Case #:
2005-0426-S
Appeal Disposition:
P-2/P-5 Review Case #:
Disposition Date:
AR Case #:
MR Case #:
AR Disposition:
MR Disposition:
AR Disposition Date:
MR Disposition Date:
RESTRICTION CODES
Presidential Records Act - [44 U.S.C. 2204(a)]
Freedom of Information Act - [5 U.S.C. 552(b)]
P-1 National Security Classified Information [(a)(1) of the PRA]
(b)(1) National security classified information [(b)(1) of the FOIA]
P-2 Relating to the appointment to Federal office [(a)(2) of the PRA]
(b)(2) Release would disclose internal personnel rules and practices of an
P-3 Release would violate a Federal statute [(a)(3) of the PRA]
agency [(b)(2) of the FOIA]
P-4 Release would disclose trade secrets or confidential commercial or
(b)(3) Release would violate a Federal statute [(b)(3) of the FOIA]
financial information [(a)(4) of the PRA]
(b)(4) Release would disclose trade secrets or confidential or financial
P-5 Release would disclose confidential advice between the President
information [(b)(4) of the FOIA]
and his advisors, or between such advisors [a)(5) of the PRA]
(b)(6) Release would constitute a clearly unwarranted invasion of
P-6 Release would constitute a clearly unwarranted invasion of
personal privacy [(b)(6) of the FOIA]
personal privacy [(a)(6) of the PRA]
(b)(7) Release would disclose information compiled for law enforcement
purposes [(b)(7) of the FOIA]
C. Closed in accordance with restrictions contained in donor's deed of
(b)(8) Release would disclose information concerning the regulation of
gift.
financial institutions [(b)(8) of the FOIA]
(b)(9) Release would disclose geological or geophysical information
PRM. Removed as a personal record misfile.
DEPARTMENT OF MOUISING
AND, OURBAN VELOPMENT
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
THE SECRETARY
WASHINGTON, D.C. 20410-0001
October 26, 1989
Honorable John H. Sununu
The White House
Washington, D.C. 20500
Dear Governor Sununu:
The President's national television address outlining his
comprehensive plan to fight drug abuse was one of his greatest
successes. The speech elevated his anti-drug strategy to the top
of the national agenda, crystallized public support for an action
program, and helped persuade Congress to pass legislation to meet
the Administration's goals.
I really believe, John, that it is great time for the second
important televised speech of the Bush Administration, seeking
the American people's support for capital gains tax reduction. I
believe a speech by the President at this time would not only
demonstrate his Administration's commitment to improving economic
growth, hope, and jobs but also would capture the high political
and moral ground.
Without a Presidential call for national support on this
issue, it now seems possible that the capital gains tax cut could
go down to defeat or be indefinitely delayed, meaning a serious
setback for the President's agenda and undercutting the
foundation for strong economic growth in the nineties.
I can't imagine a better issue or a more compelling
opportunity to capture the popular high ground or to draw our
differences with the Senate leaders who are blocking this
measure. Majority Leaders Mitchell and Gephardt and other
Democrats are relying on demagoguery and strident rhetorical
assaults against the capital gains tax cut for favoring the
wealthy over the middle class. But their class-conflict
rhetoric is really at odds with this Administration's bipartisan
efforts to unify the whole nation, for which you have achieved
such high marks by the American people.
What the Democratic leadership does not seem to understand
is that the capital gains tax cut is not primarily a budget issue
to raise revenues nor is it a tax cut for old wealth and upper
income groups. What the American people need to hear is that the
capital gains tax cut is to help those seeking to work and become
rich by "unlocking" money tied up in existing assets. This would
free capital for the use of new entrepreneurs, risk takers, and
small businessmen and women who need access to seed capital for
start ups or expansion. The enormous expansion of small business
startups and venture capital following the Steiger and 1981
Reagan/Bush capital gains tax cuts is concrete evidence that this
Administration is right to make a stand on this issue.
In giving speeches to poor and minority groups, one of the
best received lines is when I have suggested that President Bush
not only wants to cut the capital gains tax rate to 15 percent
for the nation but that he also wants to eliminate the capital
gains tax in Enterprise Zone areas of abject poverty like the
South Bronx, Overtown, or Watts. These people recognize that
high tax rates on entrepreneurs and small business are preventing
them from getting on the first rung on the ladder of opportunity.
Governor, I think the President -- if I may be so bold --
has the right to go over the heads of Mitchell, Gephardt and the
Democratic leadership right to the American people and say
"enough is enough." This Administration has tried to negotiate
this issue with the Senate leadership and has exhausted every
opportunity for bi-partisan comity. The capital gains tax cut is
part of a winning strategy to create jobs, expand the economy,
and reach into areas which have yet to be revitalized.
A Presidential speech explaining the benefits of the
capital gains tax cut coupled with perhaps Enterprise Zones and
the extension of the low income housing tax credit could -- in my
view -- give the Administration the high moral ground as well as
the high political ground vis-a-vis Mitchell-Gephardt.
As always, it is a privilege to serve in this
Administration, and I look forward to help this President achieve
his mission of sustained economic growth which is the fundamental
precondition for all our hopes for this country.
Sinserely,
One Jack Kemp
P.S. I'm including as an addendum for your reading a great speech
by President Coolidge to the New York Republican Party on Lincoln
Day 1924, which is self-explanatory. I hope you and the
President get a chance to read it.
by
I'm the and way, for of the the to the another next speech month m show Texas to to the Prindent
132 TAXATION: THE PEOPLE'S BUSINESS
BENEFITS OF TAX REDUCTION 133
licly stated the position of the Treasury in
problem is to find a rate which will pro-
a speech at Chicago, in which he said:
duce the largest returns. Experience does
'There is no reason why the subject of
not show that the higher rate produces the
taxation cannot be approached from a
larger revenue. Experience is all in the
other way
purely non-partisan viewpoint. The out-
standing feature of the Mellon plan is
"I agree perfectly with those who wish
the Secretary's recommendation for a re-
to relieve the small taxpayer by getting
duction of the high surtaxes. Similar
the largest possible contribution from the
recommendations have been made by the
people with large incomes. But if the
last two preceding Secretaries of the
rates on large incomes are so high that
Treasury, both of whom held their offices
they disappear, the small taxpayer will
under a Democratic President. There is
be left to bear the entire burden. If, on
nothing political in recommending a sound
the other hand, the rates are placed where
basis of taxation. It is simply common
they will produce the most revenue from
large incomes, then the small taxpayer
sense.
will be relieved. The experience of the
President Coolidge, in his Lincoln Day ad-
Treasury Department and the opinion of
the best experts place the rate which will
dress at New York on February 12, 1924 (see
collect most from the people of great
Appendix E), gave a masterly analysis of
wealth, thus giving the largest relief to
the tax situation and urged that the existing
people of moderate wealth, at not over 25
system be revised along the lines recom-
per cent.
mended by the Treasury. The President
"A very important social and economic
question is also involved in high rates.
said:
That is the result taxation has upon na-
"The first object of taxation is to secure
tional development. Our progress in that
revenue. When the taxation of large in-
direction depends upon two factors-per-
comes is approached with that in view, the
sonal ability and surplus income. An ex-
138 TAXATION: THE PEOPLE'S BUSINESS
The fortunate condition of the Govern-
ment's finances in 1924 justifies not only a
revision but a reduction of taxes. It is pos-
sible to visualize the effect which such a re-
duction will have when it is realized that a
CHAPTER VIII
reduction of three hundred million dollars a
TAX-EXEMPT SECURITIES
year over a twenty-year period will leave in
the pockets of the people over six billion
dollars for other purposes.
During this time, the budget will provide
for continued payments which will gradually
reduce the public debt, so that, if a sound sys-
tem of taxation is adopted and the present
policy of economy in government is con-
tinued, the country may look forward during
the present generation not only to a decrease
in the tax burden but to increased prosperity
in which everyone will share. The prosperity
of each individual is, after all, dependent
upon the prosperity of the whole country;
and anything that endangers or retards the
country's normal development also jeopard-
izes to that extent the prosperity of each in-
dividual taxpayer.
RECAPTURING THE AMERICAN DREAM
President Bush's Stated National Housing Policy
"Both Jack and I are dedicated to making America, to the fullest extent possible, an opportunity
society. And that means an economy that's thriving and creating jobs; cities that are filled with
enterprise and offer residents a good life and good living; neighborhoods that are vibrant and
safe, with affordable houses going up, old ones being restored."
"It means giving people - working people, poor people, all our citizens - control over their
own lives. And it means a commitment to civil rights and economic opportunity for every
American. The chance for a greater America lies before us and we're going to seize that chance."
President Bush
February 13, 1989.
"And together we must and will find a way to stop the decline in our inner cities-to restore hope
and make the '90s a decade of urban renaissance."
President Bush
August 8, 1989
Theme HOPE: Homeownership and Opportunity for People Everywhere
Purpose to give the Bush Administration the high moral ground on the issues of homeownership, home-
lessness, and economic opportunity during the upcoming Congressional debate of national housing policy
Proposal for HOPE
1. $1 billion HOPE grant program
Targetted homeownership for low-income families
Will be used for urban homesteading and resident management in public housing, HUD assisted
housing, and non-profits
Grants for rehabilitation, acquisition, loans, technical assistance
Requires 50% state, local, private match
2. Service Supported Housing Vouchers for Homeless
Mentally ill and substance abusers make up largest portion of "street people"
Housing alone will not be enough to get them off the streets
$100 million needed for grants to non profits and states to combine shelter with comprehensive
mental health, rehabilitation and social services
3.
IRAs for First Time Homebuyers
President Bush endorsed homeownership IRAs in campaign
Encourage savings for investment in a first home
Congress is moving to expand IRAs far beyond the popular idea of homeownership
No threat to retirement security, because they must be repaid to IRA
4. Preserving Vulnerable Housing Stock
Owners of about 350,000 subsidized rental units are eligible to prepay mortgages and kick out
low income tenants
Congress has placed a virtual moratorium on prepayment which expires Februrary 1990
HUD currently has insufficient money and no immediate workable policy to address this prob-
lem; tenant groups, property owners and Congress are demanding action
HUD proposes using the 10 year equivalent of a housing voucher to help low income tenants and
non-profits buy the buildings or give tenants rental vouchers
$1 billion needed in FY 1991; resources for 1990 are adequate if Congress extends legislative
restrictions through the end of the fiscal year
5. Enterprise Zones
Tax incentives to encourage entrepreneurship and jobs in distressed urban and rural communities
President Bush's proposal is currently before Congress and needs immediate passage
6. Operation Bootstrap
Tie new housing vouchers to actions at the local level to provide child care, job training and
social services that lead to self-sufficiency
No incremental cost
7. FHA Credit Expansion to Greenline Inner Cities
FHA credit underserves distressed inner cities and rural areas
FHA will provide greater access to credit to non-profits and state finance agencies on a shared
basis to encourage rehabilitation, lease purchase and acquisition for low income use
No incremental cost
8. Low Income Housing Tax Credit
Only incentive remaining for construction of low income housing
Legislation to reauthorize highly likely to pass Congress this year
9. S & L Assets for Low Income Use
FIRREA requires use of S & L assets to create affordable housing (right of 1st resfusal)
HUD's strategy will combine non-profit sponsors, property discounts, and other incentives
No incremental cost
10. Supportive Services for Frail Elderly
Keeps low income elderly in own homes to prevent premature institutionalization
$100 million to provide supportive health care and social services to seniors living in HUD
assisted housing
Cost $2.2 billion BA in Fy 1991
compared to $4 billion for Cranston-D'Amato
$23 billion plus for House Banking
$4 billion for Rep Study Committee