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Housing Bill Signing 11/28/90 [OA 7563]
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3
3
THE FACT- CHECK COPY
Staffed for 2pm 11/27
Grant/Blymire
November 26, 1990
3:30 p.m.
A:HUDBILL
PRESIDENTIAL REMARKS: NATIONAL AFFORDABLE HOUSING ACT
BILL SIGNING CEREMONY
THE EAST ROOM
WEDNESDAY, NOVEMBER 28, 1990
2:00 P.M.
((Acknowledgements))
ward
Let me begin today with a story, a bit of a history lesson.
States
It was 1862: the middle of the American Civil War. On May 20 of
that year, [here, at the White House] one of my noblest
ended
in
predecessors, Abraham Lincoln, sat down with pen in hand, and
1865
signed into law the Homestead Act of 1862. That bill gave
acres to any family who wanted to make a go of it in the
? nowhere 160 does was it
141
say not wilderness it
wilderness and reach for the American Dream.
American course History
It was one of the most successful endeavors in American
what about
history causing the great land rush to the Wild West -- and
Manifest Destiny? ?
forming the vision for a new homesteading program in urban
P.
America today. Because Abraham Lincoln's Homestead Act empowered
people, it freed people from the burden of poverty and government
dependency. Likewise, today, creating the opportunity for low-
income Americans to become property owners is a key to fighting
poverty and giving real hope to thousands.
I've said before that the cornerstone of this
Administration's domestic agenda is this idea of empowerment --
giving people -- working people, poor people, everyone -- control
over their own lives, so that all Americans can have a life of
dignity, responsibility and economic opportunity. The status quo
2
of centralized bureaucracy is not working for the people -- the
ones who need affordable housing, the ones who want to choose the
best schools for their kids, the ones who want to pull themselves
out of dependency and into a life of self-sufficiency in a safe,
clean community. And so our goal is to build a system that puts
power in the hands of people, not bureaucrats. Because it is the
people who know what is best for themselves and their families,
not the government.
That's exactly what the X National Affordable Housing Act does
X
X
X.
X
x
X
X
in several ways. First, it authorizes, a major Administration
HUD Icemp labinet Affairs Casse, lease Dir.
initiative: Homeownership and Opportunity for People Everywhere -
X
- the HOPE Initiative. HOPE will provide new opportunities for
Daniel Asso.
low-income families to buy their own homes -- "urban
homesteaders, " if you will -- and helps the residents of public
X
X
housing to buy their own units. Tenant ownership and management
XXX
of public housing is an idea whose time has come. Let me tell
you
remarkable -- more people pay their rent, X maintenance improves, X
X
Empowement
+
X
X
themo
operating XXXX costs decline, crime rates plummet, employment goes up,
XXXX
more kids stay in school and neighborhoods come back to life.
And the reason? Because each resident now has an equity stake in
society -- a chance to make a go of it -- to live the American
Dream themselves.
We want public housing to become a springboard for
independence, not a bottomless pit of dependency. HUD up usea to
HublicAffax
have
3
Mitchell,
x
XX
X
X
x
XX
X
give awards for public housing residents who stayed in public
pep Tony HUD Asst. Pub.Af. if
housing the longest. They stopped doing that. Now -- and X even
more so with this bill -- we re offering incentives to public
housing tenants who move out -- and move up -- into the
productive economic mainstream.
X
+
X
But, there's more. This bill contains HOME Investment
X
Staffed memo signing. bill
Partnerships, to assist people who currently rent and those who
want to rehabilitate existing rural housing -- because affordable
housing is in everybody's interest. The National Homeownership
Trust would provide low-cost financing for people who are buying
a home for the first time who would not otherwise qualify for
financing because of their low income. And, in addition to
housing assistance for migrant farm workers, the elderly and the
disabled, this legislation also creates the Shelter Plus Care
X
Program -- to assist homeless persons who are mentally ill, who
have a drug abuse problem, or who have AIDS -- to give them the
support they need to keep them from returning to a desolate life
on the streets. And finally, it reforms certain programs in the
Federal Housing Administration to make it more financially sound.
The Fair Housing Act gives people the best kind of
government assistance: it provides opportunity and encourages
responsibility -- without the shackles of dependency. That's the
American Dream -- for no matter where people live or how much
money they have, all men yearn to control their own lives.
when he signed the Homestead Act
Abraham Lincoln knew this, and his vision lives on today as the
foundation for our efforts to empower all Americans. His vision
also lives on in the efforts of people in other countries -- from
Prague to Pretoria -- to control their own lives as well.
And so it is with that in mind -- the undying ideal of hope
and opportunity for all -- that I am pleased to sign this bill
into law. Thank each and every one of you for joining us today,
and God bless the United States of America.
# # #
Grant/Blymire
November 27, 1990
5:00 p.m. A:HUDBILL
PRESIDENTIAL REMARKS: NATIONAL AFFORDABLE HOUSING ACT
SIGNING CEREMONY
THE EAST ROOM
WEDNESDAY, NOVEMBER 28, 1990
2:00 P.M.
( (Thank you very much. It's great to see our HUD Secretary
Jack Kemp here today, as well as so many Members of Congress who
were able to make it today -- I see Senators Kit Bond and Al
D'Amato are here. In particular, I want to thank the Chairmen of
the Banking Committees -- Senator Don Reigle and Congressman
Henry Gonzalez. I hear that Chalmers Wilie and Jake Garn could
not join us today but as the Ranking Republicans on the Banking
Check wl
Committees, I want to thank them for their remarkable efforts.
Bedy
And I'd like to say hello to Mayor Sue Myrick of Charlotte, North
Carolina, the head of the Republican mayors, and I understand
quite a few other mayors are with us today, too. Welcome to the
White House. ) )
Let me begin today with a story, a bit of a history lesson.
It was 1862: the middle of the American Civil War. On May 20 of
that year, one of my noblest predecessors, Abraham Lincoln, sat
down with pen in hand, and signed into law the Homestead Act of
1862. That bill gave 160 acres to any family who wanted to make
a go of it in the wilderness, and reach for the American Dream.
It was one of the most successful endeavors in American
history -- causing the great land rush to the Wild West -- and
forming the vision for a new homesteading program in urban
America today. Because Abraham Lincoln's Homestead Act empowered
2
people, it freed people from the burden of poverty, it freed them
to control their own destinies -- to create their own
opportunities -- to live the vision of the American Dream.
Likewise, today, creating the opportunity for low-income
Americans to become property owners is a key to fighting poverty
and offering real hope to thousands.
I've said before that a cornerstone of our efforts to reduce
the heavy hand of government is this idea of empowering people
-- not bureaucracies. Giving people -- working people, poor
people, everyone -- control over their own lives and access to
property and jobs, so that all Americans can have a life of
dignity, responsibility and economic opportunity. Secretary Kemp
has long been a champion of this idea -- and that's why I have
appointed him as chairman of the Domestic Policy Council's
Economic Empowerment Task Force.
The status quo of centralized bureaucracy is not working for
the people -- the ones who need affordable housing, the ones who
want to choose the best schools for their kids or child care for
their younger children -- the ones who want to pull themselves
out of dependency and into a life of self-sufficiency in a safe,
clean and drug-free community. It is the people who have the
best answers for themselves and their families, not the
government. ///
That's exactly what the National Affordable Housing Act does
in several ways -- it puts power in the hands of the people.
3
First, it authorizes a major Administration initiative:
Homeownership and Opportunity for People Everywhere
-- the HOPE Initiative. HOPE will provide new opportunities for
low-income families to buy their own homes -- "urban
homesteaders," if you will -- and helps the residents of public
housing to buy their own units. Tenant management, control, and
ultimately ownership of public housing is an idea whose time has
come. Let me tell you why:
When the people who live in public housing are in charge,
the results are remarkable -- more people pay their rent,
maintenance improves, operating costs decline, crime rates
plummet, employment goes up, more kids stay in school, and
neighborhoods come back to life. And the reason? Because each
resident now has an equity stake in society -- a chance to make a
go of it -- to live the American Dream themselves.
We want public housing to become a springboard for
independence, not a bottomless pit of dependency. HUD used to be
asked to give awards for public housing residents who stayed in
public housing the longest. We have stopped doing that. Now --
and even more so with this bill -- we're offering incentives to
public housing tenants who move out -- and move up -- into the
productive economic mainstream. These are the people who will
help us meet our goal of one million new homeowners by 1992.
But there's more. This bill contains HOME Investment
Partnerships, a new block grant to provide incentives to states,
localities and non-profit organizations to provide people who
4
currently rent with vouchers, tenant-based assistance and
rehabilitation of existing housing -- because affordable housing
is in everybody's interest. And, in addition to housing
assistance for migrant farm workers, the elderly and the
disabled, this legislation also creates the Shelter Plus Care
Program -- to assist homeless persons who are mentally ill, who
have a drug abuse problem, or other problems -- to give them the
support they need to keep them from returning to a desolate life
on the streets. Finally, it reforms certain programs in the
Federal Housing Administration to make them more financially
sound. [[And next year we will return to the Congress with the
Administration's request for Enterprise Zones, creating
opportunity in our nation's most depressed communities. ]]
The National Affordable Housing Act gives people the best
kind of government assistance: it provides opportunity and
encourages responsibility -- without the shackles of dependency.
That's the American Dream -- for no matter where people live or
how much money they have, all people yearn to control their own
lives. Abraham Lincoln knew this, and his vision lives on today
as the foundation for our efforts to empower all Americans.
And so it is with that in mind -- the undying ideal of hope
and opportunity for all -- that I am pleased to sign this bill
into law. Thank each and every one of you for joining us today,
and God bless the United States of America.
# # #
Document No. 19207655
WHITE HOUSE STAFFING MEMORANDUM
11/26/90 COB
DATE: 11/23/90
ACTION/CONCURRENCE/COMMENT DUE BY:
ENROLLED BILL MEMO ON S. 566 -- NATIONAL AFFORDABLE HOUSING
ACT -- AND SIGNING STATEMENT
SUBJECT:
ACTION FYI
ACTION FYI
VICE PRESIDENT
MCCLURE
SUNUNU
NEWMAN
SCOWCROFT
PORTER
DARMAN
ROGICH
CARD
UNTERMEYER
CICCONI
BOSKIN
DEMAREST
CLERK
FITZWATER
GRAY
HAGIN
HOLIDAY
REMARKS:
Please forward any comments directly to my office no later than
COB Monday, November 26. Thank you.
RESPONSE:
James W. Cicconi
Assistant to the President
and Deputy to the Chief of Staff
Ext. 2702
WTR
PRESIDENT
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE
UNITED
OFFICE OF MANAGEMENT AND BUDGET
STRUITY
SERVICE
WASHINGTON, D.C. 20503
November 23, 1990
THE DIRECTOR
MEMORANDUM FOR THE PRESIDENT
SUBJECT: Enrolled Bill S. 566 - Cranston-Gonzalez National
Affordable Housing Act
Sponsors - Sen. Cranston (D) CA and 42 others
Last Day for Action
November 30, 1990 - Friday
Purpose
Provides greater housing opportunities for low-income
families through new programs and reforms of current programs.
Agency Recommendations
Office of Management and Budget
Approval (Signing
statement attached)
Department of Agriculture
Approval
Department of Housing and Urban
Development (HUD)
Approval
Council of Economic Advisers
Approval
Office of National Drug Control
Policy
Approval
Department of the Treasury
No objection
Department of Labor
No objection
Department of Justice
Defers (Signing
statement attached)
Department of Health and Human
Services
Defers to HUD
(Informally)
Discussion
S. 566 is comprehensive housing legislation designed to
provide greater housing opportunities for low-income families.
The enrolled bill represents a compromise between Congress and
the Administration. It passed the Senate by a vote of 93-6 and
the House by voice vote.
Detailed descriptions of the provisions of the enrolled
bill are enclosed with the HUD and Department of Agriculture
(USDA) views letters. The most significant provisions of S. 566
are described below.
-- Major New Programs
Homeownership and Opportunity for People Everywhere (HOPE).
S. 566 contains provisions based on the Administration's HOPE
initiative to help low-income persons purchase their own homes.
The enrolled bill would authorize appropriations of $155 million
for FY 1991 and $855 million for FY 1992 for this activity. HUD
would provide grants to non-profit entities, public agencies,
and tenant organizations. The grants would assist public
housing tenants in buying their units and low-income families in
purchasing publicly owned multifamily buildings. The grants
also would help low-income families to purchase certain single-
family properties owned by Federal, State, or local governments
or by public housing authorities.
Shelter Plus Care Program. The enrolled bill would
authorize appropriations of $123.2 million in FY 1991 and $258.6
million in FY 1992 for this Administration proposal. Grants
would be provided to States and localities for rental housing
assistance linked to their providing supportive services for
certain homeless individuals. Homeless individuals who are
seriously mentally ill, have a substance abuse problem, or have
AIDS would be eligible for assistance. The same provisions are
included in another pending enrolled bill, H.R. 3789, the
"Stewart B. McKinney Homeless Assistance Amendments Act of
1990."
HOME Investment Partnerships. S. 566 would authorize
appropriations of $1 billion for FY 1991 and $2.1 billion for
FY 1992 for grants to State and local governments to provide
affordable housing. The grants could be used for acquisition of
housing, new construction, rehabilitation of existing housing,
and tenant rental assistance. Jurisdictions would be given
incentives to use the funds for tenant assistance and
rehabilitation of housing. To use funds for new construction,
jurisdictions would have to meet certain specified criteria.
HUD would establish a Trust Fund for each participating
jurisdiction. The initial funding source for these Trust Funds
would be Federal appropriations, which would be allocated among
the Trust Funds by formula. Subsequent funding for each Trust
Fund would be through repayments from previous housing
investments made by the participating jurisdiction. In
addition, Congress could enact additional appropriations for the
Trust Funds.
-2-
Ten percent of the FY 1991 appropriated funds and
15 percent of the FY 1992 appropriated funds for HOME grants
would be set aside for the construction of low-income rental
housing. During the first 18 months that a jurisdiction
receives Federal funds, it would have to use 15 percent of the
funds for investment in housing developed, sponsored, or owned
by nonprofit community housing development organizations.
National Homeownership Trust. S. 566 would authorize
appropriations of $250 million for FY 1991 and $521.5 million
for FY 1992 for deposit in a National Homeownership Trust Fund.
The Fund would be used to provide low-cost mortgage financing or
downpayment assistance to low- and moderate-income first-time
homebuyers who would not otherwise qualify for financing to
purchase a home. Assistance would be provided to buy down
mortgage interest rates to six percent and to cover some or all
of the downpayment and closing costs.
The Trust would be governed by a Board of Directors
composed of six specified Federal officials and one individual
"representing consumer interests" appointed by the President
with Senate confirmation.
To be eligible for assistance, a homebuyer's income could
not exceed 95 percent of area median income (115 percent in high
cost areas). Assistance would have to be repaid when the house
is sold, when it ceases to be the homebuyer's principal
residence, or when the homebuyer's income exceeds the
eligibility cutoff for two successive years. Mortgage amounts
could not exceed $124,875.
Housing Assistance for People with AIDS. S. 566 would
authorize appropriations of $75 million for FY 1991 and
$157 million for FY 1992 for grants to States and localities to
provide assistance to help meet the housing needs of persons
with AIDS.
Rural Housing. S. 566 would authorize appropriations of
$10 million for FY 1991 and $11 million for FY 1992 for grants
and loans by USDA for the construction, acquisition, or
rehabilitation of affordable rental housing for rural migrant
farmworkers. In addition, USDA would be authorized to guarantee
loans for up to 90 percent of the loan amount for single-family
mortgages in areas at least 25 miles from urban areas.
-- Major Program Reforms
Federal Housing Administration (FHA) Reform. S. 566 would
reform the FHA single-family mortgage loan insurance program to
improve its financial soundness. These reforms are consistent
with the Administration's proposals. They have already been
-3-
enacted in the "Omnibus Budget Reconciliation Act of 1990,"
P.L. 101-508. In addition, S. 566 would prohibit new FHA
mortgages for vacation homes.
Low-Income Housing Preservation. The enrolled bill would
specify the procedures for and circumstances under which certain
owners of low-income housing financed with federally insured and
subsidized mortgages could prepay their mortgages. Upon
prepayment, the buildings could be converted from low-income
rental properties to other uses such as condominiums or high
rent apartments. Currently, a moratorium prohibits prepayment
because of concern that low-income tenants would be displaced.
S. 566 would establish procedures for determining the fair
market value of buildings subject to prepayment. In addition,
it would authorize HUD to give assistance to project residents
to help them purchase their buildings. It would also authorize
HUD to provide financial incentives to the building owner or
other parties to maintain the property for low-income tenants,
if they do not purchase it. Mortgages could be prepaid only if
residents do not purchase the building or if a willing buyer
cannot be found to maintain the building for low-income tenants.
In addition, mortgages could be prepaid if sufficient Federal
funding is not available to provide the needed level of
incentives for building owners to maintain the property for low-
income tenants. Measures are included to protect tenants who
are displaced as a result of prepayment.
-- Other Significant Provisions
S. 566 contains a number of other significant provisions.
For example, it would amend and extend the appropriations
authorizations for HUD's Community Development Block Grant
(CDBG) program and for the housing programs of the Farmers Home
Administration (FmHA) in USDA. The CDBG and other provisions
are described in more detail in the Attachment.
-- Budget Impact
S. 566 would authorize appropriations of $24.8 billion for
FY 1991 and $27.1 billion for FY 1992 for HUD's programs. For
FmHA's programs, S. 566 would authorize $2.1 billion for direct
loans and $100 million for guaranteed loans for FY 1991. It
would authorize $2.2 billion for FmHA's direct loans for
FY 1992. The amount of guaranteed loans for FY 1992 would be
determined in the FY 1992 appropriations process.
The enacted FY 1991 appropriations for HUD are
$23.7 billion in budget authority and $21.8 billion in outlays.
This is $2.4 billion in budget authority and $180 million in
outlays above the President's FY 1991 Budget request. The
enacted FY 1991 levels for FmHA's programs are $1.8 billion for
-4-
direct loans and $100 million for guaranteed loans. The
President's FY 1991 Budget requested $1 billion for direct loans
and $594 million for guaranteed loans.
Agency Views
In its enrolled bill views letter, HUD expresses
disappointment "that the bill continues a number of programs
that we do not believe merit continued support." HUD also
states that S. 566 "creates a number of new programs that will
not contribute toward the fulfillment of the basic, historic
mission of the Department of Housing and Urban Development."
Nevertheless, HUD "believes that this bill contains the
beginnings of what could be a major redirection of housing
policy in the decade ahead. Most importantly, it authorizes, at
sufficient levels, most of the proposals contained in the
Administration's HOPE initiative. It also provides an approach
to meeting the problems of prepayment that is generally
consistent with the Administration's objectives. Finally,
provisions of the bill calling for the implementation of new
housing strategies have been improved in ways that promote
program integrity and encourage the use of funds for activities
other than for new rental housing production." Accordingly, HUD
recommends approval of S. 566. HUD has informally provided a
draft signing statement, which highlights the Administration's
HOPE initiative and the other major housing programs in S. 566.
In its views letter, USDA recommends approval of the
enrolled bill. USDA states that "[t]he bill provides for
decent, safe, and affordable housing for the low income rural
residents of this Nation." USDA has informally provided
language on the rural housing provisions for inclusion in a
signing statement.
The Council of Economic Advisers (CEA), in its views
letter, recommends approval of S. 566. The Council, however,
expresses concern about a provision requiring HUD to study ways
in which State and local pension funds could be used to finance
construction of low- and moderate-income housing. CEA "urge[s]
the President and the Secretary of the Department of Housing and
Urban Development to resist all efforts to use pension assets
for socially-mandated projects."
The Department of Labor has no objection to approval of
S. 566. Labor, in its views letter, expresses strong
reservations about the mandated study of the use of State and
local pension funds to finance housing construction. The
Department believes that it is "inappropriate for the Federal
matters." Government to give direction to the States on essentially local
-5-
The Department of Justice defers to other agencies as to
whether S. 566 should be approved. Justice, however, advises
that three provisions of the enrolled bill raise "potential
constitutional problems."
Section 302 (b) (7) of S. 566 states that the Board of
Directors of the National Homeownership Trust shall include one
individual representing consumer interests, appointed by the
President and confirmed by the Senate. Because this provision
purports to impose a restriction on whom the President may
appoint, Justice advises that it violates the Appointments
Clause of the Constitution.
Section 943 of the enrolled bill would establish a National
Commission on Manufactured Housing. Section 943 (e) (3) (A) states
that the Commission "may secure directly from any department or
agency of the United States such data and information as the
Commission may require." Justice advises that this provision is
objectionable. It "fails to recognize the President's
constitutional authority to withhold
information whose
disclosure might significantly impair the conduct of foreign
relations, the national security, or the deliberative processes
of the Executive Branch or the performance of its constitutional
duties."
Section 958 (a) of S. 566 provides that the Secretary of
Housing and Urban Development "shall provide a preference to
native Hawaiians for housing assistance programs
for
housing located on Hawaiian home lands." Section 958 (d) (1)
defines the term "native Hawaiian" in a race-based fashion.
Justice advises that "[b]ecause this subsection provides for a
racially-based preference, it raises serious constitutional
concerns." Justice states that "the preference to native
Hawaiians cannot be justified under Congress's power over native
Americans because that power is limited to native Americans 'not
as a discrete racial group, but, rather, as members of quasi-
sovereign tribal entities'. Morton V. Mancari, 417 U.S. 535,
554 (1974).
Enclosed with the Justice views letter is language for a
signing statement addressing these constitutional problems.
Conclusion and Recommendations
We join with USDA, HUD, CEA, and the Office of National
Drug Control Policy in recommending approval of S. 566.
Attached for your consideration is a draft signing
statement prepared by this Office based on the material supplied
-6-
by HUD, USDA, and Justice. The draft statement has been
approved by HUD, USDA, Justice, and the Office of White House
Counsel.
Nimer Damn
Richard Darman
Director
Enclosures
-7-
Attachment
Other Significant Provisions in S. 566
S. 566 would:
-- Restructure the Section 202 Elderly and Handicapped
Housing Program to provide more assistance for housing
for people with disabilities. The current program would
be divided into two separate programs, one for the
elderly and one for the handicapped. The new programs
would provide capital grants, rather than loans, to
private, non-profit organizations for the development of
housing facilities. In addition, Federal rental
assistance would fund operating costs above the income
generated by rents.
-- Amend HUD's CDBG program to: (1) increase from 60 to
70 percent the portion of grants that must be allocated
to projects that benefit low- and moderate-income
families; (2) allow assistance to for-profit entities
for certain economic development projects; and
(3) require Arizona, California, New Mexico, and Texas
to set aside 10 percent of their CDBG funds in FY 1991
for water, sewer, and housing needs of "colonias"
(communities designated by the State or county as having
these needs) along the U.S.-Mexico border.
-- Authorize appropriations of $160 million for FY 1991 and
$167 million for FY 1992 for grants to eliminate drug
use and drug-related crime in public and assisted
housing projects.
-- Provide for a greater income mix of public housing
tenants by increasing from 5 to 15 percent the portion
of public housing units that can be rented to families
with incomes between 50 percent and 80 percent of the
median income.
-- Authorize appropriations of $25 million for FY 1991 and
$26 million for FY 1992 to develop Family Investment
Centers. These Centers would be in or near public
housing where community training and support services
could be provided.
-- Authorize the use of public housing modernization funds
to rehabilitate or dispose of vacant public housing
units.
-- Require HUD to study ways in which State and local
pension funds can be used to finance construction of
low- and moderate-income housing. A report would be due
to Congress 90 days after enactment of this Act.
-- Terminate the following programs at the end of FY 1991:
grants for new construction and substantial
rehabilitation of rental housing; Section 312
Rehabilitation Loans; Nehemiah Housing Opportunity
Grants; Section 8 Moderate Rehabilitation; and Urban
Homesteading.
-2-
STATEMENT BY THE PRESIDENT
It is with great pleasure that I today sign S. 566, the
"Cranston-Gonzalez National Affordable Housing Act." In addition
to extending and reforming existing housing programs, this
legislation creates and expands innovative new programs proposed
by this Administration. These new programs will advance
opportunities for homeownership and economic self-sufficiency in
our Nation's most distressed communities. This Act is an
exciting bipartisan initiative to break down the walls separating
low-income people from the American dream of opportunity and
homeownership.
I want to note the contributions of several people to the
enactment of this landmark legislation, starting with Secretary
of Housing and Urban Development, Jack Kemp. Secretary Kemp has
brought a unique vision to his job and a commitment to
empowerment as a tool to encourage individual dignity and
initiative and reward productive work effort.
Many Members of Congress also made significant contributions
to the bipartisan effort to produce a housing bill. A few
deserve special recognition. Senators Alan Cranston and Al
D'Amato have devoted the last several years to the passage of a
comprehensive housing bill, and we would not be here today
without their efforts. Likewise, I want to recognize the efforts
of Congressmen Henry Gonzalez and Chalmers Wylie, whose spirit of
cooperation throughout the legislative process helped bring us to
this point.
S.566 contains the Homeownership and Opportunity for People
Everywhere -- HOPE -- initiatives that my Administration
submitted to Congress earlier this year. HOPE represents a
dramatic and fundamental restructuring of housing policy. It
recognizes that the poor and low-income tenants -- not public
housing authorities and developers -- are our clients. HOPE will
do what traditional programs have not done: empower low-income
families to achieve self-sufficiency and to have a stake in their
communities by promoting resident management as well as other
forms of homeownership.
The cornerstone of HOPE is a program to provide grants to
enable low-income families and tenants to become homeowners.
HOPE homeownership grants can be used for planning activities,
including the development of resident management corporations.
They can also be used for rehabilitation and post-sale subsidies
to help ensure the success of homeownership. HOPE grants are
eligible to be used in public housing, and vacant, foreclosed,
and distressed single-family and multifamily properties.
The legislation also includes my Administration's Operation
Bootstrap -- or Family Self-Sufficiency -- proposal. In the
past, public housing was seen as a long-term residence for low-
income people. My Administration believes that Federal housing
subsidies should serve as transitional tools to help low-income
families achieve self-sufficiency, move up and into the private
housing market, and join the economic mainstream. The Family
Self-Sufficiency Program will assure that all new housing voucher
-2-
and certificate assistance is coordinated with employment
counseling, job training, child care, transportation, and other
services to encourage upward mobility.
S. 566 also authorizes our HOPE for Elderly Independence
proposal to combine vouchers and certificates with supportive
services to assist the frail elderly. In addition, it authorizes
Shelter Plus Care, which couples housing assistance and other
services to homeless persons with disabilities and their
families.
This legislation also reflects the efforts of the
Administration and Congress to enact needed reforms to the
Federal Housing Administration's (FHA) single-family mortgage
insurance program. These reforms will ensure that FHA is
actuarially safe and financially sound. The bill's provisions
meet the four principal objectives of my Administration's
original FHA reform proposals: the achievement of adequate
minimum capital standards by the earliest possible date;
insurance premiums that reflect the risk of default; minimum
equity contributions by borrowers to protect them and the
insurance fund from default risk; and maintaining the emphasis of
FHA on low- and moderate-income homebuyers. With these reforms,
we will be ensuring the availability of FHA for future
generations of families seeking to achieve homeownership.
I am pleased that this bill contains a solution to the
preservation and prepayment question that reflects the
Administration's basic principles. These include protecting
-3-
project residents from becoming homeless as a result of a
mortgage prepayment; emphasizing alternative prepayment
strategies that provide opportunities for homeownership; and
honoring the contracts between project owners and the Federal
Government.
One important preservation strategy is to provide project
owners with economic incentives to maintain their properties for
low-income use. I am concerned, however, that the incentives in
S. 566 are more generous than are necessary, providing excessive
benefits over the long term that will be paid by all taxpayers.
Nonetheless, I recognize that this preservation proposal is a
compromise, and that it represents a good faith effort by
Congress to meet the Administration's concern that limited
Federal funds be provided to those who need assistance.
This legislation provides a new block grant, HOME Investment
Partnerships, to promote partnerships among the Federal
Government, States, localities, nonprofit organizations, and
private industry. These partnerships will seek to utilize
effectively all available resources and a wide variety of
approaches to meet housing needs.
My Administration has been concerned that the HOME program
not become a vehicle for the production of new, federally
subsidized rental housing at the expense of other, more efficient
and better targeted subsidies, such as rental assistance to poor
tenants.
-4-
I believe this legislation addresses our concerns, because
it provides for a wide variety of uses for HOME funds, including
tenant-based assistance. It also imposes higher State and local
matching requirements for new construction than for tenant-based
assistance or minor rehabilitation. In addition, it requires
that 90 percent of HOME funds be targeted to families with
incomes at 60 percent or below the area median income.
Unfortunately, this bill also sets aside up to 15 percent of
total HOME funds in FY 1992 to be used solely for a rental
housing production program. I do not believe that the earmarking
of funds for new construction is consistent with the goal of
providing States and localities with maximum flexibility to meet
their specific affordable housing needs.
I am further concerned that this legislation, in several
instances, would relax longstanding provisions of current law
that provide a preference for housing assistance for those
families who are most in need. Although the Federal Government
currently serves about 4.3 million low-income families, there are
about 4 million additional families, most of them very low-
income, whose housing needs have not been met. We should not
divert assistance from those who need it most.
Several additional provisions warrant careful construction
to avoid constitutional concerns. For example, Section 302 (b) (7)
of the bill calls on the President to appoint one member of the
Board of Directors of the National Homeownership Trust to
represent consumer interests. In light of the President's power
-5-
under article II, section 2 of the Constitution, I sign this bill
with the understanding that the individual appointed by the
President to serve on the Board represents the United States as
an officer of the United States. The requirement that this
individual represent consumer interests does not constrain the
President's constitutional authority to appoint officers of the
United States, subject only to the advice and consent of the
Senate.
Section 943 (e) (3) (A) provides that the National Commission
on Manufactured Housing "may secure directly from any department
or agency of the United States such data and information as the
Commission may require." I sign the bill with the understanding
that this provision does not limit the constitutional ability of
the President to withhold information, the disclosure of which
might significantly impair the conduct of foreign relations, the
national security, or the deliberative processes of the Executive
branch or the performance of its constitutional duties.
Finally, it is the Federal Government's responsibility to
ensure that the benefits of Federal programs are offered to
individuals in a way consistent with the equal protection
guarantee of the Constitution. In that regard, I am concerned
about section 985 (a) of the bill, which provides a preference to
native Hawaiians for housing assistance programs for housing
located in the Hawaiian homelands, and section 958 (d) (1), which
defines "native Hawaiian" in a race-based fashion. This race-
based classification cannot be derived from the constitutional
-6-
authority granted to Congress and the Executive branch to benefit
native Americans as members of tribes. I direct the Attorney
General and the Secretary of Housing and Urban Development to
prepare remedial legislation for submission to Congress during
its next session, so that the Act can be brought into compliance
with the Constitution's requirements.
I am pleased that, in crafting this legislation, Congress
also has modified a number of the rural housing programs
administered by the Department of Agriculture's Farmers Home
Administration. As a result, these programs will be more
responsive to the needs of low-income residents of small towns
and rural areas. A significant change is a new program of
guaranteed loans for homeownership by low- and moderate-income
residents in rural areas. This housing reform will provide
assistance to these individuals and families more effectively and
efficiently.
In conclusion, this legislation represents true
bipartisanship, considerable give-and-take, and good faith
negotiation between Congress and the Administration. It reforms
and reauthorizes existing programs to provide for community
development, to operate and modernize public housing, and to
assist in meeting the needs of low-income families, the elderly,
and the handicapped. In addition, through HOPE, it provides the
potential for the redirection of housing policy back toward the
poor.
-7-
The signing of the "Cranston-Gonzalez National Affordable
Housing Act" presents us with an opportunity to renew our
commitment to the goals we all share: decent, safe, and
affordable housing for all Americans.
-8-
Lincoln Day by Day
A CHRONOLOGY
1809-1865
EARL SCHENCK MIERS
Editor-in-Chief
VOLUME III : 1861-1865
C. PERCY POWELL
Washington : 1960
U.S. LINCOLN SESQUICENTENNIAL COMMISSION,
11
request for reinforcements. McClellan, 345-46. After 3 P.M. Sen.
Browning (III.) and President visit soldiers in hospital at Columbia College.
Browning, Diary.
MAY 19. President declares Gen. Hunter's General Orders No. II freeing
slaves in Dept. of South void, and "that neither General Hunter, nor any
other commander, or person, has been authorized by the Government of
the United States, to make proclamations declaring the slaves of any State
free." [See May 9, 1862.] CW, V, 222-24. Congressional delegation from
InDe
Maryland, with 5° constituents from Prince George's County, visits Presi-
dent regarding Fugitive Slave Law. Lincoln assures delegation that Gen.
Wadsworth will enforce law in District of Columbia. Ibid., 224; N.Y.
t today!
Tribune, May 20; Boston Advertiser, May 20. Appoints Asst. Sec. of Treas-
ury George Harrington "to discharge the duties of Secretary of the Treasury,
during the absence of Salmon P. Chase." CW, V, 221.
inSE?
MAY
20
President and group of public men observe experiments to test
iron armor at Navy Yard. Washington Star, May 21. Says he will not
relieve Gen. Hunter even on own request. DLC-SPC, Ely to Chase, May
Ithinkhe
20, 1862. At 6 P.M. Mrs. Lincoln and carriage call at Browning residence.
wasinwash.
President arrives on horseback. Goes riding with Sen. Browning (III.)
and Capt. James N. Brown, Illinois cattleman. Browning, Diary. Ap-
thisday.
proves act securing homesteads to actual settlers on public domain, act
providing primary schools for public instruction in District of Columbia
outside Washington and Georgetown, and act prescribing qualification
(oath of allegiance) for electors in cities of Washington and Georgetown,
D.C. Stat. L., XII, 392, 394, 403. Inquires of Gen. McClellan: "Tele-
graph being open tell us the situation & suggest if you can anything about
batteries at Fort Darling." CW, V, 224. Complies with request for
autograph: "I beg that her ladyship [Sarah Sophia Fane, Lady Villiers]
will accept the assurance of my sincere gratification at this opportunity of
subscribing myself Very truly, Her Ladyship's obedient servant." Ibid.,
225.
MAY 21. President at War Dept. by 7 A.M.; Sec. Stanton and Gen. Hal-
leck join him there. Later he visits Gen. Burnside at Willard's Hotel. LL,
No. 1281. Congressional delegation presents petition asking that Gen. C.
InDC
S. Hamilton be restored to command. CW, V, 227. Lt. Col. Hicks at
White House regarding appointment as aide-de-camp to Gen. Wool. Ibid.,
229. President communicates with Senate regarding arrests by military
today
commander in Kentucky of persons suspected of secessionist sympathies.
Ibid., 227. Informs James Gordon Bennett that secretary of war "mixes
no politics whatever with his duties." Ibid., 225-26. Approves act pro-
viding for education of colored children in cities of Washington and George-
town, D.C., and for other purposes. Stat. L., XII, 407. "Library of the
Executive Mansion" orders from W. F. Richstein: "I set Stricklands Eng-
land $21.00, I set Stricklands Scotland $20.00, I Mrs. Brownings Poems
$9.00, I Mrs. Sigourneys Poems $1.25, I Mrs. Osgood Poems $0.90."
1862
113
AD
30
X
The War
Years
864
Second Bull Run - Antietam - Chaos
177
en passengers
road, getting ten sections of land per mile alongside the
right of way, with graduated Government loans on a per-
the state gov-
mile basis-$16,000 for level work, $32,000 for desert
: the President
work (the Great Basin), and $48,000 for mountain work.
uraging volun-
As the bill stood now, it was under "military necessity" an
guilty of any
offer to railroad financiers to push through a job that would
ort to Rebels
tie the two coasts closer.
buld come un-
He signed the Homestead Bill May 20, 1862, giving a
pus would be
farm free to any man who wanted to put a plow to un-
broken sod. Immense tracts of land were thrown open in
day hundreds
the Western Territories. Anyone a citizen of the United
: it-right or
States or taking out first papers declaring intention of citi-
zenship, paying a registration fee of $10 and staying on
ot get "quick
the same piece of ground five years, could have title papers
sport of regi-
making him the owner of 160 acres. Tens of thousands of
entlemen that
Britons, Irish, Germans, Scandinavians came, many ex-
ck work with
claiming, "What a good new country where they give away
IOW long does
farms!" As a war measure touching enlarged food supply,
and as an act fulfilling a Republican party pledge, Lincoln
wrote in late
found it easy to sign the bill.
egan: "I am
I do not ad-
ugh he could
chaplains for
more needed,
hy soldiers in
Chapter 9
[uasi appoint-
you perceive
Second Bull Run - Bloody Antietam - Chaos
me or names
olic Church,
ame service."
The popular Orpheus C. Kerr [Robert H. Newell] and his
bishop went
nonsense helped relieve the gloom of some readers, includ-
ur kind, and
ing Lincoln. Kerr, August 9, 1862, set forth: "Notwith-
he regularly
standing the fact that President Lincoln is an honest man,
perusing."
my boy, the genius of Slumber has opened a large wholesale
on the Pacific
establishment here, and the tendency to repose is general."
aid from the
And three weeks later: "As every thing continues to indi-
e Union Pa-
cate, my boy, that President Lincoln is an honest man, I
to build the
am still of the opinion that the restoration of the Union is
E457
R2
V.I
WH
t:
LINCOLN
11
THE PRESIDENT
SPRINGFIELD TO BULL RUN
*
E
DODD MEAD
BY
J. G. Randall
PROFESSOR OF HISTORY
IN THE UNIVERSITY OF ILLINOIS
ILLUSTRATED
DODD, MEAD & COMPANY
NEW YORK - - 1956
NORTH AND SOUTH
85
recognized slavery, when other nations were treating it as an abomina-
tion and trying to stamp it out.
Sneers against the South as shiftless and unenlightened produced
indignant reaction. Tempers of statesmen were on edge. They had
been so for years. In December 1849 there had been bedlam in Con-
gress when R. K. Meade of Virginia called William Duer of New York
"a liar, sir." A duel was with difficulty averted, and, to quote the
record, "Indescribable confusion followed-threats, violent gesticu-
lations, calls to order, and demands for adjournment were mingled
together." 4 The sergeant at arms raised high his mace, which people
had thought a mere ornament or symbol, and somehow business was
resumed without a knock-down fight, but a dangerous point had been
reached if men could not debate, organize, and legislate without per-
sonal explosions. What would now be called pulp melodrama-
Uncle Tom's Cabin, published (in book form) in 1852-became a
sensation, reaching a sale of 300,000 copies the first year. Though its
author, Harriet Beecher Stowe, had been able to see good in
Southerners, the book functioned as an antislavery tract and a slogan
of pious conflict.
Westerners were demanding liberal homestead legislation, which
men of the South were resisting. A plan for establishing colleges to
teach agriculture and the mechanical arts with Federal land-grant
aid, originating in Illinois, met also the obstacle of Southern opposi-
tion. Economic rivalries between North and South were aired and
fanned in the pages of DeBow's Review-an influential Southern
publication-and in the proceedings of Southern commercial con-
ventions. Northern and Southern groups were contending for control
of a future transcontinental railway. Immigrants crowding in from
Europe made for Northern destinations by the hundreds of thousands
in the fifties; they were tending to produce in portions of the North
a human type quite different from the native-grounded population
of the South.
Questions pertaining to slavery, however, were the focal points
of trouble and dissension. Paradoxically the matter of slavery was
both enlarged and constricted. It was enlarged in agitation as if the
very essence of all Southern life depended on the peculiar institution,
and as if the slightest breath of criticism directed against human
4 Cong. Globe, 31 Cong., 1 sess., 27; Craven, The Coming of the Civil War, 247.
Thought you might
be interested
in the attached.
Secretary
JACK KEMP
U.S. Department of and Development
DEPARTMENT U.S. Secretary Jack OFHOUSI OF Kemp HOUSING
Offers
A Progressive-Conservative Prescription
Fora New War Poverty
REFELOPMENT AND
Federal City Council Annual Meeting
Washington, D.C.
September 17, 1990
DEPARTMENT U.S. OF EHOUSING
AND
URBAN
DEVELOPMENT
"As we approach the 21st century, let us resolve to make our legacy a
successful war against poverty. Let's unleash the greatest wealth our
Nation has, the pent-up talents and potential of our people."
"
Jack Kemp
September 17, 1990
In the 1980's, the American economy
Gingrich, and Congressman Vin Weber want
experienced an unprecedented expansion,
to add capital- and labor-based incentives to
creating over 21 million new jobs -- more than
the tax code, such as the capital gains tax cut,
Europe, Canada and Japan combined -- and
Enterprise Zones, expanded Individual
more than 4 million new business enterprises.
Retirement Accounts, and a higher earned
While the Nation's gross national product
income tax credit for the working poor.
grew by 26.3 percent between 1983 and 1989,
While the 1980's were a period of
federal tax revenues expanded by 35.7
unprecedented economic expansion, parts of
percent, twice as fast as they did in the 1970's.
our Nation and some of our people have been
Federal income taxes paid by the top 1
left behind, or worse, left out. Success has not
percent of taxpayers surged by over 80
been the only story of the 1980s; grinding
percent -- from $51 billion in 1981 to $92
poverty and homelessness, violent crime and
billion in 1987.
drug abuse, and the growing numbers of
The Reagan-Bush Administration
broken families and mothers on welfare attest
rediscovered the classical prescription for
to the challenges that remain. These deeply
noninflationary economic growth: sound
disturbing problems signal the ongoing
money, income tax rate cuts across the board,
deterioration of many communities,
and reductions in the growth of government
especially minority communities.
spending and regulation. As a result, the
In 1984, Governor Mario Cuomo was
world was lifted to a higher vision of what
cheered at the Democratic Convention when
democratic capitalism could achieve in
he told his tale of America as two cities, one
creating wealth and opportunity for people.
rich and one poor, permanently divided into
By contrast, at the decade's end, the leader of
two classes. With all due respect to his great
the socialist world -- the Soviet Empire -- had
rhetoric, the Governor got it wrong. America
become an economic basket case. The
is not divided into two static classes with
intellectual and political case for socialism
envy and redistribution the only answer. But
had collapsed.
our Nation is divided into two economies --
As we enter a tougher economic climate
one is democratic capitalist, and based on
and experience slower growth, we must not
private property; the other is near socialist,
choke off expansion with higher taxes, but
government-directed, and based on public
instead stimulate the economy by enacting
ownership of property.
President Bush's proposed capital gains tax
Our macro and mainstream economy is
cut. This will free up investment capital for
market-oriented, entrepreneurial,
entrepreneurship and new job creation,
incentivized for working families; it rewards
generating billions of dollars of revenues for
work, investment, saving and human
state and federal treasuries, and adding value
productivity.
to the financial assets of our Nation.
The second economy in our inner cities
The creation of new businesses, the
is similar in many ways to Eastern European,
unleashing of innovative ideas, invigorates
or Third World socialist economies. It is
economies and markets. Economic growth in
predicated on rules, regulations, and
the 1980's confirmed that real wealth comes
incentives that are directly opposite to those
not from physical resources, but from human
governing our mainstream economy.
resources; not from mere things, but from the
The second economy almost
ideas, talents, and efforts of people. That's
guarantees poverty and dependency:
why the President and some courageous
-- it rewards welfare and unemployment at a
Republicans like Senators Bob Kasten and
higher level than working and productivity;
Connie Mack, House GOP Whip Newt
-- it taxes and regulates the entrepreneur who
wants to succeed in the above-ground
speech, a man came forward from the
capitalistic system, while rewarding the
audience and offered to finance a trust fund
underground economy of illicit capitalism;
to cover the cost of a college education for the
-- it rewards people who stay in public
young girl.
housing more than those who want to move
The startling fact in America today is
up and out into private homeownership;
that the highest marginal tax rates are not
-- it rewards the family that breaks up rather
paid by the affluent, but by welfare mothers
than the family that stays together;
or unemployed fathers who want to take a
-- it encourages debt, borrowing, and
job. In most cities, a welfare mother must
spending more than saving, investing, and
earn nearly $18,000 in wages to equal her
risk-taking.
welfare payments. According to a study by
-- but worst of all, it weakens and, in some
Christopher Jencks and Kathryn Edin in the
cases, destroys the link between effort and
American Prospect magazine, a working
reward.
mother with two children, employed at about
The irony is that the first war on
$5 an hour, would net minus 45 cents per
poverty and much of our welfare system was
hour. She would lose about $4 a day after
created to help the poor, to alleviate suffering,
taking into account lost government benefits,
and to provide a basic social safety net. But
taxes, and work-related expenses such as
despite the noble intent, it has created
transportation and child care.
dependency, welfare bureaucracy, and near
Eugene Lang, a wealthy New York
pathological social conditions for some. Our
businessman, also believes in the power of
country is now reaping this bitter harvest in
incentives to produce positive behavior.
terms of homeless women and children,
According to The New York Times, he told
unemployed fathers, and crack-addicted
children in PS 121 elementary school in East
babies -- despair not hope, poverty not
Harlem that if they stayed in school, got good
opportunity.
grades, and stayed drug free, he would
Examples abound of how disincentives
personally pay for their college educations.
have created poverty in inner cities. I
Talk about results! Sixty percent of those
recently read a Wall Street Journal article
children had been dropping out, but today 90
about a woman on welfare in Milwaukee,
percent are in their first or second year of
Wisconsin who tried to put away a few
college.
pennies, nickels, and dimes so that one day
Public housing is another example of
she could do what every mother wants to do
government policies that perpetuate a
send her daughter to college. She managed
poverty trap with disincentives to work and
to build a savings account of just over $3,000,
disincentives to build strong families.
but there was a catch: the welfare agency said
Because public housing authorities charge
she was violating welfare rules. She was
rents based entirely on a tenant's income,
taken into court, prosecuted for fraud, then
those rents actually can jump by 600 percent
fined $15,000. But since she didn't have
or more if the tenant gets married or takes a
$15,000, they took her $3,000, gave her a
job. In some cases, rents exceed those
year's sentence in jail, suspended it -- and in
charged in the private sector for similar
the process traumatized her life.
dwellings.
Guess what? She now spends every cent
We're instituting a new policy at HUD
she gets, and relies on government subsidies
that sets "ceiling" rents at no higher than the
to pay for just about everything. Incidentally,
market level. If a tenant takes a job or gets
the story may have a happy ending for this
married, the rent increase will be put into an
woman. After I mentioned her story in a
escrow or savings account, which will be
2
released to the family when they leave public
people. But this important victory isn't yet
housing, to pay, for example, for a
won. Some House-Senate conferees on the
downpayment on their first home. We want
Housing bill are trying to overturn our policy.
public housing -- indeed, all public assistance
The good news is government policies
to become a platform for self-sufficiency,
can change. More important, people do
not a trap of dependency. HUD used to give
respond to rewards. Productive human effort
awards for public housing residents who
can be promoted; behavior can be modified;
stayed in public housing the longest. We
work effort can be unleashed. President Bush
stopped that. Now, we're offering incentives
said making this happen means "giving
to public housing tenants who move up and
people -- working people, poor people, all
out into the private sector
our citizens -- control over their own lives. It
The heavily-regulated U.S. housing
means a commitment to civil rights and
market is another example of government-
economic opportunity for every American."
created scarcity. Rent controls, exclusive
The Bush Administration is pursuing
zoning laws and building codes have
and expanding a national agenda to help low-
crippled low-income rental housing markets
income people combat poverty and despair.
in many cities. Ironically, rent controls often
In his recent speech to Congress on the
help the wealthy and hurt the poor. The
Persian Gulf crisis, President Bush mentioned
New York Times recently editorialized that
this agenda -- the only domestic goal he
"Perversely, many poor families are the
spoke of not directly affected by that
harshest losers from rent controls
rent
situation.
control has benefited the lucky, not the
First, President Bush wants to cut the
needy."
capital gains tax rate, not to help the rich, but
The real effect of rent control is to
to help the poor get rich in terms of
subsidize many upper and middle income
opportunity.
families. Since rent controls create incentives
As Abraham Lincoln said, "When one
for these families to stay in regulated
starts poor, as most do in the race of life, free
apartments, these homes are not available for
society is such that he knows he can better his
those with lower incomes. According to the
condition in life. I am not ashamed to confess
Times, "some families in the highest income
that twenty-five years ago I was a hired
groups became even richer by buying
laborer, mauling rails, at work on a flatboat --
apartments they rented, reselling them later
just what might happen to any man's son! I
at 10 and 15 times what they paid."
want every man to have the chance
in
Affordable housing is a real challenge, and
which he can better his condition -- when he
the Administration is taking steps to solve it.
may look forward and hope to be a hired
State and local governments make the task
laborer this year and next, work for himself
difficult by imposing market-destroying
afterward, and finally hire men to work for
regulations.
him. That is the true system."
Another glaring example of
In the spirit of Lincoln's vision,
counterproductive government policies is the
President Bush has asked Congress to cut the
way in which HUD subsidizes vacant public
capital gains tax rate to 15 percent for the
housing. It costs the taxpayer over $1,300 per
Nation -- and establish Enterprise Zones -- as
unit to support vacant public housing often
a national policy to generate jobs,
used as crack houses for gangs and drug
opportunities, and minority enterprise in our
pushers. We've started a policy called
Nation's most distressed communities.
Operation Occupancy to subsidize only
I believe we should set a goal of
homes actually occupied by low-income
doubling or tripling the number of minority
3
business enterprises over the next decade.
unlock. According to Black Enterprise, "The
Earl Graves of Black Enterprise magazine has
greatest deterrent to black economic
pointed out that black-owned firms still
advancement has been the lack of access to
account for just 3 percent of all U.S.
venture capital."
companies, with only 1 percent of gross
The refusal by Congressional leaders
receipts. This is not just a tragedy for the
to cut the capital gains tax is
African-American community, but for all
counterproductive to our national goal of
minorities. Worst of all, it hurts all of us
winning a war against poverty. The capital
when so many of our people lack access to
gains tax is not a tax on the rich; it's a tax on
capital, property, and resources.
the creation of wealth. If the tax code taxes
Cutting the capital gains tax rate has
wealth at such a high rate that the wealth
worked before, and it can work again to
disappears, jobs will be destroyed and small
powerfully stimulate minority businesses and
business creation will drop. As jobs
job creation. In 1978, the Steiger amendment
disappear, the poor will suffer the most. To
slashed the capital gains tax from more than
make it worthwhile for people to innovate, to
50 percent to 28 percent; in 1982, the Reagan/
risk, and to create wealth, we've got to set a
Bush tax cuts began to take effect, including
lower tax rate for risk income than for
our cut in capital gains to 20 percent. What
ordinary income.
happened?
Second on the President's agenda is
Between 1977 and 1982, the number of
resident management and urban
black-owned businesses increased by 33
homesteading in public housing to empower
percent, and new Census Bureau figures
tenants to take control of their communities
show that, between 1982 and 1987, the
and achieve their dreams of homeownership.
number of black-owned companies jumped
Under President Bush's leadership, we've
38 percent -- growing two-and-a-half times
recently set a goal of creating more than 1
faster than all new business formations in the
million new homeowners by 1992 through
same period.
FHA and our HOPE initiative,
While the 1986 tax reform lowered
Homeownership and Opportunity for People
income tax rates across the board, Democratic
Everywhere, which has passed the House and
leaders in Congress extracted a high price by
Senate and goes to conference this week.
demanding a 65 percent increase in the
Post columnist William Raspberry wrote
maximum tax rate on capital gains -- one of
recently when assets are present, people
the largest increases in U.S. history!
begin to think in terms of the asset. If a
Considering inflation, the real capital
young mother owns her own home, she
gains tax rate, according to a study by
begins to pay attention to real estate values,
economist David Goldman, may easily be 75
property taxes, the cost of maintenance and so
percent or more. This punitive tax is
forth it is the assets themselves that create
staggering the entrepreneurial sector.
this effect, as opposed to just educational
Columnist Warren Brookes estimates that
programs or exhortations toward better
investment, which was growing at more than
values."
7 percent annually before the tax hike, has
Raspberry is right. Not only is
slowed by 50 percent, and new business
homeownership and tenant empowerment a
formation is actually declining for the first
practical thing to do, it's a moral imperative.
time in 10 years.
Third, in order to create greater choice
No one is hurt more by this than the
and independence, rental vouchers should be
poor and minorities who need access to the
significantly increased and expanded. Low -
seed corn that a capital gains tax cut would
income families should have greater
4
opportunity to live where they want and
choice in the education of their children
better access to affordable housing.
deserves strong consideration.
Fourth, tax reform is needed now to
Eighth, Congress should pass President
help remove more low-income families from
Bush's HOPE legislation, which allows
the tax rolls and dramatically increase the net
homebuyers to use IRA's to help purchase
income of welfare mothers and unemployed
their first home, expands the low-income
fathers who get jobs. In 1948, a median-
housing tax credit, and links housing
income family of four paid almost no income
vouchers to strategies for gaining self-
taxes, and only $30 a year in direct Social
sufficiency through a new program called
Security taxes. This year, the same family's
Operation Bootstrap.
tax burden would be over $6,000. To be as
Today's debate over how to help low-
sensitive to families as in 1948, the personal
income people is a debate between those who
exemption today would have to be well over
believe that people are a drain on resources
$6,000.
and those who see that people are our
Fifth, it is essential to expand the earned
greatest resource. It is a debate pitting hope
income tax credit and pass the President's
and opportunity against the politics of envy.
Child Care tax credit to roll back the huge
I believe that our greatest assets are not in the
burden on low-income families and
wealth we see around us but in the potential
unemployed parents. These can be paid for,
that is unseen minds yet to be educated,
in part, by the additional revenues gained
businesses yet to be opened, technologies yet
from cutting the capital gains tax rate to 15
to be discovered, jobs waiting to be created.
percent. The capital gains tax cut would
Wealth is not what we've done, but what we
expand tax revenues at all levels of
have yet to do -- and we've got a lot to do.
government by spurring new economic
I've travelled to hundreds of distressed
growth.
communities and I know entrepreneurial
Sixth, for homeless people, the
capitalism and empowerment can work to
Administration's new Shelter Plus Care plan
create the wealth and opportunities of the
will expand community-based mental health
future. As we approach the 21st century, let
facilities, drug abuse treatment, job training,
us resolve to make our legacy a successful
and day care. Shelter and support services
war against poverty. Let's unleash the
are the key to helping homeless Americans
greatest wealth our Nation has, the pent-up
re-enter the mainstream economy. If
talents and potential of our people.
Congress passes HUD's budget request for
1991, including the Shelter Plus Care
initiative, it will represent a 62 percent
increase in homeless assistance over 1990 and
nearly a 170 percent increase from 1989.
Seventh, to enhance education and
opportunity, we must expand true choice and
competition through magnet schools,
education vouchers, tuition tax credits, and
other policies which increase alternatives in
education. Merit plus champions like State
Representative Polly Williams in Wisconsin
and Council Member Keith Butler in Detroit
-- has rescued this idea from the partisan
attacks of the past. Empowering parents with
5
thought you might
be interested
in the attached.
Secretary
JACK KEMP
U.S. Department of Housing and Urban Development
Washington, D.C. 20410
(202) 708-0417
"LINCOLN'S VISION OF DEMOCRACY"
BY SECRETARY JACK KEMP
DEPARTMENT AND U.S. URBAN DEVELOPMENT OF HOUSMS
REMARKS IN COMMEMORATION OF
ABRAHAM LINCOLN'S GETTYSBURG ADDRESS
PREPARED FOR DELIVERY TO THE LINCOLN FELLOWSHIP OF PENNSYLVANIA
SOLDIER'S NATIONAL CEMETERY, GETTYSBURG, PA
NOVEMBER 19, 1990
"LINCOLN'S VISION OF DEMOCRACY"
On this field of honor 127 years ago, Providence revealed
the future of mankind. The battle of Gettysburg confirmed that
freedom is not just the God-given birthright of Americans, but
the destiny of men and women everywhere.
Here a great battle was fought to save the Union
but the
battle and the war itself were incidental to the larger principle
set forth 87 years before in the Declaration of Independence.
Liberty itself hung in the balance
a principle so vital to
the nation that Mr. Lincoln had once said he "would rather be
assassinated on this spot than to surrender it."
It is with special purpose that we return to this sacred
site, for we cannot properly commemorate the Gettysburg Address
of 1863 without celebrating what President Bush has called the
"revolution of 1989. "
A hymn of freedom is now resounding in an ever-rising chorus
from around the globe. On the eve of a new millennium, people
all over the world bear witness to the revelation of this
battlefield
and to the wisdom of Mr. Lincoln's timeless
words.
Were he here today, Lincoln would remind us that this global
surge towards freedom really began in the Revolution of 1776, the
revolution whose promise won't be fulfilled until all nations
embrace the inalienable rights Jefferson inscribed in our
Declaration.
Abraham Lincoln was not the first to link the success of
PAGE 2
American democracy to the hopes of all mankind. From our
republic's earliest days, Washington, Hamilton, Jefferson,
Webster, and other great statesmen believed that the American
experiment in human freedom and democracy was without precedent.
They knew, as did Mr. Lincoln, that if democracy failed here, it
would not succeed anywhere.
But until the Civil War, the threat to American democracy
had come only from foreign powers. Lincoln faced America's
supreme crisis: the nation that embodied mankind's last best hope
seemed hopelessly divided.
He believed that "as a nation of free men, we must live
through all time, or die by suicide."
By a longstanding tradition now forgotten, Presidents rarely
gave public addresses after their inauguration. Gettysburg was
one of Lincoln's few exceptions. He yearned for this occasion to
unfold the profound meaning of these patriot graves and implant
it deep in every American heart.
On the day of dedication, the President led the procession,
riding upright on horseback. Suddenly the cemetery came into
view with its thousands of wooden crosses
the temporary
resting sites of the fallen. Lincoln's head bowed in reverence.
When later he rose to speak after Edward Everett's grand two
hour oration, the huge crowd, standing so long and restlessly,
was hushed. Men removed their hats
15,000 people leaned
forward to catch the President's opening words.
Lincoln did not invoke Jefferson's "self-evident truths."
PAGE 3
In but 268 inspired words, he spoke instead of an American
"proposition" dedicated to the future of human equality and
liberty.
Democracy is not a mathematical deduction proven once for
all time. Democracy is a just faith
fervently held
a
commitment to be tested again and again in the fiery furnace of
history.
President Lincoln came to Gettysburg to teach us that our
nation was born of an age-old dream and charged with an eternal
mission
a nation impelled by its faith to perfect itself.
America was to be a "light unto the nations."
Slavery was the first great test challenging democracy's
central principle of equality. Lincoln's moral indignation over
slavery was unbounded. In his Peoria speech replying to Senator
Douglas, he said:
I hate
the monstrous injustice of slavery itself. I
hate it because it deprives our republican example of
its just influence in the world -- enables the enemies
of free institutions, with plausibility, to taunt us as
hypocrites -- causes the real friends of freedom to
doubt our sincerity, and especially because it forces
so many really good men amongst ourselves into an open
war with the very fundamental principles of civil
liberty -- criticizing the Declaration of Independence,
and insisting that there is no right principle of
action but self-interest.
Slavery was an abomination, a hideous stain defiling the
nation's soul; it could only be cleansed by a baptism of fire in
civil war.
Since the day Lincoln was taken from us by an assassin's
hand, American democracy has met other challenges again and again
PAGE 4
the injustice of segregation
the evil of Jim Crow laws
the despair of the Great Depression
the crises of two
world wars
the shameful denial of voting rights.
And our democracy is being tested today by levels of
poverty, homelessness, and despair unacceptable to a
compassionate and affluent nation. As the world's example of
democracy we must make it work better at home.
While acknowledging the achievements of the last decade --
the restoration of the spirit of entrepreneurial capitalism at
home, the collapse of communist totalitarianism abroad, and the
beginning of the triumph of democratic ideals throughout the
world we must recognize that our work is not yet done, that
there is much left to be accomplished. Far too many black and
minority Americans have yet to share in our national prosperity
and the full promise of the American Dream.
At a time when democracy is capturing the imagination of
Eastern Europe, we are challenged at home in those poor
communities where democratic opportunity and entrepreneurial
capitalism have yet to be extended, or even tried.
We must build a new national consensus around economic
growth and opportunity, greater access to property, jobs and
entrepreneurship. For those left out or left behind, we must
bring the great promise of democracy to every community, to every
city, and to all our people.
Abraham Lincoln -- the only Chief Executive to have presided
over a full scale civil war -- was unparalleled as a proponent of
PAGE 5
economic and political consensus. No American statesman ever
championed the cause of national unity with stronger resolve.
So opposed was Lincoln to dividing the nation that after the
fearsome battle in these very fields, he paid profound tribute to
all the "honored dead," resisting in magnanimous silence any
distinction between the slain of the South and the slain of the
North.
In his pleas for unity, we hear an echo of his first
inaugural address, "We are not enemies, but friends. We must not
be enemies. Though passion may have strained, it must not break
our bonds of affection." And while Lincoln's plea went unheeded,
he insisted that Americans were one people, one nation "conceived
in liberty," one family with a stake in each other's welfare
and civil war itself could not shake his conviction.
Lincoln helped establish a political party to form a new
national consensus around the Declaration of Independence. Yet
he always put country before party and the next generation before
the next election.
His expansive vision of democracy elevated him above any
politics of division, envy, and conflict.
Today we hear much in our politics about division
of
rich against poor, black versus white
indeed almost of class
warfare, disguised as one word -- "fairness."
In today's political vocabulary, fairness seems to have
become a euphemism for redistribution of wealth. But any true
concept of fairness must recognize the necessity of a link
PAGE 6
between reward and individual human effort.
The advocates of egalitarianism and class warfare talk as
if there are limits to growth
only so much wealth to go
around
that life is a static condition
and that poverty
is perpetual.
Lincoln ridiculed this theory. He envisioned an America
where freedom is inseparable from economic, political, and social
opportunity, and upward mobility.
As he put it, the "progress by which the poor, honest,
industrious, and resolute man raises himself, that he may work on
his own account, and hire somebody else
is the great
principle for which this government was really formed.'
We were fortunate to have Governor Cuomo of New York here
last year to remind us that Lincoln needs to be shared with the
world. He deserves our gratitude for organizing a group of
scholars to translate Lincoln's words on democracy for the people
of Poland. This was an act of enormous generosity and wisdom,
and let's pray that Lincoln will soon be available to all peoples
in every language.
But wouldn't it be tragic if Lincoln's teachings were
misinterpreted?
At the very moment when liberal democracy, private property,
and free enterprise are bringing down the Iron Curtain and
tearing down the wall between East and West, we in America are
being asked to choose between two opposing ideas -- the politics
of class warfare or Lincoln's all embracing vision of boundless
PAGE 7
democratic opportunity.
According to the politics of division, we are told that
America is divided in two
two peoples, one rich, one poor
two classes, one upper, one under
two cities, one glittering,
the other despairing. This division, we are told, is near
immutable, and redistribution of wealth is the only way to make
peace.
We are even supposed to conclude that a Lincoln of our day
would elevate the poor by redistributing wealth
that he
would provide for some at the expense of others.
Of course Mr. Lincoln would be deeply concerned about the
extent of poverty, but rather than evoke class conflict, I
believe he would move to place poverty, homelessness, and despair
on the same "course of ultimate extinction" that he proposed for
slavery in his own time.
Let me share Lincoln's very own words with you:
"I don't believe in a law to prevent a man from getting
rich," he said, "it would do more harm than good
I want every
man to have the chance -- and I believe a black man is entitled
to it -- in which he can better his condition -- when he may look
forward and hope to be a hired laborer this year and the next,
work for himself afterward, and finally to hire men to work for
him! That is the true system."
Lincoln's legacy cannot honestly be claimed by those who
would diminish one person to elevate another.
Why struggle to redistribute existing wealth? Let us commit
PAGE 8
ourselves to Lincoln's vision of democracy -- creating new
wealth, empowering the poor, opening up access to property,
expanding homeownership, creating more jobs, encouraging more
entrepreneurs, reducing the need for welfare.
We all know he favored opening public lands as plots for the
poor. He wanted every poor family to have the opportunity to own
their own home and have access to property
and in return,
they would build the home and improve the land.
Lincoln's Homestead Act of 1862 gave 160 acres to any poor
family who wanted to carve their share of the American Dream out
of the wilderness.
It was one of the most popular measures in American history
-- and today it is the source of inspiration for a new
homesteading program in urban America. We in the Bush
Administration will provide any resident of public housing the
same kind of opportunity to control, manage, and ultimately own
his or her very own home.
Yet the Homestead Act did not enhance and empower
government. It enhanced and empowered people. It not only
emancipated the economy; it helped emancipate the poor from
poverty and government dependency. Today, turning low-income
people into property owners is the next vital step in combating
the conditions of poverty and making democracy work.
Mr. Lincoln would not offer government as the first
alternative for dealing with problems. He would focus government
action where it could be used best -- to break down barriers to
PAGE 9
freedom and opportunity
to enable every man and woman to
fulfill their potential, develop their God-given talent, and
pursue their inalienable right to human happiness.
After all, isn't that what the terrible battle fought here
was really about
the noblest effort any people ever made to
dismantle the cruelest barrier to human freedom?
127 years after Gettysburg, Lincoln's belief that all human
beings are created equal and endowed with inalienable rights --
the faith upon which liberal democracy is based -- is beginning
to prevail around the world.
Because of democracy's long march from Independence Hall
through Gettysburg to the very streets of Moscow, the world knows
the simple yet profound truth: the yearning for freedom cannot be
extinguished
the struggle for inalienable rights will never
end short of victory
nothing can deny the transcendence of
democracy.
As Americans, we cannot rest until the blessings we enjoy
are shared by all. Let us fulfill our Nation's destiny by making
Mr. Lincoln's great proposition of democracy -- set forth on this
battlefield -- into a self-evident truth for every man, woman,
and child on this earth.
###
Week Ending Friday, January 27, 1989
Inaugural Address
blowing, and a world refreshed by freedom
January 20, 1989
seems reborn. For in man's heart, if not in
fact, the day of the dictator is over. The
Mr. Chief Justice, Mr. President, Vice
totalitarian era is passing, its old ideas
President Quayle, Senator Mitchell, Speaker
blown away like leaves from an ancient,
Wright, Senator Dole, Congressman Michel,
lifeless tree. A new breeze is blowing, and a
and fellow citizens, neighbors and friends:
nation refreshed by freedom stands ready
There is a man here who has earned a
to push on. There is new ground to be
lasting place in our hearts and in our histo-
broken and new action to be taken. There
ry. President Reagan, on behalf of our
are times when the future seems thick as a
nation, I thank you for the wonderful things
fog; you sit and wait, hoping the mists will
that you have done for America.
lift and reveal the right path. But this is a
I've just repeated word for word the oath
time when the future seems a door you can
taken by George Washington 200 years ago,
walk right through into a room called to-
and the Bible on which I placed my hand is
morrow.
the Bible on which he placed his. It is right
Great nations of the world are moving
that the memory of Washington be with us
toward democracy through the door to
today not only because this is our Bicenten-
freedom. Men and women of the world
nial Inauguration but because Washington
move toward free markets through the door
remains the Father of our Country. And he
to prosperity. The people of the world agi-
would, I think, be gladdened by this day;
tate for free expression and free thought
for today is the concrete expression of a
through the door to the moral and intellec-
stunning fact: our continuity these 200
tual satisfactions that only liberty allows.
years since our government began.
We know what works: Freedom works.
We meet on democracy's front porch. A
We know what's right: Freedom is right.
good place to talk as neighbors and as
We know how to secure a more just and
friends. For this is a day when our nation is
prosperous life for man on Earth: through
made whole, when our differences, for a
free markets, free speech, free elections,
moment, are suspended. And my first act as
and the exercise of free will unhampered
President is a prayer. I ask you to bow your
by the state.
heads.
For the first time in this century, for the
Heavenly Father, we bow our heads and
first time in perhaps all history, man does
thank You for Your love. Accept our thanks
not have to invent a system by which to
for the peace that yields this day and the
live. We don't have to talk late into the
shared faith that makes its continuance
night about which form of government is
likely. Make us strong to do Your work, will-
better. We don't have to wrest justice from
ing to heed and hear Your will, and write
the kings. We only have to summon it from
on our hearts these words: "Use power to
within ourselves. We must act on what we
help people." For we are given power not
know. I take as my guide the hope of a
to advance our own purposes, nor to make
saint: In crucial things, unity; in important
a great show in the world, nor a name.
things, diversity; in all things, generosity.
There is but one just use of power, and it is
America today is a proud, free nation,
to serve people. Help us remember, Lord.
decent and civil, a place we cannot help
Amen.
but love. We know in our hearts, not loudly
I come before you and assume the Presi-
and proudly but as a simple fact, that this
dency at a moment rich with promise. We
country has meaning beyond what we see,
live in a peaceful, prosperous time, but we
and that our strength is a force for good.
can make it better. For a new breeze is
But have we changed as a nation even in
99
Jan. 20 / Administration of George Bush, 1989
our time? Are we enthralled with material
decisions based on honest need and prudent
final
things, less appreciative of the nobility of
safety. And then we will do the wisest thing
natio
work and sacrifice?
of all: We will turn to the only resource we
My friends, we are not the sum of our
men
have that in times of need always grows:
old 1
possessions. They are not the measure of
the goodness and the courage of the Ameri-
our lives. In our hearts we know what mat-
Tc
can people.
frier
ters. We cannot hope only to leave our chil-
dren a bigger car, a bigger bank account.
And I am speaking of a new engagement
mea
in the lives of others, a new activism, hands-
out
We must hope to give them a sense of what
it means to be a loyal friend; a loving
on and involved, that gets the job done. We
putt
parent; a citizen who leaves his home, his
must bring in the generations, harnessing
Lea
neighborhood and town better than he
the unused talent of the elderly and the
of th
found it. And what do we want the men
unfocused energy of the young. For not
cloc.
and women who work with us to say when
only leadership is passed from generation to
fath
we're no longer there? That we were more
generation but so is stewardship. And the
ence
driven to succeed than anyone around us?
generation born after the Second World
don'
Or that we stopped to ask if a sick child had
War has come of age.
mot
gotten better and stayed a moment there to
I have spoken of a thousand points of
the
light, of all the community organizations
ble
trade a word of friendship?
No President, no government can teach
that are spread like stars throughout the
bud;
us to remember what is best in what we
Nation, doing good. We will work hand in
us n
are. But if the man you have chosen to lead
hand, encouraging, sometimes leading,
let 1
this government can help make a differ-
sometimes being led, rewarding. We will
actio
work on this in the White House, in the
The
ence; if he can celebrate the quieter,
deeper successes that are made not of gold
Cabinet agencies. I will go to the people
san.
and silk but of better hearts and finer souls;
and the programs that are the brighter
frier
if he can do these things, then he must.
points of light, and I'll ask every member of
To
America is never wholly herself unless
my government to become involved. The
mer
she is engaged in high moral principle. We
old ideas are new again because they're not
stro
as a people have such a purpose today. It is
old, they are timeless: duty, sacrifice, com-
han
to make kinder the face of the Nation and
mitment, and a patriotism that finds its ex-
and
gentler the face of the world. My friends,
pression in taking part and pitching in.
are
we have work to do. There are the home-
thei
We need a new engagement, too, be-
less, lost and roaming. There are the chil-
whc
tween the Executive and the Congress. The
dren who have nothing, no love and no
show
challenges before us will be thrashed out
normalcy. There are those who cannot free
Goo
with the House and the Senate. And we
themselves of enslavement to whatever ad-
be a
must bring the Federal budget into balance.
diction-drugs, welfare, the demoralization
G
And we must ensure that America stands
that rules the slums. There is crime to be
thei
before the world united, strong, at peace
Am
conquered, the rough crime of the streets.
and fiscally sound. But of course things may
There are young women to be helped who
be difficult. We need to compromise; we've
agre
are about to become mothers of children
We
had dissension. We need harmony; we've
they can't care for and might not love.
can
had a chorus of discordant voices.
They need our care, our guidance, and our
good
For Congress, too, has changed in our
education, though we bless them for choos-
allia
time. There has grown a certain divisive-
ing life.
stro
ness. We have seen the hard looks and
The old solution, the old way, was to
new
heard the statements in which not each
think that public money alone could end
siste
other's ideas are challenged but each
these problems. But we have learned that
prof
other's motives. And our great parties have
that is not so. And in any case, our funds
tion
too often been far apart and untrusting of
are low. We have a deficit to bring down.
hop
each other. It's been this way since Viet-
We have more will than wallet, but will is
hop
nam. That war cleaves us still. But, friends,
what we need. We will make the hard
lanc
that war began in earnest a quarter of a
choices, looking at what we have and per-
H
century ago, and surely the statue of limita-
haps allocating it differently, making our
citiz
tion has been reached. This is a fact: The
fact
100
Administration of George Bush, 1989 / Jan. 20
lent
final lesson of Vietnam is that no great
mocracy and seen their hopes fulfilled. But
hing
nation can long afford to be sundered by a
my thoughts have been turning the past
we
memory. A new breeze is blowing, and the
few days to those who would be watching
OWS:
old bipartisanship must be made new again.
at home, to an older fellow who will throw
eri-
To my friends-and, yes, I do mean
a salute by himself when the flag goes by
friends-in the loyal opposition-and, yes, I
and the woman who will tell her sons the
nent
mean loyal, I put out my hand. I am putting
words of the battle hymns. I don't mean
nds-
out my hand to you, Mr. Speaker. I am
this to be sentimental. I mean that on days
We
putting out my hand to you, Mr. Majority
like this we remember that we are all part
sing
Leader. For this is the thing: This is the age
of a continuum, inescapably connected by
the
of the offered hand. And we can't turn back
the ties that bind.
not
clocks, and I don't want to. But when our
n to
fathers were young, Mr. Speaker, our differ-
Our children are watching in schools
ences ended at the water's edge. And we
throughout our great land. And to them I
the
orld
don't wish to turn back time, but when our
say, Thank you for watching democracy's
mothers were young, Mr. Majority Leader,
big day. For democracy belongs to us all,
:s of
the Congress and the Executive were capa-
and freedom is like a beautiful kite that can
ble of working together to produce a
go higher and higher with the breeze. And
tions
budget on which this nation could live. Let
to all I say, No matter what your circum-
the
d in
us negotiate soon and hard. But in the end,
stances or where you are, you are part of
ding,
let us produce. The American people await
this day, you are part of the life of our great
action. They didn't send us here to bicker.
nation.
will
the
They ask us to rise above the merely parti-
A President is neither prince nor pope,
san. "In crucial things, unity"-and this, my
and I don't seek a window on men's souls.
ople
ghter
friends, is crucial.
In fact, I yearn for a greater tolerance, and
er of
To the world, too, we offer new engage-
easy-goingness about each other's attitudes
The
ment and a renewed vow: We will stay
and way of life.
strong to protect the peace. The offered
e not
There are few clear areas in which we as
hand is a reluctant fist, once made, strong
com-
a society must rise up united and express
and can be used with great effect. There
:S ex-
our intolerance. The most obvious now is
are today Americans who are held against
drugs. And when that first cocaine was
their will in foreign lands and Americans
be-
smuggled in on a ship, it may as well have
who are unaccounted for. Assistance can be
The
been a deadly bacteria, so much has it hurt
shown here and will be long remembered.
I out
the body, the soul of our country. And
Good will begets good will. Good faith can
d we
there is much to be done and to be said,
be a spiral that endlessly moves on.
ance.
Great nations like great men must keep
but take my word for it: This scourge will
tands
their word. When America says something,
stop.
beace
America means it, whether a treaty or an
And so, there is much to do. And tomor-
may
agreement or a vow made on marble steps.
row the work begins. And I do not mistrust
we've
We will always try to speak clearly, for
the future. I do not fear what is ahead. For
we've
candor is a compliment; but subtlety, too, is
our problems are large, but our heart is
good and has its place. While keeping our
larger. Our challenges are great, but our
1 our
alliances and friendships around the world
will is greater. And if our flaws are endless,
isive-
strong, ever strong, we will continue the
God's love is truly boundless.
and
new closeness with the Soviet Union, con-
Some see leadership as high drama and
each
sistent both with our security and with
the sound of trumpets calling, and some-
each
progress. One might say that our new rela-
times it is that. But I see history as a book
have
tionship in part reflects the triumph of
with many pages, and each day we fill a
ng of
hope and strength over experience. But
page with acts of hopefulness and meaning.
Viet-
hope is good, and so is strength and vigi-
The new breeze-blows, a page turns, the
iends,
lance.
story unfolds. And so, today a chapter
of a
Here today are tens of thousands of our
begins, a small and stately story of unity,
imita-
citizens who feel the understandable satis-
diversity, and generosity-shared, and writ-
: The
faction of those who have taken part in de-
ten, together.
101
Jan. 20 / Administration of George Bush, 1989
Thank you. God bless you. And God bless
gather together on this day in homes and
the United States of America.
Thank you
places of worship to pray in thanksgiving
you. We'll SC
for our blessings of peace, freedom, pros-
Note: The President spoke at 12:05 p.m.
perity, and Independence. Let all Ameri-
Note: The P
from a platform erected at the West Front
cans kneel humbly before our Heavenly
the Executive
of the Capitol. Immediately before the ad-
Father in search of His counsel and for His
dress, the oath of office was administered
by Chief Justice William H. Rehnquist. The
divine guidance and wisdom upon the lead-
ers of the United States of America.
address was broadcast live on radio and
television.
In Witness Whereof, I have hereunto set
my hand this twentieth day of January, in
Question-ar
the year of our Lord nineteen hundred and
Reporters
eighty-nine, and of the Independence of
January 21,
the United States of America the two hun-
Proclamation 5936-National Day of
dred and thirteenth.
The Presi
Prayer and Thanksgiving, 1989
[Helen Thon
January 20, 1989
George H.W. Bush
First Day of
By the President of the United States
[Filed with the Office of the Federal Regis-
Q. How ai
of America
ter, 12:07 p.m., January 23, 1989]
President?
The Presio
A Proclamation
in now, after
On this Bicentennial of the Presidency of
the inaugura
the United States of America, it is fitting to
Remarks to Visitors of the
mother here
recall our first President, George Washing-
White House
great joy to
ton, who believed in our country's divine
destiny. He said, "No people can be bound
January 21, 1989
last night. o
about 6 a.m.
to acknowledge and adore the invisible
The President. Good morning, everybody.
pumped a h:
hand, which conducts the affairs of men,
Thank you. Thank you all very much. Let
looking goc
more than the people of the United States."
As we celebrate this American Bicenten-
me just say that I know some of you have
you'd call a 1
nial Presidential Inaugural, we celebrate
been up all night long. And so, what we
Q. Which
The Presic
America's brotherhood-our common
want to do is not delay this but take whoev-
ideals, our common kinship, our national
er is first. And I gather that's been sorted
"Thousand
unity. We celebrate America as "one nation
out by whoever got first in line into the-
across in th
under God."
Visitors. No!
exciting ove
As I assume the office of President, I am
The President. Not quite?
the family i
humbled before God and seek His counsel
Visitors. No!
We have a lu
and favor on our land, and join with our
The President. Okay, so there's some in-
Mrs. Bush
first President who said,
it
be
justice out there. [Laughter]
The Presic
would
peculiarly improper to omit in this first offi-
Visitor. We love you, George. I love you.
Mrs. Bush
cial act, my fervent supplications to that
The President. No, but this is the people's
Q. Are yc
Almighty Being who rules over the uni-
house, and it just seemed appropriate on
you responsi
verse
that his benediction may conse-
this first day that we welcome as many as
Mrs. Bush
crate to the liberties and happiness of the
we can. I have a little hiatus in the middle
Q. What
people of the United States, a government
because I do have to go over to this build-
Mrs. Bush
instituted by themselves for these essential
ing. I'm sure most of you recognize that as
Q. What :
purposes."
the West Wing, and then the office you see
Mrs. Bush
Now, Therefore, I, George Bush, Presi-
in the corner is the President's Oval Office.
ing day of n
dent of the United States of America, by
And I have to go sign one or two things and
derful. Ever
the authority vested in me by the Constitu-
at least start to work over there, and then I
thing is so b
tion and laws of the United States, do
will come back. Barbara will be here-some
The Presi
hereby proclaim January 22, 1989, a Nation-
of our kids inside. But we just wanted to
me not to I
al Day of Prayer and Thanksgiving and call
upon the citizens of our great Nation to
wish you well and welcome you to the peo-
my knees
ple's house.
You're looki
102
Didt sent to HG
THE WHITE HOUSE
WASHINGTON
November 16, 1990
MEMORANDUM
SUBJECT:
Empowerment
"An election that is about ideas and values is also about
philosophy. And I have one. At the bright center is the
individual. And radiating out from him or her is the family, the
essential unit of closeness and of love
From the individual to the family to the community, and on
out to the town, to the church and school, and, still echoing
out, to the county, the state, the nation -- each doing what it
does well, and no more. And I believe that power must always be
kept close to the individual -- close to the hands that raise the
family and run the home
And there is another tradition. And that is the idea of
community -- a beautiful word with a big meaning. Though liberal
democrats have an odd view of it. They see "community" as a
limited cluster of interest groups, locked in odd conformity. In
this view, the country waits passive while Washington sets the
rules.
But that's not what community means -- not to me."
Vice President Bush's Acceptance Speech, August 18, 1988
The powers not delegated to the United States by the
Constitution, nor prohibited by it to the States, are reserved to
the people.
U.S. Constitution, Amendment X
We Republicans have struggled for sixty years to reconcile
our belief in the importance of self-government and liberty with
the emergence of the big-government welfare state. We have
fought government and sometimes appeased it, but never embraced
it and instilled it with our middle class sensibilities.
The President has embraced the belief that government should
help people -- the premise behind the creation of the welfare
state -- without embracing the status quo. Democrats who
interpret the President's call for a kinder and gentler nation as
a call for more of what they propose totally miss the point. The
President does not question whether government should help: it
should. Instead, the Bush Administration has focused on how
2
government should help: make it work for people. His framework
for domestic policy is fundamentally different from the old
"social engineering" paradigm still favored by liberals.
Conservative policy-makers do not ignore human nature; they
build with it, not against it. All people, rich, poor and those
in between, have certain basic yearnings and abilities. The
intensity of those yearnings varies, as does the range of ability
-- not to mention the will or the resources necessary to develop
ability. Still, there is something universal, something natural,
about the yearnings of people. Certainly, the changes sweeping
Europe, Central America and Asia all have a common thread: the
yearning, or will, to be free.
Will power is encouraged by opportunity, unleashed by
liberty and channeled by responsibility. All three --
opportunity, liberty and responsibility -- are preconditions of
self-governance. And self-governance is the key to freedom.
This has been proven again and again by the defeat of socialism
in different cultures and in both the developed and the
developing world these past few years.
The reform of domestic policy is motivated by the
observation that despite cultural differences or economic
condition, all people yearn to be free and all people achieve
more through self-governance. Government aid should provide
opportunity and encourage responsibility without limiting
liberty.
In other words, we need to give people the power to make
choices and the incentive to act responsibly. We need to
strengthen the link between effort and reward for low income
Americans; between choice and consequences. This is
empowerment.
The liberal objective is to "do what's best" for people --
and liberals think they know what is best. They want to change
society from the top down. The result is the centralized,
bureaucratic approach to helping people favored by socialists.
The President is not out to shape society from on high, but
to empower people to change their own lives. This is a dramatic
change from the philosophy that has dominated domestic policy for
sixty years. The liberals controlling Congress have passed law
after law, created program after program, so much of which
submerged the individual to the "greater good" of a new society
conceived by well-meaning, if somewhat elitist, intellectuals.
We know that the status quo created by focusing on society
instead of on the individual is a failure -- and a costly failure
3
at that. It has been costly not only in terms of wasted tax
dollars but in the wasted lives of the very people who were
supposed to benefit from the deals and great societies of the
past. Too many people are now trapped in a cycle of dependency
and despair because the liberal architects were suspicious of a
basic building block: human nature.
The result, as we see now, is government of the bureaucrats,
by the bureaucrats and for the bureaucrats. We need to reduce
the role of bureaucrats in providing aid to people. We need a
new paradigm for government to replace the bureaucratic model and
to return power to people.
The President has already started to present a new model for
government without defining it as such. Nearly all of the
President's domestic initiatives were shaped by the philosophy of
empowerment; government working for people by providing the
resources, the authority and the incentive for each individual to
govern themselves.
Enterprise zones may be the most promoted, and crime
fighting the most overlooked, examples of empowerment. Safe
streets, drug-free schools and neighborhoods reclaimed for
families are essential ingredients to opportunity and personal
empowerment. Four other Bush Administration initiatives are also
models for empowerment: Community service; child care; resident
management and ownership; and educational choice.
COMMUNITY SERVICE
"It's not simply volunteering, but the personal act of
helping another individual in need, which gives us membership in
a community. Giving and expecting nothing in return is what it
means to be a citizen. Volunteering is an act. It's an act of
heroism on a grand scale."
President Bush, April 10, 1989
"I'm not talking about another government program. Another
bureaucracy is the last thing we need. Believe me, I understand
that. [Service] is a movement, a way of looking at life."
President Bush, June 21, 1989
"We must uphold those ideals through what I call one-to-one
caring. Each of us can make a difference in the life of
4
another
the need for involvement in the lives of others is
not just a problem outside our borders: empowerment must be for
Americans, too."
President Bush, May 12, 1990
The President's community service initiative is the ultimate
empowerment program, precisely because it is expressly not a new
government program. By enlisting individuals instead of creating
bureaucracies, it offers a collection of real "micro" solutions
to the problems of our communities instead of a single "macro"
program.
By highlighting the efforts of volunteers daily, the
President is trying to make individuals aware that they have the
power to change their community -- indeed, it is a person's
responsibility as a member of the community to help others. The
President shows that individuals and groups are coming up with
solutions that work all around the country -- all without a
blueprint conceived by self-proclaimed government experts.
CHILD CARE
"George Bush designed his child care policy so that
government empowers parents instead of trying to replace them.
George Bush believes
that parents, empowered with a full
range of choice and consumer information, are the best judges and
enforcers of quality child care. Far-away regulation writers and
once-a-year inspections cannot and must not replace parental and
community responsibilities."
Invest in Our Children Fact Sheet p.6, October 1988 (Reproduced
in Leadership on the Issues, p.154-6 10/88)
"H.R. 5835 also contains child care provisions, strongly
supported by this Administration, that will enlarge the
opportunities of parents to obtain the child care they desire,
including care that is provided by sectarian institutions if the
parents so choose. The largest portion of this new child care
program will come from tax credits to people -- as requested by
the Administration. In addition, a Child Care and Development
Block Grant program includes provisions for the issuance of child
care certificates or vouchers that would enable parents to
exercise their own judgement as to what type of child care best
suits the particular needs of their own child."
Signing Statement by the President, November 5, 1990
The President's Child Care initiative is one of the first
accomplishments of an empowerment agenda. There are two truths
5
about child care. First, parents have stronger incentives than
bureaucrats to assure the well-being of their children.
Bureaucrats would inevitably exercise their power to limit the
power of parents to choose care for their children. Second, not
all parents choose the same type of care for their children --
indeed, there is no such thing as ideal care.
The liberal Democrats, on the other hand, were pressing for
a state-managed child care system, complete with licensing,
regulations and inspections. A government employee, not the
parents, would have final say over what type of care was
available and who could be subsidized. One has to wonder who the
Democrats were really hoping to help: the aid recipient or the
aid giver?
Although the liberal Democrats control Congress, the
President was eventually able to enact his approach because a
proposal that increases the power to choose is intrinsically
better than a proposal that forces people to trade choice for
aid. Not only did the Administration have a better idea, we
explained it to the American people and fought for it on Capitol
Hill. Without our active support, even good ideas will go
nowhere.
RESIDENT MANAGEMENT AND OWNERSHIP OF PUBLIC HOUSING
"George Bush believes in putting more power in the hands of
people, not government. He will help low income people meet
rents too high for them to afford, and will enable them for the
first time to own and be responsible for their own homes
In the last decade, a new and exciting form of home
ownership has been growing -- tenant control and ownership of
public housing. The results of giving tenants control have been
remarkable:
More people pay their rent;
Maintenance improves;
Operating costs decline;
Crime rates plummet;
Employment goes up;
Education receives a new boost -- more kids stay in
school and go to college where none had ever gone
6
before."
George Bush on the Homeless, Housing and Fair Housing Fact Sheet,
September 22, 1988 (Reproduced in Leadership on the Issues,
p.182-3)
Tenant management and ownership is a third example of
empowerment. It unhooks low-income families from the direct
control of the state in the most sacred sphere of individual
power and expression: the home. It returns to residents the
responsibility for the care and protection of their immediate
community and gives each person the incentive to improve their
neighborhood. It enables each resident to take a stake in
society. As a result, tenant management and ownership provides
all sorts of secondary benefits to the residents -- and to
society -- as mentioned above.
Clint Bolick of the Landmark Legal Foundation relates a
conversation he had with a public housing resident -- and former
Black Panther -- in St. Louis about our tenant power initiative.
She said "the Democrats always say they want to help us. But
when we ask for the keys to the place, they won't give them to
us. They offer us more money instead. You Republicans, you give
us the keys. I'm starting to like Republicans."
That story speaks almost as loudly as the results from the
projects that the tenants have taken over. Coopers and Lybrand
attempts to quantify the direct monetary benefit in a study of
one tenant-run project. They estimate that it saved the city
$785,000 over the first four years. If the trends continue for
the next 6 years, it could save $3.7 million more. Perhaps the
real benefit is the renewal of opportunity -- of the American
dream -- where before there was only dependence and despair.
CHOICE IN EDUCATION
"It is time for a second great wave of education reform --
not helter-skelter, not here and there, but everywhere -- in
every state, in every district, for every school and every
student in America. Those good and tested reform ideas of recent
years must become universal -- universally understood and
applied, and thus universally enjoyed by our children. Certainly
among the most promising of these ideas -- perhaps the single
most promising of these ideas -- is choice.
Choice plans that are intelligently conceived, implemented,
and monitored -- plans like magnet schools, open enrollment
programs, and other innovative mechanisms -- restore that
opportunity to our families. They give parents back their voices
and their proper determining roles -- in the makeup of children's
7
education. They give schools a chance to distinguish themselves
from one another, and a chance to compete for and earn the
loyalty of the students and families they serve. And choice
plans work."
President-Elect Bush, Remarks at White House Workshop on Choice
in Education, January 10, 1989
"In Milwaukee, Wisconsin because of a grassroots movement
made up largely of poor, inner city parents, a new experiment in
choice is applying the leverage of competition and stimulating
change. Thanks to Polly Williams, once a welfare mother of four
and now a state legislator, low-income parents can choose to send
their kids to private non-sectarian schools with money from the
public school system's budget paying $2500 in tuition for each
student. Choice empowers people. And it puts competition to
work, improving schools for every student."
President Bush, National Teacher of the Year Award Remarks, April
4, 1990
As a paradigm of empowerment, educational choice contains
all.the elements outlined earlier: enhancing the power (and the
responsibility) of parents; creating new incentives for schools
to reform themselves; and shifting resources to programs -- in
this case schools -- that work. If a child's school does not
perform, the parents can do more than try to complain to
unresponsive bureaucrats, they can act. It changes the balance
of power between parents and administrators, which may explain
why the education establishment resists choice so vigorously.
Clint Bolick, who represented Polly Williams when the
establishment, including the "civil rights" groups purporting to
represent the interests of low-income black Americans, challenged
the choice plan, tells a story of opportunity for Republicans.
Supporters mobilized several busloads of parents from the
community to come to court and watch oral arguments. After the
argument, Clint tells of getting on the bus as it erupted in
cheers for him. It is a scene reminiscent of earlier struggles
for rights spearheaded by liberal lawyers, only now it is the
conservative lawyers fighting to return power to people and it is
the liberals fighting to protect the status quo.
A REFORM AGENDA FOR THE 1990s
Nearly every one of the President's domestic initiatives
have been designed to empower people. It is an approach to
governing that has enormous appeal because, as both Ben
Wattenberg and Alan Keyes emphasized at empowerment breakfast
8
meetings, it draws on strong currents of American culture. In a
battle of values pitting the individual against the bureaucratic
state, we know which value the American people will support.
The next step is to develop a reform agenda for domestic
policy and to advance our philosophy of governing. Our approach
is different from that of the Democrats -- we need to define that
difference again and again to show how we are different. That
means going back to the drawing board, rethinking how government
should help people across the board, and building on the reforms
we have already enacted. A reform agenda involves going on the
offense with our approach by applying it to new issues.
We should not shrink from making bold proposals. Success is
not defined by what we convince a liberal Congress, hostile to
our philosophy, to enact. Success will be defined by the way
this country is governed 10 years from now. If we make the
welfare state work for people, if we decentralize power by
dismantling needless bureaucracy, if we spark a renewal of self-
governance, then we have succeeded. That will never happen under
the current control of Congress. If, instead, we are 10 years
farther down the line to socialism -- a road we know leads to
failure -- we will have lost.
Empowerment is the positive agenda that sets the stage for a
successful rerun of the Truman strategy. It will put the
Democrats in the unenviable position of defending the failed
status quo, of slapping down ideas that tap into the wellspring
of dissatisfaction with the direction of the country. The
Democrats have nothing to present to the American people that
would reform the system. They will give more, but they won't
take the keys away from their true constituency -- the
bureaucrats -- and give them to the people.
The following are some ideas we might consider as part of a
reform agenda:
o
Voucherize some federal funding for local elementary and
secondary schools (Chapter One) to support local educational
choice initiatives. This would allow parents to transfer
some federal funds to the schools they choose for their
children.
Remove disincentives to continued work by older Americans.
This could include elimination of the Social Security
earnings test and preemption of state licensing laws that
discourage second careers, such as teaching certificates.
Ban certain economic regulations and licensing requirements
that create barriers for small entrepreneurs. Examples of
9
possible targets might include: taxicab licensing, barber
and hairdresser licensing, and other similarly dubious
restrictions.
Consolidate, or "cash-out," all income support programs into
a single negative income tax program. There are possible
intermediate steps, such as allowing food stamp recipients
to use food stamps to pay the rent. The Low Income
Opportunity Board approved waivers for many similar ways to
simplify aid programs.
Enact a new flat tax, with dramatically enhanced personal
exemptions and no deductions for anything but charitable
giving (along the lines proposed by Larry Lindsey in The
Growth Experiment). This could be combined with the
replacement of Medicare and Medicaid with a health voucher
to provide and require -- universal health insurance, as
proposed by Stuart Butler (another breakfast speaker).
Propose enterprise zones including the elimination of the
capital gains tax.
Reduce the high effective marginal tax rates and eliminate
the disincentives to saving by people receiving government
aid that currently exist.
Modify unemployment insurance to allow recipients to
withdraw benefits in a single payment, empowering them to
use the funds to start their own business.
Consider supporting the establishment of community financial
institutions to make "micro" loans.
Promote voluntary recycling with market incentives as a way
individuals can help improve their own community and affect
other global problems.
Create a right of action for individuals to challenge all
economic regulation that is unnecessary, changing the
current lenient standard of review by courts. This might be
done in connection with a statutory economic bill of rights.
THE WHITE HOUSE
WASHINGTON
November 23, 1990
Mary Kate -
In case my information is false, you may have already talked
to someone about doing brief remarks for the 1990 Housing Act
Signing Ceremony. I talked to Daniel Cass this morning and he
said he would send us the H.U.D. talking points as soon as he
receives them.
The event is Wednesday, November 28th at 2:00 p.m. in the
East Room.
Nancy
many
THE WHITE HOUSE
WASHINGTON
Date:
11/24
Mary Kate Grant
TO:
FROM:
DANIEL CASSE Dac
Associate Director
Office of Cabinet Affairs
Here is a bunch of stuff on the Housing Bill:
some press clips, some material from HUD on
the President's HOPE legislation, which is
part of the housing bill, and a memo I send to
Ede a while back to push for the signing
ceremony.
The HOPE legislation, which encourages home
ownership, is seen by Kemp as a real victory even
though it was authorized but not funded.
Another point you might want to include: on the
morning of the signing ceremony the Domestic
Policy Council is meeting on the topic of
economic empowerment. Kemp has touted this housing
legislation as a model of the kind of economic
incentives and opportunities we want to create
in all areas of domestic policy. I have asked
Richard Porter, the Exec. Sec. of the DPC to
leave a draft of the discussion paper for
Wednesday's meeting in your office.
Please call me if you need any more information.
U.S. Department of Housing and Urban Development
Office of Public Affairs
T
Washington, D.C. 20410
News Release
HUD No. 90-102
FOR RELEASE:
Bill Glavin (202) / 708-0685
Monday,
Robert Nipp (202) 708-2682
October 29, 1990
NEW HOUSING LEGISLATION IS
MAJOR VICTORY FOR HOMEOWNERSHIP
Secretary of Housing and Urban Development Jack Kemp today lauded
final Congressional approval of "a bold new approach to housing
policy in the 90's," and the cooperative efforts of the House, Senate
and Bush Administration which led to its passage.
The National Affordable Housing Act authorizes key initiatives to
empower the poor through economic incentives, strengthen public
housing and low-income homeownership efforts, target assistance
directly to those in need, and increase funding for homeless
programs.
Secretary Kemp said: "This a major achievement for the Bush
Administration and a victory for low and moderate-income Americans.
As we prepare to celebrate the 25th anniversary of HUD, I especially
want to congratulate those in Congress who supported our bold new
approach to housing policy in the 90's, and not just a continuation
of the status quo."
The legislation includes two major Administration initiatives:
the HOPE Homeownership and Opportunity for People Everywhere)
proposal, and reforms to return the Federal Housing Administration
(FHA) to actuarial soundness.
-more-
2024562223 OCT 29, 1990 4:55PM #205 P.02
:01
FROM:HUD: SECRETARY'S STAFF
HUD No. 90-102
-2-
The bill authorizes the major components of HOPE, including:
- HOPE Grants to increase homeownership for low-income families
- the Shelter Plus Care program for the homeless mentally ill
and substance abusers
- Operation Bootstrap, which combines upward mobility
opportunities with housing assistance
- HOPE for Elderly Independence, which provides shelter and
services to the frail elderly
Significant reforms to the FHA Mutual Mortgage Fund, which has
been losing about $300 million a year, meet the Administration's
goals for achieving long-term actuarial soundness in the fund. The
reforms will reduce defaults, build capital for the fund, ensure that
low and middle-income homebuyers have access to FHA loans, increase
homeowner equity, and establish a risk-related premium structure.
The Administration also was able to negotiate a shift in the
emphasis of a new program, HOME, from new construction of rental
housing to tenant-based assistance and rehabilitation of existing
stock. HOME authorizes block grants to States and localities for
housing assistance that is tightly targeted to low-income people and
gives priority to tenant-based assistance and rehabilitation.
The legislation also contains a permanent strategy for low-
income housing preservation that meets the Administration's goals of
protecting low income residents and providing new opportunities for
homeownership.
The bill authorizes $27.4 billion for the Department in fiscal
1991 and would raise the 1992 level to $29.9 billion. It expands
housing assistance by $3.6 billion--27% over 1990, and fully funds
HUD's McKinney Act homeless programs.
#
#
#
OCT 29, 1990 4:55PM #205 P.03
2024562223
:01
FROM:HUD: SECRETARY'S STAFF
U.S. Department of Housing and Urban Development
Office of Public Affairs
For Departmental
Distribution Only
Secretary's News Report
MONDAY, OCTOBER 29, 1990
THE WASHINGTON POST
SUNDAY, OCTOBER 28, 1990
$57.4 Billion
Although the legislation repre-
To protect the FHA's dwindling
sents a consensus that the federal
mortgage-insurance fund, which has
government went too far during
been hurt by a rising default rate,
Housing Bill
the Reagan years in abandoning its
the legislation reduces the amount
support for public housing, the
of closing costs that homeowners
funding commitment contained in
may finance with FHA assistance.
Sent to Bush
the bill must still be backed up by
That provision is expected to cost
annual appropriations starting next
the average buyer of a $65,000
house another $833.
year.
Measure Envisions
Congressional advocates of a
In addition, the legislation re-
stronger federal role in housing and
quires that home buyers using FHA
community development hailed the
mortgage assistance pay a risk-
Larger Federal Role
legislation as a new beginning.
based premium of 0.5 percent of
The legislation "represents a ma-
their loan balance each year, al-
jor redirection in federal housing
though those making higher down
By Tom Kenworthy
policy to meet the basic needs of
payments would pay the premium
Washington Post Staff Writer
housing for low-income persons,"
for a shorter period.
Congress reversed a decade-long
said Rep. Chalmers P. Wylie (Ohio),
Overall, the measure is expected
erosion of the federal government's
the ranking Republican on the
to be a boon to state and local gov-
commitment to public housing pro-
House Banking, Finance and Urban
ernments. Cities and states will
grams by giving final approval yes-
Affairs Committee.
benefit over two years from a $3.1
terday to a two-year $57.4 billion
The bill authorizes about $35 bil-
billion trust fund and that could give
housing bill.
them flexibility in meeting their
lion over two years for existing ur-
The Senate voted 93 to 6 to
needs for low-income housing.
ban housing programs, including
adopt the compromise measure and
those covering low-income rental
Under that program, local and
send it to President Bush for his ex-
assistance, and elderly and handi-
state governments may use a line of
pected signature.
credit provided by HUD on a range
capped facilities. In an important
The bill is an amalgam that re-
of housing projects from housing re-
change of policy, the legislation re-
plenishes many existing housing as-
habilitation and new construction to
sumes federal support for the con-
sistance programs. It includes some
struction of public housing.
tenant acquisition of public units.
of Housing and Urban Development
New programs include a number
Secretary Jack Kemp's new propos-
of Kemp's proposals that would be-
als to spur tenant aquisition of hous-
gin to allow public housing tenants
ing units and measures to shore up
to buy their units. It also authorizes
the financially ailing Federal Hous-
more than $770 million for a new
ing Administration, which provides
National Homeownership Trust
mortgage-loan insurance to single-
fund to help first-time home buyers
family home buyers.
who meet certain income criteria
with financing or down payments on
housing purchases.
SATURDAY, OCTOBER 27, 1990
THE WASHINGTON POST
FHA Reform Package
only until they have had some time
to save enough for the increased
cash closing costs.
Home buyers of moderate means
may eventually find some relief in a
To Restrict Buyers
plan contained in the bill to establish
a National Housing Trust Fund that
will subsidize interest rates down to
6 percent or provide down-payment
Rules to Require Paying More Closing Costs
assistance. Eligibility is limited to
borrowers who fail to qualify for a
market-rate mortgage on the basis
By H. Jane Lehman
the full amount of the closing costs
of income. The household's income
Special to The Washington Post
into the loan amount.
also cannot exceed 115 percent of a
Under the new plan, the closing
The imminent passage of a federal
costs on a $125,000 home financed
high-cost area's median income,
housing bill will put a popular gov-
which in the Washington market
with a minimum $5,875 down pay-
ernment-backed mortgage program
ment would require the borrower to
would put the limit at $54,477.
beyond the reach of many first-time
The borrower must make a 1 per-
pay $1,612 more at closing. When
buyers, but will provide a new as-
the changes are fully implemented,
cent down payment and agree to re-
sortment of home financing breaks.
the upfront premium would drop by
pay the assistance when the house is
One of the more disputed provi-
eventually sold. Although the pro-
sions of the bill raises the insurance
$1,938, but the borrower must pay
gram is limited to first-time buyers,
premium for Federal Housing Ad-
an annual premium of $684 for the
the new law also includes displaced
ministration-insured mortgages,
30-year life of the loan.
nearly doubling the fee for the riski-
The FHA program, which last
homemakers.
est buyers who make the lowest
year accounted for about one in sev-
Congress is unlikely to authorize
down payments.
en mortgage originations nation-
major funding for the trust until fis-
At the same time, the upfront
wide, insures mortgages of up to
cal 1992. The bill authorizes $520
costs of securing an FHA mortgage
$124,875 for single-family homes
million for the program at that time.
will increase to discourage future
and condominiums.
Rep. Henry B. Gonzalez (D-Tex.),
defaults because borrowers will have
The new law also would perma-
the author of the trust plan, charac-
a larger cash stake in their proper-
nently extend the $124,875 FHA
terized the effort as a "beginning" to
ties.
loan limit. The ceiling was last raised
help first-time buyers who have
The FHA changes would go into
12 months ago from $101,250.
effect 90 days after President Bush
Many home buyers prefer the
been "shut out [of federal housing
signs the law, which he is expected
FHA program to privately insured
to do. That would make the likely
assistance] for five to six years in a
row."
implementation date sometime in
February.
The reforms were prompted by
The reforms were
Older homeowners stand to bene-
fit from a change that expands a re-
recent losses of $350 million a year
in the FHA loan fund, said John C.
prompted by recent.
verse mortgage demonstration pro-
gram starting next year. The new
Weicher, a Department of Housing
losses of $350
law would enable 25,000 homeown-
and Urban Development assistant
ers 62 or older to cash out the equi-
secretary. The anticipated accumu-
million a year in the
ty built up in their homes on either
lation of reserves under the new
an installment basis or collect it as a
scheme should also offset higher
FHA loan fund.
lump sum. Repayment is generally
borrower defaults, he added.
not due as long as the borrower lives
The new FHA insurance plan ef-
in the home without selling it.
fectively raises the overall premium
mortgage programs because FHA
borrower-approval standards are
The new law also gives some new
from 3.8 percent of the loan amount
ammunition to homeowners when
to 5.5 percent to 7.25 percent, de-
more lenient and the down-payment
pending upon the down payment in-
requirements are not as stringent.
The changes, however, will pre-
their mortgage is sold to another
volved, Weicher said.
vent thousands of borrowers who to-
lender. Under the plan, lenders will
Although the new law will lower
the upfront insurance premium to
day could take advantage of the pro-
face stiff financial penalties for fail-
gram from doing so. On the high
ing to give borrowers 15-day ad-
2.25 percent of the loan amount
from 3.8 percent, when the changes
side, the Mortgage Bankers Associa-
vance warning that their mortgage
tion of America cálculates the revi-
is changing hands.
are fully phased in after five years, it
saddles borrowers with annual re-
sions will lock out 100,000 to
The old and new lenders must
newal premiums they currently do
250,000 borrowers annually. Na-
provide toll-free telephone numbers
not have to pay.
tional groups representing home
and name the appropriate person to
The FHA reforms would also re-
builders and real estate brokers pro-
handle borrower inquiries or com-
quire borrowers to pay in cash 43
ject 60,000 will lose out.
plaints.
percent of loan costs that would cov-
HUD puts the best face on the
If a borrower sends a mortgage
er such settlement services as the
changes. Weicher said he believes
payment on time but to the wrong
appraisal, title insurance and deed
20,000 potential FHA buyers will be
lender, the plan requires the waiver
registration. Borrowers now can roll
excluded from the loan program and
of any late fees for 60 days following
3
the loan transfer.
CONTINUE
CONTINUED
Lender penalties include actual
Sunday, Oct. 28, 1990
The Philadelphia Inquirer
damages and, where there is a pat-
tern of practice of noncompliance,
punitive damages of up to $1,000
Housing-aid measure
per individual homeowner. Class ac-
tion suits can drive the fines up to
$500,000 or 1 percent of the lend-
er's net worth, whichever is less.
sent to the President
Michelle Meier, government af-
fairs counsel for Consumers Union,
said the consumer protections incor-
By-David Hess
dling housing contracts.
porated in the new mortgage trans-
Inquirer Washington Bureau
The complex bill includes:
fer standards suffer from the failure
WASHINGTON - Congress yester-
$3.1 billion in block grants to state
to require lenders to inform home-
daysent to the President the first
and local governments for seed
money for new affordable housing
owners of those new rights.
overhaul of U.S. housing policy in
more than a decade, paving. the way
programs - ranging from construc-
In other FHA program-related
for a wide array of programs to help
tion to rehabilitation of aging struc-
low. and moderate-families obtain
tures to rent subsidies.
changes, the law also narrows what
decent homes.
$772 million to help first-time buy-
some consumer advocates claim are
The Senate vote was 93-6. It passed
ers finance their homes. The money
pricing practices that discriminate
the House on Wednesday.
could be used to help defray costs of
against borrowers who take out
With bipartisan backing and the
down payments and to pay mortgage
small FHA mortgages of about
endorsement of the Bush administra-
interest costs in excess of 6 percent.
$50,000 or less.
fiom, the bill authorizes fresh money
$1 billion to help low-income ten-
The lawmakers agreed that a
for construction of low-income hous-
ants buy houses or apartments
ing and opens opportunities for pub-
owned by public housing agencies or
lender cannot impose more than a
lic thousing tenants to buy homes or
housing made available by the Reso-
two-percentage-point variation in
apartments with federal aid.
lution Trust Corp., which takes over
the amounts charged for lending
Htalso shores up the finances of the
foreclosed units from bankrupt sav-
fees for varying-sized loans.
Federal Housing Administration's
ings and loan associations.
The new housing bill also contains
home-loan insurance fund. And it
$327 million to help public housing
some potentially good news for
minimizes chances that 350,000 low-
authorities rid their projects of drug
homeowners who need financing for
income tenants will be evicted by
dealers and criminals.
landlords who might otherwise
$1.7 billion for rental aid, loans
remodeling projects. It tentatively
switch their units to condos or high-
and seed money to expand low-cost
raises the Title 1 home improve-
rent apartments.
housing for the elderly, along with
The bill authorizes about $57.4 bil-
$517 million for the handicapped.
ment loan limits from $17,000 to
Ilion over two years, including nearly
$4.3 billion for direct and guaran-
$25,000. The increase, though, is
-$8 billion in renewed rental subsi-
teed home loans for rural families,
not scheduled to go into effect until
:dies for low-income families.
along with $1 billion for rental assist-
June, and then only if a report gives
The chief Senate sponsor, Alan
ance in rural areas.
that insurance fund a clean bill of
Cranston (D., Calif.), said, "The fed-
$6.4 billion in Community Develop-
health.
eral government, at long last, is fac-
ment Block Grants, with the require-
Vacation home buyers, under the
ing up. to its responsibility to make
ment that 70 percent of the money be
decent homes affordable for all
spent for projects that directly bene-
new law, can no longer turn to FHA
Americans, the poor included."
fit low- and moderate-income fam-
for financing.
Rep. Henry B. Gonzalez (D., Texas),
ilies. Current law requires that only
HUD championed the change both
chairman of the House Banking, Fi-
60 percent be used for that purpose.
to stem losses in the FHA program
nance and Urban Affairs Committee,
$1.1 billion to provide shelter for
and on the philosophical grounds
said the bill was made possible by "a
the homeless, for people suffering
that the program is "more appropri-
housing secretary and a President
from chronic drug or alcohol abuse
who. sympathetic to housing
or for AIDS victims.
ately targeted" to first-time, lower-
needs." That was veiled criticism of
Under the FHA reform, home buy-
income buyers than vacation home-
the n administration, during
ers would have to put up more
owners, Weicher said.
which deep cuts in spending para-
money at the outset to obtain insured
lyzed housing programs and
mortgages. On a $65,000 mortgage,
prompted widespread fraud and in-
for example, the additional cost
fluence-posidling to obtain dwin-
would be $833.
4
10/16/90
TALKING POINTS ON THE HOUSING BILL
The housing bill, agreed to last night by House and Senate
Banking committee conferees, is a far-reaching, even landmark
milestone in housing and urban development for the nineties. It
offers the first major new housing programs in twenty years and
completely overhauls how our national -- in partnership with
states and non-profits -- will dramatically expand affordable
housing and homeownership in the decades ahead.
Based upon final conferee discussions, here are some
indicators of what it means for Americans:
--
expands authorized housing assistance by $3.6 billion in
1991 a 27% increase in authorized funds over 1990 (excludes
a $6.7 billion increase for Section 8 contract renewals).
The 1991 authorization level is $24.8 billion for HUD
programs, growing to $26.6 billion for 1992 -- a two-year
increase of 45% over 1990 levels. (See Attachment.) ;
increases number of low income people helped by over 220,000
per year, including increases for vouchers/certificates of
nearly 75,000 per year;
--
authorizes CDBG at $3.1 billion;
expands public housing modernization funds to $2.15 billion;
--
authorizes public housing operating subsidies at $2 billion;
I
authorizes public housing drug elimination grants to $160
million, including $10 million for Youth Sports Programs, a
63% increase over 1990;
contains two-year authorization of Administration's HOPE
initiative at $1.0 billion in matching funds ($155 million,
1991; $855 million, 1992). Homeownership opportunities
created in public housing, HUD assisted housing, and vacant,
foreclosed, FHA, RTC property;
contains the first prepayment/preservation strategy ever to
help preserve low income properties that are in danger of
leaving the inventory. The new strategy balances the
property rights of owners with our demand that poor people
not be hurt. It offers the Administration's monetized 10-
year voucher to give low income resident groups and non-
profits the opportunity to buy these projects (issue still
pending; funding is $20 billion above Administration's
request over 20 years because it oversubsidizes owners);
OCT 17, 1990 5:55PM #173 P.05
2024562223
:01
FROM:HUD: SECRETARY'S STAFF
authorizes the Administration's Shelter-Plus-Care program at
$382 million over two years, a comprehensive homeless
program that combines housing assistance with necessary
support services to help the homeless achieve a dignified
and independent life. This is the first new homeless
program to serve this tremendously underserved population of
mentally-ill and drug-abuser homeless, which makes up over
50% of all homeless;
contains HOPE for elderly independence to link housing
vouchers with supportive services to help keep the frail
elderly in their own homes and not become prematurely
institutionalized;
contains Operation Bootstrap that links housing with job
training, and transportation to jobs. For the first time,
Bootstrap makes housing assistance contingent on low income
people moving to self-sufficiency;
offers a $1 billion HOP/HOME block grant in 1991, growing to
$2 billion in 1992, which -- because of Administration's
insistence -- is tightly targeted to the poor and
incentivized for the most cost-effective means of meeting
housing need, including full eligibility for vouchers and
tenant based assistance;
:
priority given to light rehab and tenant based assistance at
a 4:1 match, substantial rehab at 3:1, and new construction
at 2:1. Because twice as many people can be helped with
vouchers as with new construction using the same funds, the
differential match is a real victory for a rationale and
cost effective national housing policy; and,
--
reforms FHA along the lines recommended by the
Administration, balancing the social purpose to help first
time homebuyers with a common sense goal of restoring
actuarial soundness with prudent capital requirements.
OCT 17, 1990 5:55PM #173 P.06
2024562223
:01
FROM:HUD: SECRETARY'S STAFF
THE WHITE HOUSE
WASHINGTON
October 31, 1990
MEMORANDUM FOR EDE HOLIDAY
FROM:
DANIEL CASSE Dae
SUBJECT:
Signing Ceremony for the Housing Bill
As you know, Secretary Kemp has proposed a White House signing
ceremony for the National Affordable Housing Act -- the major
housing bill that has been passed by Congress. Kemp regards the
bill as a legislative victory for the Administration that
symbolizes many of the domestic policy themes the President has
been advancing. Highlights of the bill include:
The President's HOPE proposal that increases homeownership
for low-income families by allowing public housing tenants
to buy their own units
Operation Bootstrap, which links housing to job training and
transportation to employment. This program creates
incentives for the poor to prosper by making housing
assistance contingent on taking steps toward self-
sufficiency.
HOME block grants to states and localities that are tightly
targeted on low-income people. These grants keep federal
assistance focused on those who truly need it.
Reform of the Federal Housing Administration (FHA). The FHA
Mortgage Fund, which was losing about $300 million a year,
was a symbol of unchecked federal policy. The new
legislation meets the Administration's goals of reducing
defaults, increasing capital and restoring fiscal soundness.
The Administration's Shelter-Plus-Care program, which links
housing assistance with services to the mentally ill and
drug addicted homeless population.
The proposed day for the signing, November 15, is also the day
scheduled for the first meeting of the DPC Economic Empowerment
Task Force chaired by Kemp. All the themes to be promoted by the
Task Force -- empowerment, self-sufficiency, programs focused on
the truly needy, effective and compassionate policy, accountable
management -- can be found in this legislation. In the months
ahead, the strongest parts of the housing legislation will serve
as a model for ideas and programs in other domestic policy areas.
Old fact check copy
Grant
November 25, 1990
3 p.m.
A:HUDBILL
PRESIDENTIAL REMARKS: NATIONAL AFFORDABLE HOUSING ACT
BILL SIGNING CEREMONY
THE EAST ROOM
WEDNESDAY, NOVEMBER 28, 1990
2:00 P.M.
(
(Acknowledgements)
)
midgline
not 1865 Apportattox until
Let me begin today with a story, a bit of a history lesson.
It was 1862: the American Civil War was over, the cruelest
What Fabout
barricade ever to human freedom was demolished for good. On
1605 theists wasn't the
20 of that year, [here, at the White House] one of my noblest
predecessors, Abraham Lincoln, sat down with pen in hand, and
signed into law the Homestead Act of 1862. That bill gave 160
acres to any poor family who wanted to make a go of it in the
wilderness, and live the American Dream themselves.
industrialization
It was one of the most celebrated proposals in American
era
it
more.
history -- caused the great land rush to the Wild West -- and it
formed the vision for a new homesteading program in urban America
today. Because Abraham Lincoln's Homestead Act empowered people.
It freed the poor from the burden of poverty and
many went
dependency Likewise, today, creating the opportunity
farming.
income Americans to become property owners is the key to fighting
poverty and making democracy truly work.
lak
I've said before that the cornerstone of this
mentoos. m
Administration's domestic agenda is this idea of empowerment
:
all people
giving people -- working people, poor people, everyone -- control
X
over their own lives, so that all Americans can have a life of
2
dignity, responsibility and economic opportunity. Our
initiatives are designed to give people the power to make choices
and the incentive to act responsibly. The status quo of
centralized bureaucracy is not working for the people -- the ones
who need affordable housing, the ones who want the power to
choose the best schools for their kids, the ones who want to pull
themselves out of dependence and into a life of self-sufficiency
in a safe, clean community -- but it is working for the
bureaucrats, and very well. And so our goal is to build a system
that puts power in the hands of people, not bureaucrats. Because
it is the people who know what is best for themselves and their
families, not the government.
That's exactly what this bill does. In the same spirit of
Abraham Lincoln's legislation, the Affordable Housing Act of 1990
X
empowers people. It is truly a victory for low and moderate
income Americans -- because it reforms the status quo, and makes
the government work for people, not against them.
First of all, it a major Administration initiative:
Homeownership and Opportunity for People Everywhere -- the HOPE
Daniel Huprelease Cabnet casse, Dir. Affairs
Initiative. HOPE will provide new opportunities for low-income
families to buy their own homes -- "urban homesteaders, " if you
will -- and helps the residents of public housing to buy their
own units. Tenant ownership of public housing is an idea whose
time has come. Let me tell you why:
X
impoverment memo
When these new homeowners are in charge, the results are
remarkable -- more people pay their rent, maintenance improves,
3
X.
X
X
X
X
X
X
X
X
operating costs decline, crime rates plummet, employment goes up,
X X X X X X X X X
more kids stay in school and neighborhoods come back to life.
And the reasón? Because each resident now XXX has an equity stake in
+
X
X
X.X
eveny
sociéty -- a chance to X make a go of it - -- to XX live the American X
Dream themselves.
We want public housing to become a springboard for
independence, not a bottomless pit of dependency. HUD used to
give awards for public housing residents who stayed in public
housing the longest. They stopped doing that. Now -- and even
moreso with this bill -- we're offering incentives to public
housing tenants who move out -- and move up -- into the
productive economic mainstream.
But there's more. This bill contains HOME Investment
Partnerships, to assist people who currently rent and those who
want to rehabilitate existing rural housing -- because affordable
housing is in everybody's interest. The National Homeownership
Trust would provide low-cost financing for people who are buying
a home for the first time who would not otherwise qualify for
financing because of their low income. And in addition to
housing assistance to migrant farm workers, the elderly and the
disabled, this legislation also creates the Shelter Plus Care
Program -- to assist homeless persons who are mentally ill, who
have a drug abuse problem, or who have AIDS. And finally, it
reforms certain programs in the Federál Housing Administration to to
make it more financially sound.
4
The Fair Housing Act gives people the best kind of
government assistance: it provides opportunity and encourages
responsibility -- without limiting liberty. That's the American
Dream -- for no matter where people live or how much money they
have, all men yearn to be free, to control their own lives.
Abraham Lincoln knew this, and his vision lives on today as the
foundation for our efforts to empower all Americans.
On my first day in office, I said to the nation: "We know
what X works: Freedom works. We know what's right: Freedom is
forman
right. We know how to secure a more just and properous life on
X
X
Earth: through free markéts, free speech, free elections, and the
exercise of free will unhampered by the state."
1989
So much has happened since that cold day in January in 1988,
when the fires of freedom first began to spread so quickly across
the globe. From Moscow to Managua, from Prague to Pretoria, and
even in the nations of South America I'll visit next week -- the
light of liberty is guiding people toward democracy, prosperity
and a better life for themselves and their children. Free
markets, free speech, free elections and free will truly are
working.
itis
And so with that in mind -- the undying ideal of freedom and
opportunity for all -- that I am pleased to sign this bill into
law. Thank each and every one of you for joining us today, and
God bless the United States of America.
# # #
Bell South
463-4100