Tag: housing and urban development

HUD ‘Failing the Taxpayers’

That’s what the Department of Housing and Urban Development’s recently retired inspector general had to say in response to rampant malfeasance and mismanagement at public housing authorities uncovered by a joint investigation by ABC News and The Center for Public Integrity.

From the report:

The problems are widespread, from an executive in New Orleans convicted of embezzling more than $900,000 in housing money around the time he bought a lavish Florida mansion to federal funds wrongly being spent to provide housing for sex offenders or to pay vouchers to residents long since dead.

Despite red flags from its own internal watchdog, HUD has continued to plow fresh federal dollars into these troubled agencies, including $218 million in stimulus funds since 2009, the joint investigation found.

The report singles out Philadelphia’s public housing authority, which HUD reportedly considers to be a “model agency.” The Philadelphia Housing Authority’s outgoing executive director, who was paid $300,000 a year, had “spent lavishly on parties that included belly dancers, and had used more than $500,000 in housing authority funds to secretly settle claims accusing him of inappropriate sexual advances with female employees.”

Here’s the former director of the “model agency” channeling his inner Charlie Sheen on the taxpayer’s dime:

Sen. Charles Grassley (R-IA) doesn’t understand how HUD could have missed the problems:

“We expect that the agency in Washington, D.C. ought to be making sure that every taxpayer dollar is spent in a responsible way. And it seems to me that we have not had that proper oversight,” Grassley said.

Really, Senator? As a Cato essay on HUD scandals illustrates, the agency has been plagued by mismanagement and corruption since its inception. HUD has never made sure every taxpayer dollar was “spent in a responsible way.” And it never will for the simple fact that a government agency has little incentive to ensure that money coerced from taxpayers isn’t wasted. In contrast, a private charity with a record like HUD would see its voluntary donations dry up.

See this Cato for more on public housing subsidies and why they should be abolished.

Sen. Rand Paul Proposes Serious Cuts

Freshman Sen. Rand Paul (R-KY) has raised the bar in Washington by releasing a bill that would make substantial, specific, and immediate cuts in federal spending. While policymakers on both sides of the aisle have largely paid lip service to stopping Washington’s record run of fiscal profligacy, Paul’s proposal makes good on his campaign promise to seriously tackle the federal government’s bloated budget.

Paul’s bill would target $500 billion in cuts for fiscal 2011 alone. While audacious by Washington standards, cutting federal spending by that amount would still leave us with a projected $1 trillion deficit this year. Nonetheless, the federal government’s scope would be dramatically curtailed, which would pay dividends in coming years as the economy is unshackled from numerous failed federal interventions.

A description of Paul’s proposed cuts can be viewed here, but some of the bolder ideas merit a comment or two.

First, Paul would eliminate most Department of Education spending, with the exception of higher education subsidies. He correctly notes that the federal government’s increased involvement in education has been “detrimental” and that “the mere existence of the Department of Education is an overreach of power by the federal government.”

Second, the Department of Energy, which is becoming a chief source of corporate welfare, would be zeroed out. Paul would eliminate subsidies for all energy industries – from fossil fuels to so-called “green” energies. He notes that the government’s interference in energy development should be ended and the free market allowed to “start taking the reins.”

Third, the Department of Housing and Urban Development – one of most visible examples of government failure – would be eliminated. Among the HUD programs that Paul singles out, it is his criticism of housing vouchers that deserves the most applause as they remain popular in some Republican and conservative quarters.

Paul deserves credit for proposing cuts at the Department of Defense, although the savings would be relatively small. However, his proposal would cut the Department of Homeland Security almost in half, and would zero out billions of dollars in foreign aid. The latter is well-timed given the situation in Egypt, a major recipient of U.S. foreign aid dollars.

Finally, Paul would chop a quarter of the Department of Health and Human Service’s budget, although he doesn’t take on Medicare or Medicaid. He is reportedly at work on separate legislation that would address Medicare and Social Security. Because Paul’s proposal is focused on immediate cuts, his decision to tackle the big mandatory spending programs separately shouldn’t be viewed as a cop out.

Thus far, the spending cut bar in Washington has been set pretty low. Policymakers from both parties and varying ideological backgrounds have been timid in spelling out precisely what they would cut. By getting specific, Paul has raised the bar, which will hopefully put pressure on others – in particular, the congressional Republican leadership – to move beyond a vague, myopic fixation on nondefense discretionary spending.