By John F. Di Leo -
Reflections on the release of the HUD watchdog's report on wasteful public housing assistance...
The watchdog for the Department of Housing and Urban Development released a report.
Some 25,000 families, only about 3% of the system, depending on how you look at it, receive federal housing assistance despite having earnings well above the income limits required to qualify for such subsidies.
Major publications on both sides of the argument – such as the Daily Caller on the right and the Washington Post on the left – immediately seized on the issue and rightly blasted it. How dare the government provide welfare state programs to people who don’t qualify for them? It’s outrageous!
From the left’s perspective: this displaces housing dollars that should have gone to needy people on wait-lists. From the right’s perspective: this wastes tax dollars that were therefore wrongly confiscated from taxpayers.
One Story, Two Viewpoints
The right has always fought waste and abuse in government spending. If we’re going to confiscate money from hard working citizens, the theory goes, we must make sure to make the most of every such dollar. We must diligently target the recipients so that only the neediest get assistance, minimizing the loss of funds along the way as they meander through the Washington DC path. By the time money goes from the taxpayers’ pocket to the IRS to the treasury vault to Congressional disbursement to the department in question to the agency at hand to the agency’s program to the final recipient… the money has usually shrunken considerably, from a waterfall to a drip. The right is wise to assault any waste and abuse along the way.
The left fights it for a different reason. The left doesn’t mind the loss of funds along the way, because the left favors government bureaucracies; they employ government bureaucrats, the temple acolytes of the modern church of liberalism. But the left wants to help as many recipients as possible too, so when money goes to the wrong recipients, the left knows this not only keeps it from helping some of those they intended to help, it also diminishes public support for the welfare state in general. And they can’t stand for that.
A rather significant difference, but not an unusual one in Washington. Always watch it when you agree with someone on a policy; people often do hold the same position for very different reasons (remember this when listening to political candidates, in particular!).
Learning About Our Government
The American public has always assumed certain things about the Welfare State, among them, the fact that it rewards people for staying poor, because you are “punished” (by removal of benefits) when you start doing better. If an unemployed person gets free food, but an employed person has to buy food himself, the theory goes, why get a job? This is a logical indictment of the Welfare State in general.
Well, this news story revealed that not all programs do work that way. Some of these housing deals only vet the recipient at application time. If you qualify on Tuesday and move in on Wednesday, they won’t toss you out when you get a job on Thursday. For some of these federal programs, they’ll never check you again, as long as you remain a good tenant.
As a result, the watchdog report revealed, there are tens of thousands of people in subsidized housing who earn hundreds of thousands of dollars a year. And they stay there, for years and years. They may not be millionaires (yet), but they clearly don’t need housing subsidies.
For most Americans, housing is our number one expense, at least until we pay for college. It costs more than our cars, more than our groceries, more than our entertainment budgets. Our rent, mortgage, and property taxes are the difference between just getting by and getting ahead.
So it is that, in the wake of this report’s release, right and left alike are horrified, and are calling for reform.
Can It Be Done?
The first question to be asked, in any political discussion, should be “Is it Constitutional?” That’s an easy one here. Since federal housing support is plainly unconstitutional, anything we do to make it less wasteful is naturally going to be Constitutional. So we move on to question number two: “Can it be done?”
On this one, the answer wasn’t easy at first. Since the dawn of the Welfare State during the Great Depression of the 1930s, we didn’t see a serious effort to clean it up for over forty years.
But then Governor Ronald Reagan was elected in 1980, with a serious commitment to trim the damage being done by the federal government’s many, many, many programs. Reagan had served as the two-term governor of the nation’s largest state (at the time, in fact, California’s economy was so big, if it had been an independent nation, it would have been the seventh ranking economic power in the world)… so he knew how government worked.
President Reagan was therefore ready to apply both his gubernatorial experience and his academic training (many have forgotten that as a college student in Illinois in the 1930s, Reagan trained as an economist, back in the days before Keynesianism took over academia).
He appointed a commission, headed by J. Peter Grace, which naturally came to be called the Grace Commission. Their report, published in 1984, was one of the blueprints that the Reagan administration used to reform the federal bureaucracy.
Sadly, not much of it was acted on. Congress blocked many of the proposed reforms, and some even in the Reagan administration itself didn’t prioritize or fully agree with. But some of it DID receive action, through the focus of Reagan appointees at the top.
The nation was stuck with the free-spending leftist House of Representatives ruled by Tip O’Neill in those days. With a Republican Congress, which would have enacted the Grace Commission reforms, we would have saved over a hundred billion dollars per year, which in those days, would have not only likely eliminated deficits but also begun to reduce the national debt.
Now that we have a Republican Congress to pass such a program, we just need a conservative Republican president to propose it.
So, yes, it can be done. The research has proven that massive savings can be accomplished by taking a judicious scalpel to government spending. In today’s environment, if it’s promoted correctly, virtually all political sides should be for it.
We need a new Grace Commission. And therefore, we need a new President to commission one.
Missing the Forest for the Trees
But all of this discussion – valuable though it is, in a small way – is, as the old cliché goes, missing the forest for the trees. We’re looking at a story about 100% of a housing subsidy system, and we’re focusing on 3% of it.
Why aren’t we focusing on the other 97%?
One of the talented conservative guru Newt Gingrich’s most important recurring themes is this one (others have addressed it; but he deserves credit for its broad dissemination):
The left judges success by how many people have been added to the programs of the welfare state; the right judges success by how many people have been freed from their dependency on such programs.
We make this very mistake by concentrating on the three percent of beneficiaries who remain on the program when they no longer need it, rather than asking ourselves the question “Why on earth do the other 97% of those millions of people need housing subsidies, particularly for years and years (many, for their entire lives)? And why on earth is there a waiting list for such services? Why does ANYONE need housing assistance in the United States of America today?”
The Real Lesson of the Story
This news story – valid though it is on its own – really ought to be a reminder of the bigger picture: the fact that there are millions of people in modern America who still struggle to pay for housing. The political class needs to focus on that need, and target it for reform.
The left’s solution is always to throw money at problems (other people’s money, that is). Offer a housing subsidy. Build free government apartments. Subsidize their loans. Limit their mortgage interest by law. There is never a shortage of leftist ideas for government’s gradual transformation into a cornucopia.
But as always, the right’s solution is the correct one. Find out why people can’t afford housing (or anything else, for that matter), and remove the impediments that block their way from affording it on their own.
Two hundred and twenty-five years after the dawn of this great nation, a nation specifically designed to promote a fair shot at prosperity for all, there is no excuse for the continued struggle of so many. There is no excuse for ninety-three million people being outside the workforce. No excuse for the massive migration of employers to foreign shores. No excuse for the plummeting statistics in new business starts, the abandonment of our cities, the skyrocketing vacancy rates in office buildings and industrial parks.
As employers become an endangered species, employment must plummet with it. Our nation has been bleeding jobs for nearly a decade, ever since Nancy Pelosi took over the House of Representatives in the election of 2006, and the bloodflow turned to a gusher when Barack Obama took the presidency in 2008.
Government policies don’t make people rich, but government policies can indeed make them poor. Bad government policies have crushed our manufacturing base, discouraged entrepreneurship, and driven good factories abroad. Good government policies, however, can undo the damage.
What We Need Now:
The right Congress and Judiciary – with the right President to use the Oval Office as a bully pulpit – can repeal the crippling programs and replace them with free market solutions.
We can overturn Obamacare and the Community Reinvestment Act; we can start issuing drilling permits again and let the coal, oil and gas industries succeed again. We can remove the illogical impediments that the EPA, F&W, and FDA place in the way of innovation and expansion. We can reform the labor law excesses that empower unions to destroy their employers, and lock up the criminal gangs that terrorize our cities, driving employment away from where the people are.
And we can reform the tax code, which currently punishes employers with the highest effective corporate tax rate on earth, encouraging multinational companies to move production to their foreign plants. We could lower our corporate income tax rates to the low teens – say, eleven or twelve percent – so that those same multinationals will stop moving production abroad, and can even start moving production back here again!
It’s not hard, but it has to be done. And it takes the right President – an economically conservative President, not a crony-capitalist or socialist or Keynesian – to make it happen.
This is the true value of the HUD watchdog’s report. It’s not about the three percent that can be counted as waste; it’s about the 97% of HUD beneficiaries who need to be freed of the golden handcuffs of the Welfare State.
And it’s about rebuilding an economy in which more and more people have a path to individual prosperity and economic independence. An American shouldn’t have to put his hand out for aid, from the government or from private charities. An American should be able to look for a job and get one.
There’s a reason, after all, that federal housing assistance isn’t addressed in the Constitution of the United States: If we obeyed the Constitution – unleashing the limitless potential of limited government, as our Framers intended – the level of prosperity across this golden nation would eliminate any need for housing assistance.
Copyright 2015 John F. Di Leo
John F. Di Leo is a Chicago-based Customs broker and international trade compliance trainer. An active movement conservative during the Reagan era, he testified before the Department of the Treasury on matters of tax reform, and before the Department of Energy on matters of wasteful spending, on behalf of such organizations as the Illinois Small Business Men’s Association and Young Americans for Freedom.
Permission is hereby granted to forward freely, provided it is uncut and the IR URL and byline are included. Follow John F. Di Leo on Facebook or LinkedIn, or on Twitter at @johnfdileo or on his own site at www.JohnFDiLeo.com.