House plans

In November, the J. Ronald Terwilliger Foundation hosted the Housing America’s Families Forum in Dallas, Texas. The Honorable Jeb Hensarling (R-Texas), chairman of the House Financial Services Committee and the Committee of Jurisdiction, provided thoughts on the recent election, the failure of an elite class of leadership, and a path for the future success of the housing market.

The Honorable Jeb Hensarling, chairman of the House Financial Services Committee, was instrumental in proposing that the Centennial Monetary Commission examine how U.S. monetary policy has affected the performance of the U.S. economy in terms of output, employment, prices, and financial stability since the creation of the Federal Reserve Board in 1913. The commisstion also recommends a course for U.S. monetary policy going forward. The belief is that Congress has delegated the power to regulate the dollar to the Fed which has failed miserably.

The American electorate expects President-Elect Trump and the Congress to restore to the nation an economy of growth, jobs and prosperity without leaving anyone out, said Hensarling. He invited Democrats to work with Republicans to fix policies that have failed and to enact 21st century programs to make America greater, fairer and more prosperous. He believes his experience in moving bills out of the Financial Services Committee and getting them passed in Congress with bipartisan support shows that cooperation between Republicans and Democrats is possible without having to abandon principles.

Hensarling said that the core principles of the Republican party are equality, liberty, opportunity and security for all Americans. He promised to eliminate programs inconsistent with these principles and to enact policies that support them.

Hensarling declared that the success of the housing market depends on robust economic growth originating from Main Street rather than from Washington, and that achieving robust income growth across the whole income ladder will be the highest priority of the new Congress and president. He contrasted this to the results of the last 8 years where income growth has been tepid for low- to middle-income households. He said that growth could be spurred through a program of business and investment-friendly tax reform and through increasing domestic energy production.

Washington’s fifty-year failure to end poverty was also cited by Hensarling as an impediment to growth. He claimed the current government programs sustain people in their poverty, but that few ever emerge from it. Programs which promote the value of work are a better way to help people to escape poverty.

The future of America’s housing

Hensarling said that Section 8 and Public Housing programs are helpful, but do not promote economic freedom or provide a path out of poverty. He called for reforms that would protect subsidies for the elderly and disabled, but would require those able to either work or to prepare for work. He envisioned a system where case workers would meet with individual assistance recipients to prepare a personalized self-sufficiency plan to help the recipient transition to regular employment.

Hensarling asserted that housing assistance vouchers currently often constrain a recipient to a local geographic area and pledged to make them portable so that it is easier for recipients to move to areas where better opportunities are available. He also pledged that Public Housing Authorities that have been rated as troubled by HUD will be reformed and that new housing delivery models will be explored.

Increasing tenant engagement was cited by Hensarling as a means of improving housing for people not receiving vouchers and living in public housing. He said that giving them a greater role in making decisions about the care and maintenance of their homes could foster a culture of economic self-sufficiency.

Hensarling promised to consolidate and streamline overlapping housing programs. He cited the recent passage of the Housing Opportunity and Modernization Act as the first step in this process.

While pointing to the value of home ownership to the economy, Hensarling said that tenancy is more appropriate for the situations of many families.

The Protecting American Taxpayers and Homeowners (PATH) Act was cited by Hensarling as the best way forward for reform of the housing market. He said that its goals are to define and limit the role of government, eliminate artificial barriers to private capital, give market participants clear, transparent and enforceable rules in order to foster competition and to enforce market discipline, and to give consumers clear information so that they can determine which product best meets their needs. The PATH Act would also gradually wind down the GSE’s, Fannie Mae and Freddie Mac, whose affordable housing mandates were cited by Hensarling as being central to the housing market meltdown leading to the Great Recession. The PATH Act would reform the FHA returning it to its traditional mission of helping first-time homebuyers and low and moderate-income families.

Hensarling called for the passage of the Fed Oversight and Reform Modernization (FORM) Act by the new Congress. It calls for the Federal Reserve to use a rules based system for setting interest rate policy. It does not dictate what system of rules to use, however, and allows the Fed to deviate from its chosen rules in emergency circumstances.

Hensarling called the Dodd-Frank Act a great mistake and vowed to replace it. He said that the proposed Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs (CHOICE) Act is a better way forward to promote growth while providing a balance between consumer protections and market stability and maintaining economic liberty and opportunity.

Hensarling disdains the idea that people need an elite class of experts to tell them how to run their lives. He said that with robust growth and job expansion, the housing sector would revive to provide more affordable housing to more Americans. He said that free enterprise and a competitive market economy resting on the rule of law is the only moral solution to the production and just distribution of material goods and services. Hensarling said that President-elect Trump and the new Congress are eager to get started on their reforms in January and that he expects them to lead to a new era of prosperity for America.