During last evening's State of the Union Address, President Obama raised the possibility of consolidating federal agencies and/or programs to reduce duplication of effort. As part of this discussion, the President made specific mention of housing policy:
"Let me take this one step further. We shouldn’t just give our people a government that’s more affordable. We should give them a government that’s more competent and more efficient. We can’t win the future with a government of the past.
"We live and do business in the Information Age, but the last major reorganization of the government happened in the age of black-and-white TV. There are 12 different agencies that deal with exports. There are at least five different agencies that deal with housing policy...
"Now, we’ve made great strides over the last two years in using technology and getting rid of waste. Veterans can now download their electronic medical records with a click of the mouse. We’re selling acres of federal office space that hasn’t been used in years, and we’ll cut through red tape to get rid of more. But we need to think bigger. In the coming months, my administration will develop a proposal to merge, consolidate, and reorganize the federal government in a way that best serves the goal of a more competitive America. I will submit that proposal to Congress for a vote –- and we will push to get it passed."
The cabinet-level agencies that administer federal housing programs include:
- Treasury (Tax Credit Exchange Program, Capital Magnet Fund, Hardest Hit Fund, Making Home Affordable, etc.)
- Defense (Homeowners Assistance Program, Military Housing Privatization Initiative)
- Veterans Affairs (VA Home Loans)
So what exactly does the President have in mind? We'll probably have to wait at least until the President's FY 2012 budget is released in mid-February to find out, but I am reminded of a similar (and ultimately unsuccessful) proposal from a few years back that caused a great deal of consternation within our industry. Remember the Strengthening America's Communities Initiative? President Bush's FY 2006 budget proposed replacing 18 federal community and economic development programs (including the Community Development Block Grant program) with a single, smaller initiative to be administered by the Department of Commerce. That proposal, which NAHRO strenuously opposed, never gained traction and was not included in the Bush Administration's FY 2007 budget.
NAHRO is generally supportive of reforming our programs to make them more efficient and effective. Unfortunately, the concept of "consolidation" has often served as a stalking horse for funding reductions and/or program terminations. We'll reserve judgment until we see President Obama's specific proposals in this area. Stay tuned.