Affordable HOMES Act

— 743 — Federal Reserve 19. Federal Reserve Bank of Atlanta, “Metro Area Home Ownership Affordability Monitor (HOAM) Index,” October 2022, https://www.atlantafed.org/center-for-housing-and-policy/data-and-tools/home-ownership- affordability-monitor.aspx (accessed January 24, 2023). 20. Apartment List Research Team, “Apartment List National Rent Report,” January 4, 2023, https://www. apartmentlist.com/research/national-rent-data (accessed January 24, 2023). 21. Primary drivers of rising real estate prices nationally also include government subsidies and government guarantees through government-sponsored enterprises (GSEs)—namely, Fannie Mae and Freddie Mac. “The unpriced implicit guarantee, which reduced interest rates for mortgage borrowers, helped cause more of the economy’s capital to be invested in housing than might otherwise have been the case.” Congressional Budget Office, “Transitioning to Alternative Structures for Housing Finance: An Update,” August 2018, p. 7, https:// www.cbo.gov/system/files/2018-08/54218-GSEupdate.pdf (accessed January 24, 2023). 22. Board of Governors of the Federal Reserve System, Reserves of Depository Institutions Data Series (TOTRESNS), 1960–2022, https://fred.stlouisfed.org/series/TOTRESNS (accessed January 24, 2023). 23. George A. Selgin, The Theory of Free Banking: Money Supply Under Competitive Note Issue (Totowa, NJ: Rowman & Littlefield, 1998). See also Alexander William Salter and Andrew T. Young, “A Theory of Self- Enforcing Monetary Constitutions with Reference to the Suffolk System, 1825–1858,” Journal of Economic Behavior & Organization, Vol. 156 (December 2018), pp 13–22. 24. Reforms should also strengthen the incentives of bank depositors (customers) and bank shareholders (owners) to monitor bank portfolios. Deposit insurance undermines the former, as even President Franklin Roosevelt recognized. Bailouts and last-resort lending undermine the latter. 25. Under the current system, banks are supplying the U.S. dollars. Legislation would been needed that includes a mechanism for supplying the correct number of U.S. dollars along with their own notes. 26. F. A. Hayek, Denationalization of Money: An Analysis of the Theory and Current Practice of Concurrent Currencies (London, UK: Institute of Economic Affairs, 1976). 27. Kate Davidson, “GOP Platform Includes Proposal to Study Return to Gold Standard,” The Wall Street Journal, July 20, 2016, https://www.wsj.com/articles/gop-platform-includes-proposal-to-study-return-to-gold- standard-1469047214?mod=article_inline (accessed January 24, 2023). 28. H.R. 9157, To Define the Dollar as a Fixed Weight of Gold, and for Other Purposes (Gold Standard Restoration Act), 117th Congress, introduced October 7, 2022, https://www.congress.gov/117/bills/hr9157/BILLS-117hr9157ih. pdf (accessed January 24, 2023). 29. Judy Shelton, “Gold and Government,” Cato Journal, Vol. 32, No. 2 (Spring/Summer 2012), pp. 333–347, https://www.cato.org/sites/cato.org/files/serials/files/cato-journal/2012/7/v32n2-9.pdf?mod=article_inline (accessed January 24, 2023). 30. Lawrence H. White, “Making the Transition to a New Gold Standard,” Cato Journal, Vol. 32, No. 2 (Spring/ Summer 2012), pp. 411–421, https://www.cato.org/sites/cato.org/files/serials/files/cato-journal/2012/7/v32n2- 14.pdf (accessed January 24, 2023). 31. Juha Kilponen and Kai Leitemo, “Model Uncertainty and Delegation: A Case for Friedman’s k-Percent Money Growth Rule?” Journal of Money, Credit and Banking, Vol. 40, No. 2/3 (March–April 2008), pp. 547–556. 32. Adam Shapiro and Daniel J. Wilson, “The Evolution of the FOMC’s Explicit Inflation Target,” Federal Reserve Bank of San Francisco, FRBSF Economic Letter No. 2019–12, April 15, 2019, https://www.frbsf.org/wp-content/ uploads/sites/4/el2019-12.pdf (accessed January 24, 2023). 33. WSJ Pro, “Research Says a 3% Fed Inflation Target Could Boost Job Market,” The Wall Street Journal, August 18, 2021, https://www.wsj.com/articles/research-says-a-3-fed-inflation-target-could-boost-job-market- 11629308829#:~:text=Research%20Says%20a%203%25%20Fed%20Inflation%20Target%20Could%2- 0Boost%20Job%20Market,-Aug.&text=Two%20former%20high%2Dlevel%20Federal,help%20bolster%20 the%20job%20market (accessed January 24, 2023). See also Oliver Blanchard, “It Is Time to Revisit the 2% Inflation Target,” Financial Times, November 28, 2022, https://www.ft.com/content/02c8a9ac-b71d-4cef-a6ff- cac120d25588 (accessed January 24, 2023). 34. Alexander William Salter, “CBDC in the USA: Not Now, Not Ever,” American Institute for Economic Research, December, 13, 2022, https://www.aier.org/article/cbdc-in-the-usa-not-now-not-ever/ (accessed February 1, 2022). — 745 — 25 SMALL BUSINESS ADMINISTRATION Karen Kerrigan MISSION STATEMENT The U.S. Small Business Administration (SBA) supports U.S. entrepreneurship and small business growth by strengthening free enterprise through policy advo- cacy and facilitating programs that help entrepreneurs to launch and grow their businesses and compete effectively in the global marketplace. OVERVIEW Created almost 70 years ago, the SBA was launched under the Small Business Act with a mission to “aid, counsel, assist and protect, insofar as is possible, the interests of small business concerns.”1 According to its current mission statement: The U.S. Small Business Administration (SBA) helps Americans start, grow, and build resilient businesses. SBA was created in 1953 as an independent agency of the federal government to aid, counsel, assist and protect the interests of small business concerns; preserve free competitive enterprise; and maintain and strengthen the overall economy of our nation.2 The SBA’s founding mission has evolved over time as programs have been expanded or implemented, subject to the philosophical grounding of each Admin- istration as well as assorted economic challenges and the occurrence of natural disasters. Because of its distinct role in the federal government, the SBA became

— 743 — Federal Reserve 19. Federal Reserve Bank of Atlanta, “Metro Area Home Ownership Affordability Monitor (HOAM) Index,” October 2022, https://www.atlantafed.org/center-for-housing-and-policy/data-and-tools/home-ownership- affordability-monitor.aspx (accessed January 24, 2023). 20. Apartment List Research Team, “Apartment List National Rent Report,” January 4, 2023, https://www. apartmentlist.com/research/national-rent-data (accessed January 24, 2023). 21. Primary drivers of rising real estate prices nationally also include government subsidies and government guarantees through government-sponsored enterprises (GSEs)—namely, Fannie Mae and Freddie Mac. “The unpriced implicit guarantee, which reduced interest rates for mortgage borrowers, helped cause more of the economy’s capital to be invested in housing than might otherwise have been the case.” Congressional Budget Office, “Transitioning to Alternative Structures for Housing Finance: An Update,” August 2018, p. 7, https:// www.cbo.gov/system/files/2018-08/54218-GSEupdate.pdf (accessed January 24, 2023). 22. Board of Governors of the Federal Reserve System, Reserves of Depository Institutions Data Series (TOTRESNS), 1960–2022, https://fred.stlouisfed.org/series/TOTRESNS (accessed January 24, 2023). 23. George A. Selgin, The Theory of Free Banking: Money Supply Under Competitive Note Issue (Totowa, NJ: Rowman & Littlefield, 1998). See also Alexander William Salter and Andrew T. Young, “A Theory of Self- Enforcing Monetary Constitutions with Reference to the Suffolk System, 1825–1858,” Journal of Economic Behavior & Organization, Vol. 156 (December 2018), pp 13–22. 24. Reforms should also strengthen the incentives of bank depositors (customers) and bank shareholders (owners) to monitor bank portfolios. Deposit insurance undermines the former, as even President Franklin Roosevelt recognized. Bailouts and last-resort lending undermine the latter. 25. Under the current system, banks are supplying the U.S. dollars. Legislation would been needed that includes a mechanism for supplying the correct number of U.S. dollars along with their own notes. 26. F. A. Hayek, Denationalization of Money: An Analysis of the Theory and Current Practice of Concurrent Currencies (London, UK: Institute of Economic Affairs, 1976). 27. Kate Davidson, “GOP Platform Includes Proposal to Study Return to Gold Standard,” The Wall Street Journal, July 20, 2016, https://www.wsj.com/articles/gop-platform-includes-proposal-to-study-return-to-gold- standard-1469047214?mod=article_inline (accessed January 24, 2023). 28. H.R. 9157, To Define the Dollar as a Fixed Weight of Gold, and for Other Purposes (Gold Standard Restoration Act), 117th Congress, introduced October 7, 2022, https://www.congress.gov/117/bills/hr9157/BILLS-117hr9157ih. pdf (accessed January 24, 2023). 29. Judy Shelton, “Gold and Government,” Cato Journal, Vol. 32, No. 2 (Spring/Summer 2012), pp. 333–347, https://www.cato.org/sites/cato.org/files/serials/files/cato-journal/2012/7/v32n2-9.pdf?mod=article_inline (accessed January 24, 2023). 30. Lawrence H. White, “Making the Transition to a New Gold Standard,” Cato Journal, Vol. 32, No. 2 (Spring/ Summer 2012), pp. 411–421, https://www.cato.org/sites/cato.org/files/serials/files/cato-journal/2012/7/v32n2- 14.pdf (accessed January 24, 2023). 31. Juha Kilponen and Kai Leitemo, “Model Uncertainty and Delegation: A Case for Friedman’s k-Percent Money Growth Rule?” Journal of Money, Credit and Banking, Vol. 40, No. 2/3 (March–April 2008), pp. 547–556. 32. Adam Shapiro and Daniel J. Wilson, “The Evolution of the FOMC’s Explicit Inflation Target,” Federal Reserve Bank of San Francisco, FRBSF Economic Letter No. 2019–12, April 15, 2019, https://www.frbsf.org/wp-content/ uploads/sites/4/el2019-12.pdf (accessed January 24, 2023). 33. WSJ Pro, “Research Says a 3% Fed Inflation Target Could Boost Job Market,” The Wall Street Journal, August 18, 2021, https://www.wsj.com/articles/research-says-a-3-fed-inflation-target-could-boost-job-market- 11629308829#:~:text=Research%20Says%20a%203%25%20Fed%20Inflation%20Target%20Could%2- 0Boost%20Job%20Market,-Aug.&text=Two%20former%20high%2Dlevel%20Federal,help%20bolster%20 the%20job%20market (accessed January 24, 2023). See also Oliver Blanchard, “It Is Time to Revisit the 2% Inflation Target,” Financial Times, November 28, 2022, https://www.ft.com/content/02c8a9ac-b71d-4cef-a6ff- cac120d25588 (accessed January 24, 2023). 34. Alexander William Salter, “CBDC in the USA: Not Now, Not Ever,” American Institute for Economic Research, December, 13, 2022, https://www.aier.org/article/cbdc-in-the-usa-not-now-not-ever/ (accessed February 1, 2022).

— 512 — Mandate for Leadership: The Conservative Promise housing model. At best, any new public investments will provide maintenance funds to bring substandard housing units and properties up to livability standards but will still fail to address larger aims of upward mobility and dynamism for local housing markets where land can be sold by PHAs and put to greater economic use, thereby benefiting entire local economies through greater private investment, productivity and employment opportunities, and increased tax revenue. Any long-term view of HUD’s future must include maintaining the strong financial operations and reliable reporting that are needed to run a $50 billion- per-year agency. Before the Trump Administration, HUD effectively did not have a Chief Financial Officer (CFO) for eight years, and HUD’s financial infrastructure inevitably deteriorated. The department’s auditors were unable to conclude that HUD’s internal operations were producing accurate financial reporting. The audi- tors had identified multiple material weaknesses and significant deficiencies in the department’s internal financial controls. Overall, the deterioration of HUD’s financial infrastructure led to a lack of accountability with respect to the use of taxpayer funds as well as to pervasive difficulties with operations and program implementation. However, by hiring a new CFO from the private sector with a proven track record of visionary leadership, HUD was able to implement an agencywide governance structure that improved its financial processes and internal controls and harnessed the power of innovative new technologies to bring a modernized business mindset to the agency’s financial infrastructure. By the end of the Trump Administration, for the first time in nearly a decade, HUD was able to address all of its previously identified material weaknesses, and the auditors were able to issue their first clean audit report on HUD’s financial statements and internal controls. Finally, and more fundamentally, Congress could consider a wholesale overhaul of HUD that contemplates devolving many HUD functions to states and localities with any remaining federal functions consolidated to other federal agencies (for example, by transferring loan guarantee programs to SBA; moving Indian housing programs to the Department of the Interior; moving rental assistance, mortgage insurance programs, and GNMA to a redesignated Housing and Home Finance Agency). Generally, this reform path could consolidate some programs, elimi- nate others that have failed to produce meaningful long-run results, and narrow the scope of many programs so that they are closer to what they were when they were created. — 513 — Department of Housing and Urban Development ENDNOTES 1. At a 1998 Senate hearing, then-HUD Secretary Andrew Cuomo acknowledged that the department “faced a competence gap” and had “the dubious distinction of being the only federal agency designated as ‘high risk’ by the General Accounting [now Government Accountability] Office (GAO),” even referencing the Section 8 rental subsidy as “on the brink of becoming the next savings and loan scandal,” and explained how the department was stepping up enforcement efforts “focused on closing the competence gap by eliminating waste, fraud, and abuse.” See “Testimony of Secretary Andrew Cuomo before the House Appropriations Subcommittee on VA, HUD, and Independent Agencies,” March 25, 1998, https://archives.hud.gov/ testimony/1998/tst32598.cfm (accessed March 4, 2023). 2. H.R. 7984, Housing and Urban Development Act of 1965, Public Law No. 89-117, 89th Congress, August 10, 1965, https://www.congress.gov/89/statute/STATUTE-79/STATUTE-79-Pg451.pdf (accessed March 4, 2023). 3. U.S. Department of Housing and Urban Development, 2023 Budget in Brief, pp. 2 and 7, https://www.hud.gov/ sites/dfiles/CFO/documents/2023_BudgetInBriefFINAL.pdf (accessed March 4, 2023). 4. For example, the Special Applications Center (SAC) located in Chicago, Illinois, was established in 1998 as a division of the Office of Public and Indian Housing to accept, review, and approve all nonfunded, noncompetitive applications and plans for demolition, disposition, and conversion of land subject to an annual contributions contract (ACC) in public housing. 5. The Secretary has delegated full authority for the Administration and enforcement of the Fair Housing Act to the Assistant Secretary of the Office of Fair Housing and Equal Opportunity but also has delegated limited assignment and decision-making authority to the General Counsel. 6. Effectively the HUD Chief Operating Officer and appointed by the President with Senate advice and consent. 7. The Office of Hearings and Appeals (OHA) is an independent adjudicatory office within the Office of the Secretary. Led by a Director who is appointed by the Secretary, it supervises the Administrative Judges of the Office of Appeals, the administrative law judges of the Office of Administrative Law Judges, and the OHA support staff. The HUD Secretary appoints administrative judges and administrative law judges in accordance with the Administrative Procedure Act, 5 U.S.C. Chapter 5, https://www.law.cornell.edu/uscode/text/5/part-I/ chapter-5 (accessed March 4, 2023). 8. HUD currently has a Departmental Equity Assessment Working Group, supported with five FTEs funded by the OSDBU, “as part of the President’s Executive Order 13985, Executive Order On Advancing Racial Equity and Support for Underserved Communities Through the Federal Government.” See U.S. Department of Housing and Urban Development, 2023 Congressional Justifications, p. 35-15, https://www.hud.gov/sites/ dfiles/CFO/documents/2023HUDCongressionalJustificationsFINALelectronicversion.pdf (accessed March 4, 2023), and President Joseph R. Biden Jr., Executive Order 13985, “Advancing Racial Equity and Support for Underserved Communities Through the Federal Government,” January 20, 2021, in Federal Register, Vol. 86, No. 14 (January 25, 2021), pp. 7009–7013, https://www.govinfo.gov/content/pkg/FR-2021-01-25/pdf/2021- 01753.pdf (accessed March 4, 2023). 9. Interestingly, “[t]he 2023 President’s Budget requests $748 thousand for CFBNP, which is $436 thousand less than the 2022 Annualized CR level. The Budget reflects total funding (carryover and new authority) of $1.2 million, $448 thousand less than 2022 total funding.” U.S. Department of Housing and Urban Development, 2023 Congressional Justifications, p. 35-16. 10. See H.R. 558, Stewart B. McKinney Homeless Assistance Act, Public Law No. 100-77, 100th Congress, July 22, 1987, https://www.govinfo.gov/content/pkg/STATUTE-101/pdf/STATUTE-101-Pg482.pdf (accessed March 5, 2023). Later renamed the McKinney–Vento Homeless Assistance Act. 11. Established under the Housing and Community Development Act of 1974, 42 U.S.C. §§ 5301 et seq., https:// www.law.cornell.edu/uscode/text/42 (accessed March 4, 2023). 12. S. 566, Cranston–Gonzalez National Affordable Housing Act, Public Law No. 101-625, 101st Congress, November 28, 1990, Title II, https://www.congress.gov/101/statute/STATUTE-104/STATUTE-104-Pg4079.pdf (accessed March 5, 2023). 13. S. 1, Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, Public Law No. 91-646, 91st Congress, January 2, 1971, https://www.congress.gov/91/statute/STATUTE-84/STATUTE-84-Pg1894.pdf (accessed March 4, 2023). “The URA establishes the minimum Federal requirements for the acquisition of real property for Federally-funded programs and projects, and for the relocation of persons who must move from