Waters clashes with Trump officials over 'disastrous' housing plans

Waters clashes with Trump officials over 'disastrous' housing plans
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A hearing Tuesday highlighted the deep divide between House Democrats and the Trump administration over housing policy as lawmakers pressed officials on their plans and accused them of ignoring what they said was a housing affordability crisis.

Three top Trump administration officials testified before the House Financial Services Committee, to explain their ambitious plan to reform the federal housing finance system.

But the hearing was a contentious affair as Democrats challenged Treasury Secretary Steven MnuchinSteven Terner MnuchinNew book questions Harris's record on big banks On The Money: US paid record .1B in tariffs in September | Dems ramp up oversight of 'opportunity zones' | Judge hints at letting House lawsuit over Trump tax returns proceed Democrats ramp up oversight efforts over 'opportunity zone' incentive MORE, Housing and Urban Development Secretary Ben CarsonBenjamin (Ben) Solomon CarsonTrump launches effort to boost support among black voters Zoning is not the answer to all our housing problems Freer housing is 'fairer housing' — HUD should tie funding to looser zoning MORE and Federal Housing Finance Agency Director Mark Calabria over the rise in housing costs and its devastating results.

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“The Trump administration's housing finance reform plan would be disastrous for our housing system,” Financial Services Chairwoman Maxine WatersMaxine Moore WatersDivides over China, fossil fuels threaten House deal to reboot Ex-Im Bank Hillicon Valley: Lawmakers unleash on Zuckerberg | House passes third election interference bill | Online extremism legislation advances in House | Google claims quantum computing breakthrough On The Money: Lawmakers hammer Zuckerberg over Facebook controversies | GOP chair expects another funding stopgap | Senate rejects Dem measure on SALT deduction cap workarounds MORE (D-Calif.) said. 

Both the administration and Democratic lawmakers have proposed plans to overhaul the federal housing finance system and expand affordable housing, some of which include broad overlap. Housing affordability is a top priority of Waters, who is from Los Angeles, where homelessness rose 12 percent last year. 

Yet despite those shared concerns, Democrats and administration officials appeared to lack the trust necessary to break a decadelong stalemate on housing finance.

"[The administration] has consistently pushed harmful housing policies and proposed slashing and eliminating key housing funding for those most in need," Waters said.

Washington has failed for more than a decade to overhaul the patchwork created to salvage the U.S. housing sector after the 2008 recession. Lawmakers have struggled to agree on a way to release the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, better known as Fannie Mae and Freddie Mac, from Washington’s control.

The two government-sponsored enterprises purchase mortgages from banks, package them into bonds and sell those bonds to help fund home loans for buyers in areas underserved by private firms. Critics of the system say the vast amounts of debt held by Fannie and Freddie, along with lower credit standards for their loans, distort the housing market and load it with risk.

Trump officials defended their plans to overhaul that system.

“In their current condition Fannie Mae and Freddie Mac will fail in a downturn,” Calabria said. “Of course it is my objective to get them out of this condition.”

The Trump administration has proposed steps it could take to tackle the issue on its own, including forcing Fannie and Freddie to boost capital reserves and reduce its footprint before releasing them to the private sector. 

Such steps would not need congressional approval but wouldn’t address the potential harm that could come from abruptly pulling crucial federal support for low-income housing.

Republicans urged support for the plans.

Rep. Patrick McHenryPatrick Timothy McHenryTrump roasts Republicans at private fundraising event North Carolina ruling could cost GOP House seats Divides over China, fossil fuels threaten House deal to reboot Ex-Im Bank MORE (N.C.), the panel’s top Republican, said that while the administration’s plan is “by no means perfect, it sketches a path forward and away from the status quo that puts taxpayers at risk.”

“We can work together and achieve a bipartisan outcome that creates that competition, that certainty in the marketplace,” McHenry continued. 

“We all want to look out for housing availability and affordability, and we all want to protect the taxpayers, whether that's Republicans or Democrats,” said Rep. Steve StiversSteven (Steve) Ernst StiversWaters clashes with Trump officials over 'disastrous' housing plans Financial sector's work on SAFE Banking Act shows together, everyone achieves more GOP ratchets up 2020 attacks as impeachment storm grows MORE (R-Ohio).

But three years of bruising feuds between Democrats and the Trump administration on housing policy make any agreement on overhauling the federal housing finance system a hard sell.

Several administration officials also challenged Waters over the title of the day's hearing, “The End of Affordable Housing?,” by citing issues in her home state.

“If we really want to examine the end of affordable housing, this would be a field hearing in San Francisco or Los Angeles,” Carson said, nodding at “two cities at the epicenter of the nation's affordable housing crisis.”

Carson also drew fire Tuesday from Democrats over reports that the Department of Housing and Urban Development (HUD) withheld relief aid from Puerto Rico appropriated by Congress after Hurricane Maria.

While Carson insisted that HUD withheld the aid due to corruption concerns, Rep. Nydia Velázquez (D-N.Y.) suggested that the decision was related to Trump's frequent criticism of the commonwealth's government.

When Velazquez connected the September arrests of two Federal Emergency Management Administration officials to broader "corruption" in the Trump administration, Republicans erupted in outrage.

McHenry asked Waters to reprimand Velázquez for "unbecoming" language, and Rep. Bill PoseyWilliam (Bill) Joseph PoseyOvernight Health Care — Presented by Partnership for America's Health Care Future — Trump official declines to detail plans if ObamaCare struck down | DEA unveils rule for opioid manufacturers | Republican tells Zuckerberg to allow anti-vax content Poll: Women more likely to say social media has negative effect on society Republican lawmaker tells Zuckerberg Facebook should allow anti-vaccine content MORE (R-Fla.) condemned the congresswoman for "throwing insults."

Carson's toxic relationship with House Democrats has been a focal point of his appearances before the committee. 

The secretary has feuded with House Democrats over HUD proposals to evict undocumented immigrants from federally subsidized housing, loosen anti-transgender discrimination rules, and raise the burden of proof to prove inadvertent housing discrimination.

Carson sought to move past his past battles with the Democrats on Tuesday, even as he panned the party's concern over "political correctness" as something that "will destroy this country."

The hearing's fireworks only highlighted the divisions between the two parties on housing policy.

Waters said the administration has far to go to win the trust of her party.

“The Trump administration has proven again and again that it is not to be trusted,” she said.