that HUD take strong action to finally take over the worst public housing authorities of our Nation.

This legislation wipes away the disincentives to work, yet retains tenant protections. Residents will now have a true choice, allowing them to pursue dreams of economic advancement and self-sufficiency.

Our bill encourages accountability in our Federal programs, and recognizes the unique nature and dynamics of individual neighborhoods and communities.

Secretary Cuomo shares my commitment to positive change in this area. I look forward to working with him to craft truly comprehensive reform legislation. We do need comprehensive reform, Mr. Secretary. Public housing in too many communities has become culturally and economically isolated.

Tinkering around the edges of these programs will not improve fundamentally the lives of our citizens. Streamlining some management processes but failing to ask the hard questions regarding the fundamental nature of these programs is simply to rearrange the deck chairs on the Titanic.

The National Academy of Public Administration's 1994 report on HUD stated that if the Department was not operating competently within 5 years, Congress should consider dismantling the Department.

We are now in year three of that NAPA report. The iceberg looms in the horizon, and the water is very cold. I very much look forward to hearing from you today, Mr. Secretary. I know that you have some bold proposals of your own to redirect the agency and its programs, and I welcome them.

Now, I would like to turn to the Congresswoman from Indiana to see if she has any comment.

[The prepared statement of Hon. Rick Lazio can be found on page 272 in the appendix.]

Ms. CARSON. Thank you very much, Mr. Chairman. I'm still learning how to be a Member of this community. I apologize to the Chairman for being late.

I wanted to say that it's a great for me to be able to come and sit in this hearing. Perhaps if I had been a resident of a public housing project I probably would have been another month late getting here, but it's good to be here. Thank you very much.

Chairman LAZIO. Thank you.

Congressman Bereuter.

Mr. BEREUTER. Thank you, Mr. Chairman. I'm in a mark-up at 10:00 o'clock, so I want to hear as much as possible what the Secretary has to say, and would welcome him before this subcommittee for the first time. I wish you the greatest of successes, and I yield back the balance of my time.

Chairman LAZIO. Thank you. The gentleman from Massachu

setts.

Mr. KENNEDY. Thank you very much, Mr. Chairman. First of all, I want to welcome the Secretary. It is a great pleasure having Andrew Cuomo before this subcommittee today, and I'm sure that I speak for all of us when I say that we're looking forward to working with you over the course of the next 4 years, or at least I will be for 2 years.

I do want to say how much we're looking forward to the professionalism that you have brought to the homeless programs, both before you became the Secretary and before you started working at HUD, as well as the innovation and creativity you showed in terms of getting more housing built for the homeless. Perhaps more than any other person in the United States.

And the leadership that you showed for the past few years working with Secretary Cisneros on all the myriad of programs that you are charged with at HUD showed the kind of competence that can be brought to these programs.

There are a number of problems at HUD. I think all of us are looking forward to your taking on many of the management issues, as well as trying to make sure that we protect the growing number of very poor people that exist in this country that are in desperate need of housing assistance.

All of us recognize that we're working within a budget that is much reduced. The end result of those budget reductions is that if we're going to allow public housing to be able to sustain itself, the public housing authorities have to find ways of increasing the revenues to themselves. This inevitably means they have to find wealthier tenants to be able to brought into public housing, or they have to charge poorer tenants more rent.

And no matter how you cut it, that means that more comes out of the hide of the poor, less comes out of the hide of the Government, and as a result of that, it puts increasing pressure on the poor.

And I think that one of the most important issues that you can take on, Mr. Secretary, is how this country relates not just to those who currently get public housing assistance, or any kind of housing assistance, but the millions of Americans that are currently receiving no housing assistance. The numbers of this group are growing perhaps faster than any other segment of our society and desperately need this country to be able to find the moral conscience to move forward and provide some protections.

I think while many of us are looking forward to working with Chairman Lazio on a range of different issues over the course of the coming Congress, and welcome the fact that he has shown such an aggressive hearing schedule, there are issues that involve how we're going to deal with public housing specifically that I think warrant not only today's hearing but also I hope the spirit of compromise in working together into the future.

I think essentially what we have here is a bill that represents sort of where the bill was last year when it came off the tracks. And if we're going to see us move forward, we will be looking forward to your leadership, as well as Mr. Lazio's leadership, to determine how we're ultimately going to deal with the 30 percent rent cap issue, how we're going to deal with targeting issues, which I know we have some differences on, and how we're going to ultimately deal with the notion of the repeal of the 1937 Act.

I think that if we can find ways of working together to make sure that we don't end up just arbitrarily hurting large numbers of very poor people without taking into account the kind of situations that they're going to be facing, I am hopeful that we can actually get a bill passed this year.

It's time after 6 years to finally get a housing bill passed in the Congress and I look forward to working with the Chairman and with you, Mr. Secretary, to get that accomplished.

Thank you very much for coming this morning. If the Chairman would just indulge me very briefly, I would like to also welcome Ms. Carson, who we were all very much looking forward to having join us on the subcommittee, and it's a delight to have her here, and we're looking forward to a lively session.

Thank you very much, Mr. Chairman.

Chairman LAZIO. I thank the gentleman, my friend. Are there any other opening statements?

Mr. Ney.

Mr. NEY. Thank you, Mr. Chairman. Not really an opening statement, but I just want to thank the Chairman for pursuing this important subject. I want to thank Mr. Cuomo for his time here. Also pre-apologize. If you think there's bureaucracy in HUD, we have three hearings at the same time, so my leaving doesn't in any way diminish the feelings that I have for the job we'll be doing together. Thank you.

Chairman LAZIO. Thank you, sir. I thank the gentleman. Are there any other opening statements? Any other Members wish to be heard?

[No response.]

Chairman LAZIO. That being the case, Mr. Secretary, welcome here. Thank you. We're looking forward to your comments, and the floor is yours.

STATEMENT OF HON. ANDREW CUOMO, SECRETARY, U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Secretary CUOMO. Thank you, Mr. Chairman. It's actually truly my pleasure to be here in my first appearance since being Secretary. I was here in my prior capacity, as you know, as assistant secretary, but I am very much looking forward to working with the committee, with the Ranking Member. I thank him for his kind comments. I'll be sure to tell his sister that he was kind and gracious to me, at least in the opening statement. And I hope he stays that way all through the hearing, Mr. Chairman.

Let me also thank the entire subcommittee for the good work that we've already been doing together over these past few months. Even though this is the first hearing, as the subcommittee knows we've been working very hard over these past few weeks, and I already start to see a pattern of nonpartisan, nonpolitical action. I think it augers well for the future.

If I might, I will summarize my statement, Mr. Chairman, if it's OK to have the entire statement entered into the record.

Chairman LAZIO. Without objection.

Secretary CUOMO. Let me begin by introducing some of the HUD family who are here. Michael Stegman, who is the Acting Chief of Staff; Kevin Marchman, who is the Assistant Secretary for Public Housing; Hal DeCell, the Assistant Secretary for Congressional Relations; Rod Solomon, who is the Senior Director of Policy and Legislation for Public Housing; Paul Leonard, who is the Deputy Assistant Secretary for Policy; Cheryl Fox who is the Issues Advisor

to me; and Frank DeStefano who is Senior Counselor to the Secretary.

I have some specific comments that I would like to go through, but if I could make some general opening comments first, Mr. Chairman, apropos your statements and the Ranking Member's

statements.

It has been 6 years since we've had a bill, which I think everyone would say is too long. I think the good news is that we are within the end of that hiatus, and we're looking forward to truly an historic piece of legislation being passed by this committee, and hopefully we can be a part of it.

And I think, Mr. Chairman, your comments are very well taken about the problems that we have in the public housing system. And the problems cannot be minimized, nor would the Department or myself personally seek to minimize them. They've gone on for too long.

When we've made mistakes in public housing, we made them big. You have many projects that in my opinion now exist throughout this country which were flawed from inception. They were flawed by design, and they were condemned almost at the point of construction.

They were too dense, they were too isolated, they were too concentrated, they were without support, they were without integration, they were without jobs, they were without opportunity. Literally those great buildings with the caged hallways in concrete bunkers. They were a mistake.

In many cases the best thing we can do is literally blow them up and start over, and we're doing that, to the tune of 100,000 units between now and the year 2000. And those were mistakes and none of us would want our children growing up in those buildings, and no one's children should.

There is no doubt that we have to address those, and address those fiercely. And I agree, Mr. Chairman, that you cannot be too aggressive in attacking that problem.

At the same time I think we have to have a caution not to allow the notable failures which they are to stereotype the entire public housing industry in this Nation. Because of the 3,400 public housing authorities only about 75 are so-called "troubled" housing authorities.

The troubled ones tend to be the tail that wags the dog. They get the attention, and as I said, when they go bad, they go bad in a big way. But the vast majority of the public housing developments across this country were smaller, were more integrated, were placed within community and are operating well, which then suggests, as the Chairman pointed out last year, a different way for HUD to manage that portfolio as opposed to the troubled portfolio.

I think the Ranking Member raises a very interesting point, and a poignant point, when he speaks to the value of public housing in this country. It truly is a precious national resource. We have about one million units.

But the Department has just done some research which to me is staggering. What it says is the one million units which are public housing units are actually one-third of the affordable housing stock in this Nation, affordable to very low-income.

Without Section 8, and so forth, public housing is one-third of the available stock. If you are a minimum wage family, if you are earning minimum wage in the city of Boston, public housing represents 42 percent of all the available units to you. Minimum wage family, public housing is 42 percent of all the available units.

New York City, 65 percent of the affordable units are public housing units; Cleveland, 70 percent; St. Louis, 55 percent; Baltimore, 24 percent; Dodge City, Nebraska, 251 units, but it's about 16 percent of all the affordable housing, if you're a minimum wage family.

And there's going to be more and more minimum wage families coming off the welfare reform package.

If we need to do one thing in this Nation with affordable housing, it's to provide more affordable housing. The President's budget takes a step in that direction, and I hope next year to take an even broader step in that direction.

I also think it's important, Mr. Chairman, as you have pointed out many times, we're discussing public housing today. The institution of public housing, if you will. But for public housing to work, public housing must exist within a community and be integrated into a comprehensive community development plan.

If all we do is provide housing to an individual or a community, it is not going to work. It has to be housing in a comprehensive setting, the transportation, the police, and most of all the economic development opportunity, the jobs, at the end of it.

We have already done much over these past few years, working together. We continued HOPE VI, suspension of One-for-One, the One Strike. So I think we have proven that we can operate in a nonpolitical and nonpartisan manner.

I also believe that we have agreement on the goals of what the committee sets out to do in H.R. 2. We were very close last year. I believe we are even closer at the beginning of the process this year.

The subcommittee's points about mixed income, encouraging work, deregulation of high performers, minimum rents, we agree. We have questions as to limits, and questions as to degrees, but we don't question the goals that the subcommittee seeks to reach. We also propose a certain number of amendments, additions, if you will, to H.R. 2. In keeping with the Chairman's point, we understand at HUD that management is job one. The Chairman mentioned the NAPA statement and the extent of the management problems.

Nobody wants to go for a ride on the Titanic, I can assure you, Mr. Chairman. And HUD has done quite a bit of work over the past 4 years, and HUD will do more work in a more aggressive fashion, on a shorter timeframe, on the management issues over these next few years than I believe it has ever done before.

It cannot do what you want it to do without legislation. We cannot, by administrative fiat make the kind of changes we have to make to get the management to a place where this subcommittee would be proud to call HUD the model of Federal management that we want to make it.

We are downsizing HUD dramatically. Four years ago, HUD was about 13,000. Four years from today HUD will be about 7,500.