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If you want to know why George W. Bush's recently announced affordable housing plans are so pathetic, you could do worse than to ponder the toilet paper that used to be in Phil Gramm's front yard. If you think that sounds especially wacky, read on. Remember, it's "conservative" to give back money to your campaign contributors, it's "compassionate" to say you're doing it to benefit the poor.
First, the plans. On April 11, Bush released his eagerly-awaited "New Prosperity Initiative," over which the health care advocates are still laughing (when they're not weeping). Less widely reported than Bush's health insurance tax credit is the "American Dream Down Payment Fund" announced in the same package. According to the Bush campaign, the plan provides $1 billion over five years to provide assistance to first-time homebuyers making less than 80% of the area median income. The assistance is in the form of matching funds: if a bank will make a contribution to the homeowner's down payment, the fund will match three times the bank's contribution, up to a princely total of $1,500. The fund will be administered by "state agencies."
The Bush campaign notes that "by leveraging the capital of banks and other private institutions, the fund could help over 650,000 low-income homebuyers." This is the kind of math magic Bush is famous for. One billion, less $5 million per year for 50 different state agencies to administer the fund for five years, divided by $1,500, equals 650,000. That would equal 130,000 homebuyers per year, if all the money were spent.
What's ironic is that the Bush campaign itself notes that there are 17 million people who are eligible for existing federally-assisted housing programs, and only a quarter of them are actually being served. Bush's plan would increase the number of homebuyers assisted by less than 1% per year, or not quite 4% over five years. If, in fact, the banks make the initial contribution to begin with. And if, in fact, the borrowers are fortunate enough to live in parts of the country in which $2,000 makes a difference in whether or not one can buy a home. And if, in fact, Bush's hugely expensive tax cut doesn't bankrupt the Treasury first. "Dream" seems a more and more appropriate name for this fund for the majority of low-income would-be homebuyers.
Part II of the housing plan, announced on April 18, shows that Bush is somewhat more generous when it comes to lining the pockets of "entrepreneurs." The AP reports that the new plan involves $1.7 billion in tax credits to developers. "Bush said his proposed tax credit could cover up to 50% of the cost of redeveloping low-income housing and could spur development of up to 15,000 new homes a year over the five years of the program."
So far, the Bush campaign's official website has not made any more information about this plan available, so it's anybody's guess how shoveling $1.7 billion to private rehabbers is going to make rehabilitation or home purchase more accessible to low-income homebuyers without falling prey to the "gentrification effect," in which rehabbed neighborhoods end up priced out of the reach of any but affluent escapees from the suburbs. Given what we've seen in Texas of how Bush appointees allocate tax credits to developers, it's a good bet that a plan administered under the Bush philosophy will end up benefiting real estate developers more than homebuyers. The Center for Responsive Politics reports that "Real Estate" ranks third in the list of top industries contributing to the Bush campaign, at a conservative estimate of $3.3 million as of March 1. Maybe that explains it.
So what's all this got to do with Phil Gramm's house getting teepeed? Texas Senator Gramm is, of course, the Republican chair of the Senate Banking Committee who has waged a long and ugly war against the Community Reinvestment Act, or CRA, the only legislative toe-hold community and housing activists have in the fight against "redlining," or failure by banks to make loans--especially home mortgage loans--in predominantly low-income and minority neighborhoods. At Gramm's insistence, the CRA was seriously weakened in 1999, exempting banks from CRA examinations for up to five years and seriously curtailing the amount of remedial action regulators can require of non-compliant banks.
All that annoyed a number of housing activists enough for them to stage a protest outside Gramm's Washington home. According to one outraged commentator who is now one of Bush's housing advisers, "several busloads of protestors arrived at [Gramm's home]. They trampled his garden and lawn, banged on his windows, harassed his wife, and left his property strewn with litter. . . . It is not possible [for an activist] to credibly present oneself as a sophisticated real-estate developer capable of responsibly managing a multi-million dollar project yet spend weekends littering a Senator's lawn with toilet paper."
This high dudgeon comes from Lawrence B. Lindsey in the Winter 2000 issue of _The Neighborworks Journal_. Lindsey is a former Governor of the Federal Reserve, and currently divides his time between the American Enterprise Institute, a right-wing think tank, and the Bush campaign, which he advises. According to the _Inner City Press_ (4/10/99), Lindsey is "portrayed as being one of the 'compassionate conservatives' that would moderate the Texas governor's more right-wing instincts." He also appears to be the kind of "compassionate conservative" who can chuck his compassion in a heartbeat when the situation calls for some sleazy, pro-developer propaganda. He and Bush must get on like a house on fire.
Lindsey's article, "Community Development at a Crossroads," is a long, distorted, inaccurate smear campaign against "so-called 'community development' group[s]." Not once in the article does Lindsey name one of the groups he is attacking or explain why their work does not benefit their communities. As ICP notes, Lindsey's attack is based on three "anecdotes . . . full of inaccuracies." One is the dreadful protest at Gramm's house, which Lindsey misrepresents as occurring before, not after, Gramm's attack on the CRA on the floor of the Senate. Similarly, Lindsey gives a seriously distorted version of some Philadelphia community groups' protest against a major bank merger. These smears are simply an attempt to "excuse" the Republican assault on the CRA by hinting that it is an effect, not a cause, of community anger at Gramm and the banks.
Throughout the piece, Lindsey contrasts the unnamed "bad" groups to the also unnamed "professionals" who, he says, deserve to be entrusted with the billions of dollars in federal funds flowing through the community redevelopment network. Although we don't hear any names, it's not hard to guess who these "good guys" are from Lindsey's rhetorical flights of fancy:
"[Bad groups] are giving community development a bad name. Although they may get short-term political and financial payoffs, the industry as a whole pays the price of losing its most important asset--a good reputation. If you don't believe this, recall the hundreds of millions of dollars spent by Tylenol after someone put poison in a Tylenol capsule. Or consider what Coca-Cola recently had to go through due to problems at one of its bottlers in Belgium."
Notice how "community development," which was once understood to be a mixture of government programs and nonprofit community groups occasionally assisted by financial institutions, has now become "an industry." Notice how criticism of the "industry" is being equated with lethal poisoning. But that's not all. It appears that "community development" is really a Republican industry, and nonprofit community-based groups are even worse than "extortionists":
"The Republican party faced a nightmare when former Ku Klux Klan leader David Duke left the Democratic party and declared himself a Republican. Of course most members of the party of Lincoln viewed Duke's views as abhorrent, but there was nothing they could legally do to stop him from registering with whatever party he wanted. At first they did nothing, counting on people to realize that most Republicans do not share David Duke's views. By their silence, the Republicans became indelibly tainted. . . . Unfortunately, the community development industry also has some self-proclaimed members, who are using the name of community development to advance their own selfish agendas."
One assumes Lindsey wrote this before the South Carolina primary, and one does wonder if he'd be so willing today to cast mostly Democratic-leaning affordable housing advocacy groups, which are largely composed of people of color, as riders of the KKK to George W. Bush's Lincoln. Probably. The political cluelessness, the hypersensitivity to perceived "attacks" by folks who are merely asserting their constitutional right to free speech, the easy conflation of "the good of the community" with "the good of industry" displayed in Lindsey's essay, are exactly characteristic of Bush's political style.
So Bush offers $1,500 each to a comparative handful of homebuyers, if the banks will play along. Given what Gramm and his fellow Republicans have done to the CRA, there's not much left in the way of a legal mechanism to force them to ante up. Then he offers nearly twice as much to "private investors," and calls this an answer to the problem of access to homeownership by the poorest Americans. With the kind of advice he's getting from Lindsey, we're not surprised.
BUSH TALKS (GASP) "HOUSING FOR THE POOR"
"George W. Bush, appealing anew to voters who have tended to support Democrats, today proposed a $1.7 billion program to increase housing for low-income people. It would give a tax credit to developers to refurbish existing houses.... Bush said his proposed tax credit could cover up to 50 percent of the cost of redeveloping low-income housing and could spur development of up to 15,000 new homes a year over the five years of the program. "Under this credit private investors will have a powerful incentive to increase the supply of affordable houses," Bush said." (AP 4/17/00) Don't make us laugh, George, our lips are chapped. Denizens of Austin betting parlors are taking sucker bets today that Bush will never ask the nation to look at his Texas record to see what he would do with America's housing program for the poor. Come with us down memory lane and look at the sad specifics of Bush's terrible Texas housing record. --Politex, 4/18/00
BUSH ADMINISTRATIVE INEPTNESS--POOR APPOINTEES, WEAK OVERSIGHT--FUELS HOUSING AGENCY SCANDAL "For several months, the Tx. Dept. of Housing has been reeling as federal and state investigators probed public corruption allegations against one of its board members (Florita Bell Griffin) and questionable practices of its former executive director (Larry P. Manley)." Manley was "appointed in 1995 by Gov. George W. Bush to run an agency that dispenses half a billion dollars a year to improve housing for poor Texans." By 1996, "state auditors reported problems at the housing agency. Investigators said that year that the department under Mr. Manley had awarded developers tens of millions of dollars in federal tax breaks in an arbitrary and undocumented manner." In 1997, state auditors "uncovered more problems....
They found that the agency had awarded more than 60 percent of the contracts under a new program to people who previously worked with Mr. Manley at Texas savings and loans." Manley resigned last summer. That same week, it was reported that Bell, another Bush appointee, was "accused of using her influence as a public official to approve federal subsidies for low-income real estate deals in which she had a special interest." Bush's replacement for Manley, Daisy Steiner, recently met with the Senate Finance Committee on Feb. 2 and apologetically conceded that her "agency serves only 1.5 percent of the estimated l.5 million low income Texans who need housing help," a poor record, even using the agency's own criteria. The following day, two years late, the state auditors sent their 1997 findings to George's office. (HC 8/28/98, 2/3/99) 2/22/99
RESPONSIBILITY AND BUSH'S HOUSING SCANDAL For an (unannounced) presidential candidate who is using "responsibility" as one of his campaign themes, it's read my lips, not my actions as far as the growing housing scandal is concerned. Some background: the Guv appointed 7 of 9 members of the state's housing agency and two of those appointees are in trouble. First, the agency has been given $l84 million since l992 to spend on affordable housing for the poor and the elderly, and over 45% of that total has yet to be spent. If the money isn't spent soon, the government will take some of it back. Bush appointee Larry Manley, who resigned last week as executive director, said he resigned because he wanted to be an investment banker again. Since Manley has been aware of mismanagement charges for months, shouldn't he have been responsible enough to talk to those charges?
Manley also said he wasn't resigning because another Bush appointee, Florita Griffin, is being investigated by the FBI because she has been accused of setting up fraudulent real estate deals between the nine-member agency board and a Bryan-area low income housing group of which she is a secret member. She has denied allegations but has not been quoted about her responsibility to the people of Texas. Although Bush spinmeisters Edwards and Hughes tell us what the Guv is doing to put out this embarrassing fire, they fail to indicate how responsible he feels for appointing the two members of the agency who are presently under a cloud. Typically, their remarks read like his history with Manley and Giffin began when the scandal broke. Finally, the source of this information, the "Austin American-Statesman," has not behaved responsibly to its readers. With a vague, non-Bush one-column headline pushed nearly off the page by a five-column, full-color picture of UT's Memorial Stadium and three opening paragraphs of Bush spin, it isn't until we get to end of paragraph 5 on the very back inner page of section 2 that we realize George has a serious problem on his hands, and it's of his own making. 8/29/98, Austex