Lawmakers Praise Kemp’s HUD Reform Plans : Housing: Some House members caution the secretary against ‘overkill’ by altering regulations on Community Development Block Grants.

Members of Congress praised Housing Secretary Jack Kemp Thursday for his proposals to reform the beleaguered Department of Housing and Urban Development, but they cautioned him not to engage in “overkill” in changing agency programs.

“As I look at the scandals that have been revealed at HUD, it is my view that what we have seen is a people problem, not a program problem,” said Rep. Henry B. Gonzalez (D-Tex.), chairman of the housing and community development subcommittee of the House Banking, Finance and Urban Affairs Committee. Gonzalez’s panel is one of several conducting HUD inquiries.

“What we have had in the last eight years at HUD are ambitious and venal people who betrayed their public trust,” Gonzalez said during a hearing at which Kemp described his reform proposals.

“I make the distinction between scandalous mismanagement and the integrity of HUD programs,” Gonzalez said. “These programs work when people of good will are there to administer them.”

Kemp has offered a package of reforms to clean up his department, which has been tainted by allegations of influence peddling and political favoritism during the Ronald Reagan Administration. Some of Kemp’s planned reforms will require congressional action.

Kemp’s proposals include naming a top financial officer for the department and requiring public registration of all HUD lobbyists and consultants to discourage influence peddling and mishandling of funds. He also has proposed changes in several HUD programs to ensure that HUD money is directed to low- and moderate-income areas.

Two Ohio lawmakers took issue with Kemp’s proposal to change the popular Community Development Block Grant program by increasing the proportion of funds required to be used for the benefit of the poor.

The program now allows 40% of the grants made to the states to be used for projects that do not directly benefit low-income persons. Kemp, noting that some states have used the money for projects such as bike racks and swimming pools, wants to reduce that share to 25%. Further, he has proposed that wealthier communities be required to use 100% of their grants for the poor.

Rep. Mary Rose Oakar (D-Ohio), complaining that she was “not responsible because someone in New York got a swimming pool,” insisted that the local officials in her district operate the program effectively.

“To stifle a certain degree of flexibility of the program would be absolutely outrageous,” Oakar said. “Don’t blame the program--we just need better management. . . . There’s such a thing as overkill.”

Rep. Chalmers P. Wylie (R-Ohio) said the money has been used by cities to replace reduced federal revenue sharing and told Kemp that the fact that “you honed in” on the Community Development Block Grant program bothered him because the program has been effective in his district.

Kemp assured Oakar that he was “not out to get it (the program),” but said he felt it would be difficult to defend a program “that allows monies to be spent without some guidelines.” He said his proposed 75% allocation to benefit the poor was “hardly Kemp scorched-earth policy.”

Oakar also told Kemp she would not allow the new climate of reform to deter her from fighting for housing projects for her city.

“If I’m not an ombudsman for my area, I ought to be thrown out of office,” she said. “Sometimes I get the impression that what we’re going to do is have a fortress built up as an overreaction. I don’t want to see that happen.” Kemp responded he would “personally fire” any HUD employee who was disrespectful to a member of Congress.

In a meeting with a group of reporters later in the day, Kemp said he was surprised--and somewhat amused--at Oakar’s reaction.

“A Democrat criticizing a Republican for trying to fight poverty,” he said. “We’ve come full circle. I was very surprised at Mary Rose Oakar--that she would put herself in the position of making an inference we were targeting too much to low income. I would love to have a debate on that.”

Kemp told reporters he believed he was receiving “generally good marks” for his proposals and that there “seems to be a lot of good will.” Everyone, he said, “wants to see HUD back on its feet and aimed in the right direction.”

He added: “I don’t think I have anyone in Congress saying, ‘I hope Kemp screws up.’ ”