Rural Partnership and Prosperity Act

— 515 — Department of Housing and Urban Development 25. Process must prioritize where political leadership can implement administrative reforms through regulatory action and subregulatory guidance reforms. 26. China and other foreign nations should not be able to disrupt our nation’s housing markets, including by artificially driving up prices and reducing affordability and access to housing for Americans who are crowded out of the market by such market participation. 27. These initiatives are maintained under such designations as diversity, equity, and inclusion (DEI); critical race theory (CRT); black, indigenous, Pacific Islander, and other people of color (BIPOC); and environmental, social, and governance (ESG). 28. At a minimum, these efforts duplicate what the federal government already collects and assesses; at worst, they institute arbitrary procedures in real estate appraisal practices that undermine integrity and perversely introduce arbitrary biases into what should be an unbiased system for determining financial value. 29. Revise regulatory and subregulatory guidance, where applicable within statutory authorities, that adds unnecessary delay and costs to the construction and development of new housing and has been estimated to account for about 40 percent of new housing unit costs in multifamily housing. 30. The Biden Administration has issued a proposed rule to replace the Trump Administration’s “Preserving Community and Neighborhood Choice” rule that had repealed earlier rules expanding AFFH enforcement. See U.S. Department of Housing and Urban Development, Office of Fair Housing, “Preserving Community and Neighborhood Choice,” Final Rule, Federal Register, Vol. 85, No. 153 (August 7, 2020), pp. 47899–47912, https://www.govinfo.gov/content/pkg/FR-2020-08-07/pdf/2020-16320.pdf (accessed March 5, 2023), and U.S. Department of Housing and Urban Development, Office of the Secretary, “Affirmatively Furthering Fair Housing,” Proposed Rule, Federal Register, Vol. 88, No. 27 (February 9, 2023), pp. 8516–8590, https://www. govinfo.gov/content/pkg/FR-2015-07-16/pdf/2015-17032.pdf (accessed March 5, 2023). 31. Certain pilot initiatives may encourage greater take-up of loan products designed for faster equity accumulation, including loans with shorter terms and accelerated amortization schedules. In concept, the FHA’s Home Equity Accelerator Loan (HEAL) and Good Neighbor Next Door (GNND) pilot initiatives might lead to meaningful wealth generation for first-time buyers, but they should be available to all eligible households only when they do not arbitrarily discriminate based on race or other characteristics. 32. Housing supply does remain a problem in the U.S., but constructing more units at the low end of the market will not solve the problem. Investors and developers can deliver at more efficient cost new units that will allow for greater upward mobility of rental and ownership housing stock and better target increased construction of mid-tier rental units. Further, and more fundamental to the housing supply challenge in markets across the U.S., localities can consider revising land use, zoning, and building regulations that constrict new housing development, adding time delays and costs that impede construction. Federal housing policy should get out of the way where possible and minimize the distortive impact that stimulating greater demand through loose lending can have in driving up housing prices for households that are looking for affordable entry into the housing market. 33. U.S. Department of Housing and Urban Development, Office of the Secretary, “Housing and Community Development Act of 1980: Verification of Eligible Status,” Proposed Rule, Federal Register, Vol. 84, No. 91 (May 10, 2019), pp. 20589–20595, https://www.govinfo.gov/content/pkg/FR-2019-05-10/pdf/2019-09566.pdf (accessed March 5, 2023). 34. Reforms should contemplate rent payment flexibilities, allow escrow savings, and set maximum term limits that can reduce implicit penalties for increasing household incomes over eligibility terms for housing assistance and reweight waiting-list prioritization for two-parent households. 35. Some PHAs have been able to implement work requirements and term limit policies in various congressionally authorized demonstration programs, notably the Moving to Work (MTW) demonstration program established in 1996 for 39 PHAs (Congress has since authorized another 100 PHAs) in which participating MTW PHAs were given authority to implement rent reforms, work requirements and other experimental policies in rental assistance programs along with flexibilities in the use of capital and operating appropriations. 36. The FSS program has a general five-year term with a possible two-year extension, which could be applied at the term limit for overall benefits, and certain PHAs have imposed five-year to seven-year term limits. Families in these programs build escrow savings during their term eligibility that helps to facilitate successful transitions to family self-sufficiency and unassisted housing. — 516 — Mandate for Leadership: The Conservative Promise 37. HUD should implement administrative changes in regulation and guidance and seek statutory authority to end all Housing First directives of Continuum of Care (CoC) grantees and contract homelessness providers in addition to establishing restrictions on local Housing First policies where HUD grant funds are used. 38. The U.S. Interagency Council on Homelessness (USICH) was established in the 1990s, and numerous Administrations have devoted enormous resources to the Housing First model, experimenting with various ways to provide federally financed rapid rehousing and permanent housing opportunities. Housing First is a far-left idea premised on the belief that homelessness is primarily circumstantial rather than behavioral. The Housing First answer to homelessness is to give someone a house instead of attempting to understand the underlying causes of homelessness. Federal intervention centered on Housing First has failed to acknowledge that resolving the issue of homelessness is often a matter of resolving mental health and substance abuse challenges. Instead of the permanent supportive housing proffered by Housing First, a conservative Administration should shift to transitional housing with a focus on addressing the underlying issues that cause homelessness in the first place. 39. The Senate Low-Income First-Time Homebuyers (LIFT) Act would address this policy goal. See S. 2797, Low-Income First-Time Homebuyers Act of 2021 (LIFT Homebuyers Act of 2021), 117th Congress, introduced September 22, 2021, https://www.congress.gov/117/bills/s2797/BILLS-117s2797is.pdf (accessed March 5, 2023). 40. FHA did not facilitate the widespread use of 30-year mortgages until the 1950s when, interacting with Federal Reserve policies, federal agencies began broader adoption of the mortgages, which, despite lowering the monthly repayment terms, result in slow equity accumulation and wealth-building opportunities. 41. The Housing and Economic Recovery Act of 2008 fundamentally revised the scope of federal regulation in the nation’s housing finance system, placing Fannie Mae and Freddie Mac under the purview of a newly established Federal Housing Finance Agency (FHFA) and establishing a Housing Trust Fund (HTF) that is administered in the HUD Office of Community Planning and Development. See H.R. 3221, Housing and Economic Recovery Act of 2008, Public Law No. 110-289, 110th Congress, July 30, 2008, https://www.congress. gov/110/plaws/publ289/PLAW-110publ289.pdf (accessed March 5, 2023). 42. Guiding questions: What reforms should be proposed that could be accomplished within five years? What reforms can be done administratively, and what reforms would need legislative authorization? Are there functions that HUD administers that could be achieved more effectively at another department or agency? What big-picture reforms should be proposed that might take more than five years that would reorganize HUD and its programs to meet the objectives in the vision or mission? What would occur in the absence of these public finance subsidies? How much crowd-out do these subsidies create in the market? Would America be a seriously underhoused nation without these subsidies? Who are the policies intended to benefit? What organizational changes must be made? 43. The Faircloth Amendment (Quality Housing and Work Responsibility Act of 1998) amended the Housing Act of 1937 to maintain public housing units at 1999 levels, preventing housing authorities from maintaining more public housing than they did then. H.R. 4194, Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1999, Public Law No. 105-276, 105th Congress, October 21, 1998, Title V, https://www.congress.gov/105/plaws/publ276/PLAW-105publ276.pdf (accessed March 5, 2023). In recent years, the statutory restriction on new construction of public housing units has been circumvented through some narrow uses of preservation programs such as the Rental Assistance Demonstration (RAD) program, initially authorized in 2012 and reauthorized several times since under higher program unit conversion caps. Congress also provided paths for renewal and continuation of a portion of existing public housing; project/site-based housing stock (refinancing with long-term HAP contract commitments); and Section 8 units through the Multifamily Assisted Housing Reform and Affordability Act of 1997 (MAHRA). H.R. 2158, Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1998, Public Law No. 105-65, 105th Congress, October 27, 1997, Title V, https://www.congress.gov/105/plaws/publ65/PLAW-105publ65.pdf (accessed March 5, 2023). 44. As the evolution of HUD rental assistance transitions away from the public housing model toward housing choice vouchers, there should be adequate landlord participation to ensure that the supply of housing units for rent in these programs meets the demand for rent among eligible tenants. This issue has been addressed in various ways, including by a task force instituted at the department during the Trump Administration, but could likely remain a challenge in the administration of the program.

— 296 — Mandate for Leadership: The Conservative Promise support went to just six commodities—corn, cotton, peanuts, rice, soybeans, and wheat—that together account for only 28 percent of farm receipts.32 Although many farmers do not receive much in the way of subsidies, especially those in the areas of livestock and specialty crops (fruit, vegetable, and nuts),33 there are still a sig- nificant number of farmers growing row crops like corn and cotton that do receive significant farm subsidies. The primary subsidy programs include the Agriculture Risk Coverage (ARC) program,34 the Price Loss Coverage (PLC) program,35 and the federal crop insur- ance program.36 Farmers can participate on a crop-by-crop basis in the ARC program or the PLC program. These programs cover about 20 different crops.37 The ARC program protects farmers from what are referred to as “shallow” losses, pro- viding payments when their actual revenues fall below 86 percent of the expected revenues for their crops.38 The PLC program provides payments to farmers when commodity prices fall below a fixed, statutorily established reference price.39 The federal crop insurance program is broader in scope than ARC and PLC, and in crop year 2019 covered 124 commodities.40 Farmers pay a portion of a premium to participate in the program. Taxpayers on average pay about 60 per- cent41 of the premium. As explained by CRS, “Revenue Protection was the most frequently purchased policy type in 2019, accounting for almost 70 [percent] of policies purchased.”42 While there are certainly other subsidy programs besides ARC, PLC, and federal crop insurance, one program that deserves special mention is the federal sugar program. This program, unlike most other subsidy programs, intentionally tries to restrict supply43 and thereby drives up prices. The program costs consumers as much as $3.7 billion a year.44 When it comes to reforming subsidy programs, the next Administration will primarily have to look to legislative solutions. The next Administration should champion legislation that would: l Repeal the federal sugar program. The federal government should not be in the central planning business, and the sugar program is a prime example of harmful central planning. Its very purpose is to limit the sugar supply in order to increase prices. The program has a regressive effect, since lower-income households spend more of their money to meet food needs compared to higher income households.45 l Ideally, repeal the ARC and PLC programs. Farmers eligible to participate in ARC or PLC are generally already able to purchase federal crop insurance, policies that protect against shortfalls in expected revenue whether caused by lower prices or smaller harvests. The ARC program is especially egregious because farmers are being protected from shallow — 297 — Department of Agriculture losses, which is another way of saying minor dips in expected revenue. This is hardly consistent with the concept of providing a safety net to help farmers when they fall on hard times. The Congressional Budget Office (CBO), in one of its options to reduce the federal deficit, has once again identified repealing all Title I farm programs, including ARC, PLC, and the federal sugar program.46 l Stop paying farmers twice for price and revenue losses during the same year. Farmers can receive support from the ARC or PLC programs and the federal crop insurance program to cover price declines and revenue shortfalls during the same year. Congress should prohibit this duplication by prohibiting farmers from receiving an ARC or PLC payment the same year they receive a crop insurance indemnity. l Reduce the premium subsidy rate for crop insurance. On average, taxpayers cover about 60 percent47 of the premium cost for policies purchased in the federal crop insurance program. One of the most widely supported and bipartisan policy reforms is to reduce the premium subsidy that taxpayers are forced to pay.48 At a minimum, taxpayers should not pay more than 50 percent of the premium. After all, taxpayers should not have to pay more than the farmers who benefit from the crop insurance policies. CBO has found that reducing the premium subsidy to 47 percent would save $8.1 billion over 10 years and have little impact on crop insurance participation or on the number of covered acres.49 In that analysis, there would be a reduction in insured acres of just one-half of 1 percent, and only 1.5 percent of acres would have lower coverage levels. 50 This reform is basically all benefit with little to no cost. In its recently released report identifying options to reduce the federal deficit, CBO found that reducing the premium subsidy to 40 percent would save $20.9 billion over 10 years.51 Beyond these legislative reforms, the next Administration should: l Communicate to Congress the necessity of transparency and a genuine reform process. The White House and the USDA should make it very clear that the farm bill process, including reform of farm subsidies, must be con- ducted through an open process with time for mark-up and the opportunity for changes to be made outside the Agriculture Committee process. The farm bill too often is developed behind closed doors and without any chance for real reform. The White House, given the power of the bully pulpit,

— 311 — Department of Agriculture ENDNOTES 1. U.S. Department of Agriculture, Fiscal Year 2023 Budget Summary, p.1, https://www.usda.gov/sites/default/ files/documents/2023-usda-budget-summary.pdf (accessed December 14, 2022). 2. See, for example, U.S. Department of Agriculture, “Transforming the U.S. Food System,” https://www.usda. gov/fst (accessed December 14, 2022). 3. U.S. Department of Agriculture, Fiscal Year 2023 Budget Summary, p.1. 4. U.S. Department of Agriculture, “USDA Celebrates 150 Years,” https://www.usda.gov/our-agency/about-usda/ history (accessed December 16, 2022). 5. The law stated, “[T]here is hereby established at the seat of government of the United States a Department of Agriculture, the general designs and duties of which shall be to acquire and to diffuse among the people of the United States useful information on subjects connected with agriculture in the most general and comprehensive sense of that word, and to procure, propagate, and distribute among the people new and valuable seeds and plants.” Gladys L. Baker et al., Century of Service: The First 100 Years of the United States Department of Agriculture, (Washington, DC: U.S. Government Printing Office, 1963) p. 13, https://babel. hathitrust.org/cgi/pt?id=uc1.b4254098&view=1up&seq=33 (accessed December 16, 2022). 6. U.S. Department of Agriculture, Fiscal Year 2023 Budget Summary, p. 2. 7. Ibid., p. 2. 8. U.S. Department of Agriculture, Strategic Plan: Fiscal Years 2022–2026, p. 3, https://www.usda.gov/sites/ default/files/documents/usda-fy-2022-2026-strategic-plan.pdf (accessed December 14, 2022). 9. News release, “USDA Announces Framework for Shoring Up the Food Supply Chain and Transforming the Food System to Be Fairer, More Competitive, More Resilient,” U.S. Department of Agriculture, June 1, 2022, https://www.usda.gov/media/press-releases/2022/06/01/usda-announces-framework-shoring-food-supply- chain-and-transforming (accessed December 14, 2022). 10. U.S. Department of Agriculture, “Transforming the U.S. Food System.” 11. U.S. Department of Agriculture, Strategic Plan: Fiscal Years 2022–2026, pp. 1–2. 12. U.S. Department of Agriculture, “Background on the U.S. Approach to the 2021 UN Food Systems Summit,” August 4, 2021, https://www.usda.gov/sites/default/files/documents/Background-on-US-approach-2021-UN- Food-Systems-Summit.pdf (accessed December 14, 2022). 13. U.S. Department of Agriculture, “UN Food Systems Summit,” https://www.usda.gov/oce/sustainability/un- summit (accessed December 14, 2022). 14. Mark Bittman et al., “How a National Food Policy Could Save Millions of American Lives,” The Washington Post, November 7, 2014, https://www.washingtonpost.com/opinions/how-a-national-food-policy-could- save-millions-of-american-lives/2014/11/07/89c55e16-637f-11e4-836c-83bc4f26eb67_story.html (accessed December 14, 2022); Daren Bakst and Gabriella Beaumont-Smith, “No, We Don’t Need to Transform the American Food System,” The Daily Signal, February 26, 2021, https://www.dailysignal.com/2021/02/26/ no-we-dont-need-to-transform-the-american-food-system/ (accessed December 14, 2022); and Daren Bakst, “Biden’s Food Conference Should Put People First, Not Environmental Extremism,” The Daily Signal, September 22, 2022, https://www.dailysignal.com/2022/09/22/bidens-food-conference-should-put-people- first-not-environmental-extremism/ (accessed December 14, 2022). 15. News release, “USDA to Invest Up to $300 Million in New Organic Transition Initiative,” U.S. Department of Agriculture, August 22, 2022, https://www.usda.gov/media/press-releases/2022/08/22/usda-invest-300- million-new-organic-transition-initiative (accessed December 14, 2022). 16. Gary Baise, “Sri Lanka’s Green New Deal Was a Disaster,” Farm Futures, November 14, 2022, https://www. farmprogress.com/commentary/sri-lankas-green-new-deal-was-disaster (accessed December 16, 2022). 17. See, for example, Catherine Greene et al., “Growing Organic Demand Provides High-Value Opportunities for Many Types of Producers,” Economic Research Service, U.S. Department of Agriculture, February 6, 2017, https://www. ers.usda.gov/amber-waves/2017/januaryfebruary/growing-organic-demand-provides-high-value-opportunities- for-many-types-of-producers/#:~:text=ERS%20research%20shows%20that%20many,flavor%20desired%20 by%20the%20consumer (accessed December 14, 2022), and Andrea Carlson, “Investigating Retail Price Premiums for Organic Foods,” Economic Research Service, U.S. Department of Agriculture, May 24, 2016, https://www.ers. usda.gov/amber-waves/2016/may/investigating-retail-price-premiums-for-organic-foods/ (accessed December 16, 2022). Further, there are many myths, such as those regarding the alleged health benefit of organic food. One — 312 — Mandate for Leadership: The Conservative Promise meta study found that “[t]he published literature lacks strong evidence that organic foods are significantly more nutritious than conventional foods.” Crystal Smith-Spangler et al., “Are Organic Foods Safer or Healthier Than Conventional Alternatives,” Annals of Internal Medicine, Vol. 157, No. 5 (September 4, 2012), pp. 348–366, https:// www.acpjournals.org/doi/epdf/10.7326/0003-4819-157-5-201209040-00007 (accessed December 16, 2022). 18. Steve Savage, “USDA Data Confirm Organic Yields Significantly Lower Than With Conventional Farming,” Genetic Literacy Project, February 16, 2018, https://geneticliteracyproject.org/2018/02/16/usda-data-confirm- organic-yields-dramatically-lower-conventional-farming/ (accessed December 16, 2022). 19. See, for example, U.S. Department of Agriculture, “Notice: Climate-Smart Agriculture and Forestry Partnership Program, Request for Comments,” USDA–2021–0010, October 21, 2021, https://www.regulations. gov/document/USDA-2021-0010-0001 (accessed December 16, 2022). 20. Inflation Reduction Act of 2022, Public Law 117–169. 21. U.S. Department of Agriculture, Economic Research Service, “Productivity Growth in U.S. Agriculture (1948–2019),” https://www.ers.usda.gov/data-products/agricultural-productivity-in-the-u-s/productivity- growth-in-u-s-agriculture-1948-2019/ (accessed December 14, 2022). 22. U.S. Department of Agriculture, Economic Research Service, “Total Food Budget Share Increased from 9.4 Percent of Disposable Income to 10.3 Percent in 2021,” July 15, 2022, https://www.ers.usda.gov/data-products/ chart-gallery/gallery/chart-detail/?chartId=76967 (accessed December 14, 2022). 23. U.S. Department of Labor, Bureau of Labor Statistics, “Quintiles of Income Before Taxes: Annual Expenditure Means, Shares, and Standard Errors, and Coefficients of Variation, Consumer Expenditure Surveys,” 2021, Table 1101, https://www.bls.gov/cex/tables/calendar-year/mean-item-share-average-standard-error/cu- income-quintiles-before-taxes-2021.pdf (accessed December 16, 2022), and Daren Bakst and Patrick Tyrrell, “Big Government Policies That Hurt the Poor and How to Address Them,” Heritage Foundation Special Report No.176, April 5, 2017, p. 7, https://www.heritage.org/sites/default/files/2017-04/SR176.pdf. 24. Daren Bakst and Joshua Sewell, “Congress Should Stop Abrogating Its Spending Power and Rein in the USDA Slush Fund,” Heritage Foundation Issue Brief No. 6052, February 19, 2021, p. 2, https://www.heritage.org/ budget-and-spending/report/congress-should-stop-abrogating-its-spending-power-and-rein-the-usda. 25. Commodity Credit Corporation Charter Act of 1948, Public Law 80–806. 26. Bakst and Sewall, “Congress Should Stop Abrogating Its Spending Power.” 27. Ibid., p. 3. 28. Daren Bakst, “Comment from Bakst, Darren” on “Notice: Climate-Smart Agriculture and Forestry Partnership Program, Request for Comments,” USDA–2021–0010, October 21, 2021,” November 1, 2021, https://www. regulations.gov/document/USDA-2021-0010-0001/comment?filter=bakst (accessed December 16, 2022). 29. U.S. Department of Agriculture, “Notice: Climate-Smart Agriculture and Forestry Partnership Program.” 30. Megan Stubbs, “The Commodity Credit Corporation (CCC),” Congressional Research Service Report for Congress, updated January 14, 2021, https://crsreports.congress.gov/product/pdf/R/R44606 (accessed December 16, 2022). 31. “Overall, 34 percent of all farms reported receiving some type of Government payment in 2021,” and “[o]verall, 14 percent of U.S. farms participated in Federal crop insurance programs.” Christine Whitt, Noah Miller, and Ryan Olver, “America’s Farms and Ranches at a Glance: 2022 Edition,” U.S. Department of Agriculture, Economic Research Service, pp. 24 and 26, https://www.ers.usda.gov/webdocs/publications/105388/eib-247. pdf?v=527.4 (accessed March 18, 2023). This data, which apparently does not cover crop insurance, included payments beyond just commodity payments, such as conservation payments. 32. Randy Schnepf, “Farm Safety-Net Payments Under the 2014 Farm Bill: Comparison by Program Crop,” Congressional Research Service Report for Congress, August 11, 2017, https://fas.org/sgp/crs/misc/R44914.pdf (accessed December 14, 2022). 33. Although livestock and specialty crop producers do receive some subsidies, former American Farm Bureau Federation President Bob Stallman captured the subsidy issue well. He “dismisse[d] outright the claim that farmers couldn’t survive without subsidy money. ‘Why does the livestock industry survive without subsidies?’ he ask[ed]. ‘Why does the specialty crop [fruit and vegetable] industry survive?’” Tamar Haspel, “Why Do Taxpayers Subsidize Rich Farmers?” The Washington Post, March 15, 2018, https://www.washingtonpost. com/lifestyle/food/why-do-taxpayers-subsidize-rich-farmers/2018/03/15/50e89906-27b6-11e8-b79d- f3d931db7f68_story.html (accessed March 18, 2023).