Letter to Nancy Pelosi, Speaker of the United States House of Representatives

Letter

Letter to Nancy Pelosi, Speaker of the House

As Congress prepares to consider $825 billion in new spending on a so-called stimulus plan, Rep. Shelley Moore Capito (R-WV) is calling for better targeting of those funds to maximize their stimulative impact and shield taxpayers from the rapidly ballooning costs of the current proposal.

"This bill proposes spending more money on programs that can't spend the money they already have," said Capito, who sent a letter to House Speaker Nancy Pelosi (D-CA) outlining her concerns. "If we're truly going to achieve maximum stimulus, we need to make sure these dollars can have an immediate impact and we certainly shouldn't be giving stimulus funding to political organizations like ACORN."

"We still don't know how all the TARP money is being used, so before authorizing hundreds of billions in additional spending, doesn't Congress at least have an obligation to make sure stimulus dollars will actually provide stimulus?"

A Congressional Budget Office report released this week notes that less than two-thirds of the plan will take effect within the first 19 months of the bill's passage, a figure that falls short of President Obama's goal.

Moreover, the current stimulus bill fails to include bipartisan funding guidelines implemented last year to prevent organizations that have been indicted for election fraud, or organizations that hired employees indicted for federal election fraud from receiving funding through similar federal programs. In recent years, ACORN has been plagued by high-profile cases of election fraud and was barred from receiving funding based on these guidelines. Those guidelines would not apply under the stimulus plan as it is currently written.

"The stated goal of this legislation is to provide immediate stimulus to our ailing economy," wrote Capito and others. "It is, therefore, imperative that this legislation target funds to programs and organizations which offer the maximum immediate economic stimulus… In addition to questioning the economic stimulus nature of… this bill, we are concerned that this bill opens the door for groups like the Association of Community Organizations for Reform Now (ACORN) to have access to billions of taxpayer dollars."

Capito's letter to House Speaker Nancy Pelosi (D-CA) was signed by 22 of her colleagues on the House Financial Services Committee and delivered to the Speaker's office today.

(Full text of the letter)

January 27, 2009

The Honorable Nancy Pelosi
Speaker of the House
H-232, The Capitol
Washington, D.C. 20515

Dear Speaker Pelosi:

The House will consider an economic stimulus bill, the "American Recovery and Reinvestment Act (ARRA) this week that will cost the American taxpayer in the range of $825 billion. The stated goal of this legislation is to provide immediate stimulus to our ailing economy. It is, therefore, imperative that this legislation target funds to programs and organization which offer the maximum immediate economic stimulus, and ensures that bad actors are not rewarded.

There are several provisions included in the bill that do not meet this standard. Funds should not be provided to programs that have a recognized difficulty in expending appropriations. Title XII of ARRA provides almost $15 billion for existing housing programs. The majority of the programs earmarked for funds under the stimulus bill have large unexpended balances sitting in their accounts. While the funds have been obligated, the programs have very slow spend-out rates. Providing affordable housing for our most vulnerable populations is certainly a worthy goal, but given this backlog in unexpended balances, it is questionable whether the new housing funds included in this bill will provide the economic stimulus necessary to revive our economy.

The proposal to authorize more than $4.19 billion for the Neighborhood Stabilization Program is similarly troubling. As the Washington Post recently editorialized:

"For sheer irrationality, it would be hard to top the $4.19 billion the bill would give to the Neighborhood Stabilization Program, on top of $4 billion authorized last year. This program gives local governments money to buy and rehabilitate homes that have been foreclosed on -- thus giving lenders an incentive to foreclose on more houses."

In addition to questioning the economic stimulus nature of the housing funds included in this bill, we are concerned that this bill opens the door for groups like the Association of Community Organizations for Reform Now (ACORN) to have access to billions of taxpayer dollars.

Already ACORN qualifies for and receives millions in funding as a HUD-certified housing counselor through HUD's HOME and Community Development Block Grant programs. According to a 2008 analysis conducted by House Republicans, ACORN has received at least $54 million dollars in direct federal funding since 1994. The group receives millions more from the government through indirect funding from states and cities.

At a time of financial distress, Congress should not reward bad actors that illegally manipulate our electoral process. Last congress, eligibility standards were included in Public Law 110-289, the "Housing and Economic Recovery Act of 2008" (HERA) which barred groups such as ACORN from receiving assistance under the Neighborhood Stabilization Program. ACORN was rendered ineligible for funding with language that prevented any group indicted for federal election fraud or that hired an individual indicted for federal election fraud from accessing funds made available through the neighborhood stabilization program. Given the changes to the Neighborhood Stabilization program included in the economic stimulus bill, it is unclear whether those same safeguards and restriction continue to apply.

We call upon our colleagues to include language in "American Recovery and Reinvestment Act of 2009" to prevent ACORN and other such organizations from receiving any stimulus assistance as well as ensuring that the housing programs selected for the stimulus package are able to quickly disburse the funds. We look forward addressing these issues and setting our economy on a responsible path to recovery.

Sincerely,
Shelley Moore Capito, Subcommittee on Housing and Community Opportunity
Spencer Bachus, Ranking Member - Committee on Financial Services
Other Members of the House Financial Services Committee

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