Bloomberg News

Romney Would Deny American Dream by Closing HUD, Donovan Says

April 27, 2012

Mitt Romney, left, in a neighborhood hit hard by foreclosures on April 1, 2011, in Las Vegas. Photographer: Julie Jacobson/AP Photo

Mitt Romney, left, in a neighborhood hit hard by foreclosures on April 1, 2011, in Las Vegas. Photographer: Julie Jacobson/AP Photo

Mitt Romney, the presumptive Republican presidential nominee, would be denying Americans their most important savings vehicle if he eliminates the Department of Housing and Urban Development as he has suggested, agency Secretary Shaun Donovan said today.

Home ownership is the way many Americans pay for big-ticket items such as college and retirement, Donovan said.

“When you say, ‘Let the market hit bottom. Government shouldn’t be engaged in supporting housing in any way,’ what you’re talking about is telling those families who want to send their kids to college, who want to start a small business, who want to save for retirement that they’re going to give up on those dreams,” Donovan said. “That’s something we are not willing to accept.”

Romney said at a fundraiser he might get rid of the cabinet-level agency at a private Florida fundraiser this month. His father, George Romney, served as HUD secretary during the administration of President Richard Nixon in the early 1970s.

“I’m going to take a lot of departments in Washington, and agencies, and combine them,” Romney said, according to NBC News, which reported it overheard the comments from a sidewalk outside of the fundraiser. “Things like Housing and Urban Development, which my dad was head of, that might not be around later.”

Donovan said he interpreted Romney’s comment as a criticism of the federal government’s role in housing rather than a recommendation for a bureaucratic reorganization.

“It’s a fundamental question of whether we ought to be engaged in the work that we’re doing,” he said.

HUD’s Importance

HUD runs the Federal Housing Administration, which insures mortgages for buyers with low down payments. The agency also runs the government’s housing programs for the poor and disabled.

“Fundamentally, if you ask the question, ‘Does what HUD provides to the most vulnerable Americans, is it necessary today? Is it more important than it’s ever been?’ The answer is yes,” Donovan said.

The Romney campaign didn’t immediately respond to a request for comment.

President Barack Obama’s administration has said the government footprint in the housing market needs to shrink, he said. The administration “would seriously consider” releasing a proposal for housing finance reform “if it would be helpful in reaching resolution,” Donovan said in an interview today on Bloomberg Television’s InBusiness with Margaret Brennan.

Still, he said, it is up to Congress to come up with a plan for winding down Fannie Mae and Freddie Mac, the mortgage- finance companies operating under U.S. conservatorship.

“We need a bipartisan consensus on reform to emerge,” he said. “This really is about Congress taking that step.”

To contact the reporter on this story: Clea Benson in Washington at cbenson20@bloomberg.net

To contact the editor responsible for this story: Maura Reynolds at mreynolds34@bloomberg.net


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