View Header


                     Office of the Press Secretary
                      (San Francisco, California)
For Immediate Release                                      June 23, 1997
                           PRESS BRIEFING BY
                          HUD SECRETARY CUOMO 
                 AND DEPUTY PRESS SECRETARY BARRY TOIV                 
                            The Clift Hotel
                       San Francisco, California                               

11:25 A.M. PDT

SECRETARY CUOMO: Good morning. The President just spoke at the United States Conference of Mayors. This is their annual convention, obviously, in San Francisco, hosted by Mayor Willie Brown. The President's speech outlined a report that we issued today, which is called the State of the Cities report -- you have copies of it. It's a report put out by the Department of Housing and Urban Development at the President's request. The President requested from the Department about six months ago to find out how cities are doing, and the results are called the State of the Cities.

The basic findings of the State of the Cities report are, one, the cities are doing much better than they've ever done before, especially in the '70s and the '80s. Poverty is down, crime is down, unemployment is down. But, it goes on to say, there is still much more that needs to be done and there are some real structural problems that cities have to deal with.

Number one, cities are not getting as many new jobs as the suburbs are getting. Number two, the amount of poverty in the city is increasing and it's becoming more racially and geographically segregated. And, third, the middle class is still leaving cities, which is a bad sign for the long-term fiscal health of cities.

The President went on to lay out a seven point agenda to deal with that. Primary in the new agenda was a new homesteading initiative, which is about a $700-million initiative to provide more homeownership opportunities in cities. The President also pushed Congress for the second round of empowerment zones and new brownfields legislation.

The report then goes on to speak about a reinvented -- a new HUD for a new century, it calls it -- the State of the Cities report concludes by saying, to implement this new agenda we're going to need a new HUD, a new government department. It calls for a remake. We will announce a total overhaul of HUD later this week. But it signaled in the State of the Cities report.

The speech went over very well. The Conference of Mayors is going to do a statement. They're very pleased. There were comments like, this is the first time in 20 years they've heard a President lay out as thoughtful an agenda about urban America. But that happened about 20 minutes, a half hour ago. Whatever questions you might have on it, it would be my pleasure to answer.

Q One specific question if I may about the 25 point reduction the FAA is going to propose -- as I understand it, that applies only to first-time home buyers in certain designated so-called central cities. The other three that you've had over the past four years, did they apply to the same small category, or were they more broadly applied?

SECRETARY CUOMO: No. FHA is part of HUD. We're reducing the mortgage premium, reducing the up-front closing costs. Third reduction. The other reductions were national in scope. This reduction is only central cities. But that's the top 524 cities in the country. So when you say a small area, 524 cities are basically every city -- every area you would think of as a city.

But what the point of it is, we're trying to get a homeownership incentive for cities, as opposed to the rest of the country. And that's this targeted FHA reduction -- first time in history it's ever been done.

Q Just one overall question. You said that you're going to announce next week a remake of HUD. Can you summarize what you think the old HUD, the goal of the old HUD was Can you summarize what you think the old HUD -- the goal of the old HUD was versus the goal of what you think the new HUD is going to be?

SECRETARY CUOMO: Yes. Actually, it's going to be this week -- later this week is going to be the announcement, on Thursday, of the new HUD. The President talks about not just a list of initiatives -- empowerment zones, homeownership -- but more a shift in philosophy called his empowerment philosophy, which he started when he came in 1993.

The empowerment philosophy is a much different philosophy than past programs. It says let's get the decision-making down into the local communities, lets come up with comprehensive solutions. They have to be bottom up; it has to be about the creation of jobs and opportunity, not a plethora of social programs to be administered. That's the President's empowerment philosophy.

The old HUD was the classic Washington top-down bureaucracy. The antithesis to the President's empowerment agenda. This HUD will be the instrumentality to implement the President's empowerment agenda, as opposed to running more top-down federal programs.

Q How many people do you anticipate will take advantage of the lowered mortgage premiums for central city home purchases? And how much overall in total are these three initiatives going to cost?

SECRETARY CUOMO: How many thousand -- 20,000 a year we estimate.

Q And what's the figure for the cost for the three proposals that the President --

SECRETARY CUOMO: About $700 million.

Q Annual number, or is that a five-year budget number?

SECRETARY CUOMO: That is an annual. I can get you those numbers; I don't have them here.

Q How are you going to pay for them?

SECRETARY CUOMO: That's within the HUD budget.

Q In San Francisco, there's great concern about racial tensions in the housing, public housing. What's being done to address that?

SECRETARY CUOMO: When this first started -- the San Francisco Housing Authority is basically run by the Federal Department of Housing and Urban Development in a partnership with the city. But when we first heard about the situation I sent out my Deputy General Counsel for Fair Housing, Mercedes Marquez -- she's been on the scene, she's been talking to people.

From her initial assessment, we decided to call in the FBI, the Federal Bureau of Investigation has been brought in. They're talking to the various parties to come up with an assessment of facts and then we'll make a determination once we have the facts. But let me be clear; even before the FBI comes back, there will be zero tolerance for any violence, any racial violence whatsoever. Now, if that is indeed the case -- we have to find out when the FBI comes back -- but if that's the case, we will take sure and swift action.

Q Could you give a sense of -- I don't know, kind of a sense of proportion as to how significant the Officer Next Door program would be? I mean, is it -- how symbolic is it? How likely do you think it would be to really have an impact on many communities?

SECRETARY CUOMO: I think it's going to have a real impact. It's not -- there are cities who are doing things like this. Many cities talk about a residency law, where they want their employees to be in their city, especially their police officers. Why? Because if you're a police officer, you're a police officer 24 hours a day; you bring a sense of security; you can stabilize a neighborhood. People want to live next to a police officer. We're trying to attract the middle class back to a city, some marginal areas -- if we can say there's two officers who live on this block.

The flip side is, from the officer's point of view, 50 percent is a real financial incentive. If you have a house that's at $80,000 appraised value, that's $40,000. The discount on the house can be equal to their annual salary. So this is not a small financial incentive. This can be a significant financial incentive. We know the concept works because cities have been doing it. They have come up with their own incentives.

Now, the President's point was we have this big portfolio of houses, why don't we use it to do what the cities need done. And we think it can have a real impact. We're talking about 2,000 police officers as the first phase. But it works for the officers, it works for the community, it works for the cities.

Q What cities have tried it?

SECRETARY CUOMO: Los Angeles has tried it. Columbia, South Carolina.

Q There's been a reduction of crime in the neighborhoods where it's been done? Is there any --

SECRETARY CUOMO: I don't know the data on it. I know that it's been viewed as a success by those areas.

Q It seems like such a tiny number -- 1,000 police officers nationwide, when many of these departments have tens of thousands of officers. Are there plans to expand the program, or is there just a limited housing stock that you all have available?

SECRETARY CUOMO: No, actually, what we're talking about is doing it as a first phase, is what we've spoken about. If it works the way we think it's going to work, then we will continue it and the numbers will be larger. The HUD portfolio continues. These are houses that we take back in foreclosure. So it's not a finite quantity of homes. We have new homes literally every day. And if this works the way we think it works and we get the cities coming in with the level of interest we think we will, we'll continue this and the numbers will be quite significant.

Okay. Thank you very much.

MR. TOIV: Got anything else I can mop up?

Q Can you tell us how much money is going to be raised at the three fundraisers today?

MR. TOIV: I don't have the Boxer information. You all can probably get that from the DSCC or from Senator Boxer's office or campaign. But for the -- yes, we can get that. The DNC fund-raisers, they expect to raise about $80,000.

This is the Saxophone Club.

Anything else? Anybody want to know what we're doing on tobacco?

Q Yes.

MR. TOIV: You should have asked. The review has begun of the proposed settlement. There will be a large number of agencies involved, including HHS and FDA, Justice, Treasury, USDA, Labor, OMB, and a number of White House offices as well.

Eight working groups have been established on the major issues, to be comprised of various combinations of those offices and agencies. The main groups -- first, obviously, the whole issue of FDA regulation -- marketing, access, labeling issues, is one working group. There will be a working group on budget issues; in other words, how the money is proposed to be spent. The third is industry analysis. That's a group that's going to look at the incentives in the agreement, the financial picture of the industry, those kinds of issues. Also, working groups will be looking at the issues of workplace smoking, smoking cessation, the issue of litigation, liability, and disclosure. There will be a working group on international issues, and there will be a working group on implementation issues. I hope that adds up to eight.

Q How many groups?

MR. TOIV: There are eight working groups. And I hope what I gave you just adds up to eight.

Q Did you make workplace smoking and smoking cessation one or two?

MR. TOIV: They seem to be two, but let's count. Good. And the President has given Secretary Shalala and Bruce Reed 30 days to complete this review. As he said yesterday, he wanted to get this done in a matter of weeks.

And so, over the next few weeks, these working groups will be reviewing the terms of the settlement, and as the President said yesterday, there will be a particular focus on the FDA and budget portions of the agreement. And also, the working groups will -- as we have said, the working groups will consult extensively with the Congress, with outside groups, obviously with public health organizations, Drs. Kessler and Koop and many others.

Anything else?

Q -- the heads these groups --

MR. TOIV: I don't think I have that at the moment. I'm not sure if they've decided who heads those groups yet.

Q Has the President has been briefed now on the Supreme Court's actions today?

MR. TOIV: I believe he's aware of it.

Q Any reaction from him himself?

MR. TOIV: I believe you've got the reaction from the White House.

Q You have nothing beyond --

MR. TOIV: Nothing beyond the Ruff statement, no.

Q And do we have a copy of that here? A written statement?

MR. TOIV: It's not even a written statement, but I'll make sure you get the words.

Q Hey, Barry, what are you going to do with these letters that --

MR. TOIV: Well, those letters will go up to the Hill. We want -- are you talking about the letters on China NTR?


MR. TOIV: Those letters are going to go to the Hill. I would assume they're going to distribute them to House members in advance of the vote tomorrow. Obviously, there's a lot of work going on on that to convince House members making good progress. And that vote is tomorrow, as you know.

Anything else? Okay.

Q How long are we in here, Barry?

MR. TOIV: A couple of hours? Josh?

MR. SILVERMAN: We're planning to leave a little before 1:00 p.m.

MR. TOIV: Okay.

Q -- Boxer, right?

MR. TOIV: What?

Q A Boxer fundraiser?

MR. TOIV: Yes.

THE PRESS: Thank you.

END 11:41 A.M. PDT