The House Committee on Financial Services held its first hearing of the 112^th Congress on January 26, “Promoting Economic Recovery and Job Creation: The Road Forward.”

Representative Maxine Waters (D-CA) introduced testimony from the NLIHC into the hearing’s record, which argues capitalizing the National Housing Trust Fund will create jobs. According to the NLIHC testimony, “one proven way to create jobs is to invest in housing production, preservation, and rehabilitation. Today, there are over 1.7 million unemployed workers whose last job was in construction. With a 20% unemployment rate, the construction industry has the highest rate of people looking for work of any industry. Congress could immediately create much needed construction jobs by funding the National Housing Trust Fund.”

Ms. Waters is the ranking member of the Subcommittee on Capital Markets and Government Sponsored Enterprises, which will have a lead role in the future of U.S. housing finance and reform of Fannie Mae and Freddie Mac. Ranking Member Waters said she hopes to take politics out of the discussion as the subcommittee moves to review reform of the housing GSEs, Fannie Mae and Freddie Mac.

According to a hearing schedule released by Committee Chair Spencer Bachus (R-AL) on January 26, the Subcommittee on Capital Markets is expected to hold a GSE reform hearing on February 9. On January 21, 33 national organizations wrote to the White House (see Memo, 1/21), urging that funding for the NHTF be included in the Administration’s proposal to reform Fannie Mae and Freddie Mac. This letter was also introduced into the hearing record by Ranking Member Waters.

Statements from majority members of the committee, including Chair Bachus, Representatives Judy Biggert (R-IL), Jeb Hensarling (R-TX), and others, focused on the regulatory uncertainty businesses face in the wake of 2010’s Dodd-Frank Wall Street Reform and Consumer Protection Act and health care reform, and on the importance of cutting both entitlement and discretionary spending.

In his opening statement, Chair Bachus said, “We begin this work faced with an oncoming rush of more than 300 new rules and regulations being written by government officials as required by the massive financial services restructuring bill (Dodd-Frank) adopted last year. This is causing an understandable fixation on the near-term goal of moderating the negative impact of those regulations and avoiding unnecessary disruptions of our economy.”

Minority members countered that hearing testimony lacked ways to promote job creation. Representative Nydia Velazquez (D-NY) asked the hearing’s first panel of four witnesses if they believed the Dodd-Frank Act had caused small businesses to stop creating new jobs; three said no. Representative Jim Himes (D-CT) spoke about the significant impact the extension of the Bush tax cuts will have on the federal debt.

At a January 25 mark up to officially organize the Committee, Chair Bachus pointed to sustainable economic growth and job creation as the Committee’s highest goals, and he highlighted American exceptionalism in free market enterprises, the principles of economic and market freedoms and individual economic initiatives. Committee Ranking Member Barney Frank (D-MA) made a brief statement encouraging openness, transparency and bi-partisan cooperation in the new Committee.

For the NLIHC testimony, go to: http://www.nlihc.org/doc/NHTF_January_26_Testimony_HFS_Comm.pdf

To read the January 21 letter to the White House, go to: http://www.nlihc.org/doc/NHTF_Letter_1.21.11.pdf

Hearing information, including witness testimony and an archive webcast at: http://financialservices.house.gov/Hearings/hearingDetails.aspx?NewsID=1737