“…a square mile in central Baghdad seemed like hell on earth. An inferno… This is on a completely different scale from everything else that has gone before. This isn’t just an attack on bricks and mortar. It is an assault on the human senses… demolishing Saddam Hussein’s symbols of power.”
ITN’s John Irvine reporting from Baghdad, Iraq, March 21, 2003
Over the past month, Washington, DC has been reeling from a relentless barrage of precedent shattering changes in the bureaucracy and broader economy of government consulting and programmatic grants. Nearly everyone I have asked knows someone who has lost their job or a major grant. For conservative libertarians, it is an historic victory against “the administrative state.” Ultimately, it could become the biggest change in government since 1933. For progressives, centrists, and traditional conservatives, it has been an “assault on the human senses.”
The climate of fear and confusion among housing leaders across the political spectrum has been palpable. There is widespread fear that publicly pushing back against actions by the administration will lead to retribution. NHC continues to work with our members to avert consequences of actions by “Department of Government Efficiency” (DOGE) staff that fail to take into account the impact individual staff and contracts have on the stability of the mortgage finance system and the safety and soundness of the private entities that depend upon the government guardrails and train tracks upon which it operates. We are also working to support administration appointees committed to expanding affordable housing and making government more efficient.
In a recent article in Bloomberg on DOGE cuts to Ginnie Mae staff, I said cutting staff from an agency that makes billions of dollars for the government while managing the market’s safety and soundness “is the government equivalent of eating your seed corn.” I also noted that “the people who President Trump has appointed to run these agencies will find themselves having to clean up the mess that DOGE staff creates.”
“The president ran on bringing down the cost of housing,” Ken Wingert, chief advocacy officer at the National Association of Home Builders, told Politico. “Increasing the cost of construction inputs doesn’t accomplish that goal, and we will continue to relay that to folks in the administration and on the Hill.” President Trump issued an Executive Order on housing affordability on January 20. In it he ordered the heads of all executive departments and agencies to pursue “appropriate actions to lower the cost of housing and expand housing supply.”
Initial reports that only ten percent of the staff at Ginnie Mae would be fired significantly understate the actual impact. NHC has confirmed that one-fifth to one-quarter of positions at Ginnie Mae are likely to be vacant due to retirements, forced resignations, and firings of probationary staff hired within the last year to modernize the agency.
In a Wall Street Journal op-ed published in December, former HUD Deputy Secretary in the first Trump Administration Brian Montgomery wrote that FHA mortgage insurance “is funded by borrowers’ premiums paid through their lenders. The agency’s reserves come entirely from borrowers’ premiums and investment income.” During FY24, Ginnie Mae’s mortgage-backed securities (MBS) program supported 1.2 million households nationwide — including servicemembers, veterans, and first-time homebuyers — from urban centers to rural and Tribal communities, according to a Ginnie Mae report quoted by HousingWire.
“The MBS gross annual issuance totaled $423.4 billion, increasing Ginnie Mae’s outstanding portfolio to a record $2.64 trillion. This performance generated $3.1 billion in results of operations, including a $1.3 billion contribution to the U.S. Government.” The link to the report has since been removed from the Ginnie Mae website, however the original report in PDF form is available here. NHC is recovering purged reports for inclusion in our Housing Resource Center. If you would like to support this initiative, please contact Brittany Webb at bwebb@nhc.org.
Other consequences of cuts to HUD staff include reporting of data and research used in housing and community development, as well as HOME funding and Community Development Block Grants that are used by states, local governments and developers of affordable housing to close funding gaps in projects that build affordable housing throughout the country. Without these grants, affordable housing units are more expensive to build while delays in funding due to staff shortages increase costs as well. These are like train tracks the housing economy travels on. Tearing up the tracks creates enormous risk. Repeal of fair housing data and firing of regulatory staff at HUD and the Consumer Financial Protection Bureau could result in long term legal exposure for lenders.
The National Fair Housing Alliance (NFHA) cautions that “fair housing, fair lending, and anti-discrimination obligations are enshrined in the Constitution and civil rights laws. The EOs cannot change that.” A fact sheet prepared by NFHA warns that “the White House’s executive actions are likely illegal, and organizations that follow these EOs may risk violating civil rights and other laws.”
NHC has been careful to confirm reports based on facts and not rumors. Over the past several days, there have been numerous reports that half of the staff at FHA would be fired on February 21. These reports were denied by HUD. We are now hearing that career General Deputy Assistant Secretaries have been instructed to prepare lists of employees to be laid off in a reduction in force action by Monday, February 24. These recommendations would then need to be approved by the Secretary.
That has not stopped Elon Musk from sending an email with the subject line “What did you do last week?” to 2.3 million federal employees throughout the government. Sent from the HR arm of the Office of Personnel Management, it said “Please reply to this email with approx. 5 bullets of what you accomplished last week and cc your manager.” In a post on X, Musk said “Failure to respond will be taken as a resignation.” Many of President Trump’s senior appointees did not appreciate the initiative, according to The Washington Post, that reported that FBI employees received an all-staff email from Director Kash Patel instructing them not to respond to the request. “The FBI, through the Office of the Director, is in charge of all of our review processes and will conduct reviews in accordance with FBI procedures,” Patel wrote.
There is another way to make government more efficient and President Trump’s own Treasury Secretary led it during the first Trump administration. Secretary Steven Mnuchin was tasked with responding to President Trump’s Executive Order 13772 of February 3, 2017, which required a report on seven Core Principles, including fostering “economic growth and vibrant financial markets through more rigorous regulatory impact analysis that addresses systemic risk and market failures, such as moral hazard and information asymmetry.”
The report noted that the Treasury Department “incorporated the widest possible range of perspectives in evaluating approaches to the regulation of the U.S. financial system according to the Core Principles.” Consultations occurred over several weeks with member agencies of the Financial Stability Oversight Council and “a wide range of stakeholders, including trade groups, financial services firms, consumer and other advocacy groups, academics, experts, financial markets utilities, rating agencies, investors and investment strategists, and others with relevant knowledge.” Many of NHC’s most conservative – and progressive – members were included. The report concluded with 16 pages of recommendations “that can better align the financial system to serve consumers and businesses in order to support their economic objectives and drive economic growth.” Not only has this work not been consulted to date, it has been removed from the Treasury Department website but is available on NHC’s Housing Resource Center.
There is a lot of important work to be done reducing government waste, making government more efficient, better utilizing modern technology, and identifying abuse and fraud when and where it actually occurs. That is the job of President Trump’s senior appointees, confirmed with the advice and consent of the Senate, who serve at his pleasure.
While a shock and awe approach is tempting, as it was in the Second Gulf War, it often doesn’t end well. It is useful to recall that what began as the demolition of “Saddam Hussein’s symbols of power” and a victory that was celebrated with great fanfare as a “mission accomplished” it was followed with the Battles of Fallujah and nearly nine years of what many called “a forever war,” ending with the U.S. withdrawal from what is now an Iranian vassal state.