As the second Trump Administration turns the corner on its first 100 days, I am again reminded of the Second Gulf War. It is a painful and ominous metaphor, and one that Republicans in particular, should consider since we all know how this story ends. When the first Gulf War broke out, President George H.W. Bush, Defense Secretary Richard Cheney, Joint Chiefs Chair Colin Powell and my boss, Secretary of State James Baker, were mindful of General Powell’s “Pottery Barn Rule – if you break it, you own it.” The result was a war that achieved its objective, had broad international support, and boosted the approval ratings of President Bush to among the highest of the 20th century.
The second Gulf War was a disaster, beginning with a Shock and Awe bombing campaign that destroyed much of Iraq’s infrastructure, followed by Operation Desert Scorpion, which decapitated the Iraqi Government. When US and British Troops came under fire from a growing resistance, President George W. Bush’s response was “bring ‘em on.” And they did. The result of our effort to destroy Iraq and rebuild it in our image was an unmitigated disaster, resulting in nearly two decades of ISIS rule and Iranian hegemony.
Today’s political Shock and Awe campaign has devastated the Federal government in the name of efficiency, but unfortunately, only chaos has resulted. Ultimately, the Pottery Barn rule is more relevant than ever. If you break it, you own it. And cleaning up the mess – increased homelessness, incapacitated investment channels, destabilized markets, soaring inflation driven by a worsening housing crisis – will fall on President Trump’s own appointees.
Over the past two weeks, there appeared to be a shift in the center of power from Elon Musk’s “DOGE Bros” back to the Cabinet. If you had asked me on Friday morning, I would have said I was cautiously optimistic about the future of affordable housing policy in the Trump administration. Unfortunately, that didn’t last through the day. Late on Friday, President Trump signed an Executive Order declaring that seven additional agencies “shall reduce the performance of their statutory functions and associated personnel to the minimum presence and function required by law.” Among those listed were the Community Development Financial Institutions Fund (CDFI Fund) and the U.S. Interagency Council on Homelessness (USICH). Within seven days, agency leadership is required to report to the Director of the Office of Management and Budget (OMB) “confirming full compliance with this order and explaining which components or functions of the governmental entity, if any, are statutorily required and to what extent.”
Over the weekend, CDFI’s, housing leaders, and supporters across the political spectrum mobilized to protect these vital programs. The National Association of Affordable Housing Lenders convened a call with CDFI trade groups, their lobbyists, and others to craft a comprehensive strategy to defend the CDFI Fund by communicating its tangible value to Republican Congressional offices and others who can influence the White House, Treasury Department, and OMB. The Opportunity Finance Network (OFN) and Housing Partnership Network (HPN) issued statements on Saturday, and all of us in the affordable housing community are working together to ensure the critically important functions of the CDFI Fund are not eliminated or interrupted.
Support from Congress has been strongly bipartisan. Senators Mike Crapo (R-Idaho) and Mark Warner (D-Va.) co-chair the Senate Community Development Finance Caucus, which includes 14 Republican and 14 Democrat Senators. On Sunday, March 16, they issued a joint statement asserting “we are proud to reaffirm our bipartisan commitment to support the CDFI Fund’s mission.” The statement recalled “when the CDFI Fund was developed 30 years ago, it was created in the form of a private-public partnership to promote access to capital in our most underserved urban and rural communities. Since 1994, the CDFI sector has grown to over 1400 institutions, located in every state and territory in the nation — and leveraging at least $8 in private sector investment for every $1 in public funding received.”
Ironically, the assault on CDFIs and other government programs comes at the end of a week that saw positive progress on refining and focusing efforts to make government genuinely more efficient. In a recorded message posted on X, HUD Secretary Scott Turner insisted that the changes the department is undertaking are necessary because “the status quo is no longer working” and not helping the “most vulnerable people in America.” He’s not wrong.
The status quo should be unacceptable to anyone who is passionate about solving these problems. Turner promised that HUD would “cut and consolidate as necessary because that is a product of change,” while promising that “we will not slow down the Department’s mission critical programs and processes. We will not stop service to our nation’s most vulnerable individuals and families. We will not disrupt the important role of field offices with sweeping office closures. We will not leave public housing authority tenants and landlords without critical resources, period.” NHC is committed to working with Secretary Turner to improve HUD programs and processes wherever possible, embracing his call for data-driven decision making and insisting on data-driven assessments of success.
We also saw the confirmation of Federal Housing Finance Agency Director Bill Pulte, who said he will be “laser-focused on the safety and soundness of our regulated entities as we ensure that the dream of homeownership becomes a reality for as many Americans as possible.” Pulte’s confirmation by the Senate included four Democrats, including Elisa Slotkin (D-Mich).
NHC looks forward to working with Secretary Turner and Director Pulte to make their organizations more efficient and effective.
Yet this latest assault on the CDFI Fund is deeply disturbing because the Fund has strong bipartisan support. Just a few weeks ago, Republican senators were reassured by the Trump Administration that it would not seek to dismantle the CDFI Fund. This made the Friday night assault on the CDFI Fund and USICH all the more confusing and disturbing. Who wrote this Executive Order so at odds with the President’s commitment to address affordable housing and the stated intentions of his own staff? Why didn’t senior Treasury Department staff know about the Executive Order when asked about it on Saturday morning? Will President Trump’s housing leadership team be allowed to do their work without interference from those who have no knowledge or background in housing policy? And ultimately, if the housing economy breaks, who will pay for it and how much more will that cost?
The President’s latest Executive Order makes clear that any changes to the CDFI Fund and USICH must be made “consistent with applicable law.” That caveat needs to be strictly adhered to. And Secretary Turner and his team, as well as Treasury Secretary Bessent and Director Pulte, must also have the full support of the White House and the Office of Management and Budget. These leaders were chosen by the President and confirmed with the advice and consent of the Senate. They should be allowed to lead without Friday night assaults on housing and communities across America. At the same time, all of us who have dedicated our lives to addressing these important problems must be ready to work together on real reform that moves progress beyond that status quo ante.