Transcript of Cuomo's Address to the National Press Club - 4/28/99

Thank you, Larry, for the very kind introduction. It's a pleasure to be with so many friends and colleagues and so many organizations that HUD works with in this great field. I'm proud to be joined by my wife, Kerry Kennedy Cuomo, as my guest, as the president mentioned.

Two other guests: One is Mayor Paul Helmke, Mayor of Fort Wayne, Indiana and past president of the United States Conference of Mayors. Paul represents the new breed of mayor that I believe

Two other guests: One is Mayor Paul Helmke, Mayor of Fort Wayne, Indiana and past president of the United States Conference of Mayors. Paul represents the new breed of mayor that I believe is out there in this nation today. He is a professional. He is great at what he does, and he is making a real difference in his city. And I want to thank him very much for being here. Paul. (Applause.)

I'd also like to thank Deputy Secretary Saul Ramirez for being here. As you heard in the introduction, we've had a great two years at HUD. That does not necessarily mean we've had an easy two years at HUD. It's not the easiest department to work in; a lot of tough problems, a lot of tough issues. But we make it work because we make it work as a team. And Saul is here as representative of the team. And I want to thank all of the ones who are here today for the great work they're doing. Thank you, Saul. (Applause.)

The president was very gracious in his introduction about the HUD Secretary. Being the HUD Secretary, believe it or not, you don't always get the kindest, most gracious introduction -- I don't know why.

An editorial once said this about the HUD secretaryship. And I quote, just to make sure I get the quote right: "A job that has zero glamour, no prospects for an infusion of new federal money, a neglected constituency with little power and virtually no urgency on the White House domestic agenda," closed quote

Otherwise it's a great job. (Laughter)

It's not just the press that makes fun of you when you're the HUD Secretary. Even your family makes fun of you when you're the HUD Secretary. (Laughter.)

Congressman Joseph Kennedy, Kerry's brother, would introduce me, as he did many times, because he was on the Housing Subcommittee. He would say, "Now the HUD Secretary, my brother-in-law, Andrew Cuomo, the HUD Secretary because no one else wanted the job." (Laughter.)

Not just my brother-in-law. My own brother, Christopher, went to the confirmation hearing when I was going to be confirmed by the Senate and sat through the hearing for three hours. And the senators went one after the other, and they were all talking about the problems of HUD and questioning me about the problems of HUD. "What are you going to do about the Section 8 crisis? And what are you going to do about the crisis of public housing and the crisis of waste, fraud and abuse and the crisis of GAO?"

This goes on and on and on for three hours. And finally it's over. I go to the hallway and I see my brother Chris. I said, "So what do you think? How did it go, the hearing?

He said, "I think you should call the President right away and say you made a mistake. You don't want this Department. It has too many problems." (Laughter.)

But I am the HUD Secretary. And I'll tell you the truth, there's no place else that I would want to be, especially at this time in our nation's history, because I think it is a pivotal position and a pivotal time in history.

It's a fascinating time to be in Washington. On one hand, you have a story of great, great economic success, an economic success story that actually defies belief. I hear all the experts coming in and advising the White House, and expert after expert has always said, "It can't be this good for this long." Except it is.

The President and the Vice President revel in the record of economic accomplishments. And they should. Eighteen million new jobs. Who would have believed it? When President Clinton took office, he had a deficit with 11 zeros. Now they're talking about an historic surplus; the lowest peacetime unemployment since I was born, 41 years; crime down, welfare down, poverty down. Cities are doing better than they have in decades, by and large. And my favorite statistic of accomplishment: The highest homeownership rate in history, 66.7 percent. (Applause.)

Now, it may be a coincidence that I'm the housing secretary and we have the highest homeownership rate in history. But I told the President, "I'm taking credit for it" -- (laughter) -- because you know if the rate was going the other way, I'd be the first to get blamed for it. So I do take credit for it, as we all should, because it is a great American accomplishment.

But that is not the full story of America. If it were, I wouldn't be here today with the presentation that I'm about to make for you. They say the brightest light casts the greatest shadow. Well, then, the strongest American economy maybe casts the greatest economic shadow. And the truth is, there are people and places in this country that are not enjoying that great American success. They say the rising tide raises all boats. Well, this tide is rising so fast that it's drowning some.

Dow Jones hits new records all the time; over 10,000, which is great. But it doesn't mean anything if you're one of the three out of five Americans who's not even in the stock market. There are more millionaires made by this economy than ever before, but the top 1 percent control 40 percent of the wealth. Highest home ownership rate at 66.7 percent, but you still have 600,000 homeless Americans who are going to sleep on our streets tonight.

The new American paradigm is the great American paradox.

President Clinton says this is not a story of success and that this nation can do better and that it's not truly a success until the economy is working for everyone, everywhere, and that now is the time to take this great economy, use it as a tool, use the resources to make the economy work everywhere. And he is right.

I have been to the other America, if you will. I have seen the dual reality of the time that we live in. And I can tell you that the poverty, the despair, is just as bad in some places as it has ever been. And the sense of hopelessness is just as bad as it has ever been. For all the progress we've made, Lord knows we have longer to go.

I also believe that if the American people saw the reality, the other reality, the other America, they would do something about it. If they saw the conditions of poverty that still exist in this nation, they would not allow it to continue. It's not about the America we know. We have to expose that reality, show them the other America, and they won't stand for it.

We also have to show them that we can actually solve it and that government can be an instrument in that solution. And that's what we want to talk to you about today, exposing the problem, because more and more, the poor in this nation, the places left behind in this nation, are isolated. We don't live there anymore as a nation. We've moved out to the suburbs. You don't see these places on the Internet. You don't see them on the nightly news. So for many people, they don't exist, except they do.

Today we're releasing a report called {"Now Is The Time"} that talks about the places that the economy forgot. Please allow me to make a slide presentation that has some of the relevant numbers, make some general points, and then it would be my pleasure to take your questions.

We talk about America in the shadows, in the shadow of the economic success, the places the economy forgot. We went out and we did a survey of the 539 central cities to see how they were actually doing in this new economy. And the findings: Basically, first, one in six central cities have unemployment 50 percent or higher than the national rate. At a time when the nation's population grew by 17 percent, one in five central cities lost at least 5 percent of their population since 1980. Third finding: One in three central cities had poverty 50 percent higher than the national rate of poverty. Fourth finding: One in seven have high unemployment and either high population loss or high poverty, what we call the double-trouble cities.

First finding: High job loss, unemployment. One in six central cities have unemployment 50 percent higher than the national rate. Eighty percent, 80 percent of the new jobs that have been created between 1994 and 1995 were created in the suburbs. That statistic tells the story.

Buffalo, New York is the picture. Why Buffalo? Because the classic urban icons, the big cities -- the New York City, the Chicago, the Los Angeles -- are actually doing well in this economy. The global economy has been very kind to the bigger cities. There's a phenomenon they call the mega-cities, international cities; Rome, Paris, New York. They're doing well. It's more the medium-size city, the smaller city, that is having trouble in the economic transition. And Buffalo represents that.

Buffalo was a city that made steel, except we don't make steel the same way we did at one time. Now it's overseas. Now it's technologized. And the number of workers we need is far less.

The question for Buffalo is, "But then what is the new economy? What does provide the jobs?" And they're working their way towards that answer. Unemployment, 8.7 percent, and they have lost the manufacturing base that made them. Employment down 24 percent in Buffalo, New York. And when the jobs leave and people start to leave for the suburbs, the median income comes down; in Buffalo, from $38,000 to $31,000.

Not just Buffalo; Texas City, Texas, an example of a city that had a marginal base to begin with. Where Buffalo had a strong manufacturing base, Texas City had a marginal base. It was partially agriculture, partially manufacturing. But when the economy shifted, the marginal base fell behind.

You also have cities that have retained their manufacturing base. They have the same number of jobs, but there's been a demographic explosion and the population has gone up and they don't have enough jobs for the population. That is Chico, California.

This is a problem that is coast to coast. We often think of these as isolated problems in the nation or isolated cities. You can go from Panama City, Florida to Salinas, California

You have 95 cities in 25 states and the District of Columbia which are in this category.

Second finding; a significant population loss. At a time when the nation's population grew about 17 percent, these cities, one in five, lost 5 percent or more of their population. Detroit, Michigan is the picture here. It made the automobile. Automobile manufacturing was reduced as we went overseas for part of the market, moved out to the suburbs. The population dropped 17 percent.

Since 1970, one-third of the population has been gone, and this is with one of the best mayors in the nation, Dennis Archer, working in Detroit; median income from $44,000 to $29,000. Canton, Ohio, same story. Pittsburgh, Pennsylvania, same story.

One hundred and sixteen cities in 28 states facing significant population loss.

Finding number three: High poverty, which we define as 50 percent or higher than the national rate, and one out of three cities falls into that category. And these are all connected phenomena. As the jobs leave, as the people leave, the people who remain behind tend to be those people who didn't have the resources to go out to the suburbs. They tend to be poorer. The city winds up concentrating more poverty.

East St. Louis, poverty, 44.3 percent, six times higher than the suburbs; population shrunk by almost one-half. And when the city loses people, loses jobs, becomes more concentrated, the services in the city also dissipate. The businesses dissipate. East St. Louis, you now have one hospital left, 120 beds for a population of 36,000 people.

There are also cities in this category that are apparently doing well in certain areas. They'll have great downtown redevelopment or they'll have new sports stadiums. But that does not urban redevelopment make. The city of Baltimore, beautiful Inner Harbor, doing very, very well, but the neighborhoods are not doing as well; poverty at 24 percent.



Providence, Rhode Island, Brown University, beautiful downtown redevelopment with Mayor Cianci, but you still have a poverty rate that's about 28 percent. Atlanta is another case in point; great mayor, just had the Olympics, new sports stadium, but they still have poverty at about 34 percent.

Public housing, which we know something about at HUD, tends then to concentrate the most poverty in these places of concentration to begin with. Robert Taylor Homes, notorious public housing on Chicago's south side, average income just about $7,000. We have done a lot of work in public housing, but we have more to do. These are all recent photos, I want you to know. And when you think of public housing and you think of Robert Taylor Homes and you think of those conditions, see the face of a child, because 62 percent of the residents of public housing in this nation are children -- 62 percent.

One hundred seventy cities in 34 states have high poverty.

Then we have what we call double-trouble cities that have high unemployment and either high poverty or population - or both.

Gary, Indiana tells the story here; population loss of 27 percent. Gary was also in the steel business. The steel mill is still there; it's just smaller than it was. You now have computers where you had people. Median income, $43,000 to $30,000; unemployment, 8.2 percent. I saw that sign in Gary; it said it all. "You have a life. Get a future." How telling for Gary.

But even in Gary, Indiana, you see the flickers of a resurgence. An Ace Hardware store, which went in, put in a store, developed a business, and is now one of the highest-producing Ace Hardware stores in the Ace chain, in Gary, Indiana. You also have residents who will not give up; Annie Preston, lifelong Gary, Indiana resident. Everyone around Annie has moved. Literally half the block is vacant. But Annie says she's going to stay and the city is going to rebuild around her. And something about Annie suggests that she's right.



Monroe, Louisiana is the same story. Hartford, Connecticut is the same story. Seventy-four cities in 23 states.

This phenomenon is not just a city or urban phenomenon. We focus on cities in this report, but we're also going to be looking at two other areas that we saw. One is what we call the graying suburbs, the older suburbs; and the other one is the impoverished rural communities which we call flat-liners.

The graying suburbs are the suburbs that were the destination point 30 years ago when people left the city. They are the suburb that is adjoining the city, and it was the place, the destination point for people who were fleeing the urban experience. It's now the departure point.

The suburbs are getting older, they're starting to look more and more like the city that people left, and people are now leaving that suburb for the exburb. Delaware County -- that's where you went when you moved out of Philadelphia. But now Delaware is starting to look more like the problems of cities, so people are moving on. The schools are getting older, the roads are getting older. Cuyahoga County outside of Cleveland, Cook County outside of Chicago -- they now have many of the same problems that the cities have. But as I'll get to in a moment, that's actually an opportunity I believe.

There are also rural communities which are to me as bad as they were in the '60s. You can talk about economic cycles and the economy going up and the economy going down. These were a constant flat economic line. They didn't go up, they didn't go down. Hazard, Kentucky -- this is the Appalachia in Kentucky -- poverty 26.6 percent. Appalachia in West Virginia, 27 percent. Guadalupe, Arizona -- that's Nellie Perez -- Guadalupe, in the middle of Maricopa County, one of the fastest-growing counties in the nation right outside of Scottsdale and million dollar homes, and literally in their shadow is Guadalupe -- some of the worst housing conditions I have seen anywhere. Rio Grande Valley, what they call the Colonias, the Texas-Mexico border -- people living in homes that you wouldn't believe animals should live in.

And in my opinion the worst conditions exist on our Indian reservations. And these Indian reservations represent to me a scar on this nation's soul. They are our nation's birth's version of original sin. The conditions on the reservations are in many cases intolerable. High school drop-out rate on Pine Ridge, which is the Oglala Sioux, 70 percent. This is a home that I just happened to walk into and took this picture. If you look at this picture, there are two women and two babies in this room. The room couldn't be more than 10 by 12. Seventy-three percent unemployment -- poorest county in the nation.

Kasigluk, Alaska -- Native Americans again. That's a HUD home -- HUD does all the homes on Indian reservations. I went into that home, and there was a bathroom, but the bathroom was all filled with goods. It was used for storage. And I said, "Why aren't you using the bathroom?" They said, "Well, HUD regulations said that you have to have a bathroom." I said, "Well, that makes sense." They said, "The only problem is we don't have running water in Kasigluk." (Laughter.)

There's a lot left to do. And this is a young lady who we saw on our way out of Kasigluk who was sort of following us along on her bicycle as we were taking this official tour with a lot of people and making a fuss. And she came over to the boat as we were leaving, and she just smiled. And when I looked in her face and in her eyes I saw my daughters and my daughters' face. And I said that this child should have the same opportunity in Kasigluk, Alaska as my daughters have in McLean, Virginia. And that's what we are trying to talk about today. These are problems. And you look at the pictures, they are somewhat depressing and distressing -- and they should be. But they are not just problems as the President says, they are also opportunities. And I want to take a few moments to talk about some of the solutions.

I think there are two arenas that we have to address, and we have to do them both simultaneously. The first arena is about the American people. And the second arena is coming up with a government agenda that can actually do something about these conditions.

For the American people, first we have to expose these conditions to the American people. The economy is so strong, all the talk is so positive. They don't know these conditions exist. I am convinced of it. That's not where they live, they don't see it on the way to work, it's not their daily experience -- it is almost inconceivable. We have to expose it, we have to show them the pictures, let them see the other reality, if you will.

Secondly, we need to reestablish the credibility with the American people, because the truth is they are somewhat skeptical about government saying we're going to help people in need. They heard that before, and they are not so sure that it worked well. There has been tremendous political rhetoric over how well government programs have worked -- tremendous hype, tremendous overstatement. And the truth as usual is somewhere in the middle. Not all government programs fail. That is a myth. It's political hyperbole. Medicaid did not fail. Medicare did not fail. The FHA did not fail. You have Democrats and Republicans alike falling over themselves trying to save Social Security. Many, many government programs work extraordinarily well. But at the same time, not all programs work efficiently and effectively. And some poverty programs did not work well.

But I also believe we have learned from the mistake, because if you look at the poverty programs that didn't work well, they tended to have a common mistake in my opinion, which was in an attempt to save the person from the private market and the cruelties of the private market they wound up removing the person from the private marketplace and creating an entirely new market which was a government subsistence market. And we substitute it for the private market by giving food stamps and public housing and income supplements, and we distorted the behavior and the incentives and sanctions of the private market. And this mistake was made by liberals and conservatives alike, albeit it in a very different way.

The liberals eliminated the risk of the private market by guaranteeing an income. But the conservatives eliminated the reward by only supporting a system in which a person could not excel. You need both the risk and the reward for a person to effectively compete in this society and be assimilated into mainstream America. And that tends to be the common mistake we made over and over.

The third piece on the agenda with the American people is to prove not just that you have the right policy but that you can actually do it, that you can actually be competent in its administration. And that's what we have been working through at HUD for the past two years. You heard a lot in the introduction about the management work we've done at HUD. And we have. You know, the management work is not sexy, exciting work. No person likes to be elected -- appointed to a political position and come in and sit in a conference room for two years and do management charts. But that's what HUD needed. That's what the federal government need. Vice President Gore so effectively -- reinvent government -- proved to the American people that you can actually do what you say you can do, and take that great HUD which was the poster child for mismanagement, and turn HUD around from a management point of view -- show that HUD can absolutely work. Boy, if you can turn around HUD, you can turn around anything! And we did! We are not bumping up against management nirvana, don't get me wrong -- (laughter) -- but we have made extraordinary progress, and HUD now works. We got our first clean audit! A clean audit, a first clean audit in the department's history two weeks ago. (Applause.)

Prove government works. If you put those elements together the American people will be with us. Expose the problem. Have the right policy which learns from the past mistakes and prove you can do it -- and prove you can do it well. The American people will be with us. And then we have to have the governmental agenda that will work. Once we have their support, we have to have the governmental agenda that will make a real difference. And I don't think there is any mystery to that. We know what it is. We have been doing it. We do it well. We just need to now bring it to scale. We need to do economic development in these areas. What is the one commonality among all these areas? They are not competitive economically. Net they are at a competitive disadvantage. The suburbs are more competitive economically than the cities. It's easier to go to a rural area that is more proximate than one that is located further away.

We have to work to give incentives for businesses to go there, and we can do it, and we have done it. And both parties agree on this. Democrats have a program called Empowerment Zones -- uses the tax code to provide incentives, tax subsidies, to get people to come. Republicans called it enterprise zones -- same basic concept - incentives for the business to come to inner-city areas. We have a program at HUD called the EDI, economic development initiative program, where we have done $3.5 billion in economic development loans -- $3.5 billion -- with no defaults which called for Uncle Sam to pay one dollar. Through the economic development we know how to do it. Build the housing -- people in this room can tell you more about that than anyone in the nation. The truth is we have more Americans who need affordable housing now than ever before -- 5.3 million households, the greatest need for affordable housing in history. Why? Because a cruel irony: the strong economy has actually driven up the rents, and now those at the bottom can't reach the rents at the top.

And, as the President says, focus on education. And I would put that issue first, because education was always the great equalizer in this nation. It was the ladder of opportunity, and it was the first step on the ladder. You could go to a public education, and you could wind up being the governor of the State of New York or the president of the United States, or the general in charge of the military -- all with the public education system. And I am afraid that we are losing that asset. People talk about education and the crisis of education, and the crisis of education. But the truth is it is not an education crisis; it is an education crisis for the poor. If you are rich in this nation you can get a great education. If you can pay for a private school you can get the best education on the planet -- bar none. The problem is if you are poor and you can't provide the private education, or you are in a poor school district. Then you have a problem.

The truth is we are moving to two education systems. And you can go into a city in a community and you see it. You can go into one school in a suburban district, and they have all the tools and all the equipment. They take the first grader, they bring them in, and they put them on the Internet. The other side of town, the urban school district, they don't have a basketball net. The richest school district, the suburban school district, first grade you're on the Pentium processor. The urban school, the most sophisticated piece of electronic equipment they have is the metal detector that you walk through on your way to the classroom. That is not equality of education. That's the governmental agenda.

And now is the time my friends to do this. That's the President's whole point. Now is the time to do it. The excuses are gone. The time to repair the hole in the roof is when the sun is shining, and it's high noon on the economic clock.

Thanks to President Clinton, the deficit is gone! A lot of time when you talked about a progressive agenda, an investment agenda, they said, Oh, you can't do that. How about the deficit? The deficit, the deficit. We have to pay off the deficit. Well, the deficit is gone, the excuse is gone. Businesses are ready to go. They are more mobile than ever before. It's a heck of an opportunity. You have a cell phone, a satellite, a computer, they'll go.

If you offer incentives, they will go. And we can give them incentives them to go where we need them to go. The boundary line between the city and the suburb is blurring. City and suburb for the first time in a long time had a common agenda. When they talk about sprawl and sustainability and quality of life, I am not sure exactly what they're talking about. But I do know they're saying this. It is now in the best interest of the suburb to preserve their quality of life to have the development occur in the city. The redevelopment of our cities is in the best interests of the suburbs. The first time in a long time the cities and the suburbs have come together. You put them together, you have a political majority that wins.

And now is the time, because to keep this great economy running you need two elements to feed that economic engine. You need workers and you need markets. Businesses all across the country will tell you they can't find the workers. You want to know where the workers are? They are the unemployed in Detroit, and they are the unemployed in Gary, Indiana, and they are the unemployed in Kasigluk. The unemployed of today are the workers of tomorrow! The new markets they're looking for? $21 billion in untapped resources -- untapped retail purchasing power in the most distressed communities in the nation. Now is the time.

And I know I have to wrap up, because Larry slipped me a note. Let me make one more point -- it will take me two minutes, Larry, I promise, and in some ways it's more important than anything else I've said.

Now is the time, because there are many practical reasons why we must, and many practical opportunities which say it makes sense governmentally. But on the broader level I also believe we must do this because it is essential for what we would call the soul of our nation.

This is a unique place, America. There is no common skin color, there is no common religion. We had a common set of principles that made us. We talk about justice for all and opportunity for all and community for all, and that's what made us. That's what the Statue of Liberty promised when she stood in New York Harbor -- she said, "Come one, come all, and you will get these principles!" It doesn't matter if you are black or you are white or you are rich or you are poor, you come here, justice, opportunity, community!

And people believed us, and people got in little boats and they went across great oceans to a land they never knew with a language they didn't speak, only on the promise of those principles! They have to be vindicated. Justice! Real justice!

A higher form -- I'm not talking about criminal justice; I am talking about a concept of justice which is central to the Constitution, Lincoln's justice, Bobby Kennedy's justice, FDR's justice.

Economic justice that says you're not a success with your Dow Jones breaking 10,000 when one out of five children sleeps in poverty tonight! That is not success as a nation.

The concept of social justice, that said you are not a success, you are not a just society as a people when you can walk down the block and there are men and women homeless on the street, and we don't even see them anymore. We have gotten to a place that's a society where we would sooner bend down to pick up an aluminum can to recycle than to bend down and help a fellow human being on the street. That is not a success. That was not our vision of society.

Racial justice -- that was our promise.

Look how far we have to go. Go talk to Jasper, Texas, where just last year they dragged a black man to death -- decapitated him -- only because of the color of his skin; New Jersey, eve of Rosh Hashanah, they went in and they knocked over all the tombstones only because people were Jewish. We did a case in Missouri -- Portuguese woman moved into a neighborhood -- the welcoming committee planted a seven- foot cross on her lawn and moved it. Why? Because she was Portuguese -- they thought she was African American.

We have further to go -- community, interconnection, interrelation -- are we there yet? Concept that says there's a cord that connects us all -- you can't see it, but there is a cord that connects you and you and you to me. And that cord then weaves a fabric, and that fabric then is society, and we are all only as strong as the weakest link in that society, that says that young girl in Kasigluk is our child. That girl in Robert Taylor homes is our child. That young boy in Detroit is our child. The young boy who goes hungry tonight in Appalachia is our child. And until we make it together none of us really does. And we are at a point where we can grab a future that is brighter than ever before. We can seize a future that is brighter than any that has gone before, a future in which the bright sun of American opportunities shines on the faces of all her children. Now is the time to do it. And if not now, then when? Thank you for listening. (Applause.)