The Washington Post - 07.09.2019

SATURDAY, SEPTEMBER 7 , 2019. THE WASHINGTON POST EZ RE A

BY DAVID NAKAMURA AND JOSH DAWSEY

Staffers at the Department of
Homeland Security were at work
on the response to Hurricane
Dorian this week when their
boss, acting secretary Kevin
McAleenan, popped up on cable
television news channels sitting
next to President Trump in the
Oval Office.
McAleenan’s briefing, with
other administration officials, on
the s torm’s p rogress w as the kind
of emergency briefing that past
presidents had assembled to
demonstrate their readiness and
instill public confidence ahead of
a looming natural disaster.
But the ensuing media confla-
gration over “Sharpie-gate” — in
which Trump brandished a doc-
tored weather map to try to
prove himself right over an erro-
neous claim that the storm had
been headed toward Alabama as
late as last weekend — was not
something anyone had expected.
And for staffers at federal agen-
cies that have l ed the a dministra-
tion’s response to Dorian, a
storm that has wreaked havoc on
the Bahamas and battered the
coast in the Carolinas, Trump’s
involvement has been a mixed
blessing.
The president has been eager
for updates on the hurricane’s
path, they said, and the White
House was responsive to re-
quests from agencies as they
planned an emergency response
in Florida, the Carolinas and
Puerto Rico, a U.S. territory
where the administration’s re-
sponse to Hurricane Maria in
2017 was widely criticized as
contributing to a slow recovery
and a high number of deaths.
Ye t Trump’s personal involve-
ment as the megaphone for the
government’s public messaging
has also served as a distraction,
according to agency staffers and
independent hurricane response
experts who are working with
the administration.
After canceling a trip to Po-
land to stay in the Washington
area to monitor the storm,
Trump has flown on Marine One
from Camp David to play golf at
his private club in Sterling, Va.;
feuded with London Mayor
Sadiq Khan, who criticized the
golfing; mocked Puerto Rico as
“one of the most corrupt places
on earth”; and spent days, and
numerous tweets, defending his
stance that Alabama had been in
the storm’s path.
Trump and his administration
continued their Alabama cru-
sade Friday, as the National Oce-
anic and Atmospheric Adminis-
tration issued an unsigned state-
ment siding with Trump over its
own scientists on whether the
state was at risk of a direct hit

from Dorian. Alabama was never in the “cone of uncertainty” used in tracking storms, and the Na- tional Hurricane Center never mentioned the state in its docu- ments. David Lapan, who served as a DHS spokesman until October 2017, said Trump’s willingness to use his large social media pres- ence — with 64 million Twitter followers — to amplify warnings and guidance from federal agencies can be viewed as a positive. The president has retweeted scores of messages from the Hurricane Center, the National Weather Service and the Coast Guard, as well as from state and municipal government agencies and local news outlets. “When he gets involved in creating his own messaging, get- ting the facts wrong in the process, that’s where it’s damaging,” said Lapan, now a vice president at the Bipartisan Policy Center. Lapan — who was involved in DHS’s responses to Hurricanes Maria, Irma and Harvey in 20 17 — said Trump’s actions could be confusing for the federal workforce, such as when he asserted that the storm was threatening Alabama days after the path had definitively turned away from the state, according to government experts. “You’re not really sure as part

of the workforce: ‘Is this guidance? Are we supposed to be carrying these things out?’ ” Lapan said. “What people end up doing is tuning that out or say- ing: ‘I’m only going to listen to people who are my direct bosses. If the president says something, I will wait t o hear it f rom my c hain of command.’ ” Behind the scenes, Trump has been regularly briefed on the storm, according to White House aides and staffers in the federal agencies. The former reality-television star has shown particular interest in superlatives, asking whether storms are the “biggest” or the “strongest” i n recent years. He publicly marveled at one point that the storm was a Cat- egory 5, which he insisted he had never heard of before. In fact, four other storms of that size have threatened the United States since he took office. Trump has been “very en- gaged,” said one administration official from a federal agency who spoke on the condition of anonymity to discuss internal deliberations. Trump has been in personal contact with agency leaders, this official said, and the president seemed at times to be “taking a daily, and an almost hourly, interest in the hurricane.”

One former U. S. government official who served in a previous presidential administration and has helped in Puerto Rico’s recovery efforts said he was im- pressed with the Trump administration’s preparations on the is- land ahead of Dorian. The Federal Emergency Man- agement Agency was “really for- ward-leaning,” said this person, who spoke on the condition of anonymity because of the sensi- tivity of the situation. “I felt they were in a pretty good place to deal with a storm t hat was insane before changing directions. I’m not a Trump fan, but there’s nothing I could criticize about what they did in Puerto Rico.” Ye t this person said Trump’s role should be “cheerleader in chief” f or the federal workforce. “His job is to instill confidence in the system,” he said. Reporters “should be covering whether we have water or have d one the r ight thing with evacuations,” he said. “But you’re focusing on why he’s playing golf or Sharpie-gate. It’s an absolute distraction, and it hurts the response.” White House staffers privately expressed frustration that the media made a big s tory out of the altered weather map and Trump’s comments on Alabama. But they acknowledged that Trump fueled it by fixating on t he

issue and repeatedly raising it with administration officials, reporters and outside advisers. Trump has been preoccupied with other issues this week as well. He complained last weekend to advisers about his “pho- ny” poll numbers and unfair coverage on Fox News — in his mind, MSNBC and CNN are against him so Fox should be for him. Making matters more uncer- tain, Trump is operating with “acting” l eaders — at DHS with McAleenan, who had been head of Customs and Border Protec- tion until being promoted in the spring, and at FEMA with Peter Gaynor, who has served as acting administrator since last October. Lapan, the former DHS spokesman, said he sensed that Trump asserted himself in a more forceful public role as Dorian approached than he had during the hurricanes in 2017, when then-FEMA Administrator William “Brock” Long, who had been confirmed by the Senate, marshaled the response. “I wonder if the president felt more compelled to insert himself,” Lapan said. “Is he more emboldened to step into those circumstances than he might have been?” [email protected] [email protected]

BY RENAE MERLE

The Trump administration’s
vast plan for remaking the hous-
ing market could leave future
home buyers, particularly those
who are lower-income, with few-
er options and resources, accord-
ing to housing advocates.
The housing plans released
Thursday by the Treasury and
Housing and Urban Develop-
ment departments envision a
smaller role for the government
in the h ousing market, while tak-
ing swipes at current programs
aimed at affordable housing.
President Trump’s proposals
raise “serious concerns about the
future of housing in this country,
particularly affordable housing,”
said Rep. Maxine Waters (D-
Calif.), chairman of the House
Financial Services Committee.
The Trump administration is
also making a once-unthinkable
concession in its plan: Fannie
Mae and Freddie Mac are here to
stay.
The housing giants have lin-
gered under government control
for more than a decade after
receiving more than $100 billion
in taxpayer bailouts to shore up
the housing market. Lawmakers
squabbled for years about their
fates, with Republicans repeated-
ly calling for Fannie Mae and
Freddie Mac to be abolished.
Instead, the Treasury Depart-
ment unveiled a sweeping plan
this week that recommends re-
turning the massive companies
to private hands.
“Both in the Obama adminis-
tration and during periods of
bipartisan negotiations the focus
was on whiteboarding a totally
new system,” said David M.
Dworkin, who was a senior a dvis-
er in t he Treasury Department on
housing finance during the
Obama and Trump administra-
tions. “It is too hard. The current
system is too embedded and the
unintended consequences are
too unpredictable.”
Here’s what you need to know

about the housing reports sub- mitted Thursday by the Treasury Department and the Department of Housing and Urban Develop- ment and how i t could affect y ou.

How could the administration’s proposals affect consumers? The Trump administration says its proposals aim to protect the availability of the 30-year mortgage and support affordable housing throughout the country. But housing advocates warn that some proposals could raise mortgage rates and make it harder for some people to obtain a mortgage. The plan, for example, calls for eliminating Fannie Mae and Freddie Mac’s affordable h ousing goals and replacing them with a fee paid to the Department of Housing and Urban Develop- ment. The goals “should be re- placed with a more efficient, transparent, and accountable mechanism for delivering tai- lored support,” t he Treasury De- partment’s report says. But f ees paid by the companies would inevitably be absorbed into HUD’s budget rather than going directly to h elp low-income borrowers, said Dworkin, chief executive of the National Hous- ing Conference. “The net result would b e zero. In f act, it w ould be less than zero, because it would make the housing affordability crisis the report acknowledges even worse,” he said.

What areas of the country are most likely to be affected? While the p roposals generally deal with the national housing market, some could affect people in cities that have rent-control laws in place. According to the Urban Institute, there are 183 munici- palities with some form of rent control, with nearly all in New Jersey and New York. (Cities in Maryland and California, as well as the District, also have rent control.) The report questions whether

Fannie Mae and Freddie Mac should be backing loans in juris- dictions with rent-control laws. The administration urges the Federal Housing Finance Agency (FHFA), the regulator for Fannie Mae and Freddie Mac, to “revisit

... underwriting criteria” for
lo ans on multifamily properties
where r ent-control laws “ or other
undue impediments to housing
development” are in place.
The report indicates those ac-
tions could be done administra-
tively, meaning approval from
Congress wouldn’t be needed.
That is another non-starter,
Dworkin said. “How on earth do
conservatives accept govern-
ment making entire parts of the
economy unavailable to cities
th at d o things they don’t l ike?” h e
said. “The entire c ity of New York
would not be able to use Fannie
Mae and Freddie Mac financing
for anything. It’s never going to
happen.”

Why is this proposal happening now? This week marks the 11th anniversary of the government seizing control of Fannie Mae and Freddie Mac, as the housing market unraveled and the firms’ losses piled up. Both companies play a critical part in the housing market, buy- ing m ortgages from lenders, then packaging t hem into securities to sell to investors. They back more than half the country’s mortgages, providing key market support. Republicans and Democrats have long agreed that the companies shouldn’t be kept in government conservatorship indefinite- ly but have struggled to come up with a solution, fearful that a wrong move could disrupt the housing market and the availability of 30 -year mortgages. One major difference now, in- dustry and housing advocates say, is Treasury Secretary Steven Mnuchin. In addition to being a former Goldman Sachs banker, Mnuchin also used to run a re-

gional bank and is familiar with the mortgage market. “Mnuchin understands mortgage markets and wants his lega- cy to include a role in ending the [Fannie Mae, Freddie Mac] pur- gatory of the past decade,” Charles Gabriel, an analyst with Washington-based research firm Capital Alpha Partners, said in a research note.

How likely is this to pass Con- gress? Many of the 49 proposals could be accomplished through administrative action by federal agencies while others need approval from Congress. Republicans praised the reports as a road map to complet- ing a complicated task that, they note, the Obama administration failed to do. “Eleven years after being bailed out and put into conservatorship, it is time to make the hard decisions and strengthen our h ousing f inance system,” s aid Sen. Mike C rapo (R-Idaho), c hair- man of the Senate Banking Com- mittee. Crapo unveiled a proposal t hat mirrors many of the Trump administration’s proposals for Fan- nie Mae and Freddie Mac earlier this year and has scheduled a hearing next week that will include Mnuchin, Mark Calabria, the head of FHFA, and HUD Secretary Ben Carson. But there are several potential speed bumps to passing such significant legislation anytime soon. Democrats in the H ouse a re unlikely to consider legislation that might alter Fannie Mae and Freddie Mac’s affordable housing goals, for example. And lawmakers may not want to wade into such politically fraught waters so close to the next election. “There i s simply n o viable win- dow for comprehensive mortgage finance reform legislation in this Congress,” Isaac Boltan- sky, director of policy research at Compass Point Research & Trad- ing, said in a research note.

What happens if Congress can’t reach a deal? Trump’s proposals include several measures that could be tackled without Con- gress.

Even if Congress fails to act, Calabria has significant leeway to start the process of releasing Fan- nie Mae and Freddie Mac from government control, potentially putting pressure on reluctant lawmakers. Calabria, for example, could start by allowing Fannie and Freddie to retain more capital in preparation for becoming viable private companies again. He could also, as the Trump administration recommends, end the practice of the Treasury Depart- ment collecting most of the companies’ profits.

What about Fannie Mae and Freddie Mac’s shareholders? De- spite being in government conservatorship, Fannie Mae and Freddie Mac’s stocks still trade on public markets — at a fraction of their previous value. These shareholders remain in limbo under the Trump plan but retain some hope for a big payoff. If the companies are released from government control, their stock price could jump, allowing some investors to potentially lock in profits. For Fannie Mae and Freddie Mac investors, “the outlook seems confirmingly positive, al- beit with uncertainty for timeta- ble and crucial tumblers’ falling into place,” said Gabriel, of Capi- tal Alpha Partners. Among those watching the issue most closely are the hedge funds and other investors who have spent years lobbying the White House and Capitol Hill to rescind the companies’ government conservatorship. In p articu- lar, Wall Street has been vexed that both companies send their profits to the Treasury rather than sharing them with shareholders. [email protected]

Hurricane Trump brings winds of uncertainty to storm e≠ort

Trump’s housing plan could hinder some buyers, experts say

BY LAURIE MCGINLEY

Stephen Hahn, a senior o fficial at MD Anderson Cancer Center in Houston, is being considered for the top job at the Food and Drug Administration, according to people familiar with the dis- cussions. Hahn, a radiation oncologist and researcher, met with Presi- dent Trump on Wednesday to discuss being nominated as commissioner of the agency. An administration official said that Trump has not made a final decision on the FDA job, but that Hahn “is a strong candidate.” He has emerged as the chief rival t o Norman “Ned” Sharpless, who was tapped as acting FDA chief after Commissioner Scott Gottlieb resigned in March. Sharpless previously was director of the National Cancer Insti- tute and the UNC Lineberger Comprehensive Cancer Center in Chapel Hill, N.C. He can serve as acting commissioner only until Nov. 1. The administration also has considered a third candidate, Alexa Boer Kimball, a Harvard dermatology professor and president and chief executive of the Harvard Medical Faculty Physi- cians at Beth Israel Deaconess Medical Center in Boston. The Wall Street Journal first reported that Hahn was being considered for the FDA job. Overseeing the FDA — an agency with sprawling responsi- bilities that include food safety, drug approvals and tobacco reg- ulation — has long been a tough job. But the post is especially challenging now amid consumer anger about high d rug p rices, the explosion of youth vaping and medical-device safety. As chief medical executive at MD Anderson in Houston, Hahn is responsible for overseeing pa- tient care. He worked at the NCI from the late 198 0s until the mid-1990s, before moving to the University of Pennsylvania and eventually becoming chairman of the radiation oncology department. After almost two decades at Penn, he joined MD Anderson and in 2017 became chief operating officer during a tumultuous time that culminated in the res- ignation of then-President Ron- ald DePinho. Justin Bekelman, a Penn radiation oncologist who worked for Hahn, described him as “a terrif- ic leader and a first-rate person who puts patients first.” He also said Hahn was “an impeccable researcher,” whose clinical trial work has included innovative therapies combining immuno- therapy and radiation. The MD Anderson website describes Hahn as having exper- tise in lung cancer and sarcoma, an uncommon group of cancers that arise in the bones and connective tissue. It a dds t hat his research “focuses on the molecu- lar causes of the tumor microen- vironment, particularly the study of chemical signals that go awry.” Sharpless also has strong sup- porters to become the permanent FDA head. Earlier this week, dozens of cancer groups and four previous FDA commissioners endorsed him, calling on Trump and Health and Human Services Secretary Alex Azar to quickly nominate him. The former commissioners said Sharp- less “has gained the respect of the agency staff and a broad spectrum of the public.” It was signed by Mark McClellan and Andrew von Eschenbach, who led the agency during the George W. Bush administration, and Robert Califf and Margaret Ham- burg, who served during the Obama administration. Gottlieb has also said he sup- ports Sharpless’s nomination and confirmation. S harpless sup- porters say it would be disrup- tive to install yet another FDA chief and stress his research and drug-development credentials. In June, in a live “Chasing Cancer” event at The Washing- ton Post, Sharpless said he was committed to speeding drug dis- covery and lowering costs, in part by harnessing big data. He also said he would like to be nominated to be permanent commissioner. He called the agency “a great place to be involved with,” but added the White House would decide who got the nod for the top job. In an email Thursday, Hahn declined to comment. The FDA also declined to comment. [email protected]

Ashley Parker contributed to this report.

Oncologist

in running

for job as

FDA chief

ELIJAH NOUVELAGE FOR THE WASHINGTON POST A resident observes the damage from Hurricane Dorian on Friday at the Boardwalk RV Park in Emerald Isle, N.C. For staffers at federal agencies that have led the administration’s response to the storm, President Trump’s eager involvement has been a mixed blessing.

The Washington Post - 07.09.2019

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