When Newt Gingrich and his fellow Republicans took control of the House of Representatives in 1995, they threatened to abolish the Department of Housing and Urban Development (HUD).
At around the same time, then-Vice President Al Gore was working on “reinventing government” to make agencies operate in a more decentralized, flexible way.
Against that background, HUD downsized its staff in the 1990s from about 13,500 to around 9,000 in 2002. The cuts were supposed to be accompanied by simplification of HUD’s complex array of very specific categorical programs, but somehow, significant simplification did not occur.
To run its programs with a much-reduced workforce, HUD increased its commitments for contract work by about 62 percent between fiscal years 1997 and 2000, from about $786 million to almost $1.3 billion, according to the Government Accountability Office.
Former HUD Secretary Henry Cisneros oversaw most of the staff reductions at HUD during his tenure as secretary from 1993 to 1997.
The cuts were not made in response to Gingrich and House Republicans’ threats to abolish HUD, he said. In keeping with Gore’s initiative, Cisneros said he wanted to change HUD so that “government was steering, not rowing … to channel and utilize market forces to create the results we wanted.”
“We flipped the HUD organization chart upside down by giving field staff more authority,” he said. Cisneros added that under his leadership, HUD relied on contractors for tasks that were not directly related to the day-to-day business of running housing and community development programs, such as information technology.
Still, the huge increase in contracting volume overwhelmed the agency’s ability to effectively monitor much of the work it was outsourcing. Despite HUD’s attempts to update its procurement systems and staffing in the late ’90s, progress on that front has been slow and uncertain, the Government Accountability Office has reported.
