High stakes, low expectations for Carson's HUD hearing
WASHINGTON — As Housing and Urban Development Secretary-designate Ben Carson testifies Thursday at his nomination hearing, he can take comfort in two facts: Republicans have enough votes to confirm him and Democrats are hunting bigger game.
Yet at the same time, he faces a tightrope balancing act that could ultimately sink his nomination. Although lawmakers are likely to set a relatively low bar for Carson given his lack of expertise in housing, they are still looking for comfort that the retired neurosurgeon is up to the task. Given his lackluster performances during debates in the GOP presidential primaries, some observers said there is reason to be worried Carson could get himself into trouble.
Carson "has got to do better before the Senate than he did in the GOP debates," said Jaret Seiberg, an analyst with Cowen Washington Research Group. "Nobody's expecting him to be a master of all housing and urban development issues, but he needs to convince people he's going to be able to tackle the job."
A former senior Senate staffer who spoke on condition of anonymity described Carson as "one of the biggest wild cards in terms of a higher percentage of a train wreck."
"What we saw in the debates was not enough to give anybody confidence that he's the right man for the job," the former staffer said.
Carson will also be going up against some Democrats likely to ask tough questions, creating more opportunity for a major mistake. That includes Sen. Elizabeth Warren, D-Mass., who is known for her prosecutorial style during Senate Banking Committee hearings.
"In many ways, this is Elizabeth Warren's real shot at a nominee in finance that goes through the banking committee," said Edward Mills, a Washington policy analyst at FBR & Co.
Warren and others are likely to focus on Carson's objections to fair housing policies and rental subsidies for the poor. They will also probe him to find out if he plans to rescind the just-announced 25-basis point reduction in the Federal Housing Administration's annual premium.
But Carson is likely to avoid specifics. "His style is to take a very philosophical approach to questions, even pointed questions," said Mills.
To be sure, Carson is still heavily favored to win confirmation barring a major disaster at the hearing. Although he lacks any experience in housing, several past HUD nominees have been in similar positions, lowering the bar for what is expected in the post.
Republicans, too, will be reluctant to let the nomination die unless Carson makes a grievous error.
"If he comes across as thoughtful and well-studied, the confirmation is a breeze," said Seiberg. "For him to get into trouble, he needs to stumble so badly that it would be hard for Republicans to cover the gaffes."
Mills agreed that Carson is "still popular among the Republican base. For a period of time, he was a leading contender to be the GOP nominee for president."
Carson is also likely to be coached on how to respond and emphasize that he intends to pick experienced people to help run the agency. Moreover, his personal story—how he grew up in housing projects in Detroit and Boston before becoming a prominent neurosurgeon—is a compelling one.
But his lack of experience on Capitol Hill could be as much of a liability as his relative lack of knowledge about the housing industry. Confirmation hearings can be grueling affairs and unlike the GOP presidential debates—in which Carson was one of many on stage—he will be the only witness before the banking panel.
"Is he enough of a wild card that he might crater or say off the wall things? I think yes," said the former Senate staffer. "He's an unknown."
Carson did gain one important endorsement when the Mortgage Bankers Association announced this week that it would support the nominee.
In a Jan. 9 letter to Senate Banking Committee leaders, David Stevens, the head of MBA and a former FHA commissioner, urged the panel to "approve his nomination as quickly as possible."
Citing his intellect to understand and respond to complex challenges, Stevens said HUD could benefit from a "fresh perspective."
"We believe he will put those talents to good use, helping strengthen America's housing market, promoting the production of affordable rental housing, and improving communities nationwide," Stevens says.
The mortgage lending industry is hoping Carson will support the FHA's premium cut, which doesn't go into effect until Jan. 27 and could be delayed or rescinded by the incoming administration. But Carson is likely to dodge that question, observers said, saying he wants to study the impact to the FHA's mortgage insurance fund and consult with other HUD officials.
Isaac Boltansky, an analyst with Compass Point Research and Trading, said the FHA premium cut is a "telling data point" that isn't getting enough attention.
Is the Trump administration "traditional ideological Republicans?" said Boltansky. "If so, its mission is to shrink the government's exposure and therefore a pricing cut should be reversed. Or is it a new business and economy focused GOP? If so, you leave the cut in place."