NEW DIRECTION FOR ENERGY INDEPENDENCE, NATIONAL SECURITY, AND CONSUMER PROTECTION ACT AND THE RENEWABLE ENERGY AND ENERGY CONSERVATION TAX ACT OF 2007--MOTION TO PROCEED -- (Senate - April 02, 2008)
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Ms. STABENOW. Mr. President, I come to the floor today to talk about what is happening in the housing crisis, which I know we are all extremely concerned about, and to talk about what is happening to families across the country. We are in a crisis in America.
Few States are being hurt as much as my State of Michigan, which currently rates sixth in the Nation in mortgage foreclosures. Families are seeing their life's dream--their home--being lost as a result of the crisis. Last year, over 87,000 households were in foreclosure--87,000 families faced with the loss of their piece of the American dream.
Every day we delay passing legislation, thousands more families lose their homes and are stripped of their American dream, their home. I thank Senator Reid, our leader, and Senator McConnell, the Republican leader, for coming together for the leadership of our colleagues on both sides of the aisle to forge an agreement, because it is absolutely critical that we come together and take action as soon as possible.
I know that right now we are seeing the final stages of putting together a substitute amendment. I know it is our majority leader's position to move this legislation as quickly as possible.
This year alone, over 20,000 households, 20,000 families, are in foreclosure in Michigan. This crisis is only going to get worse, which is why we have to act now. We are hearing about the broader ramifications--first starting with subprime loans, and then to larger home loans, and now to the larger financial markets, where there is no certainty, and capital is drying up so that entrepreneurs who want to start a small business may not be able to do so.
The young person getting ready to go to college who is looking to get a student loan might not be able to do so. There are broad implications because the way the financial markets are intertwined right now has created a situation where it is imperative we act. We have to go to the heart, to the central piece that has started all of this, which is to address what is happening as it relates to home ownership and financing.
It has become clear, unfortunately, because of many hearings that have been held and criminal investigations that have been launched on the issue of subprime lending that we have seen manipulative practices and tactics as a part of this problem--not the whole problem but certainly a very important part of it.
It has become clear a considerable number of mortgage brokers targeted subprime loan products to minority borrowers, folks who are out doing a sales job, making something sound a whole lot better than it is, such a good deal, when maybe you have a senior who needs a home repair, a roof done, a new furnace, or a young family trying to get into that first home and they were told things that were not true and, in some cases, were sold a bill of goods.
On top of that, many of these borrowers, many of these families, would have qualified for a prime mortgage with better terms.
We are only beginning to see the effects of this crisis and the results of this kind of targeting. Foreclosures have already led to the loss of property values throughout entire communities in Michigan. It may be that only one home in a neighborhood has a foreclosure sign in front of it, but what happens to the values of the houses on either side, the house across the street, the house in the next block? This is impacting whole communities. The result is a credit crisis that is making safe, affordable mortgages less available for aspiring homeowners, putting the American dream further at risk.
Families across Michigan are struggling. Families across the Nation are struggling. We know that for most people, it is getting that home. It is going from a renter to a homeowner, to tucking away that equity in the home that brings someone the opportunity to be a part of middle-class America. We know that home equity has paid for young people to be able to go to college and for future dreams of those families. That equity, that value of that home, in too many cases is slipping away.
That is why I am proud to be part of a majority in Congress that has already acted on a couple of key points. Last December, we acted to pass my legislation that would make sure at least, as people are filling out their taxes before April 15 of this year, they would not be penalized with additional taxes if they lost their home or had to lose money on a refinancing. We passed together--and I am very appreciative of the fact that we were able to do this--and President Bush signed the bill that would basically indicate, as an example, if you have a $100,000 mortgage and you are in a situation where you have to sell for $80,000 or there is a foreclosure and a resale of $80,000, that you do not pay taxes on that $20,000 difference that is forgiven by the bank, for instance. That does not count as income toward you. What we have done is eliminate the added insult to injury. You lose your home and then you get another tax bill. We acted last December to make sure that would not happen, and I am very pleased to have led that effort.
We also passed provisions in the economic stimulus package, as well as increasing FHA's ability to help families facing foreclosure. We know we are in the very final steps of having a conference committee report done, and this is a very important part of what needs to happen.
We also know that is not enough. There is much more to be done, not only to directly help families and communities, but to create certainty within the marketplace so that lenders who are operating under the rules are regulated, so our traditional lenders feel confident to once again lend to others, to each other, to be able to continue our economy moving forward. That is why I am very proud of, again, Senator Reid, our leadership, Senator Dodd, Senator Baucus, and others who put together the Foreclosure Prevention Act of 2008 to help over 1 million people stay in their homes and accomplish three important goals that I hope will be included as we come to a larger agreement with colleagues across the aisle so we have an approach that can pass with strong bipartisan support.
We have brought to the floor of the Senate and have asked for action--we asked 3 weeks ago for action and we are now back hopefully to the point where we can get action on issues such as keeping families in their homes by increasing the preforeclosure counseling funds so people can get help figuring out the maze. Because of the financial structuring, you can get a mortgage and you can go back and those folks don't own the mortgage. In fact, they are packaged together, securitized, sold in the marketplace, maybe even divided up. Maybe you don't have one entity that owns your mortgage but maybe two or three. It is an extremely complicated question. So being able to help people get through that situation with preforeclosure counseling is very important.
Allowing State housing agencies to issue $10 billion more in refinancing bonds has been a part of our package and I hope will be in the final package; also, allowing homeowners in bankruptcy to modify their mortgages. We also include in our plan the ability to help communities harmed by foreclosures by allowing them to use community development block grant funds, very important funds to support local communities to purchase and rehabilitate foreclosed properties therefore, enabling struggling communities to focus on their properties.
We also have focused on businesses--homebuilders and others--that at this point need assistance through the Tax Code to apply excess net operating losses to prior years that were profitable to allow them to manage the excess in inventory and be able to move forward and be profitable.
Our plan also includes help for families to avoid foreclosures in the future by requiring mortgage documents be simplified.
These are important steps that will help millions of hard-working Americans and address the most important issue causing our economic problems, which is the issue related to housing and financing.
I urge colleagues to come together to act as quickly as possible as final plans for a bipartisan bill are being put forward.
I would be remiss if I did not also speak to one other piece of this, particularly for a State such as Michigan. For us, it has not been the high values on homes or even the financial mechanism of adjustable rate mortgage arms and so on. For us in Michigan, our main cause of this problem relates to the fact that people are losing their jobs. It is unemployment, people losing their jobs or finding themselves in a situation where their income is cut in half from $28 an hour now at $14 an hour. The mortgage has not changed. The cost of food has not changed. In fact, it has gone up. Gasoline costs have gone up. Everything is going up, but wages are going down if they exist at all.
In Michigan, these are not families who were flipping their houses or speculating on real estate. These are hard-working men and women who played by the rules all their life, patriotic Americans who have been devastated by the current economic downturn, devastated by policies that have allowed us to export jobs rather than products, which is what we need to be doing.
In Michigan, we have been in recession for quite some time now. Middle-class families are losing everything in terms of jobs, homes, so on. Although I have to say, we are tough in Michigan and resilient and working hard to bring new opportunities and new industries to Michigan, but it has been very challenging for us at a time when since 2001, since this administration came into power, we have lost over 3 million manufacturing jobs in this country. It is hard to believe. These are the jobs that created middle-class America, good wage, good health care, good pensions, good way of life, good standard of living. We have been at the forefront, unfortunately, in a global economy where we are not enforcing our trade laws adequately, where we are not addressing health care costs in a way that makes sure everyone is covered but does not cause us to have health care costs going through the roof.
By not addressing those issues--even though I have to say I am very proud to be part of a caucus that has tried at every effort, tried in every form we can to address those issues, but despite that, we have not seen what needs to be done in this country to create a level playing field, to create a race to the top so other countries are coming to us. Instead, we see pressure for a race to the bottom.
In Michigan, families are seeing, unfortunately, their American dream turn into an American nightmare because of lack of action on those issues that relate to fighting for middle-class America in this country and to keep middle-class America in this country.
I do not want to lose sight of these families. The housing bills in front of us are very important to help families, but I hope that in the not too distant future we will do something else that is incredibly important to help these families keep making the mortgage payments, and that is to extend unemployment benefits. In every other time of economic downturn, a recession, this Congress has responded, whether it be a Democratic President or Republican President, to extend the benefits to those hard-working Americans who have lost their jobs through no fault of their own so they can continue to put food on the table, to pay the mortgage, keep a roof over their head while they work very hard to find another job.
No one gets rich on unemployment compensation. People are getting on average 40 cents on every dollar earned. Nobody is operating without an extreme struggle even on unemployment compensation. But we know it is the right thing to do, the moral thing to do for families.
We have been told that one of the two things that have the most economic stimulus is extending unemployment compensation. Why? Because if you are unemployed, you are not deciding: Gosh, do I save that money coming in or do I spend it? You have to spend it. You have to spend it to keep a flow for your family. So we know it has a tremendous economic stimulus effect.
The other point that is so critical--and I want to give tremendous credit to our Presiding Officer, the great Senator from Iowa, the chairman of the Agriculture Committee, for his incredible commitment to extending and strengthening the food programs in this country--food stamps, nutrition, school nutrition. But as he has said so eloquently on so many occasions, increasing the dollars for food stamps immediately goes into economic stimulus because when you receive that help, you are going right to the grocery store and you are buying the food your family needs. There is something wrong in this country when the best we can do at the moment is $1 per person per meal. I thank the Presiding Officer for his efforts. This is one of the key things we can do to help families.
In Michigan right now, we not only have an unemployment rate that is the highest in the Nation, 7.2 percent, but we also have one out of eight people on food stamps. These are folks who never thought in their life they would need help, never dreamed they would need help and now find themselves in a situation.
We have heard a lot over the last months from the administration that things are not as bad as we think, that the underlying economics are fine, although that has changed in the last 3 weeks. But we keep hearing that there is not enough evidence to show that we need to increase unemployment compensation or help people put food on their tables. But we also know that every economic indicator says exactly the opposite.
And we are now hearing from the Bureau of Labor Statistics and Goldman Sachs that by the beginning of next year, which is coming faster than we would like, in January of next year, the national unemployment average will be 6 1/2 percent.
Families expect us to act and do something when this kind of evidence is available in terms of the economy. We took action in 2002 across the aisle in extending unemployment benefits, and yet I don't understand why that is not at the top of the list right now. Over 41,000 people in Michigan lost their unemployment insurance benefits in the first 3 months of this year, and millions more across the country will lose that help for their family by the end of the year. Something has to be done.
We are talking about people who were working, the middle class of this country who have lost their jobs, probably related in some way to this economy and what is happening. The job may have gone overseas, it may not, but they are in a situation where they are losing their jobs. We can not turn our backs on them.
The housing package in front of us is a critically important step, and I want to congratulate again everyone involved in coming to this point. I hope we have something we will be able to move quickly on, with a very strong bipartisan vote. Then I hope we are going to move just as quickly to those areas we know are desperately needed for families and that will have an immediate economic stimulus effect; to be able to do those things that will support the dignity of work.
The majority of Americans are not looking for a handout from anybody. They are looking for an opportunity to care for their own family and to work hard and to be able to have the American dream. They are looking to us to understand what is going on not only in Michigan but across the country and to act to support them.
Mr. President, I suggest the absence of a quorum
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