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Public Statements

New Direction for Energy Independence, National Security, and Consumer Protection Act and the Renewable Energy and Energy Conservation Tax Act of 2007

Floor Speech

By:
Date:
Location: Washington, DC


NEW DIRECTION FOR ENERGY INDEPENDENCE, NATIONAL SECURITY, AND CONSUMER PROTECTION ACT AND THE RENEWABLE ENERGY AND ENERGY CONSERVATION TAX ACT OF 2007 -- (Senate - April 03, 2008)

BREAK IN TRANSCRIPT

Ms. LANDRIEU. I thank my colleague from Illinois for those comments. I do appreciate his help because from the beginning of the catastrophe we faced from Hurricanes Katrina and Rita, the anniversaries of which we will not celebrate, by any chance, but mark by the end of August of this year and, of course, 3 weeks later in September, we still are struggling. I thank the Senator from Illinois for his constant help and support as we work through how to recover, how to rebuild with a Federal agency, FEMA, that was caught flat footed and poorly staffed and poorly resourced and disorganized. Initially, it made some improvements, but we still have great challenges when it comes to the rebuilding of the gulf coast.

That is why I am here to take this opportunity, while we are on a housing bill for the Nation, and there is some real urgency to get real help to real people who need the Federal Government to act to help stabilize markets appropriately. And as we are talking about this, I wanted to offer an amendment that I would like to speak on, one amendment that I intend to offer to make sure this bill, in its attempt to help homeowners struggling to get back in their homes, as this bill tries to help neighborhoods stabilize from Detroit to California to the east coast, as this bill attempts to do other things, that we do continue to give appropriate aid and support to the hundreds of thousands of homeowners who are still struggling despite the good work this Congress has done to give them help.

A chart illustrates this, if I could put it up. We have heard a lot about the city of Detroit and a region which has, outside of Stockton, CA, and Las Vegas, NV, the highest percentage of foreclosures, almost 5 percent in this region, which is a significant percentage. Stockton, CA, almost 5 percent; Las Vegas, 4.2; other communities from Sacramento to Miami, FL, to the Denver-Aurora area, Fort Lauderdale, a fairly significant percentage of homes that are foreclosed. In some areas, it is quite a few people.

Let's look at San Bernardino, CA. This is 51,000 homes. That is a lot of homes, a big place, lots of people, lots of children. You can imagine in your mind, if you are from a community of 50,000, how big that could be. They are not all in this situation, clustered, 51,000 foreclosures all in the same block. Some of them are spread throughout a great area. But that is still a large number.

This is why we have come to the floor to try to bring help to these families. Some of them, in my opinion, deserve help. Maybe some of them don't. I hope this bill will sort the wheat from the chaff because maybe some of these people entered into the kind of loans they shouldn't have. Maybe they should have read the fine print, and they didn't. I am not here saying every single one deserves a handout, but I am saying they deserve this Senate to talk about what help they might need to receive and the ramifications.

If the whole financial establishment could get together and have a debate about Bear Sterns and Wall Street and what it might mean, what it would mean to the country if Bear Sterns collapsed, and they debated and came up with a solution, we most certainly need to be on this Senate floor talking about what solutions might be appropriate for homeowners. I understand the Bear Sterns issue was that they were all intertwined and, if they failed, maybe all the other banks would fail.

Let me say for the record that in places such as Detroit, if all of these homes fail, it will put such a burden on that city or that area that others who had nothing to do with any of this may also fail. That is the principle. It is the same principle for which the Fed sort of bailed out Bear Sterns. And we most certainly need to be on the floor of the Senate talking about not trying to save people who did the wrong thing but trying to help people who did nothing wrong and may get pulled down by maybe whatever people want to characterize as our inaction or inappropriate regulation, whatever.

But this is not normal. We are on the floor talking about these numbers because they are high.

Let me show you what the gulf coast numbers, though, look like because it is striking.

Let's take St. Bernard Parish. Let's look at this chart with the other one so we can get a comparison. Remember, Detroit has 41,000 homes, or 4.9 percent, that were destroyed. That is basically this Detroit, Livonia, Dearborn area.

Let me tell you about what the people from St. Bernard are still reeling from. It is not a 5-percent, it is not a 10-percent, it is a 54-percent destruction rate--54 percent. There is no county or parish in the country that is experiencing right now the devastation of homes, including those that are closed, empty or vacated.

Now, we are recovering from a disaster, which is not necessarily the same thing as a foreclosure. But I hold these charts up to show the nature and the scope of the problem.

In Cameron Parish, it is not 4 percent, it is not 10 percent. It is 46 percent.

In Plaquemines Parish, it is 44 percent. In Orleans, it is 78,000 households, 41 percent.

In Hancock County, MS, it is 27 percent.

In Harrison County, MS, it is 10 percent.

In Jackson County, MS, it is 4 percent.

In Jefferson Parish, LA, it is 2.6 percent.

In St. Tammany Parish, LA, it is 2.4 percent.

In Vermilion Parish, LA, it is 1.0 percent.

So my amendment is drafted to address something that will help these families.

After the storm, when these homes were destroyed, we passed a special community development block grant, extra grants to Mississippi and Louisiana and Alabama and Texas, sort of like we did right after the Twin Towers fell in New York, there was some extra community development block grants sent. The Congress did the same. Not everything we did was perfect in that regard. There were still some discrepancies in how it was allocated. But suffice it to say for this discussion that money was sent, and out of that money, Mississippi created the Homeowners Assistance Program and Louisiana created the Road Home Program.

These were grants that were given to homeowners to try to help them between what their insurance would pay--and many of these homes were fully paid. These are problems where the mortgages were completely paid off. Some of these properties had insurance. Some of these properties did not have insurance because they were not in a flood plain, and they were not required to have insurance. So these are homeowners who did not do anything wrong. The homeowners I am talk talking about did just about everything right. Some of them maybe should have had insurance and did not, but, believe me, they are suffering the consequences of that. We are not bailing everybody out.

But what we did do was allow them to take this Road Home grant. Then in the tax law they can also take a casualty deduction. This is the problem: If my amendment, which I am going to offer when I can, and ask for a vote on it--and I will offer this amendment not just for myself but for Senator Cochran, Senator Vitter, and Senator Wicker. All of us are together in a bipartisan way asking the Congress to give us some relief. If this amendment I am going to offer is not adopted, these families--I am going to give you an example of the Jones family and the Smith family--will end up paying much more in taxes than they can afford, and it will be counterproductive to our recovery effort.

Let's take the Jones family. They earn $75,000 a year. Their home was substantially damaged. They did not take a casualty deduction as the current law allows. They paid the full amount of the taxes. Then out of the community development block grant--let's say they are in Mississippi--they received a grant from the State of Mississippi of $75,000, from the Mississippi Homeowners Assistance Program. Their Road Home grant will not be taxed. This family is fine.

But for this family, the Smith family--which makes the same amount of money, and their house was completely damaged--they did take the deduction. They got about a $7,000 benefit. Because of what we did, they got their $75,000 grant, but if they have to pay taxes on this, their tax could be as high as $24,000.

Now, the people whom I represent in Louisiana--and I am sure this is the same for Mississippi--can barely pay their utility bills right now, their insurance bills. They most certainly cannot pay a $24,000 tax bill.

If my amendment is not adopted--and I think it has good support from Finance on both sides--this family that I told you about that makes only $75,000 a year, that had their home destroyed--through no fault of their own--because of a confluence of things we have done, will end up having to pay $24,000.

So you may ask me: Senator, how expensive is your amendment? It is not cheap. The score for this amendment is $1 billion. It is not cheap. But we have to provide this support for these gulf coast families or you will have thousands and thousands of families suffer who arguably need the most help in the country.

These are families who at one time owned homes such as this, as shown in this picture. This happens to be a double. I will show you another picture of another home. These are people who did not do anything wrong. They did not take out any subprime loan. They did not try to take out a low adjustable mortgage. They took out their regular 30-year mortgage. They paid off their regular 30-year mortgage. They paid insurance their whole life. They will have to end up paying $24,000 in taxes, and it will be the straw that breaks the camel's back.

So you have heard me speak before about this issue. I know it can be a little complicated. We are not trying to ask for double dipping or anything. But I am going to be offering this amendment. It is important to remember, if we do not do this, we will have thousands of people, homeowners, who are trying to stay in their homes, rebuild these neighborhoods that are virtually destroyed, not on a beach--even though that is the case in some places in Mississippi--in the middle of the city, not close to any water or any beach, 5 minutes from the Super Dome, where the Hornets will be playing in one of their division championship games in a couple days, 5 minutes from the Super Dome.

They did not even know the levees were going to break. The Federal levees broke and put their homes underwater. As shown in this picture, this is where the water line is. These families will have to pay $24,000 in taxes if we cannot get this fixed.

So the bottom line is this: I am happy to try to vote for this bill for Michigan and California and places that have families that are experiencing some difficulty with their mortgages. But I have to ask this Congress to please continue to know that we still have homeowners who are struggling after 2 1/2 years to get back into their homes, with some very complicated help that we and the States and the parishes are trying to give them.

So my amendment will correct that. I will offer it when we move to that part of the legislation. I will also have several other amendments that will help the recovery process move forward. They are all about housing. They are all about helping people get back in their houses. They are not necessarily on a different subject or anything because I realize we will have other discussions later.

But while we are on housing and while we are trying to fix it for everybody in the country, let's please stay focused and give a few tweaks here and there to keep this recovery going in the right direction on the gulf coast because we have a long way to go.

I see my colleague from Kansas, and I yield the floor.


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