Stimulus Package

Floor Speech

STIMULUS PACKAGE -- (Senate - January 31, 2008)

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Mr. NELSON of Florida. Mr. President, I say to the Senator from Vermont, who comes from a cold weather State, this Senator comes from a warm weather State, and a lot of the ideas proffered by the Senator from Vermont apply to my State as well as his. He has very eloquently laid out how; that if you want to do stimulus, the quickest way to get the money into the economy and flowing so those dollars can turn over is increased compensation, unemployment compensation, and increased food stamps. This $300-per-person rebate approved over in the House, improved over here--not just because it is $500, but because it is going to senior citizens as well in the Senate Finance Committee package, whichever one of those you look at, it is going to be May, June, July, or August before those checks get out into the economy. If you want to do stimulus immediately, you are talking about 2 weeks away with increased unemployment compensation and food stamps.

What the Senator says about taking care of our veterans, our disabled veterans, and what he says about the infrastructure, is true. We desperately need infrastructure improvements. As far as a stimulus right now, that is not going to put the money out there, but a lot of this stimulus package is psychological. It is the fact that the Federal Reserve, through monetary policy, by cutting the interest rates that banks share with each other--that helps, but there is a delay, a lag, before that does anything. The immediate jolt is psychological. So too with this stimulus package. At the end of the day, this Senator is going to support it because we do need that psychological jolt, that the Government is standing behind us, not slipping further into recession. But if this Senator had his druthers, he shares a lot of the ideas that the Senator from Vermont has proffered on the quick ways to get the money out into the economy.

Mr. President, I ask unanimous consent that the Senator from Colorado be recognized following my remarks.

The PRESIDING OFFICER. Without objection, it is so ordered.

Mr. NELSON of Florida. Mr. President, I can tell my colleagues that our people are hurting. We don't normally think of the State of Florida, which is in the megatrend, which is the fourth largest State, which is going to become the third largest State within 4 years, the State that is the microcosm of the entire country in almost every demographic group--we reflect the country, in large part because a lot of the country has moved to Florida--you don't normally think of a go-go State such as that as being hurting economically. But, indeed, our State is hurting. A lot of it has to do with the real estate market going flat. You take tremendously robust areas such as Fort Myers, Lee County on the southwest coast of Florida; it has been in a building boom for years. Of course, that real estate market is flat now, and from all the ripple effects throughout the economy as a result of that, we are hurting. Our people are hurting because they are paying more for gas, for milk, for bread. Meanwhile, because of the flat real estate market, they are seeing their housing values plummet, and many of them are trying to correct the situation by selling their houses, which they can't sell, or unwinding the bad loans they have. But then they can't get buyers to look at their homes.

We see the statistics bear this out nationally. December's rate on unemployment was 5 percent, and that is the highest it has been in 2 years. The GDP growth for the last quarter of last year, 2007, increased only .6 of a percent compared to an almost 5-percent increase in the third quarter of 2007. Yesterday, the Fed, in response, cut the interest rates again by a half point, and this is the second rate cut in 8 days. Today, the Department of Labor released the initial unemployment claims for the week that ended last week, January 26, and guess who had the largest unemployment increase in the country? My State of Florida. The layoffs are concentrated in construction, in trade, in service, and manufacturing.

We are in the middle of a crisis with foreclosures, mortgage defaults, and we are hearing the experts say that the worst is still to come. Two million Americans could lose their homes. We had in Florida last year, in 2007, the second highest mortgage foreclosure rate with more than 2 percent of all our households entering some state of foreclosure during the year. That is a 100-percent increase over the previous year, and Florida home sales last year were down 31 percent compared to the previous year. Oh, by the way, the median home price dropped 13 percent.

So we are now seeing that ripple effect through the economy, particularly in a State such as mine that was such a hot growth market. We are seeing it in the deterioration of the home values, and we are seeing it in the State's economy. The fall-off of revenues to the State of Florida has been significant.

Since the housing crisis is at the heart of this slowdown, it is crucial that in this rescue passage we target these specific concerns. There is going to be a temporary increase in the conforming loan limits of Fannie Mae and Freddie Mac as well as the FHA program. I think these measures will help restore confidence and liquidity in the housing market. The Senate bill adds more aid, including a provision that would allow State and local governments to issue bonds to help with the financing of those subprime loans.

Then, of course, we mentioned earlier disabled veterans. This package is going to provide quick help to disabled veterans, as well as seniors, and I am certainly hoping that we are going to get a clear up-or-down vote on providing an additional 13 weeks of unemployment compensation that is going to help ease the pain of those who are being laid off because of this recession we have now slipped into.

Time is of the essence. In a perfect world, we shouldn't have to do this, because whatever we come up with in this package we have to go out and borrow, and that means we are going to borrow it from China. That is not good. That is piling on more debt to the national debt. But the fact is we have to do something. I am going to support it.

I yield the floor.

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