This is one of the most challenging times Michigan has faced in its 162-year history. Americans are struggling across the country, and we in Michigan have been facing a recession longer than any other state. Getting our economy back on track must be job one and is my central focus every day. To do that, we must create the conditions to allow Michigan's entrepreneurs to grow and create jobs and provide relief for Michigan families. That means we must: cut taxes for small businesses and middle class families, get loans to small businesses flowing again, invest in new hi-tech industries, preserve and modernize our auto industry and create fair trade policies that allow Michigan workers and businesses to compete and succeed in the global economy. Our people have faced down great challenges in the past, and if we enact sound policies that support our workers and business owners, Michigan will again become the global economic engine as it has been in the past.
Supporting Small Businesses
Creating the environment that allows small businesses to grow is critical to creating jobs and reducing Michigan's unemployment rate. Small businesses employ half of all private sector employees and are responsible for creating created 60-80% of all new jobs over the last decade. By serving as a platform for new ideas and new investment, small businesses create thousands of new, local jobs that will be central to Michigan's economic recovery. That is why fighting to give entrepreneurs the tools they need to succeed will always be one of my top priorities.
Our current financial crisis has adversely affected every sector of our economy, and small business is no exception. Frozen credit markets can make it impossible to get a loan to start a new business or expand an existing one. In November, I convened a field hearing in which Members of Congress traveled to Southeast Michigan to hear directly from small business owners and experts on Michigan entrepreneurs lack of access to affordable credit. The following month, I voted against the jobs bill introduced by House leadership because it lacked sufficient support for small businesses. I then advanced my own plan calling for $40 billion in unspent Wall Street bailout funds to be redirected to provide small business loans. In January, the President announced he endorsed the use of Wall Street bailout funding for small businesses instead.
To specifically help areas as hard hit as Michigan, I wrote an amendment to the Small Business Financing and Investment Act (H.R. 3854) that would provide up to $70,000 in zero interest loans with more favorable repayment terms to areas with high unemployment. My amendment will also make high-unemployment areas eligible for the New Market Venture Capital Program, providing extra incentive to invest in places such as Oakland County that have extra need.
I also supported provisions in the American Recovery and Reinvestment Act (also known as the stimulus bill) that provided $13 billion in loans, lines of credit and capital for small firms to provide a financial market that is friendly to small businesses. To further free up the lending market, the Obama Administration recently proposed the release of $15 billion of TARP funds to create a secondary market for SBA loans. This will allow banks to get credit flowing to small businesses and I fully support this plan.
In Oakland County, we are painfully aware of the effects that the Wall Street crisis has had on our economy. I believe that part of making sure Wall Street doesn't disrupt our economy again means making sure that local banks are able to lend in Oakland County. I am also a strong believer that we need to encourage private-sector small business lending in an effort to create an environment in which those with good ideas who will work hard can access the capital they need to succeed. I am an original cosponsor of legislation that would expand the Small Business Administration's Express Loan Program, which allows local banks a greater deal of discretion in lending to small businesses in the community and cuts down on the time and red tape in between local entrepreneurs and the capital they need to revitalize our economy.
The American Recovery and Reinvestment Act contains additional measures supporting small businesses. The Recovery Act will invest $7.2 billion in IT infrastructure, which over 100 high-tech CEO's have said will create hundreds of thousands of new jobs--more than half of which will be in small businesses. The Recovery Act also provides small businesses with $30 billion in tax relief, targeted to spur investment and job creation.
By giving entrepreneurs the tools they need to survive the difficult economy and thrive in the years ahead, small business will continue to be the engine of US job creation, strengthen our communities and develop the products and services that will ensure America continues to lead in the 21st century.
Creating New Manufacturing Jobs and Investing in 21st Century Technology
A healthy manufacturing base is critical to the security of the American middle class and must be a key component of our economic recovery. In order to maintain competitiveness in the global marketplace, U.S. manufacturers must adapt to new technological developments and economic changes. Other nations have committed billions of dollars to support new automotive, clean energy and other manufacturing technologies because they know they represent the jobs of the future. Our country needs to do the same or we'll get left behind.
I authored the Advanced Vehicle Technology Act of 2009 (HR 3246), which provides the Department of Energy with $2.85 billion over five years to partner with automakers, parts suppliers, universities, and industry consortiums to conduct innovative research and development projects. This funding will help ensure that the next generation of vehicles and vehicle technologies will be built right here in the United States. This legislation will create jobs in Oakland County and reduce America's dependence on foreign oil. H.R. 3246 passed the House on September 16, 2009 by a large bipartisan vote of 312-114, and was endorsed by the Chamber of Commerce, the National Association of Manufacturers, General Motors, Ford Motor Company, Chrysler, the UAW, the Motor and Equipment Manufacturers Association, Magna International, Delphi, ArvinMeritor, Robert Bosch LLC, Caterpillar, Dueco Odyne, Achates Power, the Engine Manufacturers Association, the League of Conservation Voters, the Sierra Club, and the Natural Resources Defense Council.
The Manufacturing Extension Partnership is a critical national program that provides technical services and assistance to increase productivity and efficiency of small and medium-sized manufacturers. MEP support is vital to the long term success and competitiveness of small and medium sized American manufacturers, and preserving and strengthening the program should be a priority as Congress continues its efforts to revive the economy. Currently the costs of the MEP's services are shared between the federal government, state government, and industry with the federal government contributing one third, and states and industry contributing the remaining two thirds. However, state budget problems have destabilized the MEP funding structure. At least 23 state MEP centers reported a decrease or elimination of state MEP funding in 2009 alone, and some centers have been operating without state funding for years. When a state eliminates MEP funding, it is left to the manufacturers to cover the gap or risk losing critical federal dollars. I introduced legislation with Republican Rep. Vern Ehlers this year that would reduce the matching requirements for small manufacturers and strengthen the MEP program. H.R. 4393 would reduce the financial burden on small business during a recession and align the MEP's structure with other public-private programs operated by the government by reducing the match requirement. I look forward to continuing working with my colleagues in a bipartisan fashion to champion policies and programs that support American manufacturing.
There is a great potential to revitalize our domestic manufacturing base by strengthening the domestic solar industry. While states like Michigan and many others certainly have the existing infrastructure and workforce to manufacture more solar technologies, the United States continues to lag behind China, Japan, and Europe in the manufacturing of photovoltaic modules. On October 22, 2009 the House passed H.R. 3585, the Solar Technology Roadmap Act. This important bill will strengthen our nation's solar energy industry and help us meet our domestic goals for renewable energy production. The bill will establish a roadmap and demonstration program to further advance solar technologies. The final version passed by the House included an amendment I authored to require the Department of Energy to give preference to projects in high unemployment states like Michigan. My amendment also required that all research, development and manufacturing resources be allocated in the United States. I believe that federal dollars should work to create American jobs, and this amendment seeks to ensure that these new investments are working to restore jobs lost in recent years.
Supporting our Domestic Automobile Industry
The global race to create the ultra-efficient cars and other new manufacturing technologies of the 21st Century has begun, and the United States is already giving other nations a tremendous head start. If we want to maintain our economic competitiveness, create jobs and truly become energy independent, we must support our manufacturing sector and auto industry at the same pace as other countries.
I have made fighting for our American automakers one of my top priorities. When Chrysler and GM were facing extinction, I strongly supported providing bridge loans to allow the companies to rebound from the global credit crisis. I stood up to Chrysler's debt holders, four major banks and a few dozen hedge funds who were trying to squeeze Chrysler for more than the fair market value of their debt. I argued they should make a good business decision and accept market price rather than the force the company into liquidation, and ultimately they did. When two of our Oakland County General Motors plants were facing permanent shutdown, I founded the Make it in Michigan campaign which earned the support of 30,000 citizens in asking GM to make their new subcompact car in Michigan. GM ultimately did decide to make their new car in Michigan, keeping two plants open and saving 1,400 jobs.
Now we must support our domestic auto industry in the global competition to build the fuel efficient cars of the future. I authored the Advanced Vehicle Technology Act of 2009 (HR 3246), which provides the Department of Energy with $2.85 billion over five years to partner with automakers, parts suppliers, universities, and industry consortiums to conduct innovative research and development projects. This funding will help ensure that the next generation of vehicles and vehicle technologies will be built right here in the United States. This legislation will create jobs in Oakland County and reduce America's dependence on foreign oil. H.R. 3246 passed the House on September 16, 2009 by a large bipartisan vote of 312-114, and was endorsed by the Chamber of Commerce, the National Association of Manufacturers, General Motors, Ford Motor Company, Chrysler, the UAW, the Motor and Equipment Manufacturers Association, Magna International, Delphi, ArvinMeritor, Robert Bosch LLC, Caterpillar, Dueco Odyne, Achates Power, the Engine Manufacturers Association, the League of Conservation Voters, the Sierra Club, and the Natural Resources Defense Council.
I am also a proud supporter of the Car Allowance Rebate System (CARS) Act, also known as the Cash for Clunkers program. CARS was initially approved by the Congress as part of the Supplemental Appropriations Act of 2009, and provided $1 billion in funding. When the program proved so popular that this funding was due to be completely exhausted within a matter of weeks, Congress passed emergency legislation providing an additional $2 billion in funding. There were over 690,000 transactions completed in the program, which provided an important boost for our automakers and helped result in positive GDP growth and economic expansion at a time when it was desperately needed. It also helped create a more fuel efficient vehicle fleet, resulting in a 9.2 MPG increase in average fuel economy.
Economic Recovery Act
The American Recovery and Reinvestment Act (H.R. 1, also known as the stimulus bill) was enacted on February 17, 2009. The Act consisted of three parts: roughly one-third was tax cuts for families and businesses (one of the largest tax cuts in U.S. history), another one-third was emergency support including help for unemployed workers and funding to preserve education and public safety jobs, and the final one-third consisted of direct job-creating investments in things like infrastructure improvements and new technology development (efforts to prop up Wall Street banks were not part of the Recovery Act; the bill to approve that program--known as TARP--was enacted in the fall of 2008).
The Recovery Act has already meant 69,000 additional jobs for Michigan in 2009 and a payroll tax cut for over four million Michigan residents. More jobs will be created as much of the job-creating investments will be dispersed in 2010. The Recovery Act has meant about 2 million more jobs across the U.S., according to both liberal and conservative economists. America lost nearly 750,000 jobs per month at the height of the crisis in early 2009, and the economy contracted 6% at the start of last year. Since the Recovery Act was passed in February of 2009, job losses steadily decreased until the U.S. saw net positive job creation in November and over 5% growth in the economy in the fourth quarter of '09. The Recovery Act has helped to get the economy moving in the right direction--but we must keep working.
The problem is, while the Recovery Act has meant 2 million more jobs than we'd have otherwise and is on track to meet its goal of creating or saving 3.5 million jobs, the recession that began in late 2007 has lead to the U.S. losing 8 million jobs. Clearly, there is much more work to be done before our economy is fully recovered. I do not believe that government alone can get our economy back on track, but what it can do is help create the conditions necessary to get businesses to invest and create even more jobs. The Recovery Act's middle class tax cuts, homebuyer tax credit, car buyer tax credit and assistance for the unemployed helped jumpstart consumer spending. The business tax cuts, additional funding to repair Michigan roads and investments in new technologies (such as new advanced battery development in Michigan) are creating jobs and helping to create the environment necessary for businesses to hire again. Economists from the left and right agree that the Recovery Act kept us from falling into the 2nd Great Depression during the greatest economic crisis in generations, and is continuing to create the conditions for private business to grow.
What has the Economic Recovery Act meant for Oakland County?
Protecting Home Values
Since the collapse of the housing market in 2006, home values have been falling, and it is estimated that homeowners have lost as much as $5.9 trillion in home value since that time. Because concentrated foreclosures can bring down home prices in an entire neighborhood, the first step in stabilizing home values has to be ending the tide of foreclosures and making it easier for families who have seen the value of their homes sharply decline refinance their mortgage. Getting our housing markets back on track not only will help millions of families save their homes, it will also help lead to greater economic expansion and quicker recovery due to the huge economic impact of new housing construction.
The main tool to help families facing foreclosure is the Making Home Affordable (MHA) Program, which was announced by President Obama on February 18, 2009. The MHA Program has two parts -- one which allows homeowners with mortgages owned or guaranteed by Fannie Mae or Freddie Mac to refinance into a new, more affordable mortgage as long as they don't owe more than 125% of the current value of their home. The second part of this program seeks to encourage mortgage servicers to provide modifications that will result in lower monthly payments for troubled borrowers. Borrowers who obtained their mortgage for a single family home that is their primary residence before January 1, 2009 are eligible for monthly mortgage payments lowered to no more than 31% of their monthly income.
In 2008 Congress created the Hope for Homeowners Program, in 2009 Congress passed and the President signed into law the Helping Families Save Their Homes Act of 2009 which makes a number of improvements to that program. Under Hope for Homeowners, the mortgage lender agrees to write the mortgage down to a percentage of the home's currently appraised value, and the borrower receives a new 40 year fixed rate mortgage loan insured by the FHA. For more information about this program visit http://www.hud.gov/hopeforhomeowners/consumerfactsheet.cfm, or contact your lender, or a HUD approved non-profit housing counselor. For a list of approved counselors in Michigan click here.
In addition, if you are having problems with your mortgage and would like to receive help from one of my caseworkers, please contact my District Office at 248-273-4227.
Fair Trade for American Workers and Businesses
Unfair trade has cost America jobs and hampered economic growth in Michigan. Currency manipulation on the part of China and other nations drives the cost of their imports down while pushing the cost of our exports up. Poorly written trade deals and a lack of enforcement on existing trade rules have pushed our trade deficit higher and higher. Japan and South Korea continue to employ unfair trade barriers to continue to block our automakers from selling cars there. Congress must unite across party lines and work with the administration to support fair trade for American businesses and workers.
Those who favor the uninhibited free trade policies of the previous administration attempt to label anyone who does not agree with them as "protectionist." The notion that we must either support unadulterated free trade or put up walls and trade with no one is a false choice. The issue is not whether we should have more or less trade, it is about creating reasonable rules and enacting agreements that ensure that trade is fair for American workers and businesses so that trade creates jobs at home, rather than ship them overseas.
For example, I supported a U.S. "Cash for Clunkers" program in which only American built cars could participate, but we were told that would violate international trade rules. However, the Japanese then crafted a Clunkers program in which American cars were effectively barred from participating. I spoke out against this injustice, and Japan promised they would allow American cars to participate. However, Japan later went back on this promise, allowing just a few U.S. models to participate. This is a clear example of unfair trade and I am continuing to fight it.
I believe all international trade agreements must contain internationally recognized, enforceable labor and environmental standards. Agreements should also ensure that markets in strategic industries are opened for both nations, unlike, for example, the free trade agreement President Bush negotiated with South Korea. There is already a tremendous imbalance in the flow of automobiles between South Korea and the United States--in recent years, South Korea has sold over 700,000 vehicles here, while America has been permitted to sell only around 4,500. The Korea Free Trade Agreement would make this imbalance permanent. I will never support this deal as it is currently written.
However, if a trade agreement contains key protections for workers and the environment, fairly opens markets for U.S. business and will create good paying jobs in critical industries, that agreement should be considered.
When trade is fair, competition is fair, and when competing on a level playing field, American workers and business owners will win.