Senate Democrats

Reid: As Unemployment, Foreclosures And Oil Prices Rise, Republicans Block Democrats’ Efforts To Strengthen Economy

Washington, DC—Senate Majority Leader Harry Reid made the following statement today on the floor of the U.S. Senate, encouraging Republicans to join Democrats at the negotiating table to help families threatened with foreclosure and revive our weakening economy:

“We are burdened by an economy that is spiraling downward every day.  This morning it was announced that the United States economy lost 63,000 jobs in the month of February.  That is the largest monthly job loss in nearly five years – and the second month in a row our economy has lost jobs.  We also learned that the number of jobs lost in January was larger than previously reported.  That number has been revised up to 22,000.

“It comes as no surprise that the manufacturing and construction sectors were among the hardest hit.  Manufacturing lost 52,000 jobs, while construction lost 39,000.  Homebuilders are laying off construction workers as new homes remain unsold.

“Yesterday brought even more bad news that America’s housing crisis is growing worse.  The fourth quarter of 2007 saw the highest level of homes entering foreclosure in American history.  And now, the amount of equity that Americans have in their homes has dropped to the lowest level since World War II.

“Yesterday, oil closed at $105.47 a barrel.  Not long ago, economists and investors were concerned that oil might hit $50.  Now we are at $105.47.  The American people are already struggling under the enormous burden of sky-high prices for groceries, heat for their homes, and gasoline.  By every indication, things are getting even worse.

“President Bush said this week that he does not think our country is headed for a recession.  This morning, all signs point in that direction.  But regardless of what label we use, there is no doubt whatsoever that the American people are suffering.

“There is likewise no doubt that if we don’t take action, things will get worse.  The economic stimulus bill we passed last month will help a little.  I am pleased that Democrats were able to secure rebate checks 21 million senior citizens and hundreds of thousands of disabled veterans in the bill that passed.  There is no doubt that an extra $600 will help Americans pay for groceries, heat, and gasoline.  But no one thinks a $600 check is enough to turn our economy around. 

“We must legislate the growing housing crisis – the eye of the economic storm.  President Bush – who doesn’t think America is in or headed for recession – responded to the housing crisis by directing Secretary Paulson to create a voluntary program to encourage banks to work with homeowners facing foreclosure. 

“This week, Secretary Paulson released data on the President’s approach.  How did the voluntary approach do?  Of the 1.5 million homeowners at risk of foreclosure, about 10 percent received some kind of loan modification to make it possible for them to continue paying their mortgage over the long term.  For hundreds of thousands of others, the only offer made was to add on the amount of the missed payments to the total amount due.  That’s not a modification, and it will do nothing to help struggling families keep their homes.

“I have praised the work of Secretary Paulson on more than one occasion.  The voluntary efforts he has led have had some positive impact.  Even one family saved from foreclosure is a good step.  But with millions at risk to lose their homes, and the news growing worse every single day, the Bush Administration’s voluntary program is merely a drop in the bucket.

“Last week, Democrats introduced a comprehensive housing stimulus bill.  Our bill would help the hundreds of thousands of homeowners that the President’s voluntary program leaves behind.  Our plan has five basic parts:

“First, we help families avoid foreclosure in the future by improving loan disclosures and transparency during the original loan and refinancing process.  Second, we help families keep their homes by increasing pre-foreclosure counseling funds.  I was briefed by the leaders at NeighborWorks this week – and they made it clear that demand for counseling still is not being met.

“Third, we expand refinancing opportunities for homeowners stuck in bad loans, which will help them for the long term, not just for another month or two.  We do this by allowing housing finance agencies to issue bonds to refinance subprime borrowers, a proposal endorsed by the President.  Fourth, we provide funds to help the highest-need communities purchase and rehabilitate foreclosed properties.  And fifth, we amend the bankruptcy code to allow home loans on primary residences to be modified – only in certain circumstances, with very strict guidelines.

“How have our Republican colleagues responded to our sensible plan? As we have come to expect, they responded with blocking, stalling and filibustering.  Republicans proposed an alternative plan consisting of four key concepts.  Only one of those had anything to do with housing.  The others called for tort reform, reduced regulation and a long-term extension of Bush economic policies – policies that have cost our country more than $3 trillion.

“Incredibly, the one section of their plan that relates to housing mimics many of the ideas contained in our legislation.  Instead of standing on the side of struggling families and at-risk homeowners, Republicans once again chose the side of Bush and big business.  Republicans want us to continue to help those who contributed to the foreclosure debacle in the first place.

“Every day that Republicans stonewall, is a day closer to foreclosure for hundreds of thousands of America.  This isn’t a time for stalling, it is a time for action.

“Just this week, Fed Chairman Bernanke said that the crisis demands a ‘vigorous response.’  He went on to say, ‘Reducing the rate of preventable foreclosures would promote economic stability for households, neighborhoods and the nation as a whole.  Although lenders and servicers have scaled up their efforts and adopted a wider variety of loss-mitigation techniques, more can, and should, be done.’

“The words of Chairman Bernanke and the data released this week by Secretary Paulson should be a wake-up call to my Republican colleagues: With a sustained commitment, we can help families weather the storm.  But it will take more than voluntary programs.  It will take prompt, effective and resonsible action from Congress.

“So, to my Republican colleagues, I say this: Join us at the negotiating table.  If there are parts of our bill you oppose, offer amendments.  I have made it clear, both publicly and in private conversations with Senator McConnell that we will work out an arrangement to consider related amendments from both sides of the aisle.

“Last week, Senator McConnell said that he wanted five amendments on each side to move forward.  We are ready to do exactly that.  But we continue to wait for our Republican colleagues’ five amendments.  Right now, Republicans have not permitted this bill to reach the point where amendments can be offered.

“My Republican colleagues, I ask you to join Democrats in supporting cloture on the housing bill so that we can work toward legislation that will help families keep their homes and help our economy recover.”