Economy

Foreclosure

As more and more workers lose their jobs, they become more vulnerable to foreclosure. Without a job, you have limited to no options for loan modification, and if you owe more on your house than it’s worth, your options to sell or refinance are practically non-existent. President Obama and the Democratic-led Congress have taken great strides to help struggling families survive the housing crisis, and this new legislation would ensure that the growing number of job-seeking homeowners have a chance to hang on to their homes and their dreams.
 
Alarmingly, less-risky prime mortgages surpassed subprime mortgages recently in the number of new foreclosures, with the rate of prime mortgage foreclosures at some points doubling rates seen in 2008. This increase among prime mortgage foreclosures is tied at least in part to rising unemployment.

So many of our friends and neighbors are facing the loss of their homes that in June 2009, I introduced the Temporary Mortgage Assistance Act of 2009 (H.R. 3066), which would use unobligated TARP funds to provide short-term, low-interest government loans to individuals who have lost their jobs and are in danger of foreclosure.

For months, we gave hundreds of billions of taxpayer dollars to help stabilize the big banks on Wall Street, and now it is time to return that money to our neighbors on Main Street. These loans would be going to responsible men and women who did everything right but, because of the current economic crisis, now find themselves in need of a short-term boost while they seek new employment. We cannot allow them to fall through the cracks.
 
The loans would be paid directly to a homeowner’s mortgage company, and the amount of the loans would be based on the percentage of household income lost during unemployment. For instance, if an individual’s job loss means a 60 percent reduction of household income, a loan would be issued in the amount of up to 60 percent of the mortgage payment. Although loans will accrue interest during the loan period, repayment will not begin until 60 days after the loan ends.

In June 2009, I sent a letter to President Barack Obama urging him to consider options to assist homeowners who have lost their jobs and are struggling to stay in their homes, including supporting my legislation. Eventually, part of my plan for bridge loans was folded into financial regulatory reform legislation that passed the House and is awaiting Senate debate.

The legislation authorized $3 billion for the Secretary of Housing and Urban Development to provide loans to eligible homeowners for a period not exceeding 18 months or $30,000 in aggregate, at an interest rate not exceeding 3 percent. To qualify for a loan, a homeowner must be at least 60 days delinquent, be unemployed and registered for state unemployment benefits, and have a reasonable prospect for re-employment. Additionally, the homeowner must be underwater.

Legislation is not the only way to help however. The foreclosure problem is so critical that I have tasked my staff with doing whatever we can in my District to help Marylanders. I have held three Foreclosure Prevention Workshops, helping people who are delinquent on their mortgages or facing potential foreclosure get the information and resources they need to secure their homes.

All three of the previous Foreclosure Prevention Workshops were tremendous successes. We were able to help nearly 1,000 people at each event who were in jeopardy of losing their homes.

These workshops are unique in that we are able to bring together the lenders and the borrowers to reach solutions on the spot. We had sessions on Avoiding Foreclosure Scams, a speaker from HUD discussing how to make home buying affordable, how to restore credit ratings after foreclosure, and discussions about community revitalization. There were also one-on-one sessions where we would work with the lender and homeowner to help reshape their mortgage and potentially save their home.

They were incredible experiences and I think they helped a lot of people in Baltimore City and County, and Howard County and across the State.

Stimulus

On February 17, 2009, I was proud to cast my vote for the most sweeping economic stimulus package since the New Deal. Our nation was in the midst of the worst economic crisis since the Great Depression, causing millions of people to lose their homes, their jobs, their life’s savings, and their hopes and dreams. The need for swift, deliberate action grew every day, and I was honored to join my colleagues in the House of Representatives to pass the first dramatic new investment in our future since the creation of the interstate highway system a half-century ago.
 
The American Recovery and Reinvestment Act is still on track to create or save 3.5 million jobs, it immediately cut taxes for 95 percent of American workers, and made unprecedented investments in our nation’s infrastructure. Through investments in unemployment benefits and food stamp benefits, it provided immediate relief to the Americans suffering the most while also infusing money directly back into our economy.

While there was no overnight solution to fix the fallout from the past eight years of poor economic policy, this comprehensive legislation was the first major step in restoring our nation’s economy and providing relief to the millions of Americans who were struggling with all of their might to stay above water. While the road ahead of us is still long, the Congress moved our nation miles ahead by passing this critical legislation.

A year after I cast my vote, the evidence is clear that the Recovery Act is working to cushion the greatest economic crisis since the Great Depression and lay a new foundation for economic growth.  

•    Public and private forecasters ranging from the Council of Economic Advisors to Moody’s Economy and IHS Global now say the Recovery Act is responsible for about 2 million jobs nationwide.  And the non-partisan Congressional Budget Office, which is widely-respected by Members of Congress on both sides of the aisle, says that number could be as high as 2.4 million.

•    Our economy grew 5.7 percent in the fourth quarter of 2009. This is the largest gain in six years and something many economists say is largely due to the Recovery Act.

•    While we won’t be satisfied until we begin to see net job growth, job losses today are a fraction of what they were a year ago before the Recovery Act began.  

I am proud of a number of aspects of the Recovery Act:

•    Tax Relief: Provided over $100 billion in tax relief for American businesses and families. That includes the Making Work Pay Tax Credit which cut taxes for 95 percent of working families – that’s $37 billion in tax relief for 110 million families in 2009.

•    Aid to States, Small Business: Provided critical relief for state governments facing record budget shortfalls and small businesses dealing with limited access to capital, including: More than $50 billion to help prevent cuts to Medicaid programs across the country. Nearly $60 billion in funding for education – a move that governors say funded over 300,000 education jobs in the fourth quarter of 2009. Over 42,000 small business loans that provided nearly $20 billion in much-needed capital.

•    Projects: Funded over 55,000 projects nationwide that are not only creating jobs up-front, but laying a long-term foundation for economic growth, including: Over 12,500 transportation construction projects nationwide, ranging from highway construction to airport improvement projects. 48 advanced battery and electric drive projects in 20 states worth $2.4 billion to help power the next generation of advanced vehicles. Projects in 31 states to help lay a foundation for a high speed rail network here in the U.S. - including down-payments on 13 new, large-scale high-speed rail corridors across the country.

The Recovery Act was designed to spend money gradually over time in order to sustain a true recovery. Peak spending is scheduled to occur early in 2010. As the Recovery Act shifts from rescue to rebuilding, the nature of spending will change too.  Now that much of the immediate relief has been provided, there will be a surge in project activity and tax relief in the coming months.  

Outlays for projects are expected to double in the first two quarters of this year. As the weather begins to thaw, thousands of construction projects funded late last year are expected to break ground across the country. Work is beginning on major project investments like broadband, health IT, smart grid and weatherization that were made last year. Monthly tax relief in 2010 will nearly double from $11 billion to $18 billion a month.

The job impact of Recovery Act projects already underway is in many cases just beginning to be felt. About 75 percent of recipients that reported on their Recovery Act spending indicated their projects are less than half complete - meaning there is even more job impact from those dollars to come.

Demand is so great for some of the Recovery Act’s most innovative and effective programs that the Administration has announced proposals to extend or expand them. The Vice President recently announced that the Administration will provide an additional $5 billion in 48c tax credits for renewable energy manufacturing projects because of the overwhelming number of quality applications for the initial $2.3 billion provided by the Recovery Act. The President also announced plans to seek additional funding in his budget to expand the Race to the Top educational program, which was initially funded with $4.35 billion through the Recovery Act last year.

For all of the progress made with the Recovery Act, it’s now clear we have lost more jobs than anyone could have predicted in 2008.  That’s why the President is working with Congress on additional jobs measures – many of which are rooted in the early successes of the Recovery Act.  The Recovery Act was never meant to fill a gap of 8 million jobs lost – no single government program ever could.  
But one year in, experts ranging from private forecasters to governors on both sides of the aisle say the Recovery Act has helped pull us back from the brink of economic disaster and is helping lay a firm foundation for our economic recovery.

Job Creation in Maryland
Throughout the nation, shipping will provide thousands of job opportunities. In my District, and all across Maryland, we must be ready to seize those opportunities. I introduced and was pleased that more than two-thirds of my colleagues voted to pass H.R. 2651, the Maritime Workforce Development Act, to create a recruitment, training, and student loan program to attract the next generation of workers to jobs in the maritime industry.
 
Many of the men and women who comprise our maritime industry will soon be entering retirement, and it is important that we have the tools and resources in place to bring in the next generation of mariners. The Maritime Workforce Development Act seeks to improve the current system and ensure that individuals seeking to enter or advance in the maritime field are able to afford tuition for training programs.
 
Mariners rarely enroll in traditional 2- or 4-year educational programs, instead taking frequent, multi-week courses designed to certify them for specific new qualifications. The unique structure of these programs is not easily served by existing loan programs, leaving many unable to afford the costly tuition.
 
The Maritime Workforce Development Act would authorize $60 million over six years to create a maritime-focused student loan program through which individuals can receive up to $60,000 in loans over the course of their lifetime. Recipients of the loans would be required to maintain satisfactory progress and be required to repay their loans within ten years. Additionally, the bill would authorize $60 million over six years to enable the Department of Transportation to award grants to maritime training institutions for mariner recruitment, training, and retention.
 
The maritime industry is an essential component of our nation’s commerce and economy, and we cannot ignore the growing threat of a shortage in qualified maritime labor. We cannot allow this problem to continue to grow as a result of individuals being denied access to maritime training due to income levels, and H.R. 2651 takes the first step in ensuring that we don’t.
 
Unemployment/COBRA Extension
To protect those Americans who have lost their jobs, through no fault of their own, I voted yes on the Unemployment Compensation Extension Act of 2009 (H.R. 3548). The legislation extends unemployment benefits by up to 13 weeks for over 300,000 jobless workers who reside in high unemployment states. The bill will also apply to over one million workers who would have otherwise exhausted benefits before the end of 2009. The unemployment funding will thus immediately move back into the stream of the economy.
Our friends and families throughout the nation are still suffering from this economic downturn. Jobs tend to recover slower than the rest of the economy, but we know they will come back. We must avoid slowing that process even more, by keeping as many Americans as we can out of poverty and foreclosure. This legislation will do exactly that.

At the time the bill was passed, there were nearly six unemployed Americans for every available job and long-term unemployment was at a historically high level. Five million Americans have been without work for longer than six months.

This legislation is deficit-neutral. The cost of the bill is offset by two provisions. First, it extends for one year a federal unemployment tax that has been in place for over 30 years and which President Bush proposed extending in his last budget. The tax costs employers $14 per year, per employee. Second, it requires that current reporting on newly hired employees include the date work started to reduce unemployment insurance overpayments.