Economy & Budget

A sobering picture (Rep. Carolyn Maloney)

Yesterday, at my request, the Government Accountability Office (GAO) released a report that provides a thorough understanding of the state of the housing market at the end of June 2009. A table in the Appendix of that report, which I have turned into a detailed map, provides a sobering snapshot of the percentage of mortgages in default or in the foreclosure process.

The House recently passed a sweeping regulatory reform package, the Wall Street Reform and Consumer Protection Act, which will help prevent a similar crisis in the future. As part of that package, a provision will create a Consumer Financial Protection Agency to protect borrowers from predatory lending practices associated with many of these nonprime mortgages. The bill will also provide transparency in the over-the-counter derivatives market so that banks will not be able to offer the unregulated mortgaged related securities that led to our financial crisis.

It is now up to the Senate to act. As Senators consider this landmark consumer financial protection legislation, let's hope they remember yesterday’s GAO report, and in particular its map of troubled mortgages. Both serve as powerful reminders that for many American families, the dream of homeownership has turned into a nightmare of foreclosure.

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America's New Year's unemployment hangover (Rep. John Carter)

One cannot drink oneself into sobriety. Yet that is precisely what Congressional Democrats and the Obama Administration have attempted with our economy for the past year with predictable and painful results.

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Unemployment continues to stand at an official 10% for the third month in a row, the worst joblessness in 27 years.  The real unemployment rate is far worse.  Included in the December economic figures was a shocker – the percentage of adult men who are working has fallen to the lowest level in recorded U.S. history at just 80%.  That means that one in five men in this country between 18 and 54 are neither working nor claiming unemployment.  They have fallen completely out of the workforce.

That helps explain why December’s unemployment rate remained at November’s 10% rate in spite of an additional 85,000 Americans losing their jobs.  At the same time the new jobless claims were added, many of the previously unemployed were simply removed from the workforce numbers altogether.

Economists estimate our true jobless rate as high as 17%, and that could grow in coming months as more Americans exhaust their unemployment benefits and lose homes to foreclosure.

When Barack Obama was sworn into office last January, unemployment stood at 7.2%.  President Obama of course blamed this on the preceding Bush Administration, while ignoring the fact that his fellow Democrats had total control of the House and Senate since 2006.

We were told that unless we passed his $757 billion stimulus plan immediately, unemployment could jump to 8% before we started recovering midway through 2009.  Democrats passed it, and unemployment has soared to over 10% and stayed there.

Did any of this budget-breaking spending do any good? Not according to the Associated Press:

“Spend a lot or spend nothing at all, it didn’t matter, the AP analysis showed: Local unemployment rates rose and fell regardless of how much stimulus money Washington poured out for transportation, raising questions about Obama’s argument that more road money would address an ‘urgent need to accelerate job growth” (AP, 1/11/10).

So Congressional Democrats and the President pushed for a “cap and trade” energy tax and a health care takeover that will add millions more to the jobless roles through massive new taxes, higher consumer prices, oppressive regulations, and out-of-control federal spending and deficits.

The unemployment rate soared even higher, but Obama and Pelosi learned nothing.  They pushed another “stimulus” bill through the House in December, putting taxpayers another $75 billion in debt.

Deficit spending undermines economic growth.  Shoring up failed businesses and business practices undermines economic growth.  Piling on debt for our children and grandchildren undermines economic growth.  Lack of economic growth means more joblessness.

The Obama Administration and the House of Pelosi spent 2009 in a drunken binge of government spending and power grabs.  We are left in January 2010 with a splitting deficit hangover, and the only way to recover is to set aside the bottle of fiscal irresponsibility.

We can begin by repealing whatever is left of the Bush and Obama Administration “stimulus” plans, ending the energy and health care takeovers, and recovering the taxpayer funds handed over to failed companies.

Then we can start creating sustainable new jobs through cutting taxes for individuals and small businesses, taking the burden of debt off our children, and restoring the vibrancy of our free market economy that has been stifled by Washington.

Cross-posted from Big Government

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The Big Question: Will a new bank fee help?

Some of the nation's top political commentators, legislators and intellectuals offer some insight into the biggest question burning up the blogosphere today.

Today's question:

Will a new fee on banks help Democrats lower the debt and win public approval?

(Read today's responses after the jump.)

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'Stimulus' is not creating jobs (Rep. Michele Bachmann)

If the 2.7 millions jobs that have been lost since the so-called stimulus was signed into the law did not convince you that government spending does not correlate into economic growth, take a look at this story from the Associated Press: Stimulus Cash Doesn't Create Local Jobs:

“A federal spending surge of more than $20 billion for roads and bridges in President Obama's first stimulus has had NO EFFECT on local unemployment rates, raising questions about his argument for billions more to address an ‘urgent need to accelerate job growth.’ An Associated Press analysis of stimulus spending found that it didn't matter if a lot of money was spent on highways or none at all: Local unemployment rates rose and fell regardless. And the stimulus spending only barely helped the beleaguered construction industry, the analysis showed.”

Yet, President Obama wants to pass a second stimulus calling for billions of dollars of more spending. When will the President and Democrat leadership learn that spending money we don’t have isn’t always the remedy to fix whatever problem confronts us? When will they get the hint? Republicans have put forth a better way to give our families the relief they need that will turn our economy around.

Cross-posted to Townhall

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Congress is committed to creating jobs on Main Street (Rep. Edolphus Towns)

Across the nation, in our communities and neighborhoods, we are experiencing the effects of the economic downturn. Jobs have vanished at rates not seen since the Great Depression, and many know someone who lost their job as a result of the recession.

The Democratic Congress has been focused on turning around our economy, and acted on our commitment by enacting several measures that have already created or saved more than a million jobs this year. We moved quickly at the beginning of 2009 to pass the American Recovery and Reinvestment Act, or "Recovery Act," which has helped keep cops on the beat and teachers in classrooms, while making critical investments in green technology and our nation's infrastructure.

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Let’s be frank, Mr. Vice President: The stimulus failed (Rep. Tom Price)

Today, the State of Georgia welcomes Vice President Joe Biden for an update on the administration’s so-called stimulus bill. With national unemployment sitting today at 10%, and worse in Georgia, the White House’s credibility on stimulus success is dubious at best. Yet as proper manners would dictate, we owe the Vice President an opportunity to make his case.

President Obama tapped Mr. Biden to oversee the stimulus program because, as he put it, “nobody messes with Joe.”  While that may be so, as the Vice President has been traveling around the nation touting the various spending priorities of the stimulus bill, their alleged benefits have yet to materialize into jobs.  So if the Vice President is visiting to have us believe expanding broadband is how jobs are created or that we can “weatherize” our way back to prosperity, it may be Joe who is messing with Georgia.

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Jobs? (Rep. Joe Wilson)

In the past two years, the debt ceiling has been raised four times.  This week, Congress debated raising the debt ceiling by $1.8 trillion.  Congress continues spend, spend, and spend - ultimately passing our debts onto our grandchildren.  I’m pleased that my colleague Congressman Steve Scalise introduced H.R. 4262, the Control America’s Purse-strings to Deliver a Better Tomorrow (CAP the DEBT) Act to put a lid on this irresponsible spending.

Instead of setting spending records, Congress should be considering job creation alternatives. Here are some ideas that we have presented to Speaker Pelosi for consideration:

-- Provide a 5% across the board income tax cut
-- Increase the Child Tax Credit from $1,000 to $5,000
-- Make the lower 15% rate on Capital Gains and Dividends permanent – this will make our rate competitive with European nations
-- Repeal the Alternative Minimum Tax on individuals
-- Make all withdrawals from IRAs Tax-and Penalty-Free
-- Permanently repeal required distributions on retirement accounts
-- Increase by 50% the tax deduction on student loans and the tax deduction on qualified higher education expenses
-- Allow small business to take a tax deduction equal to 20% of their income
-- Make unemployment benefits tax free so that those individuals between jobs can focus on providing for their families
-- To encourage responsible buyers to enter the housing market and stabilize prices, offer a home-buyers credit of $7,500.

I call on my colleagues to work across the aisle to deliver to the American people at least a few of these ideas that will get America’s economy rolling once again. 

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All I want for Christmas is reasonable regulation of the financial industry (Rep. Jackie Speier)

Next time you're at the mall, supporting your hometown merchants with holiday purchases, I would like you to consider something. Every store owner must comply with a list of regulations that govern their building, signs, how they treat employees, product safety and the veracity of their advertising.

While no merchant is clamoring for more government intrusion, most would agree that it is reasonable to impose standards to protect consumers from toasters that explode when plugged in or toys that contain toxic chemicals. Yet, over the past decade, similar regulations governing the very largest financial companies have been gutted in favor of a "buyer beware" attitude that rewards Wall Street executives for gambling with other people's money while putting our entire economy in peril. It has been heads we win, tails you lose.

When a local business fails, the damage is bad for the community but it is kept local. As devastating as it is for the merchant, employees and customers, it is unlikely to affect the broader economy in any profound way.

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The bailout that never ends (Rep. Lynn Westmoreland)

The $700 billion Wall Street bailout last year proved exceedingly unpopular with regular Americans. Nevertheless, House Democrats, with their tin ears to the ground, are looking to make bailouts the status quo by creating a permanent bailout fund.

The financial regulation bill cooked up by Rep. Barney Frank (D-Mass.), the “Barney Bill,” offers a smorgasbord of bad policies that will affect every American. The Barney is yet another leg of the Giant Government Takeover of major industries pushed through the House this year. If your appetite for bigger government wasn’t satiated by the Car Takeover (GM and Chrysler), the Energy Takeover (cap and trade) or the Health Care Takeover, Barney has something designed just for you: The Financial System Takeover.

There are many reasons to oppose the financial regulatory overhaul bill on the floor this week, but the major reasons are that it will further tighten credit, allow bureaucrats to chop up U.S. businesses they deem “too big,” cost consumers more and kill jobs.

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The Big Question: Should Obama focus on black jobless rate?

Michelle Bernard, president of Independent Women’s Forum: Creating jobs and lowering unemployment for everyone should be the president's top priority .

Today's question:

Should President Barack Obama develop a plan to address unemployment among African-Americans as suggested by some members of the Congressional Black Caucus?

Read today's responses after the jump...

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