Date: 3/18/2009
LOS ANGELES (AP) — Clutching pajamas for her three youngest kids, Janice Johnson straggled into a Skid Row homeless shelter on a recent night, frustrated and weary from another fruitless apartment hunt.
The Midnight Mission was her last resort after being evicted when a bank took over the South Los Angeles building where she’d rented an apartment for years.
“I don’t want to be on the street,” said Johnson, a single mother who lives on welfare. “I’m just trying to keep the kids going to school. With this homeless thing, I’m getting calls that my 8-year-old is sleeping in class.”
The foreclosure crisis is hitting inner-cities hard as landlords default on mortgages in record numbers and foreclosures force tenants into the street. Boarded up apartment buildings have become common on impoverished city blocks while emergency shelters are swelling with mothers with children.
“The doors are busting down with people with this problem,” said Mercedes Marquez, city housing general manager. “And the wave is still coming.”
The problem has grown to such proportions that the City Council recently halted evictions and the city decided to buy empty buildings and designate them as affordable apartments.
Government mortgage company Freddie Mac recently said it would allow homeowners facing foreclosure-related eviction to remain in their homes as renters, while Fannie Mae also has taken similar steps to prevent renters and owners from being thrown out.
Cities across the nation are grappling with the dilemma which is affecting some of their neediest residents.
In Chicago, Cook County Sheriff Thomas J. Dart now requires banks to give tenants four months notice of an eviction. Last year, he blocked foreclosure evictions after seeing renters being summarily tossed out, said spokesman Steve Patterson. Chicago’s number of foreclosure evictions has tripled over the past two years, to more than 4,500 last year.
Boston started sending postcards to tenants advising them of their rights and now requires owners to put a sign on the property advising who the landlord is and a local contact, said Pat Canavan, housing adviser to Mayor Thomas Menino. If tenants don’t have heat, city inspectors are allowed to order heating oil and bill the owner. Meanwhile, the city is exploring purchasing foreclosed buildings.
“The (debt) servicers want these buildings unoccupied but we want them occupied,” Canavan said. “There’s all kinds of fallout from this.”
Housing advocates say they’re seeing the same situation with renting families in cities large and small, urban and suburban, being forced into shelters.
Some evictees are even employed but don’t have the savings for a new apartment or simply can’t find an affordable one.
“We’re now seeing working families in shelters — people are going to work from the shelter and getting kids to school from the shelter,” said Ellen Bassuk, president of the National Center for Family Homelessness.
Evictions are likely to keep rising as job losses sock renters, said Delores Conway, multifamily market expert at the University of Southern California’s Lusk Center for Real Estate.
“The pressure is going to continue because of rising unemployment,” Conway said.
While the nation’s default rate on apartment buildings is still relatively low, it is rising quickly. Fannie Mae, for example, said its delinquency rate was 0.30 percent at the end of last year, double what it was at the end of September, and almost four times the rate at the end of 2007.
In Los Angeles, neighborhoods in the city’s low-income south and central areas are being walloped.
In 2007, buildings containing a total of 1,690 apartments were foreclosed on. In 2008, owners lost buildings containing 4,789 apartments, according to the city housing department.
Marquez said complaints have flooded in to the city from evicted tenants. Tenants rights group Inquilinos Unidos (Spanish for Tenants United) has never seen as many cases of tenant foreclosure evictions as in the past six months, said organizer Silvia Sandoval.
Most evictions stem from banks that don’t want to be landlords after foreclosing on properties, even if they have to forgo rental income. Occupied properties entails hiring a property manager, which is something banks are generally reluctant to do, even in a normal real estate market, said Dustin Hobbs, spokesman for the California Mortgage Bankers Association
“It’s not the business they’re in,” he said. “They want to resell the property free and clear.”
But in many cases, it means tenants who have paid the rent are getting thrown out because the landlord hasn’t paid the mortgage.
On top of that, many tenants complain that landlords are resorting to intimidation to get them out cheaply and quickly. Tenants in rent-controlled apartments must get a 60-day notice to vacate and relocation fees that can total thousands of dollars, Marquez said.
The council is now set to consider an ordinance that would require banks to notify the city of foreclosures so it can contact tenants to advise them of their rights.
Social service agencies are feeling the pressure. Evictions are a chief cause for a spike in families seeking emergency beds this winter, a change from the traditional population of single men.
“The housing crisis is giving us a newer demographic of people experiencing homelessness,” said Orlando Ward, public affairs director of the Midnight Mission, where about 14 families seek cots every night, about 10 more than six months ago.
Accommodations are Spartan. Families, mostly women with a couple children, sleep in a room separate from the men’s area on cots furnished with a thin mattress, sheets and a small pillow. A neighboring room serves as a children’s play area. Doors open at 6:30 p.m., lights are out at 10 p.m. Patrons must be out in the morning by 7 after a light breakfast.
It’s often the only option for working-class renters who have little financial cushion to absorb a setback such as losing an apartment, and whose relatives and friends have limited resources.
Parents with numerous children or teenagers are often forced to split up their families among various places. Most shelters don’t accept adolescent boys, for instance, out of fear of aggressive behavior.
Janice Johnson’s teenage son found a couch at a friend’s house. Other friends and relatives took in her two teenage girls, one with a baby. Johnson then bounced with her three youngest children between a motel room paid for by a social services agency and sleeping in her van until she swallowed her pride and shuffled into the Midnight Mission.
The magnitude of the situation spurred the City Council in December to suspend foreclosure evictions for year.
The source of the apartment-building foreclosures is the same as single-family homes. Many owners of small buildings, which comprise much of the rental housing in low-income neighborhoods, refinanced during the subprime lending boom, often replacing fixed-rate loans with adjustable-rate ones, Marquez said.
When interest rates skyrocketed, landlords found rental income no longer covered the mortgage. More than 95 percent of foreclosed buildings are rent-controlled.
With so many apartments at stake, city officials are exploring a plan to use federal and city money to buy buildings and designate them as housing for low- and moderate-income families.
For couples like Gabriela and Mario Hernandez, who have two kids, the stress is overwhelming. They received a 90-day eviction notice, but they can’t afford the deposit on a new place while they’re still paying $875 in monthly rent.
The owner, they said, hasn’t paid the mortgage since August. If he had been upfront about being in default, they could have saved the rent for a new
apartment.
“We just don’t have the resources,” said Gabriela. “Where are we going to go — the street?”
Copyright 2009 The Associated Press.
NAACP says bank giants steered blacks to bad loans
Date: 3/13/2009
By JESSE WASHINGTON
AP National Writer
The NAACP is accusing Wells Fargo and HSBC of forcing blacks into subprime mortgages while whites with identical qualifications got lower rates.
Class-action lawsuits were to be filed against the banks Friday in federal court in Los Angeles, Austin Tighe, co-lead counsel for the National Association for the Advancement of Colored People, told The Associated Press.
Black homebuyers have been 3½ times more likely to receive a subprime loan than white borrowers, and six times more likely to get a subprime rate when refinancing, Tighe said. Blacks still were disproportionately steered into subprime loans when their credit scores, income and down payment were equal to those of white homebuyers, he said.
Melissa Murray, vice president of corporate communications for Wells Fargo & Co., called the lawsuit “totally unfounded and reckless.” The bank is receiving federal bailout funds.
“We have never tolerated, and will never tolerate, discrimination in any way, shape or form in any of our business practices, products, or services,” Murray said.
HSBC said it does not comment on litigation. “HSBC stands by its fair lending and consumer protection practices, and we are confident that we are treating our customers fairly and with integrity,” said Neil Brazil, vice president for public affairs.
An NAACP member, Amara Weaver of Milwaukee, said she was one of the victims of predatory lending. She bought her first home in 1984, receiving a 6.25 percent fixed-rate mortgage. She says she had a steady job as a human resources director for a social services agency, never missed a mortgage payment and maintained excellent credit.
In 2004, she wanted to buy the house next door for her son to live in. She said the bank promised her a low fixed rate for a $40,000 loan, but at the closing, when reading the fine print, she noticed that the rate was actually 11 percent.
“I was blown away,” said Weaver, an NAACP member. “I didn’t have any choice (but to sign). … It made me feel violated.”
Similar NAACP lawsuits are pending against a dozen other subprime lenders.
“This is systematic, institutionalized racism,” Tighe said. “Once you take out factors relative to income and credit risk, the only difference between the borrowers is the color of their skin.”
Tighe estimated that “tens of thousands” of blacks had been forced into bad loans, but said it was difficult to gauge the scope of the problem because banks keep much of their internal data private. The lawsuits could force banks to divulge closely guarded information, such as how banks can determine the race of a loan applicant and how federal bailout funds are being spent.
The NAACP is seeking reforms from the banks such as increased transparency in the loan process, educational outreach and internal training.
Copyright 2009 The Associated Press.
By JESSE WASHINGTON
AP National Writer
The NAACP is accusing Wells Fargo and HSBC of forcing blacks into subprime mortgages while whites with identical qualifications got lower rates.
Class-action lawsuits were to be filed against the banks Friday in federal court in Los Angeles, Austin Tighe, co-lead counsel for the National Association for the Advancement of Colored People, told The Associated Press.
Black homebuyers have been 3½ times more likely to receive a subprime loan than white borrowers, and six times more likely to get a subprime rate when refinancing, Tighe said. Blacks still were disproportionately steered into subprime loans when their credit scores, income and down payment were equal to those of white homebuyers, he said.
Melissa Murray, vice president of corporate communications for Wells Fargo & Co., called the lawsuit “totally unfounded and reckless.” The bank is receiving federal bailout funds.
“We have never tolerated, and will never tolerate, discrimination in any way, shape or form in any of our business practices, products, or services,” Murray said.
HSBC said it does not comment on litigation. “HSBC stands by its fair lending and consumer protection practices, and we are confident that we are treating our customers fairly and with integrity,” said Neil Brazil, vice president for public affairs.
An NAACP member, Amara Weaver of Milwaukee, said she was one of the victims of predatory lending. She bought her first home in 1984, receiving a 6.25 percent fixed-rate mortgage. She says she had a steady job as a human resources director for a social services agency, never missed a mortgage payment and maintained excellent credit.
In 2004, she wanted to buy the house next door for her son to live in. She said the bank promised her a low fixed rate for a $40,000 loan, but at the closing, when reading the fine print, she noticed that the rate was actually 11 percent.
“I was blown away,” said Weaver, an NAACP member. “I didn’t have any choice (but to sign). … It made me feel violated.”
Similar NAACP lawsuits are pending against a dozen other subprime lenders.
“This is systematic, institutionalized racism,” Tighe said. “Once you take out factors relative to income and credit risk, the only difference between the borrowers is the color of their skin.”
Tighe estimated that “tens of thousands” of blacks had been forced into bad loans, but said it was difficult to gauge the scope of the problem because banks keep much of their internal data private. The lawsuits could force banks to divulge closely guarded information, such as how banks can determine the race of a loan applicant and how federal bailout funds are being spent.
The NAACP is seeking reforms from the banks such as increased transparency in the loan process, educational outreach and internal training.
Copyright 2009 The Associated Press.
The recovery plan: shock & awe for a shaken nation
Date: 2/14/2009
By NANCY BENAC and CALVIN WOODWARD
Associated Press Writers
WASHINGTON (AP) — America is bringing shock and awe to the home front, using dollars instead of bombs.
It’s the military doctrine of lightning force — fast and brute, or as brute as the shaken country can manage — applied to the campaign for economic recovery.
With a record-busting stimulus plan, the U.S. is marshaling resources against economic catastrophe in ways not seen since Franklin Roosevelt put the New Deal in motion.
President Barack Obama is going with the best deal he could get. The stimulus bill is a landmark legislative achievement for a new president who inherited economic spoilage along with the spoils of power. Now the nation anxiously waits to see if it works.
Undermining federal balance sheets that were already deeply in the red, Obama and Congress settled on a nearly $800 billion plan that aims to spend more on the crisis at hand than the government has spent waging the Iraq war for six years.
The idea: fast cash, and lots of it, but with a strategic view to the future.
Some dollars will flow quickly into wallets — and right out again.
The stimulus plan will mean thousands of dollars in tax breaks for first-time home buyers and people buying new cars. Lower- and middle-income taxpayers will get an extra $13 a week in their paychecks this year, and about $8 a week next year. Unemployment checks will go up $25 a week, and keep coming longer. Food stamp benefits for 30 million Americans will rise. Short-term health insurance will become more affordable for many losing their jobs.
The success of the stimulus package may be measured less by visible achievements than by what does not happen — the home that is not foreclosed, the family that doesn’t slip into poverty, the disease that does not go undiagnosed.
“The one thing we’ll never know is what would have happened if we didn’t do it,” said Nigel Gault, chief U.S. economist for IHS Global Insight.
It’s not FDR’s deal and these aren’t his times.
No federally subsidized artists will paint murals glorifying the muscle of American workers or the progress belching from smokestacks, as they did in Roosevelt’s day.
No grand compact is to be formed between generations like the one that promised everyone a federal pension. No institutions will rise to try something brand new.
“We’re not reinventing government,” said historian Kenneth C. Davis, author of the best-selling “Don’t Know Much About” series. “We’re modifying things that exist.”
Yet as the share of the economy taken up by federal spending rises to an anticipated 30 percent, the nation is grappling again with big questions about Washington’s place in people’s lives.
“The stakes are so high now, this is such a big bill, average Americans are following it,” says Princeton historian Julian Zelizer. “It’s become a bill that is an argument about what government can or can’t do.
“If there is no effect and in six months we are talking about the same economy or a worse economy, I think it would be a devastating blow to the president, Democrats, and to liberal claims about what government can do.”
To critics such as Senate Republican leader Mitch McConnell, the package is the “Europeanization of America.” Others call it “Rooseveltian” or “generational theft” in reference to the debt passed on to the future.
They might envision murals glorifying little more than filled potholes, insulated windows, depreciated computers.
Obama said it’s about more than that, and drew parallels with FDR in speaking Friday to the Business Council, formed by corporate leaders in the 1930s to advise Roosevelt’s administration.
“We adapted, we changed,” he said about those days — and these. “President Roosevelt understood the new role of government in this new world, that while extraordinary actions on its part might be the source of recovery, no action on the part of government, no matter how extraordinary, would alone be the source of our prosperity.”
In his radio address Saturday, Obama said he believed the country “will turn this crisis into opportunity and emerge from our painful present into a brighter future.”
Democrats and just enough Republicans in Congress — three — saw the package as the best chance to tamp down the economic wildfires breaking out across the landscape.
Obama came into office saying he wished to be judged on his first 1,000 days instead of the usual benchmark of 100. In some ways he will be judged on his first 10 or 20.
Not even Roosevelt, fast off the mark to deal with a bank crisis, was as fast as this in achieving something so sweeping, so early.
The enormity of the package left politicians grasping for concrete ways to convey its size.
Sen. John Thune, R-S.D., spoke of a stack of hundred-dollar bills 689 miles high, and of bills wrapped side-by-side that would encircle the Earth nearly 39 times. House Republicans predicted that the package’s costs — with interest on the necessary borrowing — could total more than a trillion dollars, enough money to buy about 1,000 boxes of Girl Scout cookies for every American.
It was enough to prompt comic Jon Stewart to riff that if you sewed the $100 bills together, “you would make a blanket for Jupiter.”
The stimulus wasn’t just about throwing cash at the economy, though.
The package is filled with billions for some of the same goals that Obama preached about on the presidential campaign trail — renewable energy and green jobs, computerized medical records, broadband Internet service for underserved areas.
“There are seeds in this bill for long-term change,” says Zelizer. “There are things that can develop out of the research that can change our lives.”
Obama sounded a drumbeat of warnings about the consequences of failing to act. But Americans didn’t need their president to tell them how grim the economic situation was — and could become.
Forty percent of Americans already have been affected by some sort of job problem in the past year, be it unemployment, underemployment, layoffs, reductions in pay or hours, or job losses by members of their households, according to a poll released Friday by the Pew Research Center. Fifty-six percent expect things to be worse or about the same a year from now — and they’ve got solid grounds for their pessimism.
The country could well suffer a net loss of 2 million to 3 million or more jobs this year, economists believe. And the unemployment rate, now 7.6 percent, could top 9 percent by spring of 2010.
The stimulus pull-together was a colossal game of winners and losers shaped and reshaped by the latest set of hands on the package. The fortunes of people, schools, towns and other varied interests rose and fell in blinks of time.
Ready to buy another home?
Poof — you just lost $15,000 that legislators had considered providing.
Buying a first home? You’re still in luck — the government plans to give you an $8,000 credit if you buy by the end of November.
A new car? You’ll be able to deduct the thousands in sales taxes from your income tax but not — as was initially proposed — your loan interest as well.
One day, the government proposed to pay 65 percent of the cost of health coverage for a year for jobless people who lose their workplace insurance. Days later, it was down to half. Ultimately, the subsidy zigzagged back up to 65 percent, but it expires before the end of the year.
Obama declared an end to pork-barrel politics, but legislators still managed to look out for favorite projects.
Senate Majority Leader Harry Reid, D-Nev., was quick to point out that a big chunk of the $8 billion set aside to construct high-speed rail lines could go to a proposed Los Angeles-to-Las Vegas route. Sen. Arlen Specter, R-Pa., helped make sure $10 billion was set aside for the National Institutes of Health, a priority of his.
Long after the dust has settled from the horse trading, the government will be seen to have moved with unaccustomed speed on policies normally subjected to years of deliberation and gridlock.
Deficit hawks found their wings clipped as both parties reached for the treasury. Democrats mainly wished to spend; Republicans, mainly to cut taxes.
After last November, guess who got their way?
Democratic House Speaker Nancy Pelosi said flatly: “We won the election; we wrote the bill.”
The debate was both large and small. Negotiators considered the proper role of government — and how fast a business can depreciate its equipment.
Entering the 1930s, Americans mainly saw the national government as the entity that fought wars, ran post offices and enforced a ban on liquor. Federal spending was only 3.4 percent of the economy.
That more than tripled during the New Deal, topping 10 percent, because of the explosion of public works and other labor programs, rural modernization, bank support, and farm and industrial aid.
“It was a transformation of society in a way that hadn’t been done since the end of the Civil War and the end of slavery,” Davis said.
The government became the entity that guaranteed a minimum wage, controlled farm production, supported artists, set workplace standards, insured deposits in regulated banks and cast the first national safety net for the elderly and handicapped under Social Security.
“The whole scope of what Roosevelt was trying to do is different but the intent is clearly the same: relief and recovery during a time of economic stress,” said John Halpin, senior fellow at the Center for American Progress.
The package won by Obama offers “very important but more subterranean changes in the way the economy works,” he said.
Federal spending as a share of the economy shot above 40 percent during World War II and has hovered around 20 percent most of the years since. That share was already projected to approach 25 percent before Obama’s stimulus plan.
To be sure, there’s still considerable disagreement about how much the New Deal helped to end a depression finally crushed by the humming factories of World War II.
Even FDR’s transformation of the federal government was not universally recognized at the time for what it was. It may be years before the full measure of Obama’s efforts are taken, too.
In 1936, The Economist magazine pronounced the New Deal a “striking success” in improving conditions that existed when FDR took office three years earlier.
But what of the legacy?
What legacy?
“If the criterion be Utopian, the achievements of the New Deal appear to be small,” the editors sniffed. “The great problems of the country are hardly touched.”
___
Associated Press writer Alan Fram contributed to this report.
Copyright 2009 The Associated Press.
By NANCY BENAC and CALVIN WOODWARD
Associated Press Writers
WASHINGTON (AP) — America is bringing shock and awe to the home front, using dollars instead of bombs.
It’s the military doctrine of lightning force — fast and brute, or as brute as the shaken country can manage — applied to the campaign for economic recovery.
With a record-busting stimulus plan, the U.S. is marshaling resources against economic catastrophe in ways not seen since Franklin Roosevelt put the New Deal in motion.
President Barack Obama is going with the best deal he could get. The stimulus bill is a landmark legislative achievement for a new president who inherited economic spoilage along with the spoils of power. Now the nation anxiously waits to see if it works.
Undermining federal balance sheets that were already deeply in the red, Obama and Congress settled on a nearly $800 billion plan that aims to spend more on the crisis at hand than the government has spent waging the Iraq war for six years.
The idea: fast cash, and lots of it, but with a strategic view to the future.
Some dollars will flow quickly into wallets — and right out again.
The stimulus plan will mean thousands of dollars in tax breaks for first-time home buyers and people buying new cars. Lower- and middle-income taxpayers will get an extra $13 a week in their paychecks this year, and about $8 a week next year. Unemployment checks will go up $25 a week, and keep coming longer. Food stamp benefits for 30 million Americans will rise. Short-term health insurance will become more affordable for many losing their jobs.
The success of the stimulus package may be measured less by visible achievements than by what does not happen — the home that is not foreclosed, the family that doesn’t slip into poverty, the disease that does not go undiagnosed.
“The one thing we’ll never know is what would have happened if we didn’t do it,” said Nigel Gault, chief U.S. economist for IHS Global Insight.
It’s not FDR’s deal and these aren’t his times.
No federally subsidized artists will paint murals glorifying the muscle of American workers or the progress belching from smokestacks, as they did in Roosevelt’s day.
No grand compact is to be formed between generations like the one that promised everyone a federal pension. No institutions will rise to try something brand new.
“We’re not reinventing government,” said historian Kenneth C. Davis, author of the best-selling “Don’t Know Much About” series. “We’re modifying things that exist.”
Yet as the share of the economy taken up by federal spending rises to an anticipated 30 percent, the nation is grappling again with big questions about Washington’s place in people’s lives.
“The stakes are so high now, this is such a big bill, average Americans are following it,” says Princeton historian Julian Zelizer. “It’s become a bill that is an argument about what government can or can’t do.
“If there is no effect and in six months we are talking about the same economy or a worse economy, I think it would be a devastating blow to the president, Democrats, and to liberal claims about what government can do.”
To critics such as Senate Republican leader Mitch McConnell, the package is the “Europeanization of America.” Others call it “Rooseveltian” or “generational theft” in reference to the debt passed on to the future.
They might envision murals glorifying little more than filled potholes, insulated windows, depreciated computers.
Obama said it’s about more than that, and drew parallels with FDR in speaking Friday to the Business Council, formed by corporate leaders in the 1930s to advise Roosevelt’s administration.
“We adapted, we changed,” he said about those days — and these. “President Roosevelt understood the new role of government in this new world, that while extraordinary actions on its part might be the source of recovery, no action on the part of government, no matter how extraordinary, would alone be the source of our prosperity.”
In his radio address Saturday, Obama said he believed the country “will turn this crisis into opportunity and emerge from our painful present into a brighter future.”
Democrats and just enough Republicans in Congress — three — saw the package as the best chance to tamp down the economic wildfires breaking out across the landscape.
Obama came into office saying he wished to be judged on his first 1,000 days instead of the usual benchmark of 100. In some ways he will be judged on his first 10 or 20.
Not even Roosevelt, fast off the mark to deal with a bank crisis, was as fast as this in achieving something so sweeping, so early.
The enormity of the package left politicians grasping for concrete ways to convey its size.
Sen. John Thune, R-S.D., spoke of a stack of hundred-dollar bills 689 miles high, and of bills wrapped side-by-side that would encircle the Earth nearly 39 times. House Republicans predicted that the package’s costs — with interest on the necessary borrowing — could total more than a trillion dollars, enough money to buy about 1,000 boxes of Girl Scout cookies for every American.
It was enough to prompt comic Jon Stewart to riff that if you sewed the $100 bills together, “you would make a blanket for Jupiter.”
The stimulus wasn’t just about throwing cash at the economy, though.
The package is filled with billions for some of the same goals that Obama preached about on the presidential campaign trail — renewable energy and green jobs, computerized medical records, broadband Internet service for underserved areas.
“There are seeds in this bill for long-term change,” says Zelizer. “There are things that can develop out of the research that can change our lives.”
Obama sounded a drumbeat of warnings about the consequences of failing to act. But Americans didn’t need their president to tell them how grim the economic situation was — and could become.
Forty percent of Americans already have been affected by some sort of job problem in the past year, be it unemployment, underemployment, layoffs, reductions in pay or hours, or job losses by members of their households, according to a poll released Friday by the Pew Research Center. Fifty-six percent expect things to be worse or about the same a year from now — and they’ve got solid grounds for their pessimism.
The country could well suffer a net loss of 2 million to 3 million or more jobs this year, economists believe. And the unemployment rate, now 7.6 percent, could top 9 percent by spring of 2010.
The stimulus pull-together was a colossal game of winners and losers shaped and reshaped by the latest set of hands on the package. The fortunes of people, schools, towns and other varied interests rose and fell in blinks of time.
Ready to buy another home?
Poof — you just lost $15,000 that legislators had considered providing.
Buying a first home? You’re still in luck — the government plans to give you an $8,000 credit if you buy by the end of November.
A new car? You’ll be able to deduct the thousands in sales taxes from your income tax but not — as was initially proposed — your loan interest as well.
One day, the government proposed to pay 65 percent of the cost of health coverage for a year for jobless people who lose their workplace insurance. Days later, it was down to half. Ultimately, the subsidy zigzagged back up to 65 percent, but it expires before the end of the year.
Obama declared an end to pork-barrel politics, but legislators still managed to look out for favorite projects.
Senate Majority Leader Harry Reid, D-Nev., was quick to point out that a big chunk of the $8 billion set aside to construct high-speed rail lines could go to a proposed Los Angeles-to-Las Vegas route. Sen. Arlen Specter, R-Pa., helped make sure $10 billion was set aside for the National Institutes of Health, a priority of his.
Long after the dust has settled from the horse trading, the government will be seen to have moved with unaccustomed speed on policies normally subjected to years of deliberation and gridlock.
Deficit hawks found their wings clipped as both parties reached for the treasury. Democrats mainly wished to spend; Republicans, mainly to cut taxes.
After last November, guess who got their way?
Democratic House Speaker Nancy Pelosi said flatly: “We won the election; we wrote the bill.”
The debate was both large and small. Negotiators considered the proper role of government — and how fast a business can depreciate its equipment.
Entering the 1930s, Americans mainly saw the national government as the entity that fought wars, ran post offices and enforced a ban on liquor. Federal spending was only 3.4 percent of the economy.
That more than tripled during the New Deal, topping 10 percent, because of the explosion of public works and other labor programs, rural modernization, bank support, and farm and industrial aid.
“It was a transformation of society in a way that hadn’t been done since the end of the Civil War and the end of slavery,” Davis said.
The government became the entity that guaranteed a minimum wage, controlled farm production, supported artists, set workplace standards, insured deposits in regulated banks and cast the first national safety net for the elderly and handicapped under Social Security.
“The whole scope of what Roosevelt was trying to do is different but the intent is clearly the same: relief and recovery during a time of economic stress,” said John Halpin, senior fellow at the Center for American Progress.
The package won by Obama offers “very important but more subterranean changes in the way the economy works,” he said.
Federal spending as a share of the economy shot above 40 percent during World War II and has hovered around 20 percent most of the years since. That share was already projected to approach 25 percent before Obama’s stimulus plan.
To be sure, there’s still considerable disagreement about how much the New Deal helped to end a depression finally crushed by the humming factories of World War II.
Even FDR’s transformation of the federal government was not universally recognized at the time for what it was. It may be years before the full measure of Obama’s efforts are taken, too.
In 1936, The Economist magazine pronounced the New Deal a “striking success” in improving conditions that existed when FDR took office three years earlier.
But what of the legacy?
What legacy?
“If the criterion be Utopian, the achievements of the New Deal appear to be small,” the editors sniffed. “The great problems of the country are hardly touched.”
___
Associated Press writer Alan Fram contributed to this report.
Copyright 2009 The Associated Press.
Obama pitches his plan to reverse economic slide
Date: 1/24/2009
By PHILIP ELLIOTT
Associated Press Writer
WASHINGTON (AP) — President Barack Obama took to the airwaves Saturday to promote his economic aid plan in what’s-it-mean-to-me terms: thousands of better schools, lower electricity bills, health coverage for millions who lose insurance.
It was the latest appeal from the new president for a massive spending bill designed to inject almost $1 trillion into the economy and fulfill campaign pledges. As lawmakers consider an $825 billion plan and Obama woos them with an eye toward a second economic package, he used his first radio and Internet address from the White House to update the public about his goals.
“Our economy could fall $1 trillion short of its full capacity, which translates into more than $12,000 in lost income for a family of four. And we could lose a generation of potential, as more young Americans are forced to forgo college dreams or the chance to train for the jobs of the future,” Obama said in a five-minute address.
“In short, if we do not act boldly and swiftly, a bad situation could become dramatically worse.”
Obama aides have refused to rule out that the administration would seek a second economic recovery plan — even before Congress approves the first — to patch an ailing economy. Some are considering a sequel to assuage members of their own Democratic Party who fret that too little of the money is going toward public works projects that would employ their constituents.
“Look, let’s get one done, and start seeing that impact on the economy before I get into hypotheticals about what we might do later on in the year,” White House press secretary Robert Gibbs said Friday.
Along with the speech, Obama’s economic team released a report designed to outline tangible benefits of the plan and shore up support. Aides said they wanted people to understand exactly what they could expect if Congress supported the proposed legislation.
The United States lost 2.6 million jobs last year, the most in any single year since World War II. Manufacturing is at a 28-year low and even Obama’s economists say unemployment could top 10 percent before the recession ends. One in 10 homeowners is at risk of foreclosure and the dollar continues its slide in value.
That harsh reality has dominated Obama’s first days in office that brought his top economic advisers to the White House on their first Saturday in power to talk about the proposed stimulus package and the federal budget.
A day earlier, he invited Democratic and Republican leaders to the White House to hear their ideas on the economy. At that visit, he did not share the details he released Saturday.
“We presented President Obama with our ideas to jump start the economy through fast-acting tax relief — not slow-moving government spending programs,” House Republican leader John Boehner of Ohio said in the weekly GOP address. “We let families, entrepreneurs, small businesses, and the self-employed keep more of what they earn to encourage investment and create millions of new private-sector jobs.”
Boehner said the Republicans would cut taxes for every taxpayer, dropping even the lowest income tax rates. “That’s up to an extra $3,200 per family every year — money that can be saved, spent or invested in any way you see fit,” Boehner said. He also proposed a tax credit for home purchases, an end of taxation of unemployment benefits and tax incentives for small businesses to invest in new equipment and hire new employees.
“We cannot borrow and spend our way back to prosperity,” Boehner said.
Obama also plans to travel to Capitol Hill on Tuesday to meet with Republican leaders, his latest move to bring along his rival party to pass an economic package that has GOP support. On Sunday, Vice President Joe Biden and economic adviser Larry Summers were to appear on the morning talk shows, as was Boehner.
Many of the goals in the speech and report were familiar from Obama’s two-year campaign, such as shifting to electronic medical records and investing in preventive health care. Other parts added specifics.
Obama’s recovery package aims to:
—double within three years the amount of energy that could be produced from renewable resources. That is an ambitious goal, given the 30 years it took to reach current levels. Advisers say that could power 6 million households.
—upgrade 10,000 schools and improve learning for about 5 million students.
—save $2 billion a year by making federal buildings energy efficient.
—triple the number of undergraduate and graduate fellowships in science.
—tighten security at 90 major ports.
The plan would spend at least 75 percent of the total cost — or more than $600 billion — within the first 18 months, either through bricks-and-shovels projects favored by Democrats or tax cuts that Republicans have pushed.
There is heavy emphasis on public works projects, which have lagged as state budgets contracted. Governors have lobbied Obama to help them patch holes in their budgets, drained by sinking tax revenues and increased need for public assistance such as Medicaid and children’s health insurance. Obama’s plan would increase the federal portion of those programs so no state would have to cut any of the 20 million children whose eligibility is now at risk.
Obama’s plan would also provide health care coverage for 8.5 million people who lose their insurance when they either lose or shift jobs.
“It’s a plan that will save or create 3 to 4 million jobs over the next few years” and recognizes “there are millions of Americans trying to find work even as, all around the country, there’s so much work to be done,” he said.
But Obama cautioned again against expecting instant results: “No one policy or program will solve the challenges we face right now, nor will this crisis recede in a short period of time.”
___
On the Net:
Obama video: www.whitehouse.gov
Obama economics report: http://www.whitehouse.gov/assets/Documents/recover
y_plan_metrics —report.pdf
Copyright 2009 The Associated Press.
By PHILIP ELLIOTT
Associated Press Writer
WASHINGTON (AP) — President Barack Obama took to the airwaves Saturday to promote his economic aid plan in what’s-it-mean-to-me terms: thousands of better schools, lower electricity bills, health coverage for millions who lose insurance.
It was the latest appeal from the new president for a massive spending bill designed to inject almost $1 trillion into the economy and fulfill campaign pledges. As lawmakers consider an $825 billion plan and Obama woos them with an eye toward a second economic package, he used his first radio and Internet address from the White House to update the public about his goals.
“Our economy could fall $1 trillion short of its full capacity, which translates into more than $12,000 in lost income for a family of four. And we could lose a generation of potential, as more young Americans are forced to forgo college dreams or the chance to train for the jobs of the future,” Obama said in a five-minute address.
“In short, if we do not act boldly and swiftly, a bad situation could become dramatically worse.”
Obama aides have refused to rule out that the administration would seek a second economic recovery plan — even before Congress approves the first — to patch an ailing economy. Some are considering a sequel to assuage members of their own Democratic Party who fret that too little of the money is going toward public works projects that would employ their constituents.
“Look, let’s get one done, and start seeing that impact on the economy before I get into hypotheticals about what we might do later on in the year,” White House press secretary Robert Gibbs said Friday.
Along with the speech, Obama’s economic team released a report designed to outline tangible benefits of the plan and shore up support. Aides said they wanted people to understand exactly what they could expect if Congress supported the proposed legislation.
The United States lost 2.6 million jobs last year, the most in any single year since World War II. Manufacturing is at a 28-year low and even Obama’s economists say unemployment could top 10 percent before the recession ends. One in 10 homeowners is at risk of foreclosure and the dollar continues its slide in value.
That harsh reality has dominated Obama’s first days in office that brought his top economic advisers to the White House on their first Saturday in power to talk about the proposed stimulus package and the federal budget.
A day earlier, he invited Democratic and Republican leaders to the White House to hear their ideas on the economy. At that visit, he did not share the details he released Saturday.
“We presented President Obama with our ideas to jump start the economy through fast-acting tax relief — not slow-moving government spending programs,” House Republican leader John Boehner of Ohio said in the weekly GOP address. “We let families, entrepreneurs, small businesses, and the self-employed keep more of what they earn to encourage investment and create millions of new private-sector jobs.”
Boehner said the Republicans would cut taxes for every taxpayer, dropping even the lowest income tax rates. “That’s up to an extra $3,200 per family every year — money that can be saved, spent or invested in any way you see fit,” Boehner said. He also proposed a tax credit for home purchases, an end of taxation of unemployment benefits and tax incentives for small businesses to invest in new equipment and hire new employees.
“We cannot borrow and spend our way back to prosperity,” Boehner said.
Obama also plans to travel to Capitol Hill on Tuesday to meet with Republican leaders, his latest move to bring along his rival party to pass an economic package that has GOP support. On Sunday, Vice President Joe Biden and economic adviser Larry Summers were to appear on the morning talk shows, as was Boehner.
Many of the goals in the speech and report were familiar from Obama’s two-year campaign, such as shifting to electronic medical records and investing in preventive health care. Other parts added specifics.
Obama’s recovery package aims to:
—double within three years the amount of energy that could be produced from renewable resources. That is an ambitious goal, given the 30 years it took to reach current levels. Advisers say that could power 6 million households.
—upgrade 10,000 schools and improve learning for about 5 million students.
—save $2 billion a year by making federal buildings energy efficient.
—triple the number of undergraduate and graduate fellowships in science.
—tighten security at 90 major ports.
The plan would spend at least 75 percent of the total cost — or more than $600 billion — within the first 18 months, either through bricks-and-shovels projects favored by Democrats or tax cuts that Republicans have pushed.
There is heavy emphasis on public works projects, which have lagged as state budgets contracted. Governors have lobbied Obama to help them patch holes in their budgets, drained by sinking tax revenues and increased need for public assistance such as Medicaid and children’s health insurance. Obama’s plan would increase the federal portion of those programs so no state would have to cut any of the 20 million children whose eligibility is now at risk.
Obama’s plan would also provide health care coverage for 8.5 million people who lose their insurance when they either lose or shift jobs.
“It’s a plan that will save or create 3 to 4 million jobs over the next few years” and recognizes “there are millions of Americans trying to find work even as, all around the country, there’s so much work to be done,” he said.
But Obama cautioned again against expecting instant results: “No one policy or program will solve the challenges we face right now, nor will this crisis recede in a short period of time.”
___
On the Net:
Obama video: www.whitehouse.gov
Obama economics report: http://www.whitehouse.gov/assets/Documents/recover
y_plan_metrics —report.pdf
Copyright 2009 The Associated Press.
Editorial:Akron Beacon Journal, Akron, Ohio, on the economy
Oct. 26, 2008
The bottom has fallen out of the housing market. The financial market is in turmoil. Jobs, home values and retirement funds are melting away. Who was keeping tabs on criminal conduct?
According to a New York Times report last week, the Federal Bureau of Investigation is not, and has not been since September 2001, in a position to pursue the types of crimes that has the economy reeling.
In the wake of 9/11, the immediate concern was to protect the nation against domestic attacks. To that end, the Justice Department gutted the FBI’s criminal investigations division, shifting resources and agents to terrorism and intelligence work.
If the focus was understandable then, it has since become a serious threat to the integrity of the financial system. …
The White House ignored repeated warnings about the extent of mortgage fraud and denied requests for funds to hire more crime investigators. The FBI could hire one new agent for its criminal division in the 2007 budget cycle, the report indicated. The financial collapse argues the need to uncover the scope of criminal conduct and to prosecute the culpable. The single-minded pursuit of terrorism, to the neglect of financial crimes, has proved costly, posing, in its own way, a threat to the nation’s security.
___
On the Net:
http://www.ohio.com/editorial/opinions/33321569.html
Copyright 2008 The Associated Press