Meeks'Message From Capitol Hill
AMortgage Bankers Association survey of the first quarter revealed that 1 in 11 mortgages in the United States are past due or in foreclosure - the highest rate of new foreclosures and past-due payments in 29 years.
Almost 9 percent of all home loans are delinquent, up from 7.9 percent for the last quarter of 2007. That's 4.8 million loans! Most of them are subprime loans that were extended to buyers with weak credit histories, but a growing percentage are homeowners with prime loans and solid credit ratings who have fallen behind.
The Federal Housing Administration announces that it faces $4.6 billion in unanticipated loan defaults and, as a result, will have to dip into its capital reserve fund to cover these losses, most of which occurred because of "unexpectedly" high default rates on home loans in its seller-financed down payment mortgage program. The FHA's projected loss is four times the shortfall this program generated a year ago.
The U.S. Labor Department reports a May unemployment rate of 5.5 percent, up from 5 percent in April. That's a loss of 49,000 jobs, the sharpest surge in monthly unemployment in 22 years.
A new record for the price of a barrel of oil is set
almost every day. It recently surpassed $138 a barrel then dropped below that mark. But that was only to tease us. The next day it jumped above $140 a barrel. Gas prices just seem to keep inching upward. Here in New York State it has gone up from $4.15 a gallon on the first Monday of this month to $4.25 a gallon this past Monday. It is much higher in many places around New York City. One economist calls the situation "unambiguously ugly."
What is the president doing? What about Congress? As far as White House action is concerned, your guess is as good as mine. About all we hear from Mr. Bush on Capitol Hill is a threat to veto practically every piece of legislation Democratic majority proposes.
The president's threats become louder whenever rank and file House or Senate Republicans join with Democrats in bipartisan coalition to get something done. That's what happened last week when the House enacted legislation extending unemployment insurance an additional 13 weeks beyond the 26 weeks the unemployed currently receive.
The vote was 274 to 137 with 49 Republicans joining 225 Democrats. But unembarrassed by the role of his economic and fiscal policies have played in disrupting the economy, President Bush immediately began to rattle his veto pen. House Republican leaders joined him in denouncing the measure as "too generous" and "about politics." House Republican leader John Boehner called it "irresponsible public policy" and a "waste of taxpayer dollars." Both he and the president seem to have forgotten that the unemployed were taxpayers when they had jobs. What could be more responsible than assisting the 3.8 million jobless American whose 26 week benefit is about expire? It's good public policy to give them a 13 week helping hand and an additional 13 weeks beyond that in states with unemployment rates above the national average.
The Bush economy has lost 325,000 jobs since New Year's Day. Nearly 6.9 million Americans were officially unemployed in May 2007. That number had risen to 8.5 million in May 2008. The economy provides 200,000 fewer jobs than it did seven years ago when George W. Bush took office.
The Emergency Extended Unemployment Compensation Act will cost $10 billion through next March. That's the equivalent of about three weeks of spending on the Iraq war. Every dollar spent by those this bill helps will generate $1.64 in new economic demand. The nonpartisan Congressional Budget Office say that extending unemployment benefits is one of the most cost-effective and fast-acting ways to stimulate the economy.
Like I said, the extension of unemployment compensation is good policy. It is accompanied by the good news that the vote for this measure was close to what is needed for the House to override a veto. Of course, the Senate has to pass it before we get to that point. I'm hoping, and surely those whose unemployment compensation benefits are about to run out are hoping, that Senate Republicans don't resort to using procedural rules to block a vote on this important legislation. I'm sure those who desperately need the extension to help them and their families grapple with economic uncertainty are hoping the bipartisanship achieved in the House extends to the Senate.