Families and businesses throughout Maine and the nation are struggling to make ends meet during these difficult economic times. To tackle the tough challenges our country is facing, we must overcome the twin effects of record-high energy prices and a steep downturn in the housing market. To help address these challenges, I have proposed an Economic Recovery Act, a multi-point plan to stabilize energy costs, promote job growth, and provide families with more financial security.
Over the course of the past several years, we have seen the price of oil soar – from about $30 per barrel in 2003, to more than $128 a barrel today, putting serious pressure on the economy and threatening a recession. Most Maine families feel this at the pump, where gasoline is already topping $4 a gallon at the very start of the summer driving season. And Mainers are already fearing that next winter will bring heating oil prices above $4.50 per gallon.
At the same time, the cost of diesel fuel has risen even higher, pushing some of America’s independent truckers to the brink of bankruptcy. In 1999, a Maine truck driver could purchase $500 of diesel fuel and drive from Augusta, Maine, all the way to Albuquerque, New Mexico. Today, a driver who purchases $500 of diesel and leaves Augusta would not even make it to Altoona, Pennsylvania, and because diesel prices continue to increase, the problem is only getting worse.
Meanwhile, weakness in the housing market is making it nearly impossible for millions of Americans to get the financing needed to stay in their homes when their adjustable rate mortgages reset. Many families are being forced into foreclosure, leaving behind vacant properties, and creating a ripple effect that is pulling down home values even further. This problem hurts communities across the nation, and requires more effective federal action.
My Economy Recovery Act would provide much-needed help to our economy by investing in energy conservation and efficiency, improving transportation systems, funding workforce development, promoting small business investment, and assisting the housing market.
The U.S. must act to protect itself from rapid increases in oil prices, and in the long-term, achieve energy independence. One way to achieve both short-term relief and long-term independence is to encourage greater efficiency. My bill would double federal funding available for low-income families to weatherize their homes to reduce heating costs. It also would increase funding for the valuable Energy Star Program, which helps consumers choose energy efficient appliances, and it would extend tax credits for the use of renewable energy and for making home improvements geared toward energy efficiency.
Action must be taken to address the impact rising diesel prices are having on the trucking industry. The rapid increase in the price of diesel fuel is making it more difficult for our nation’s truckers to stay on the road, and to deliver the goods that communities throughout our country rely on. By lifting the Federal trucking regulations which prohibit trucks that carry more than 80,000 pounds from traveling on the Interstate Highway System, trucks could operate more efficiently. My legislation, therefore, includes a provision that creates a two-year pilot program that would permit trucks carrying up to 100,000 pounds to travel on the Interstate Highway System when diesel prices are at or above $3.50 a gallon. The savings on fuel consumption will benefit the trucking industry, lower prices at the grocery store for families, and help our nation at a time when we are looking for ways to decrease our dependency on foreign oil.
Transportation infrastructure projects are a proven means of fostering economic growth and a lasting investment in states and local communities. For this reason, my bill calls for $50 billion in transportation bonds to finance roads, bridges, transit, rail, and waterways. Not only will this funding serve as a catalyst for thousands of good jobs today, but also it will improve the nation’s aging transportation infrastructure, which is critical to economic development over the long-term.
Assistance must be provided to those who have lost their jobs in this economic downturn. In just the last four months, 340,000 jobs were lost across the country. According to the Bureau of Labor Statistics, there are 1.6 million more workers unemployed today than in 2001, and 800,000 more workers unemployed than just one year ago. In Maine, 33,600 people are looking for work. Greater investment in workforce development is crucial. My legislation provides an additional $1 billion to train 300,000 more workers across the country. It also increases funding for dislocated workers by $500 million, as well as youth and adult job training programs by $250 million.
Support for job training is critical, but it is only part of the solution for offering new opportunities for today’s workers. It is also important to provide relief for small businesses, which create eighty percent of the net new jobs in America. During economic downturns, small businesses struggle with cash flow, and often must forego the investments they need to grow and remain competitive. That is why I am proposing tax incentives to encourage small business investment. This would provide welcome relief to many small businesses, which are a pillar of our economy, but also struggling during these economically challenging times.
Finally, the housing market must be stabilized for a full economic recovery to take place. Currently, more than 50 million Americans hold mortgages, and most are current on their payments. But seven million of these mortgages are “subprime” loans, most of which are adjustable-rate mortgages that “reset” to a higher – often unaffordable – rate after two or three years of very low introductory rates. As a result, approximately 1.3 million subprime mortgages are delinquent, and could soon be in foreclosure. This number is expected to rise as additional mortgages hit reset dates.
Foreclosures inflict hardship on the families who lose homes; neighborhoods whose values fall as empty homes proliferate; and borrowers who face tighter requirements and higher costs. The construction industry and many other jobs that are dependent on a strong housing economy are also affected.
One source of help would be to bolster the FHA Secure program, which is administered by the Federal Housing Administration. This program allows eligible homeowners to avoid foreclosure by assisting them with refinancing so they can afford to make their mortgage payments. The Economic Recovery Act would expand this program to make it easier for more families to refinance homes on affordable terms, and provide additional options to avoid foreclosure. The bill would help FHA reach hundreds of thousands of additional homeowners by the end of this year.
My Economic Recovery Act would target factors harming the economy, such as high energy prices and a weakening housing market. Passage of this legislation would benefit workers and families by restoring and strengthening our nation’s economy. Working toward a reinvigorated economy will remain a top priority.