Hillary Clinton Campaign Press Release - Clinton Outlines Plan To Address America's Economic Challenges

Calls For Immediate Action To Reduce Foreclosures, Lower Consumer Energy Bills

Today in Knoxville, IA, Hillary Clinton offered a serious assessment of the economic challenges facing our country, outlined her plan to restore the middle class, and called for specific steps to reduce foreclosures and help families manage skyrocketing energy bills this winter. As President, one of Hillary's top priorities will be to responsibly manage our economic challenges in the face of deepening anxiety about our economic outlook. Most importantly, she will be ready to lead on economic issues on day one of her Presidency and will focus on rebuilding America's middle class.

"The next president will be a steward of our economy at a time when the bills from eight years of neglect and mismanagement will be coming due. He – or she – will have to turn our nation and our economy around," Clinton said.

"More than ever before, our workers will need good job training for the jobs of this new century. But we can't afford on-the-job training for our next president. That could be the costliest job training in history. Every day spent learning the ropes is another day of rising costs, mounting deficits and growing anxiety for our families. And they cannot afford to keep waiting.

"My plan to turn our economy around has four components: creating the new, good jobs essential to broad-based prosperity; restoring fairness to our economy; renewing the basic bargain that if you work hard, you can get ahead; and putting our fiscal house in order again.

I will help create opportunity for those left out during the Bush years while shifting the cost of the changes we need to those special interests that have gotten a free ride."

Adding to her detailed plans to help rebuild the middle class, Hillary called for immediate action to help families fight foreclosures and pay their skyrocketing energy bills:

Double the budget of HUD's Housing Counseling Assistance Program and make an additional $100 million immediately available; Convene a "crisis conference" of housing stakeholders to stop the spike in foreclosures; Implement a Crash Home Conservation Initiative for 3 Million Families; Increase emergency energy assistance funding help more than 1 million additional families. ###

HILLARY CLINTON'S PLAN TO ADDRESS AMERICA'S ECONOMIC CHALLENGES

ECONOMIC CHALLENGES:

The housing crisis is hurting millions of families. There have been 1.6 million foreclosure filings so far this year, and that figure is expected to climb as adjustable rate mortgages reset. The Bush administration failed to act while the evidence mounted that unscrupulous brokers and lenders were qualifying people for houses they could not afford. Also, home prices are declining nationwide. One housing expert has estimated that the downturn in housing could erase $3 trillion in household wealth. [Alex Pollock, "The Subprime Lending Disaster and the Threat to the Broader Economy," Testimony to the U.S. House Joint Economic Committee, September 18, 2007]. With wages stagnant, families had turned to the equity in their homes to cover the cost of college tuition and medical bills. But now that equity is declining, and the consequences are significant. As home prices fall, consumer confidence is weakening and it is increasingly difficult for homeowners to refinance costly mortgages.

Skyrocketing energy prices are imposing a $2,000 tax on middle class families. For seven years, the Bush Administration has outsourced energy policy to Dick Cheney and the oil companies, and blocked efforts to improve energy efficiency. Today, as the price of oil moves toward $100 a barrel, we are even more dependent on imported oil than we were on 9/11. [DOE, Energy Information Agency, 2007]. And middle-class families are paying the price. The average family is spending roughly $2000 more a year on energy costs – including electricity, home heating and gas – than they were in 2000. That is the equivalent of a $2000 tax on families – more than three times what the typical family received from the Bush tax cuts.

A labor market that is not working for middle class families. Between 2000 and 2006, household income fell nearly $1,000. While productivity is up 18%, wages have stayed flat. According to a report by Goldman Sachs, over the 12-month period that ended in July of last year, the slow growth in wages for labor accounted for 64% of the increase in corporate profits. The Bush Administration defends the current labor market because the unemployment rate is at a reasonable 4.7%. But that masks the fact that labor participation has fallen to near historic lows, as millions of people have simply stopped looking for work. If labor force participation were the same today as it was in January 2001, the unemployment rate would be 6.7%.

Seven years of fiscal recklessness has eroded confidence in our economy. President Bush has overseen the most dramatic fiscal deterioration in our nation's history. Reckless tax cuts and bloated spending have driven our national debt up 60% since 2000 to $9.1 trillion. Now the dollar is declining and confidence in our economy is eroding.

There are new challenges on the horizon:

• Derivatives and other complex financial products: Derivatives and other complex financial products help investors manage risk and diversify their portfolios. But these securities can be quite volatile. Also, the owners don't always understand the risks, and so even the banks that structure and trade them are losing billions of dollars on them. The ripples are being felt from Wall Street to Main Street. Markets work best when there is information flow. And markets are telling us that these new products are too opaque. As President, Hillary will direct the National Economic Council to study derivatives and other complex investment products, and to recommend ways of making them more transparent.
• Sovereign wealth funds: Sovereign wealth funds are investment pools controlled by foreign governments. Foreign governments will use these funds to acquire stocks, real estate, and whole companies in America and other nations. It is estimated that these funds have approximately $2.5 trillion in assets today but will have more than 5 times as much within 10 years. But the funds don't have to disclose their holdings, investment objectives, investment returns or management structures. Consequently, we do not know whether they are introducing unnecessary risks into markets or whether they are being used for non-commercial ends. To remedy this information deficit, Hillary calls on the multilateral financial institutions like the World Bank and the IMF to craft transparency guidelines for sovereign wealth funds. Strict disclosure requirements are critical if we are to understand these rapidly expanding investment vehicles. We welcome foreign investment in America. But we must be especially vigilant when the foreign investor is actually a government.

HILLARY CLINTON'S ECONOMIC PLAN:

As President, Hillary Clinton will be a responsible steward of the economy and address the challenges facing the middle class. Hillary has laid out her economic blueprint for the 21st century, a comprehensive agenda that

• Creates good jobs essential to broad-based prosperity;
• Restores fairness to our economy;
• Renews the basic bargain that if you work hard, you can get ahead; and
• Puts America's fiscal house in order again.

Hillary has announced detailed plans to address the housing crisis and to reduce our dependence on foreign oil. Today she announced steps that the President must immediately take to help families fight foreclosures and pay their skyrocketing energy bills:

• Double the budget of HUD's Housing Counseling Assistance Program and make an additional $100 million immediately available. The Housing Counseling Assistance Program provides financial support to community organizations that educate and counsel homeowners. These organizations can help at-risk homeowners work out solutions with their lenders in order to avoid losing their homes. These organizations have an excellent track record. By one estimate, more than 75% of homeowners who engage in counseling ultimately avoid foreclosure. Yet far too few at-risk families have access to counseling services. To remedy this situation, Hillary calls on the President to double the budget of HUD's housing counseling program, and to make an additional $100 million available on an expedited basis. This initiative will enable community groups to help tens of thousands of families.
• Convene a "crisis conference" of housing stakeholders to stop the spike in foreclosures. Coordinated action is needed to end the foreclosure crisis that is disrupting the lives of millions of Americans. Hillary Clinton calls on the President to immediately convene a "crisis conference" that brings together all of the stakeholders—banks, mortgage lenders, servicers, insurers, investors, representatives of homeowners, regulators, community groups, representatives of city and state governments—to work out a solution to the foreclosure crisis.
• Implement a Crash Home Conservation Initiative for 3 Million Families. To help ease the financial burden of families living in cold-weather states, Hillary calls on the President to implement a crash home conservation program to provide families with easy-to-install efficiency items for their homes. The program will provide $1 billion in immediate funding to cold-weather states to help them make available Consumer kits of easily-installable energy conservation tools. States could make these kits available by offering tax credits or vouchers, or by partnering with non-profit organizations to coordinate distribution. Consumer kits would include items like water heater insulation blankets; pipe insulation; calking and weather stripping for doors, windows and attics; window insulation; low water flow faucet aerators; compact fluorescent lightbulbs; and a coupon for a visit from a furnace technician. This program could help three million families lower their heating bills by as much as 20% this winter—offsetting much of the projected increase in heating and energy costs. This is part of Hillary's broader commitment to modernizing homes to improve energy efficiency. As President, she will modernize 20 million homes over 8 years, creating good jobs that cannot be outsourced.
• Increase emergency energy assistance funding help more than 1 million additional families. Hillary calls on the President to put partisan politics aside and commit to sufficient emergency home heating funds to ensure that millions of seniors and low income families are not left literally out in the cold. She is calling on the President to consider at least $1 billion in emergency funds to increase both the size of heating assistance grants for families and extend assistance grants to up to 1 million more households this winter. She is challenging the Administration to join in an effort to encourage state LIHEAP agencies to reach out to eligible families that are likely to need assistance and encourage them to sign up. This is particularly important for senior citizens who live on fixed incomes (25% of seniors rely on Social Security as their sole source of income). Because Social Security's cost of living adjustment does not take into account regional energy prices, a number of seniors will be in a bind without increased energy assistance.

These steps build on Hillary's existing plans to reduce foreclosures, reduce or dependence on foreign oil, and combat global warming, which includes:

Addressing the housing crisis:

• Establish a $1 billion fund to assist state programs that help at-risk borrowers avoid foreclosure
• Expand Fannie Mae's and Freddie Mac's Foreclosure prevention efforts, and direct the companies to help families replace unworkable mortgages with more stable ones
• Permit the state housing finance agencies to issue an additional $2.5 billion per year of tax-free bonds, and require that they use the proceeds to help families refinance unworkable mortgages
• Strengthen the FHA so that it provides an alternative to the high-risk subprime market
• Pass legislation that punishes scam artists who prey on homeowners facing foreclosure

Reducing our dependence on foreign oil by 2/3 by 2030:

• Aggressive action to transition our economy toward renewable energy sources, with renewables generating 25% of electricity by 2025 and with 60 billion gallons of home-grown biofuels available for cars and trucks by 2030;
• A $50 billion Strategic Energy Fund, paid for in part by oil companies, to fund investments in alternative energy.
• An increase in fuel efficiency standards to 55 miles per gallon by 2030, and $20 billion of "Green Vehicle Bonds" to help U.S. automakers retool their plants to meet the standards;
• Doubling of federal investment in basic energy research, including funding for an ARPA-E, a new research agency modeled on the successful Defense Advanced Research Projects Agency