Senator Ted Kennedy On The Floor Of The Senate On The Nation’s Economic Crisis

(As Prepared for Delivery)

April 2, 2008 -- Mr. President, the nation is facing a continuing financial crisis. A massive housing bubble is collapsing. We’ve seen the near failure of one of our nation’s largest investment banks, and the Federal Reserve has already put $260 billion on the line to ensure the stability of the financial markets. But as bad as things are on Wall Street, the picture is even worse on Main Street.

Working families have suffered for years under an economy in which stagnating wages have not kept up with the skyrocketing price of essentials like food, gas, and health care. Now, the financial crisis is battering their safety net, leaving families at the center of a perfect storm of economic failures.

The home mortgage crisis spells potential disaster for millions of American families. We may have only seen the tip of the iceberg so far, but the signs are ominous.

In cities like Los Angeles, we’ve already seen tent cities of former homeowners spring up—not unlike the “Hoovervilles” of the Great Depression. Experts say two million American families could face foreclosure this year.

Even Americans who aren’t facing foreclosure are seeing their homes drop substantially in value. Housing prices have declined by 11 percent in the past year. As home prices continue to fall, American families will lose trillions of dollars in value in their homes, putting their future in peril. Buying a home is supposed to be the cornerstone of a secure financial future, but that cornerstone is unsteady. Young families are losing their nest eggs, and baby boomers are losing savings they were counting on for retirement.

It’s not just the housing market that’s in trouble – the rest of our economy and our job market are feeling the pain as well. Last month, employers cut 63,000 jobs, up from 22,000 jobs lost the month before. 7.4 million Americans are out of work, but only 4 million job openings are available. That’s nearly two workers for every job. And the situation is likely to get worse.

Economists project that the unemployment rate could rise to 6.5% next year, with three to six million Americans joining the unemployment lines by the end of 2011.

This labor market downturn will have its own ripple effects. As employers cut back, more and more Americans stand to lose their health care. More and more families on the brink will fall over the edge. As the New York Times reported this week, the number of Americans who need help to buy food is near historic highs. Nearly 28 million Americans are expected to receive food stamps this year. These families are truly in dire straits. Unless we act soon, we could see five to ten million more people fall below the poverty line during this recession.

Yet President Bush remains unwilling to call this a recession. He says that our economy is fundamentally sound. He says we will "come out stronger than ever before."

Economists know better. In a recent Wall Street Journal poll, 70% of economists say our economy is in a recession. Most others see one looming on the horizon. The American people agree—the latest Gallup poll shows 76% of Americans believe we’re already in a recession, and facing tough times ahead.

Rarely have any of us seen American families more uncertain about their economic future. They’ve worked hard and played by the rules. But now they see their dreams slipping away.

I’ve heard firsthand about the tremendous hardships that citizens in Massachusetts are facing every day. Ronica Jackson is a constituent in Boston who has a college degree and decades of work experience in human resources, hotel management, and as a corporate auditor. She left a permanent position and began temp work when she needed to care for her dying mother in 2005.

Since her mother’s death, Ronica has been unable to find even temporary work. She’s doing everything she can – sending out resumes, talking to former employers, going on 6 to 10 interviews a month.

But the jobs just aren’t there, and there are too many applicants for every opening. Now, she has exhausted her unemployment benefits, and she’s run out of savings. She has given up her home phone and computer, and faces possible eviction from her apartment.

People like Ronica rightly wonder what our government is doing to help them. They read the headlines and see that over the past four months, our nation’s banks and investment houses have received $260 billion in subsidized loans. They see the Federal Reserve rush to pledge $30 billion to bail out Bear Stearns, most of which will go to wealthy investors. Yet average families facing foreclosure don’t ever have a chance to refinance their home loan. We’ve done nothing to help laid-off workers struggling to support their families while they look for other jobs.

Surely, when we’re offering bailouts to the wealthiest fat cats on Wall Street, we should be extending a helping hand to the people who are losing their jobs or losing their homes. The American people elected us to make their lives better. Their problems – the problems discussed around the kitchen table every night in America – are just as important as the problems facing CEOs in corporate boardrooms.

These are dire times for American families and for our nation. But we have faced difficult challenges like this before. I believe in the fundamental strength of our nation. I believe we can confront these challenges, and make things better – but only if we work together, and give the needs of struggling families the high priority they deserve.

We should begin, as we have in the past, by extending unemployment benefits. Receiving a pink slip should not be a one-way ticket to financial ruin. Unemployment Insurance was enacted to help keep working families afloat during jobless times. In recessions, finding a job is harder and takes much longer, because there simply aren’t enough jobs available. That’s why we’ve granted extended unemployment benefits in every recent recession.

This time should be no different. Extending benefits is one of the most effective ways to stimulate our economy while keeping families on the brink from falling into crisis.

We must also take steps to help keep working families in their homes. Senator Dodd and Senator Schumer are working on legislation to allow families to refinance their mortgages. This common-sense idea focuses on the people who need help the most by putting real money on the table to get it done. We should pass this vital legislation now and send it to the President’s desk right away, to give needed relief to millions of struggling families.

Further, as prices for necessities like food and fuel continue to soar, we have to help other families struggling to meet their basic needs. In many parts of the nation, parents are faced with impossible choices between feeding their children and heating their homes. Benefits for programs like LIHEAP and food stamps are hardly generous to begin with. Now with the cost of food and fuel surging, the families who rely on these benefits are falling even further behind. They’re sending their children to bed hungry, and crowding around the stove at night just to keep warm. That shouldn’t happen in the United States of America. We must act now to strengthen our food stamps and heating assistance programs, so that families in need can weather these desperate times.

Finally, we should do more to help unemployed workers find good jobs. Many job seekers today don’t have the skills they need for the jobs that are open. We need to train workers to fill these positions, but this Administration has been cutting job training funds for years. In Massachusetts, we’ve got 21 workers on a waiting list for every available job training slot. It’s time to help the nation’s workers match their skills to the needs of our economy.

We also have to create more good jobs with decent wages and benefits, so that hardworking people can support their families while contributing to our economy. This country has real needs – schools are crumbling, roads are in disrepair, and bridges are in danger of collapse. We have the workers we need to fix these problems. All we need to do is put them to work building a stronger America.

It’s clear that we’re facing an extremely serious economic challenge. We’ve already received plenty of bad economic news, and there’s almost certainly more to come. We need to take action to put our economy and our country back on track, and to do that we must seize the moment, and put partisanship aside. We can’t accept a policy that helps banks and boardrooms, but says to everyone else, “Let them eat cake.”

It won’t be easy, and it will take time, but if we do what is right, we can help millions of families across the nation weather the storm, and regain hope and optimism for a better tomorrow. So let’s get to work and get it done.

Source: Senator Ted Kennedy

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