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Joint Economic Committee Democrats Chairman - Senator Martin Heinrich (D-NM)

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Jul 31 2009

Rep. Maloney Statement on Promising GDP Numbers

REP. MALONEY STATEMENT ON PROMISING GDP NUMBERS

Washington D.C. – Congresswoman Carolyn B. Maloney, Chair of the Joint Economic Committee (JEC) released the following statement on the news that Gross Domestic Product beat expectations in the second quarter by contracting by just one percent. 

"The economy made a dramatic improvement in the second quarter, bolstered by the stimulus package proposed by President Obama and passed by Democrats in Congress in February. As the recovery measures begin to take hold, I am optimistic that economic growth will turn positive this year, which is a necessary step for bringing job growth back and putting Americans back to work."

The Joint Economic Committee, established under the Employment Act of 1946, was created by Congress to review economic conditions and to analyze the effectiveness of economic policy.
 www.jec.senate.gov
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Jul 29 2009

FOLLOWING TREASURY AND HUD MEETING WITH LOAN SERVICERS REP. MALONEY URGES ADDITIONAL TRANSPARENCY, FASTER ACTION


For Immediate Release                                                Contact: Aaron Rottenstein, JEC, (202) 228-6512
July 29, 2009

FOLLOWING TREASURY AND HUD MEETING WITH LOAN SERVICERS
REP. MALONEY URGES ADDITIONAL TRANSPARENCY, FASTER ACTION

Washington D.C. –Today, Congresswoman Carolyn B. Maloney, Chair of the Joint Economic Committee (JEC) sent a letter to Treasury Secretary Timothy Geithner and Housing and Urban Development Secretary Shaun Donovan urging faster action and greater transparency from loan modification companies as they work within recently enacted programs to help borrowers stay in their homes.  Chair Maloney urges the Administration to implement reporting requirements to ensure that loan servicers do not manipulate the modification process for their own gain.  For example, servicers should be required to report information about the success of the loan modification process as well as their own overall performance.  The letter, sent today, comes on the heels of a JEC hearing at which the Government Accountability Office discussed the findings of a new report, requested by Chair Maloney, detailing the epidemic of nonprime foreclosures in localities nationwide. Testimony of expert witnesses on the ways in which government can help cut rising foreclosure rates, opening statements, and a recorded webcast can be found here.  And the new GAO report can be accessed here.  

A copy of the letter appears below:

July 29, 2009
 
The Honorable Timothy F. Geithner             
Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220
 
The Honorable Shaun Donovan
Department of Housing and Urban Development
451 7th Street, SW
Washington, D.C. 20410
 
Dear Secretary Geithner and Secretary Donovan:

Yesterday the Joint Economic Committee held a hearing entitled “Current Trends in Foreclosures and What More Can be Done to Prevent Them.”  The Committee heard testimony that should be of interest to you in your efforts to stem the tide of foreclosures across the country.  The report and witness testimony are available at www.jec.senate.gov.

A study I requested from the Government Accountability Office, entitled "Characteristics and Performance of Nonprime Mortgages" found that almost one-quarter of active non-prime loans were seriously delinquent (in the foreclosure process or more than 90 days delinquent) as of March 31, 2009.  The GAO study also includes an appendix which reports the serious delinquency rates by state and Congressional district.

This previously undisclosed loan-level data that GAO obtained and analyzed at my request provides a sobering snapshot of the foreclosure crisis inherited by the Obama administration. Key measures for addressing this problem include incentives to servicers to modify loans in the administration’s Home Affordable Modification Program and an expansion of eligibility to receive low cost FHA loans in Hope for Homeowners. 

I applaud the efforts by Treasury and HUD officials who met with mortgage servicers yesterday to encourage them to speed the pace of modifications, which are not happening quickly enough. The pledge by mortgage company executives to reach 500,000 loan modifications by November 1 is a step in the right direction.  But our hearing brought to light that questions remain about how prepared servicers are to take up the challenge to act more swiftly and more transparently.

First, the servicers who are modifying loans are the parties who originated the bad loans in the first place, so we must receive assurances that the servicers will not repeat the mistakes of the past.

Second, this crisis was precipitated by and continues in an unabated fashion because of the asymmetries in information in this market, so Treasury must insist that actions taken by servicers are more transparent to both investors and regulators.  As Dr. Joseph Mason testified yesterday, current industry reporting does not capture even the most basic manipulations by servicers.  Servicers have incentives to implement unsustainable repayment plans to depress or defer the recognition of losses in the loan pool. For this reason, servicers should be required to report information about the success of the loan modification process as well as their own overall performance. I would welcome additional details from the Administration regarding implementation of reporting requirements on servicers in order to add transparency to this market.

Finally, in response to my question about whether loan modifications face an uphill battle if foreclosures are in the best interest of the servicers, Dr. Susan Wachter testified that while it is in each servicer’s interest to foreclose quickly on delinquent properties, the collective foreclosures are driving prices down and leading to even more foreclosures. I hope you will be successful in impressing this point upon the servicers. Dr. Wachter also added that while unemployment is a factor in delinquencies, the downward spiral of home prices is contributing significantly to foreclosures.

I applaud your efforts regarding loan modifications and urge you to continue your work to encourage servicers to modify loans rather than foreclose on individuals who could stay in their homes if their payments were reduced.

I look forward to your response.
 
                                                                       
Sincerely,
 
 
                                                                   
Carolyn B. Maloney
Chair, Joint Economic Committee

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The Joint Economic Committee, established under the Employment Act of 1946, was created by Congress to review economic conditions and to analyze the effectiveness of economic policy.
 www.jec.senate.gov

 

Jul 17 2009

JEC To Examine Role of Census in Economic Data Gathering

JEC TO EXAMINE ROLE OF CENSUS IN ECONOMIC DATA GATHERING
As New Director Takes Reins at Census, Rep. Maloney to Discuss Bureau’s Importance with Former Directors

Washington D.C. – Congresswoman Carolyn B. Maloney, Chair of the Joint Economic Committee (JEC) will convene a hearing to examine the role of the Census Bureau in gathering and analyzing government statistics.  Five former heads of the Census Bureau will testify at the hearing entitled, “The Federal Statistical System in the 21st Century: The Role of the Census Bureau,” which will take place on Tuesday July 21, 2009 at 1 pm in room 2203 of the Rayburn House Office Building.  Census data and analysis plays a central role in US Government economic policy making.  The JEC and experts will discuss the Census’ continually evolving methodology and their implementation of 21st Century technologies to ensure the publication of accurate and timely scientific information.

WHAT:     JEC Hearing, “The Federal Statistical System in the 21st Century: The Role of the Census Bureau”
WHO:       Panel 1 – Former Heads of the Census Bureau
Former Census Director Vincent P. Barabba (1973-76 and 1979-81) [Nominated by Nixon (1973) and by Carter (1979)]
Former Census Director Barbara Everitt Bryant (1989 -1993) [Nominated by George H.W. Bush]
Former Census Director Martha Farnsworth Riche (1994-1998) [Nominated by Clinton]
Former Census Director Kenneth Prewitt (1998-2001) [Nominated by Clinton]
Former Census Director Charles Louis Kincannon (2002 - 2008) [Nominated by George W. Bush]

Panel 2
Dr. William F. Eddy, John C. Warner Professor of Statistics, Carnegie Mellon University, Pittsburgh, PA; Chair, Committee on National Statistics, National Academy of Sciences
Dr. Andrew Reamer, Fellow, Brookings Institution, Metropolitan Policy Program
Dr. Linda A. Jacobsen, Vice President, Domestic Programs, Population Reference Bureau
WHEN:     Tuesday, July 21, 2009 at 1 pm
WHERE:   Rayburn House Office Building, Room 2203

The Joint Economic Committee, established under the Employment Act of 1946, was created by Congress to review economic conditions and to analyze the effectiveness of economic policy.
 www.jec.senate.gov
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Jul 15 2009

JEC Chair Maloney Statement on Naming of Financial Crisis Inquiry Commission

JEC CHAIR MALONEY STATEMENT ON NAMING OF FINANCIAL CRISIS INQUIRY COMMISSION 

Washington D.C. – Congresswoman Carolyn B. Maloney, Chair of the Joint Economic Committee (JEC) released the following statement on the naming of Brooksley Born, John W. Thompson, Heather Murren, Senator Bob Graham, Byron Georgiou, and Chairman Phil Angelides to the Financial Crisis Inquiry Commission:

“Transparency and frank public discussion are the best ways to uncover the root of the problems which led our financial system into crisis.  With these appointments, the Financial Crisis Inquiry Commission gains the talent and experience necessary to conduct a thoughtful, non partisan examination of the financial sector and its government counterparts.  I look forward to working alongside this commission to ensure that the mistakes made over the past several years are not allowed to bring our economy to the brink once again.”

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The Joint Economic Committee, established under the Employment Act of 1946, was created by Congress to review economic conditions and to analyze the effectiveness of economic policy.
 www.jec.senate.gov

Jul 02 2009

JEC Chair Maloney Statement on June Jobs Report

JEC CHAIR MALONEY STATEMENT ON
JUNE JOBS REPORT

Congresswoman Carolyn B. Maloney, Chair of the Joint Economic Committee released the following statement after the U.S. economy shed 467,000 jobs in June and the unemployment rate rose to 9.5 percent:

"The worst monthly job losses are likely behind us, but the labor market clearly remains weak. It will be a long road to recovery, but the stimulus investments getting underway across the country will create jobs and stem losses."
-      Congresswoman Carolyn Maloney (D-NY), Chair, Joint Economic Committee

Key points from today’s jobs report:
• The economy lost 467,000 jobs in June.  Since the recession began, the economy has lost 6.5 million jobs.  Job losses were widespread with approximately half of the job losses in the service sector this month.  Government payrolls fell by 52,000 jobs last month, mostly from temporary Census workers who were hired two months ago.

• The unemployment rate ticked up to 9.5 percent in June.  A broader measure of unemployment, which includes discouraged workers and workers who are only working part time despite wanting full time employment, also ticked up to 16.5 percent.

• The average work week fell to 33.0 hours, a series low.  The median duration of unemployment increased to 17.9 weeks.  Nearly thirty percent of the unemployed have been unemployed for six months or more.


The Joint Economic Committee, established under the Employment Act of 1946, was created by Congress to review economic conditions and to analyze the effectiveness of economic policy.
 www.jec.senate.gov
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Jun 17 2009

JEC Chair Maloney Statement on Regulatory Reform Proposal

JEC CHAIR MALONEY STATEMENT ON REGULATORY REFORM PROPOSAL

Washington D.C. – Congresswoman Carolyn B. Maloney, Chair of the Joint Economic Committee (JEC) released the following statement regarding the Obama Administration’s announcement of a plan to overhaul the regulation of financial institutions and systemically important companies:

“Today’s actions by the Obama Administration signal that the President is determined to act swiftly, sensibly, and in the interest of the individual consumer to strengthen our financial regulatory system.  Bringing regulation in line with 21st century realities is critical to preventing future crises and protecting Americans nationwide from the unchecked risk-taking that has shown to have system-wide implications for our economy.

 “The proposed financial product safety agency will further champion protections established in the recently signed credit card reform bill.  An agency focused on shielding investors from risky and deceptive products will roll back a decade of regulatory failure and establish consumer protection as central to financial regulation.  This is a critical step and will ensure families better understand the investments they make. 
 
“As Chair of the Joint Economic Committee and a member of the Financial Services Committee, I have heard expert testimony from both the government and private sector imploring Congress to adopt more prudent financial regulation.  In the coming months, Congress will continue to work with the President to ensure that we bring greater stability and transparency to our financial system.” 

The Joint Economic Committee, established under the Employment Act of 1946, was created by Congress to review economic conditions and to analyze the effectiveness of economic policy.
 www.jec.senate.gov

Jun 09 2009

JEC Chair Maloney Open To Repeat, Expanded Stress Tests

JEC CHAIR MALONEY OPEN TO REPEAT, EXPANDED STRESS TESTS

Following Recommendations of new COP Report, Maloney Will Examine the Possibility of Ongoing Tests to Measure Bank’s Strength

Maloney: Stress Tests Need To Be Extended Beyond 2010

Washington, D.C. – Following a Joint Economic Committee (JEC) hearing at which Congressional Oversight Panel Chair Elizabeth Warren recommended additional bank stress tests, Congresswoman Carolyn B. Maloney, Chair of the JEC released the follow statement calling for a continuing series of government supervised stress tests:

“While the first round stress tests were a step forward, Professor Warren and the Congressional Oversight Panel pointed to several areas where continued monitoring is needed.  I second the Panel’s recommendation that the time horizon of the stress tests needs to be extended beyond 2010 – especially considering the ongoing concerns in the commercial real estate market, which could have significant longer term negative impacts on the financial system.”

-Congresswoman Carolyn B. Maloney, Chair of the Joint Economic Committee


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Jun 05 2009

JEC Chair Maloney Statement on May Jobs Report

JEC CHAIR MALONEY STATEMENT ON MAY JOBS REPORT

Congresswoman Carolyn B. Maloney, Chair of the Joint Economic Committee released the following statement after the U.S. economy shed 345,000 jobs in May and the unemployment rate rose to 9.4 percent:

“The economy shed jobs at nearly half the pace of the past six months, which is an encouraging sign that the worst may be behind us. We are starting to see indications of economic progress as the recovery package begins to take hold across the country. But the rising unemployment rate is a sobering reminder that we still have a long way to go to put people back to work and help families regain economic security.”

- Congresswoman Carolyn Maloney, Chair, Joint Economic Committee


The Joint Economic Committee, established under the Employment Act of 1946, was created by Congress to review economic conditions and to analyze the effectiveness of economic policy.
 www.jec.senate.gov
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May 28 2009

JEC Report Reveals Recession's Devastating Impact On Working Mothers

JEC REPORT REVEALS RECESSION’S DEVASTATING IMPACT ON WORKING MOTHERS

Analysis of Unpublished and Newly Released Government Data Show One out of Every Ten Women Maintaining a Household Are Unemployed

Washington, D.C. – Congresswoman Carolyn B. Maloney, Chair of the Joint Economic Committee (JEC), and JEC Vice Chair Senator Charles E. Schumer, released a new report entitled, “Women in the Recession: Working Mothers Face High Rates of Unemployment.”  The JEC report finds that the increases in unemployment during this recession have been especially steep for female heads of household – mothers who are solely responsible for maintaining their families’ economic security. Using unpublished and newly released data from the Bureau of Labor Statistics, the JEC report shows that, in particular, minority women have suffered some of the worst effects of the current recession.  The JEC report reveals that families are relying more and more on women’s employment, but the trend of rising job losses among women will put an even greater strain on households struggling to make ends meet in this downturn.     

Maloney said, “The recession is having a devastating impact on our nation’s most vulnerable families.  Nearly a million single moms are out of work and their families are suffering. The fact that they are receiving pink slips in greater numbers than in prior recessions has serious implications for family economic well-being. Working mothers are having a tough time sheltering their families from the current economic storm, with women of color faring the worst. The recovery measures that are starting to kick-in will help families in need, create or save jobs in healthcare and education fields which are dominated by women, and provide job training for displaced workers. We need to do all this and more to help women and their families weather this downturn.”
 
Schumer said, “In 2008 over 70 percent of mothers were active in the labor force and now, just one year later, nearly 1 million of those women are unemployed.  Today’s family cannot afford to have either parent out of work, much less a single mother who is the sole breadwinner of the household.  This report highlights a serious and disconcerting trend which the American Recovery and Reinvestment Act has sought to rectify through various programs targeted at job creation and security.  It is absolutely critical to both our economy and American families that these women are not left behind.”  

Highlights from the JEC report “Women in the Recession: Working Mothers Face High Rates on Unemployment” include:

• In 2008, seven out of ten mothers with children under 18 years old were in the labor force.  Over half of all mothers usually worked full time last year.
• As of April 2009, nearly one million working-age female heads of household wanted a job but could not find one.
• One out of every ten women maintaining a family is unemployed, which exceeds the highest rate (9.0 percent) experienced during the 2001 recession and the “jobless recovery” that followed.
• The ranks of female heads of household who are unemployed or “marginally attached” to the labor force has grown across all demographic groups, with women of color faring the worst. Black and Hispanic women in this group are currently experiencing unemployment at rates of 13.3 percent and 11.0 percent, respectively.

The American Recovery and Reinvestment Act (ARRA) will temper the effects of the current recession for these families right now and over time, according to the report. Extended unemployment benefits, nutrition assistance programs, preserving Medicaid benefits and tax cuts will bring immediate relief for these families.  In addition, ARRA invests in job creation in education, healthcare, and child care that tend to disproportionately employ women.  This will help to ensure that female-headed households will not be left behind in the recovery.

 The Joint Economic Committee, established under the Employment Act of 1946, was created by Congress to review economic conditions and to analyze the effectiveness of economic policy.
 www.jec.senate.gov
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May 12 2009

New JEC Report: Credit Card Bill of Rights Will Aid Economic Recovery

NEW JEC REPORT: CREDIT CARD BILL OF RIGHTS WILL AID ECONOMIC RECOVERY

Chair Maloney: “Unfair Credit Card Company Practices Are Squeezing Consumers and Undermining the Recovery”  

Current Credit Card Provisions are Deceptive, Anticompetitive, and Standing in the Way of Economic Recovery

Washington, D.C. – Congresswoman Carolyn B. Maloney, Chair of the Joint Economic Committee (JEC), and Senator Charles E. Schumer, Vice Chairman of the JEC, released a report showing unfair credit card practices are sending American families further into debt and undermining the economic recovery.  The report, “Vicious Cycle: How Unfair Credit Card Company Practices Are Squeezing Consumers and Undermining the Recovery,” outlines how the economic downturn and financial crisis have accelerated the adverse impacts of these practices on consumers, small businesses and our economy as a whole.

Chair Maloney: “The evidence is clear, consumers need protection from the unfair, deceptive and anticompetitive credit card companies’ practices.  As families struggle to make ends meet, these unchecked practices reduce the amount of money that families have to spend on new purchases because they are servicing their old debt. This report shows why the Credit Cardholder’s Bill of Rights is essential to assisting our economic recovery.  I proudly look forward to the day President Obama signs my bill into law.”

Vice Chairman Schumer: “This latest JEC report is further proof of why we must pass the credit card legislation that is before the Senate this week. Credit card issuers cannot be allowed to continue to pay for their own poor business practices on the backs of average American families.  In this record-low interest rate environment, it is indefensible for card issuers to be charging struggling American families record-high interest rates, and their attempts to do so explain why so many people are so angry at credit card companies.  Families already straining to make ends meet should not suddenly be required to fork over more of their hard-earned money to credit card issuers because of unexplained rate increases and questionable fees.”

Highlights from the “Vicious Cycle” Report:

• As credit cardholders and small businesses struggle in the economic downturn, significant increases in credit card interest rates have the same impact as price increases, further depressing demand for goods and services (and economic recovery). The average interest rate on credit cards went up a full percentage point from the fourth quarter of 2008 to February 2009, even though the Federal Reserve’s targeted federal funds rate – the cost of money for the banks – was lowered to between 0 and .25 percent on December 16, 2008.

• Like subprime mortgage lenders, credit card issuers have been seeking to maximize their profits by lending to those who are financially vulnerable and then spreading the risks by selling off securities based on credit card receivables. But as charge-off rates increase and the supply of credit falls because of the financial crisis, credit card companies have increasingly made up losses by raising interest rates to all borrowers, effectively charging creditworthy borrowers to make up for growing deficits.

• Creditworthy borrowers cannot simply switch to a new card when confronted with abusive practices because the unfair, deceptive, and anticompetitive practices identified in the legislation increase costs to card users of searching for and switching to a new card. These practices, which are nearly universal in the credit card industry, trap cardholders in a cycle of debt.

•  A growing share of consumers’ disposable income, which largely determines consumer spending, is being diverted to service credit card debt rather than to help economic recovery. As of March 2009, U.S. revolving consumer debt (almost entirely credit card debt) was about $950 Billion. In the fourth quarter of 2008, 13.9 percent of consumer disposable income went to service this debt.

• As household wealth has declined in the downturn, more American families are facing financial distress due to high debt burdens. In 2007, before the recession began, 14.7 percent of U.S. families had debt exceeding 40 percent of their income.

•  Personal bankruptcy rates were up almost 30 percent in 2008. Penalty interest rates, which raise interest rates on balances by 15 percent or more, can trigger bankruptcy on financially constrained families.

The Joint Economic Committee, established under the Employment Act of 1946, was created by Congress to review economic conditions and to analyze the effectiveness of economic policy.
 www.jec.senate.gov
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