Scott Walker.Democracy Requires Participation

The following is a column written by Governor Scott Walker. The budget repair bill is now in the hands of the Legislature. Although it is getting a lot more attention than most bills, it is still just a bill working its way through the process. In our state, budget bills are introduced by the Governor, reviewed by the Joint Finance Committee and then brought before the State Assembly and State Senate.

Legislators can debate budget bills in committee and on the floor of their respective houses and offer amendments. Most importantly they have the responsibility to vote, much like citizens do at the ballot box during elections.

The public offered suggestions and we made changes to the bill because of their participation in the public process. I also applaud Assembly Democrats for publicly debating the budget repair bill I introduced two weeks ago.

In contrast, their counterparts in the Senate fled the state in an effort to prevent democracy from working, stifle debate, and ultimately try and negate the results of the election that took place last November.

The reason Senate Democrats claimed they left the state was because citizens needed more time to debate the issue. This is ironic because 12 of the 14 missing Senate Democrats passed Governor Doyle’s budget repair bill, which raised taxes by a billion dollars, within 24 hours of introduction and without a public hearing in February 2009. Senate Republicans vehemently disagreed with the bill and the process Democrats used to ram it through; however they stayed in Wisconsin, debated the legislation and made the choice to participate in democracy by casting their vote in opposition.

The Legislation has been public for two weeks and the Joint Finance Committee listened to more than 17 hours of public testimony on the budget repair bill. Yet Senate Democrats still remain out of state endlessly holding media interviews.

In one interview Senator Larson said, “it’s almost like a reality TV show.”

I have a message for Senator Larson: No it isn’t. This isn’t for entertainment, this is real.

We have a deficit for the remainder of this fiscal year and a $3.6 billion deficit for the next budget that starts on July 1. Our budget repair bill allows us to save $300 million from state government workers and gives local units of government the tools to save $1.44 billion in the next state budget. In addition, it gives local governments the tools to save even more in order to protect jobs and vital services. To achieve these savings, we need to pass our repair bill. That’s why the Senate Democrats need to come home.

I go to work every day to defend the plan I laid out to make the tough decisions needed to balance Wisconsin’s budget.

It’s clear Senate Democrats disagree with the bill I put forward. I understand and respect that. I’ll always be willing to cooperate and communicate with the Democrats, but that has to happen at the State Capitol in Madison.

—Governor Scott Walker

For Immediate Release Thursday, February 24, 2011

TEXT CREDIT: Office of Governor Scott Walker 115 East Capitol Madison WI 53702 Phone (608) 266-1212 Email: govgeneral@wisconsin.gov

IMAGE CREDIT: Governor Scott Walker

Financial Services Committee Will Markup Bills to Terminate Failed Programs

WASHINGTON: Financial Services Committee Chairman Spencer Bachus announced a subcommittee hearing and full committee markup of four bills that will terminate failed and ineffective housing foreclosure programs.

The four proposals – which terminate the troubled Home Affordable Modification Program (HAMP), the Neighborhood Stabilization Program, the FHA Refinance Program, and the Emergency Homeowner Relief Fund – will be the subjects of a hearing on March 2 by the Insurance, Housing and Community Opportunity Subcommittee and a full committee markup on March 3.

“In an era of record-breaking deficits, it’s time to pull the plug on these programs that are actually doing more harm than good for struggling homeowners,” said Chairman Bachus. “These programs may have been well-intentioned but they’re not working and, in reality, are making things worse.”

Insurance and Housing Subcommittee Chairman Judy Biggert said: “We need to break down barriers that have delayed the housing recovery, including expensive and ineffective government programs that have failed to helphomeowners. Unfortunately, these programs were set up in haste, executed poorly, and have done little to restore stability in the marketplace. A government program that spends more to save a single borrower than it costs to buy a home is no help at all – it’s just a waste of taxpayer money. We need to stop funding programs that don’t work with money we don’t have.”

The Committee will consider the following bills:

The HAMP Termination Act. The Obama Administration’s signature anti-foreclosure effort, the Home Affordable Modification Program (HAMP), has failed to help a sufficient number of distressed homeowners to justify the program’s cost. According to the Administration, HAMP was supposed to help 4 million homeowners. Instead, only 521,630 loans have been permanently modified under this program and the re-default rate is high. To date, the Administration has spent approximately $840 million of the $29 billion earmarked for HAMP from the Troubled Asset Relief Program (TARP).

Far from helping at-risk homeowners, HAMP has actually made many worse off, according to a report from the Special Inspector General for the Troubled Asset Relief Program (SIGTARP):

People who apply for modifications via HAMP sometimes “end up unnecessarily depleting their dwindling savings in an ultimately futile effort to obtain the sustainable relief promised by the program guidelines. Others, who may have somehow found ways to continue to make their mortgage payments, have been drawn into failed trial modifications that have left them with more principal outstanding on their loans, less home equity (or a position further ‘underwater’), and worse credit scores. Perhaps worst of all, even in circumstances where they never missed a payment, they may face back payments, penalties, and even late fees that suddenly become due on their ‘modified’ mortgages and that they are unable to pay, thus resulting in the very loss of their homes that HAMP is meant to prevent. While it may be true that many homeowners may benefit from temporarily reduced payments even though the modification ultimately fails, Treasury’s claim that ‘every single person’ who participates in HAMP gets ‘a significant benefit’ is either hopelessly out of touch…or a cynical attempt to define failure as success.”
(Office of the Special Inspector General for the Troubled Asset Relief Program)

In a separate report, the SIGTARP noted HAMP “continues to fall dramatically short of any meaningful standard of success.”

(Office of the Special Inspector General for the Troubled Asset Relief Program)
The HAMP Termination Act ends the Treasury Secretary’s authority to provide new assistance under the program but preserves assistance already offered to homeowners through HAMP prior to the bill’s enactment.

The Neighborhood Stabilization Program Termination Act. Congress has appropriated $7 billion for the Neighborhood Stabilization program, including $2 billion in the Obama Administration’s stimulus plan. Two rounds of NSP funding have already been provided to states and localities. The Neighborhood Stabilization Program Termination Act ends the program and rescinds the unobligated third round of funding of $1 billion.

Critics have argued that the NSP does not benefit at-risk homeowners facing foreclosure, and may instead create perverse incentives for banks and other lenders to foreclose on troubled borrowers – arguably worsening the housing crisis.

The FHA Refinance Program Termination Act terminates the program and rescinds unobligated funding. The price tag for this program is $8.12 billion, of which only $50 million has been disbursed thus far. For this large outlay, the taxpayers have seen minimal return on their investment. As of December 13, 2010, only 35 applications had been submitted for this program.

The Emergency Mortgage Relief Program Termination Act ends the program and rescinds unobligated funding. The Dodd-Frank Act reauthorized the long-expired Emergency Homeowners’ Relief Act of 1975 and provided $1 billion to authorize HUD to make emergency mortgage relief payments to homeowners facing foreclosure for up to 12 months, with a possible extension of another 12 months. These loans will serve to increase the amount of the borrower’s indebtedness, so a borrower who is unable to pay back either the original amount of principal or the additional loans made under the program will be worse off in the long run.

TEXT and IMAGE CREDIT: Committee on Financial Services • 2129 Rayburn House Office Building • Washington, DC 20515 • (202) 225-7502 For Press Inquiries: (202) 226-0471