Category: Guanlie Ren
More Job Losses are Expected in Maine as the Recession is Going On
JOBLOSSES
Bangor Daily News
Guanlei Ren
Boston University Washington News Service
December 08, 2008
WASHINGTON—For Michael Lynch, a junior at the University of Southern Maine, it’s a tough time to be looking for a job. But it could be worse if he lived in some state other than Maine.
As bad as the recession-driven employment picture is in Maine, it’s slightly better than in the nation as a whole—though that may not be much of a consolation for someone seeking a job.
Lynch is a full-time musical theater student. Starting this summer, when he transferred to the university’s Portland campus, he had been looking for part-time jobs. Until a month ago, he didn’t get one.
“It’s pretty hard to get jobs in Maine,” Lynch said. Because of the bad economy, several of his friends who are also students couldn’t find part-time jobs as well. He said that a lot of people in Maine spend two hours each way commuting to Boston to work.
Like Lynch, people find that it is getting harder to find either part-time or full-time jobs not only in Maine but also the whole country.
In November, the nation shed 533,000 jobs and the unemployment rate rose to 6.7 percent, a 15-year high, up two-tenths of a percentage point from October, the Bureau of Labor Statistics reported Dec. 5. The jobless rate is likely to peak at 8.5 to 9 percent sometime late next year, many economists have predicted.
For now, the picture is a little bit brighter in Maine, where the October jobless rate was 5.7 percent, better than the national rate but still the worst since September 1995.
“The national slowdown is definitely affecting folks in Maine,” said Adam Fisher, spokesman for the Maine Department of Labor. “We know that more people are losing their jobs.”
According to the department’s Center for Workforce Research and Information, Maine had a net loss of 5,600 nonfarm jobs through October since the current recession began a year ago.
“The unemployment rate is rising over the last year in virtually all the states,” said Glenn Mills, director of economic research at the center. “The downturn is affecting Maine as well as other regions.” Unemployment insurance claims have been up significantly in recent months.
According to Mills, the largest job losses in Maine since last December were in the construction, retail trade and accommodations and food services sectors, which lost 2,100, 2,100 and 1,600 job losses respectively.
Mills said job losses “were impacted by a range of factors, especially the housing crisis and high gas prices and poor weather in the summer, which moderated tourism from usual levels.”
A middle-high end restaurant owner who didn’t want to identify herself or her business said her customer loss was very significant and her profit was down roughly 30 percent. . People tended, she said, to flock to McDonald’s.
One of her customers, a building contractor, already has lost in December four contracts , the restaurant owner said.
“The economy is slowing down,” said assistant professor Karen Buhr at the University of Maine. “There is not as much of a demand for new things to build, new offices, new stores or new houses.”
“The housing crisis is hurting Maine uniquely,” Fisher said. “We produce a lot of the building materials.”
People are also having difficulty borrowing money in the face of the credit crunch, Buhr said. “If people don’t have a lot of extra money or they are less certain about how stable their jobs might be, they might be less likely to go out and buy a lot of extra things.” That, in turn, leads to more job losses in retail trade.
Freedom Power Equipment runs a sales and repair service for lawn and garden equipment in Bangor. Bob Cousins, the manager of the company, said “more people are fixing their older equipment to make it last than they are replacing them.” His company does a big repair business and, he said, it has been quite busy this year while sales of new equipment have slowed. Although the sales have been fair this year, “we could see a drop,” Cousins said.
“I think everything in the whole country is feeling [the recession,]” he said. “Our suppliers that we buy from have cut back on inventories that they keep.” As some plants closed their business and some manufacturers reduced their products, Cousins has found some things hard to get.
The six-employee company hasn’t had to lay off any workers so far, Cousins said, and he hopes there’ll be no layoffs in the future. “But we don’t know what’s going to happen,” he said. “What I think is happening is the cost of everything we deal with is making it very hard to make a profit.”
The Maine Consensus Economic Forecasting Commission recently revised its outlook for next year, predicting that the average unemployment rate in Maine is expected to climb to 6.1 percent and that 4,300 wage and salary jobs will be lost. Job losses will still be concentrated in the construction, manufacturing, trade and leisure and hospitality sectors, the commission said.
There are a few economic bright spots. From last December, 1,500 job gains were recorded in the professional and business sectors and 900 more in education and health services, according to the Center for Workforce Research and Information’s Mills. Those job gains are also expected to continue in the next year, according to the forecasting commission.
Compared with states with a “high concentration of industries that are doing poorly,” such as Michigan and Ohio, both heavily dependent on auto manufacturing, “we are not performing extremely well, but not as badly,” Mills said.
Piscataquis County, in central Maine, had the highest unemployment rate in the state in October, 9.1 percent, well above the national average. Other counties, such as Franklin, Oxford, Somerset and Washington, also have jobless rates greater than the national rate.
Mills explained that much of that region is sparsely populated, heavily forested and has a higher than average concentration of jobs in forest products industries – logging, paper manufacturing, sawmills – and other industries in decline or adversely affected by the falloff in construction and the general economic downturn.
As to the current recession, Buhr said: “I hope it’s shorter rather than longer. I really don’t know how long it will go.”
The recession and the rising jobless rate are challenges not only for the federal government but also for the state. Lowering taxes is probably a way to solve the problem, Buhr said. But that, she added, would mean less revenue for government to spend to meet these economic challenges.
“It’s a tradeoff,” Buhr said, and governments will have to find the right balance. “There isn’t a perfect answer.”
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A Glance at UMass-Dartmouth Graduates’ Capital Life
UMD
The New Bedford Standard-Times
Guanlei Ren
Boston University Washington News Service
November 19, 2008
WASHINGTON— It is a city for politics. It is also a city for people to chase their dreams. Seventeen young graduates of the University of Massachusetts Dartmouth, listed as “friends” on a Facebook group for university alumni, are chasing their dreams in the nation’s capital.
But they don’t really know each other. They were invited to join UMass Dartmouth—Washington D.C. Alumni Club on Facebook, a social networking Web site, by friends of friends or by their friend’s friend’s friend.
Some of them were willing to share their stories of life in the capital city, to talk about their dreams and to reflect on whether the real world is what they expected.
Lee Lukoff, a Republican from South Dartmouth, came here for the politics after graduating in May from UMass Dartmouth with a degree in political science. With no Republican members of Congress from Massachusetts, Mr. Lukoff sent out applications to numerous Republicans, both in the Senate and the House, and said he was fortunate to get an internship with Rep. Tom Feeney, R-Fla.
“I really liked my internship because every day I felt like I was doing something important,” Mr. Lukoff, a graduate of Dartmouth High School, said.
He said he learned how Congress works from the inside and how a congressional office works. He was responsible for writing letters to constituents about issues they were concerned with, compiling newspaper articles and attending committee hearings and policy briefings, where he would take notes and write memos.
“Despite the fact that I was unpaid, few people get the chance to intern for a congressman, and the experience can pave the path to future jobs in politics and in government,” Mr. Lukoff said.
Rep. Feeney lost his seat in the Nov. 4 election, and Mr. Lukoff, like other office staff, is helping pack up the office and moving on to job hunting in other congressional offices, think tanks, interest groups and non-profit organizations.
Amy Morse also was a political science major and graduated from UMass Dartmouth in 2003. In the capital city, unlike Mr. Lukoff who works directly in politics, Ms. Morse works as a communications and policy associate at a non-profit and nonpartisan organization—the Committee for Economic Development.
After graduating from college, Ms. Morse was hired by the John Kerry presidential campaign and worked for a year in her home state of New Hampshire campaigning for the 2004 Democratic nominee. She held signs in the freezing cold, made hundreds of peanut butter and jelly sandwiches and made more phone calls than most people make in a lifetime.
Now she said she values Washington as a place for public service more than a place for politics.
“Working in economics is a great perspective on how valuable our human resources are in this country,” she said.
When she was in college she did an internship with Youth Serve in New Bedford, working as a mentor to at-risk youths; in Washington, she volunteers with the public school reform effort.
She dreams of running for office in New Hampshire, Ms. Morse said. “I really enjoy policy and working with people.,”
Nicole Di Fabio, a 2006 graduate from UMass Dartmouth, is semi-involved in politics, she said. “I feel that everything is political to some extent or another.”
Ms. Fabio’s job as a research associate at the Commission on Professionals in Science and Technology is her first job after graduation. She said she was very persistent in looking for jobs related to her majors—anthropology and women’s studies. Her dream is to be a professor of anthropology and women’s studies.
“Many people may view these disciplines to be more abstract, and not understand what comes from having a background in these areas,” Ms. Fabio said. “But in reality, these disciplines help you to understand life and other people as deeply as one can without actually being in the person’s shoes.”
In Ms. Fabio’s opinion, Washington is a city that seems to value social science far more than other cities do. So she looked endlessly in the “right places,” she said. “I would have continued to look until I found what I thought was right for me.”
In February 2008, her alma mater’s women’s studies department invited her to speak on a panel with Gloria Steinem, a women’s movement leader in the 1970s and co-founder of Ms. Magazine, in front of more than 200 people. “I think that is one moment in my life that I will always remember and value above all others,” she said.
For Paul Ferrari, an English literature major who also graduated in 2006, his most valuable lessons at college were not directly from classes but from his involvement with the UMass Dartmouth Theater Company, a student-run organization.
In his senior year, he was the president and company manager and learned not only how to work with his peers but how to cope with also a variety of administrative tasks, including negotiating the university’s bureaucratic contracting system.
Originally from Webster, Mass., Mr. Ferrari is currently working as a communications associate at a non-profit national education organization—the Council of Chief State School Officers.
“I am interested in politics, and am thrilled to be living in D.C. during such an exciting time in American history,” Mr. Ferrari said.
But, he said, he will probably end up working in the arts in some capacity. Before coming to Washington he had a year-long internship at a theater in Florida. Though it was a great experience, Mr. Ferrari said, it wasn’t “socially and professionally where I wanted and needed to be.”
In Washington, he said, “there’s always someone willing to engage in a conversation about current events and what’s going on around them. I feel like it was harder to have those conversations in other places.”
The mix of people and the opportunity to talk about current events is one of the attractions of the city, Mr. Ferrari said.
The four UMass Dartmouth graduates say they enjoy meeting friends after work, spending time at the gym and visiting the city’s numerous public and private museums. Mr. Lukoff, who minored in history, said his favorite museum is the National Archives. Ms. Morse, who likes art, favors the Philips Collection and the National Gallery of Art. Ms. Fabio loves the National Museum of Women in the Arts. And Mr. Ferrari is a big fan of the National Gallery of Art as well as the Hirshhorn Museum and Sculpture Garden..
“Work hard and play hard” is a Washington mantra, Ms. Morse said. However, after one year of living in Washington, she has found it is too expensive to “play hard.” Young people working on the Hill and for non-profit organizations don’t make much money, she said.
To all the four of them, the difference between campus and professional life has a common point—a relatively fixed schedule.
“I understand now why my parents went to bed so early when I was younger,” Ms. Fabio said. “Working full time really changes the amount of energy I have when the work day ends.”
As to the future, three of them have a specific graduate school plan. Mr. Lukoff is a part-time public policy student at George Mason University. Ms. Morse is applying for a public affairs master’s program at American University. Ms. Fabio is to start her graduate studies in anthropology at George Washington University in January.
As for Mr. Ferrari, he said, “I haven’t made plans to settle down and live here forever.”
What’s the next stop for him? “I will probably move to where grad school brings me next. I am not in a rush to find that out yet.”
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$112 Million Allocation for Coastal Enterprises to Aid Community Development
CEI
Bangor Daily News
Guanlei Ren
Boston University Washington News Service
October 28, 2008
WASHINGTON -- Coastal Enterprises Inc., a Wiscasset-based community development organization, has received a federal allocation of $112 million that will allow it to help finance small businesses and development projects in low-income communities.
“Coastal Enterprises continues to provide invaluable services to communities throughout Maine,” Sens. Olympia Snowe and Susan Collins said in a joint statement on Oct. 20. “Investing in affordable housing and community development in Maine’s rural and underserved areas will provide an opportunity for economic revitalization.”
The New Markets Tax Credit program, which Congress established in 2000, is aimed at spurring revitalization efforts of low-income and impoverished communities across the United States by providing federal income tax credits to investors.
For Coastal Enterprises, a nonprofit organization that seeks to create jobs by helping to finance small businesses in primarily rural regions of Maine, this is the fifth New Markets Tax Credit allocation it has received, bringing its total to $481 million.
“We receive the tax credit allocation that can be applied to significant investment that qualifies for the program,” said Charlie Spies, the managing director at Coastal Enterprises Capital Management LLC. “We receive allocations but we don’t actually receive dollars.”
Coastal Enterprises Capital Management, a for-profit subsidiary of Coastal Enterprises, helps attract capital to low-income areas using the federal program. Companies or individuals who invest in Coastal Enterprises’ projects that are part of the program receive a federal income tax credit of 39 percent of the amount invested. The tax credit is spread over seven years.
The tax credits provide an incentive to investors to make investments in rural small businesses and low-income communities, Spies said. Under the latest allocation, tax credits can be applied to up to $112 million of investments. If the full allocation is used it would result in tax credits totaling $43.7 million.
Using the tax credit program, Coastal Enterprises already has helped finance 23 projects in the northeastern United States, using $235.5 million of its allocation capacity. This has triggered private capital investment in low-income communities of more than $771 million, according to the company’s Web site.
The 23 projects cover a wide range of industries, such as fishing, insurance, construction and especially sustainable timberlands development and forest conservation.
“We’re finding in our own practice that we are able to help businesses in these communities because getting projects finished, especially now with tight credit markets, is very valuable,” Spies said.
Maine Mutual Group, an insurance company, and Hampton Inn are two projects in Presque Isle that benefited from the program. The insurance company expanded its headquarters building and upgraded its technology infrastructure, allowing the company to hire an additional 45 employees, according to the project’s summary provided by Coastal Enterprises Capital Management.
A new Hampton Inn under construction in Presque Isle will be the first “national brand” hotel in Presque Isle. Using an $11 million allocation, BLD Hospitality is building a 93-room hotel that is planned to open in July 2009. About 40 jobs are expected to be created.
Roger Beaulieu, a managing member of BLD Hospitality, said building the hotel in the current economy is a huge risk.
“With the New Markets Tax Credits, it’s worth taking that risk, because it gave us a better way to financing, which enables us to afford taking that risk,” Beaulieu said. “So if we hadn’t got the New Market Tax Credits, we probably wouldn’t have built the hotel up there.”
More projects are under consideration, Spies said. “We are working on a way to do projects for or do financing for smaller businesses at the half a million dollar range. That is a product that we’re hoping we can roll out before the end of the year.”
“That is the way we are trying to expand use of the program to allow smaller companies to take advantage of it as well,” Spies said.
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Maine’s 1st District Candidate Pingree Raised Most Money
FEC Maine House
Bangor Daily News
Guanlei Ren
Boston University Washington News Service
October 22, 2008
WASHINGTON — Democrat Chellie Pingree raised $141,966 more than Republican Charlie Summers in Maine’s 1st District House race in the quarter ending Sept. 30, bringing her fundraising total for the campaign to $1,977,732, according to filings with the Federal Election Commission.
The Pingree campaign raised $382,947 from July to September and had $358,628 to spend as of Sept. 30. Summers raised $240,981 during the third quarter, bringing his total receipts to $530,353, with $137,382 cash on hand.
The two are competing for the House seat Democratic Rep. Tom Allen is leaving to challenge Republican Sen. Susan Collins next month.
Much of Pingree’s money was raised before the June 10 Democratic primary. According to filings with the commission, Pingree, who won the six-way primary race with 44 percent of the vote, raised $1.59 million and spent $1.4 million as of June 30.
Adam Cote, who came in second in the Democratic primary with 28 percent of the vote, raised $660,471 as of June 30, the second-highest amount raised for the primary.
Pingree faced a number of strong opponents in the primary, said Mark Brewer, assistant professor of political science at the University of Maine. “And running a competitive race in that primary campaign certainly was going to cost money,” Brewer said. “So I think it was certainly appropriate to raise that much.”
The biggest expense has been television advertising, said Willy Ritch, the Pingree campaign spokesperson. “It’s expensive to buy TV time,” he said.
Ritch said that nearly one-third of the third-quarter donations came from online contributions and more than 700 persons were first-time contributors. Altogether nearly 5,000 people contributed to the campaign, 77 percent of whom gave less than $200, Ritch said. The names of persons who contribute less than $200 are not required to be reported in the filings with the election commission.
“Chellie continues to build momentum, and she has a tremendous amount of grassroots support,” Ritch said in a statement. “Every day new supporters come to the campaign.”
Summers’ campaign manager, Chris Averill, said the majority of their third-quarter contributors were new to the campaign.
“Voters aren’t going to vote on how much each campaign has raised,” Averill said. “They are going to vote on issues that matter to them and messages that they hear from each campaign and each candidate about solutions they have to deal with our problems that we have in America and challenges we face.”
Pingree was first elected in 1992 to the Maine Senate and became Maine’s second female Senate majority leader in 1996. In 2002 she ran for the U.S. Senate against incumbent Republican Susan Collins and lost by 16 percentage points. Pingree also served as president and CEO of Common Cause, a nonpartisan citizens’ lobbying group based in Washington.
Pingree’s name recognition and long history in Maine politics helps her to raise money, Brewer said. Pingree also is more successful at raising money because she is recognized as the front runner, Brewer said. And her work in Washington also built connections with out-of-state donors, he said.
According to OpenSecrets.org, a nonpartisan Web site that analyzes money and elections, Pingree has raised 65 percent of her campaign funds outside of Maine.
One of the out-of-state contributors is Colorado resident Susan Schutz, founder of Blue Mountain Arts, a company that produces greeting cards, who contributed $2,300, according to filings with the commission. Schutz has donated more than $200,000 in the last 10 years to the Democratic Party and Democratic candidates across the country, including her son Jared Polis, the Democratic candidate for Congress in Colorado’s 2nd District.
According to the filings with the commission, about 91 percent of Pingree’s campaign fund came from individual contributions and eight percent were from political action committee contributions, $1,805,421 and $165,258 respectively.
Among 21 committees that contributed $5,000—the maximum legal contribution per calendar year—19 are located in Washington, such as the Human Rights Campaign PAC and Women’s Political Committee.
“Money is important in terms of being able to wage a credible campaign,” Brewer said. “But I would say money doesn’t generally determine outcomes.”
In the 2nd District, Democrat Rep. Michael Michaud raised $118,137 during the most recent three-month period, according to filings with the commission. He has raised a total of $748,293 and had $455,191 cash to spend as of Sept. 30.
Republican John Frary reported third-quarter fundraising of $76,288, bringing his total to $221,939, with $15,962 cash on hand. All but $13,227 that the campaign has raised comes from the candidate himself.
“The money I spent comes almost entirely from my own savings,” Frary said. “I didn't wish to have any special interest PAC or union contributions.”
He said his money was spent almost entirely on advertisements in local newspapers throughout the district and he would keep spending on advertisements.
“My plan … is to go wherever I'm invited to address a crowd of people,” Frary said.
Michaud campaign manager Greg Olson said: “It’s certainly an interesting political environment. People are very concerned about the economy. We are going to campaign hard for the next several weeks, meeting the voters and asking them to send Michaud back to Congress.”
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Low Foreclosure Numbers in Maine Don’t Mean Ease for Homeowners
FORECLOSURE
Bangor Daily News
Guanlei Ren
Boston University Washington News Service
October 10, 2008
WASHINGTON— Maine’s foreclosure rate is low compared with other states. But homeowners facing foreclosure still need help, state officials say.
Of the 435 congressional districts nationally, Maine’s 1st and 2nd congressional districts rank 402nd and 388th respectively on the list of worst rates of foreclosures per household, according to www.hotpads.com, a real estate search engine.
“We are not experiencing the same rate of foreclosure in Maine that other states are experiencing; that is true,” said Will Lund, superintendent of Maine's Bureau of Consumer Credit Protection. “I think it is a combination of more conservative borrowing and more conservative lending than in other states. Maine consumers tend to be a little bit more traditional in terms of the product they are interested in.”
According to an online marketplace for foreclosure properties--RealtyTrac, which Lund called “the best source of information” on foreclosures--303,879 U.S. properties filed for foreclosures in August, a 12 percent increase from the previous month and a 27 percent increase from August 2007.
In Maine, with one in every 2,966 households filing for foreclosure, the foreclosure rate declined in August. Its foreclosure rate ranked 43rd among the 50 states. In all, 233 properties filed for foreclosure in August, a nine percent decrease from July, but still 61 percent above the level reported for August 2007.
Dan Simpson, public information manager for the Maine State Housing Authority, said: “We have a low foreclosure rate on our own home loans because, while our typical borrowers have below-average incomes, we have not made sub-prime loans and we work with our borrowers to try and avoid foreclosure.”
A study based on 2008 first-quarter numbers by Maine’s Bureau of Financial Institutions also found “foreclosure numbers remain relatively small and do not pose a threat to the stability of state-chartered banks and credit unions.”
The second-quarter figures probably will come out by the end of this month, according to Lloyd P. LaFountain III, superintendent at the Maine Bureau of Financial Institutions.
So far, he said, the national financial crisis hasn’t affected credit unions, and loans are still available.
“However, that is not to say that the situation is not serious in Maine for those people who are affected,” Lund said. “For consumers who are facing foreclosure, it’s not much consolation for them that the overall rate of foreclosure is not as great in Maine as it is in other states.”
According to a national delinquency survey by the Mortgage Bankers Association, there were 4,912 loans in the foreclosure process in Maine out of 143,468 loans as of the second quarter. The Maine’ foreclosure inventory rate for all loans, 2.91 percent, is a little higher than the national average rate of 2.75 percent and significantly higher than Maine’s 2007 rate of 1.77 percent.
Simpson said that the state “also instituted a program at the start of this year called MaineHOPE [Home Ownership Protection against Unemployment] that provides our borrowers with four months’ worth of mortgage payments if they become unemployed through no fault of their own.”
On Sept. 26 and Oct. 1, the federal Department of Housing and Urban Development announced two programs aimed to relieve the foreclosure problems.
The $3.92 billion neighborhood stabilization program allocated $19.6 million for Maine to assist local governments in acquiring and redeveloping foreclosed properties.
The HOPE for Homeowners program would help borrowers refinance into more affordable loans to prevent foreclosures.
“I think lenders are anxious to participate,” Lund said. “Lenders do not really benefit from foreclosures.” Bu in many states, he said, such programs are “only reaching less than 5 percent of all the eligible cases.”
“So although there’s been a lot of talk and although I would certainly encourage any program to do whatever it can,” Lund said, “the facts and figures may indicate that only a small percentage of consumers are actually being helped by the programs that are currently in place.”
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Homeowners Could Get FHA-backed Mortgages Under a New Program
FHA
Bangor Daily News
Guanlei Ren
Boston University Washington News Service
October 1, 2008
WASHINGTON - Homeowners stuck with costly mortgages and facing foreclosure will be able to refinance into more affordable loans with the assistance of the Federal Housing Authority (FHA) under the HOPE for Homeowners program that took effect Wednesday.
“The turbulent economy has reached a boiling point, and the American people require and deserve immediate relief,” Maine Republican Sen. Olympia Snowe said in a Sept. 30 statement. “With these programs, homeowners can access FHA-insured mortgages or receive valuable tax credits for first-time buyers. I encourage Americans to take advantage of these beneficial provisions and contact the FHA today.”
The HOPE for Homeowners program is authorized to insure up to $300 billion in mortgages and is expected to serve approximately 400,000 homeowners over the next three years.
“HOPE for Homeowners will add to the Housing and Urban Development Department’s (HUD) existing efforts to make FHA refinancing available to homeowners who need it most,” FHA Commissioner Brian D. Montgomery said in a statement. “One year ago, FHA expanded refinancing into its FHASecure program. Since that time, we have helped more than 360,000 families keep their homes by refinancing with FHA, and we will assist a total of 500,000 families by the end of this year.”
The temporary and voluntary program is intended to create new equity for troubled homeowners to ensure affordability and sustainable homeownership. Participating borrowers will have to take out 30-year FHA loans for 90 percent of the current value of their home and share their newly created equity and future appreciation equally with the FHA, according to the agency.
Kristine Foye, a spokeswoman at the New England Region of HUD, said, “The program is really designed to help people stay in their home.”
To benefit from the proceeds of the loans refinanced with government insurance, investors and lenders have to agree to take substantial and significant losses, which would be less than the losses associated with foreclosure, according to the FHA.
“Anybody who is interested in it will need to contact their lender, to work with their lender being able to write down their existing mortgage,” Foye said.
According to the FHA, only owner-occupants who are unable to afford their current mortgage payments are eligible for the program. Qualified borrowers’ existing mortgages must have been originated on or before Jan. 1, 2008, and at least six payments must have been made. The borrowers’ mortgage debt-to-income ratio must be at least 31 percent. The borrowers also need to prove that they cannot afford their current loan payments and did not intentionally miss any payments and that they own only one home.
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Maine Senators Call for Passage of a Revised Bailout Plan
Bailout Maine
Bangor Daily News
Guanlei Ren
Boston University Washington News Service
September 30, 2008
WASHINGTON - Maine’s two U.S. senators called Tuesday for the approval of a revised bailout plan after lawmakers in the House defeated the legislation by a 228-205 vote on Monday.
“Our nation is facing a dire economic crisis,” Republican Sen. Susan Collins said in a statement. “I am disappointed that a day following the U.S. House’s failure to pass legislation to address this issue, an agreement has yet to be reached on compromise legislation that will pass the House.”
The senator said that Congress must stay in Washington until an agreement is reached and the legislation has been passed.
President Bush warned Tuesday that the economic damage would last and be even worse if the financial rescue plan were not passed.
After the House rejected the plan on Monday fear spread among investors and the Dow Jones industrial plunged 777 points, the most ever for a single day. On Tuesday the market rebounded with the Dow gaining 485 points after it appeared that there would be an effort to revive the emergency rescue plan.
Republican Sen. Olympia Snowe said in a statement, “At a time of tremendous economic peril in this country, it is regrettable the bipartisan process has broken down.”
Both senators said the economic crisis had already affected Maine as shown by the recent inability of the state to sell a $50 million transportation bond that would be used to make critical transportation improvements and create as many as 1,700 jobs.
“I find it unconscionable that unchecked greed and a stunning lack of oversight has resulted in the economic calamity we face today,” Sen. Snowe said.
On Tuesday, Senate leaders of both parties vowed to work toward agreement on the bailout plan.
“Now it’s imperative that Congress continue to work together to forge a bipartisan consensus,” Sen. Snowe said.
Sen. Snowe and Sen. Collins both emphasized the need for strong protections for taxpayers, availability of critical credit, tough oversight and accountability of financial markets, and restrictions on executive compensation.
Democratic Rep. Mike Michaud, who voted against the bailout bill, said in a telephone interview that the plan put forth by Secretary of Treasury Henry Paulson did not really address the problem.
“Over the last 10 days, I seeked a lot of input from economists, banking regulators, the former FDIC chairman, and I was convinced that voting for the Paulson proposal would not offer banking institutions the capital that they need to free up the frozen markets,” Michaud said.
He said the revision of the bailout plan should include raising the $100,000 federal insurance on bank deposits and more details on how taxpayer money will be recouped.
Before the vote on Monday, Rep. Michaud’s offices received more than 2,000 phone calls and emails and about 90 percent of them opposed the bailout, according to Monica Castellanos, the congressman’s press secretary.
Democratic Rep. Thomas Allen, who voted for the plan, said in a statement that “it is imperative that Congress act responsibly to prevent any further deterioration to the financial underpinnings of our economy.”
He said that the failed bailout plan was not perfect, but it was an improvement over the original proposal.
“I will continue to work with members of Congress from both parties to build consensus and pass this critically important legislation,” Rep. Allen said.
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Massachusetts Congressmen Say Bailout Plan Needs Work
CRISIS
Worcester Telegram and Gazette
Rachel Kolokoff and Guanlei Ren
Boston University Washington News Service
September 24, 2008
WASHINGTON - Massachusetts members of Congress voiced skepticism on Capitol Hill Wednesday as Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson again urged Congress to approve a $700 billion bailout plan for Wall Street.
Though Paulson and Bernanke said at the House Financial Services Committee hearing that the bailout is required to stave off a worsening financial crisis, congressmen are reluctant to approve such a large investment in devalued financial assets without further assurance that taxpayers will benefit in the long run.
“I think we need to protect the taxpayers of this country, and handing $700 billion to Wall Street with no conditions, no oversight and no accountability is irresponsible,” U.S. Rep. James P. McGovern, D-Worcester, said.
Rep. McGovern said the last time Congress made the mistake of giving the administration free rein was with the Iraq war.
“When they passed that resolution, they basically gave President Bush whatever he wanted and that turned out to be a tragedy,” Rep. McGovern said.
U.S. Rep. John W. Olver, D-Amherst, also said the plan needs more regulations.
“The plan as first put forward by Secretary Paulson was essentially a $700 billion blank check,” Rep. Olver said in a statement. “It offered a bailout for Wall Street with virtually unlimited powers that could not be reviewed by another federal agency.”
U.S. Rep. Richard E. Neal, D-Springfield, shared Rep. Olver’s concerns, emphasizing the need for further oversight to ensure a safe return on taxpayer investments. These billions are a loan, not a grant, he said.
“I would suggest we approach this judiciously, try to value the assets that are involved and put in place a corporation with great transparency that would sell off the assets of many of these companies, many of which are good, and pay back the federal Treasury,” Rep. Neal said.
U.S. Rep. Niki Tsongas, D-Lowell, said that while it may take some time to further develop the plan, it’s become clear that this government intervention is necessary.
“It seems to me that simply by promising to act as Secretary Paulson did last week that it’s created such a high level of expectation in the market that if we fail to address it we could have a real crisis on our hands,” Tsongas said.
U.S. Sen. John F. Kerry, D-Mass., in a written statement, said he is worried that taxpayers will pay the price. While immediate action is necessary, he said, he too is troubled by a lack of oversight.
“Republicans have consistently railed against oversight and accountability during the last eight years,” Sen. Kerry said. “Now taxpayers are forced to clean up their mess.”
U.S. Sen. Edward M. Kennedy, D-Mass., agreed that accountability is vital to the plan.
“There has to be full disclosure, and Americans everywhere must join together to make sure those who hold positions of responsibility are going to fulfill them both now and in the days and weeks to come,” Sen. Kennedy said in a statement.
At Wednesday’s hearing, Secretary Paulson said he understands that members of Congress are concerned but assured them the plan has taxpayers in mind.
“Let me make clear – this entire proposal is about benefiting the American people, because today's fragile financial system puts their economic well-being at risk,” he said. “When local banks and thrifts aren't able to function as they should, Americans' personal savings, and the ability of consumers and businesses to finance spending, investment and job creation, are threatened.”
In his testimony, Mr. Bernanke emphasized that America still faces “grave threats” to its financial stability.
He also said that, besides the bailout plan, the Federal Reserve had taken actions to increase liquidity and stabilize markets, including new financial agreements with the Bank of England, the Bank of Japan and the Bank of Canada.
Members of the Financial Services Committee, chaired by U.S. Rep. Barney Frank, D-Newton, criticized the bailout plan. Lawmakers said they understand that Wall Street and Main Street are linked but want a detailed spending plan. Taxpayer protection, committee members said, was the main concern.
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