Yarmuth hopes for "big deal" jobs speech from Obama, outlines wish list
09/06/2011 04:29 PM
Louisville Democratic Congressman John Yarmuth is hoping for a big surprise from Barack Obama’s jobs speech on Thursday.
He’s not sure he’ll get that surprise, but doesn’t want to be disappointed.
“I hope to hear something that nobody expects,” Yarmuth said. “If he just comes out with extending the payroll tax holiday, and unemployment benefits and a few other things that have been floated already, I think it’s going to be seen as a disappointing initiative.” (see the :30 mark of the clip)
Yarmuth said it’s time for the president to go big with his ideas.
“I think he’s in the position of having a bar that is going to be pretty hard to get over, in terms of being seen as a strong leader in the jobs creation effort,” Yarmuth said. (see the 1:00 mark of the clip)
Yarmuth said he’d like to see the government to directly refinance mortgages that are in trouble. Yarmuth said people that are paying six to seven percent or are in adjustable mortgages could get government-backed loans to keep them in their homes.
“When you can say to the American people, look we lend money at zero percent to big banks, the least we can do is lend money at three or four percent to hard-working American families,” Yarmuth said. “I think that would be something the American people could understand very clearly.” (see the 1:55 mark of the clip)
Mortgage interest rates are at historic lows, but it’s not clear if a government-backed mortgage could get support from both sides of the aisle. It’s possible tea party advocates would say the free market is once again being upset by government intervention, and government would be lending money it doesn’t have.
But Yarmuth said many of those homeowners can’t get new loans in the private market. He said the government could be reimbursed over time and despite a big up-front cost, the government could end up with a net profit over time. Net cost would be either zero or slightly in the government’s favor by getting rate of return on the money it lends to people whose mortgages are underwater, somewhere in the 3-4 percent range.
It’s those historic low interest rates that Yarmuth said should motivate the federal government to spend money right now on infrastructure to create jobs.
“It’s an instant way to create jobs. It’s something we’re going to have to do anyway. And this is a great time to do it,” Yarmuth said. “The federal government is now borrowing money at two percent. It’s unlikely that we’ll ever be able to borrow long-term money at two percent.” (see the 5:15 mark of the clip)
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