Statement by AFL-CIO President John Sweeney on Housing Crisis Legislation

May 09, 2008 -- "Working people applaud the bipartisan effort by the U.S. House of Representatives to help struggling homeowners retain their piece of the American dream. This bill is an important step toward keeping millions of struggling families from losing everything they have worked for all their lives.

President Bush’s threat to veto this legislation is both inhumane and dangerously short-sighted. The funds in this legislation are an investment in healthy communities, vibrant neighborhoods and a stable economy.

If the President is truly concerned about assisting undeserving speculators, he should take a strong stand against provisions in the Senate-passed bill, which would bail out developers to the tune of millions even though many homebuilders profited from their own subprime lending and speculative over-heating of the market.

The House and Senate should remove this provision in conference and replace it with provisions allowing families to save their primary residence in bankruptcy. In the short term, there should be a moratorium on foreclosures put in place long enough for families on the brink to restructure their mortgages to 30-year fixed mortgages at the teaser rate.

Finally, we can’t stop now. The roots of this crisis lie in the lack of effective regulation of the mortgage and other financial markets and on our economic policy makers’ reliance on asset inflation to power economic growth in recent years. Falling or stagnant real wages, extreme inequality and the dominance of financial gimmickry over good jobs that create real value have left tens of millions of Americans dependent on borrowing to sustain their standard of living. Enacting the reforms passed in the House earlier this week are the first, critical step toward creating an economy that works for all Americans, but the finish line is still far ahead."

Source: AFL-CIO

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