Diane Feinstein replies

[Praxeas]

I got a form email (I assume) back from my Senator.

Thank you for writing to me about the current state of the economy, and the actions Congress has taken to address this severe economic crisis.
As you know, on February 17, 2009, President Obama signed the American Recovery and Reinvestment Act of 2009 (H.R. 1) into law. This important legislation represents a significant investment by the Federal Government in an effort to create jobs, improve our Nation's aging infrastructure, and assist struggling states. I agree that this bill is not perfect and understand your concerns, especially as our Nation faces an expected budget deficit of over $1.2 trillion this year.

My decision to support this legislation was a difficult one. In the end, I felt it was critical to take immediate action to provide the President with the tools needed to stabilize the economy and stem further job losses. Please find attached my statement in support of the bill that further details the reasons for my vote.




U.S. Senator Dianne Feinstein

Floor Statement

"American Recovery and Reinvestment Act of 2009"

Friday, February 13, 2009

Mr. President, I rise today to offer my support for the American Recovery and Reinvestment Act of 2009.

Our economy is in dire straits. And urgent action is required to get the economy moving and reverse the alarming trend of job loss that is currently plaguing our cities.

This nation is in the grip of the most serious recession in more than seven decades. American families are increasingly facing tough choices as economic indicators tumble across the board.

Bad news has fallen like a row of dominoes. Our current economic situation is a result of many different problems, all developing at the same time. Several major factors precipitated this crisis.

Chief among them was the collapse of the subprime housing market that sent shockwaves through the financial sector of the American economy.

This was the direct result of a scheme in which poorly underwritten loans promoted by unregulated mortgage brokers and lenders were sliced, diced, securitized and spread all over, with severe consequences that are global in scope.

Unregulated markets schemes like this were a fertile breeding ground for greed and fraud.

The Enron scandal of the late 1990s was a smaller-scale precursor, costing taxpayers billions of dollars and ending in the collapse of the energy giant, as well as the loss of hundreds of millions of dollars in Enron investments held by more than 50 mutual funds and insurance companies.

Enormous state deficits have deepened with the combined effects of rampant foreclosures and plummeting property values which have significantly cut into revenues.

And local governments, trying to maximize returns for taxpayers with investments in firms like Lehman Brothers, have lost their money. They are looking to the state for help, and the state is looking to the federal government for help.

The financial sector is currently held aloft by a lifeline from the federal government. Main Street is also looking to Washington to provide an injection of financial stability.

There are many different vectors of this economic crisis. But there is only one sure solution. And that is the infusion of large amounts of capital into the marketplace from the only place with the capacity to do so, which is the federal government.

It's time to give the American people some good news for a change. It's estimated that the bill could help sustain and create up to 3.5 million jobs over the next two years - with 396,000 in California alone.

The bill before us is far from perfect. But we need to give the president the flexibility and resources he needs to create jobs and revive our ailing economy.

This bill will not meet every need, and some difficult choices have been made in order to move it forward with the 60 votes it needed to secure passage in the Senate.

But faced with a choice of taking action to confront this crisis, or simply dithering away as families lose their jobs, their homes and their hope, I think the choice is clear: We must support this economic recovery package.

President Obama inherited an unprecedented fiscal mess when he took office last month.

The National debt is $10.7 trillion

This year's budget deficit is projected at $1.2 trillion.

The GDP fell by 3.8 percent last quarter, the worst showing in 26 years.

Unemployment is skyrocketing, at 7.6 percent nationwide. Since the recession started in December 2007, 3.6 million jobs have been lost. More than 598,000 jobs were lost in January. Economists say three million more could be lost by the end of this year.


Part 2 next

[Praxeas]

In California, We have a 9.3 percent unemployment rate. There are at least 1.7 million unemployed workers in California.

We have the 4th highest foreclosure rate in the nation. There were 837,665 foreclosures filed in 2008, up 110 percent from 2007.

The state budget deficit has reached $42 billion.

This has real and serious implications.

The Governor has had to halt public infrastructure projects. Public employees are being furloughed and local governments are planning to slash the critical services upon which taxpayers depend.

The bill before us will not solve every problem, but it will provide funding for critical investments that will create jobs and get our economy moving again.

First, it will fund transportation. It will provide $29 billion for highways and bridges. California's share by formula will be at least $2.6 billion.

This bill will also provide $8.4 billion for public transit - i.e., subway, bus, and light rail projects. California's share by formula will be $1 billion;

Another $1.3 billion will go for Airport capital improvements. And $9.3 billion will be invested in Intercity Passenger Rail, including $8 billion targeted at building High Speed Rail.

In total, the bill provides roughly $50 billion for transportation. These projects will not only modernize the corridors used to transport passengers and goods that move across America, they are also a critical part of the jobs creation goal of this package.

Experts estimate that between 27,000 to 37,000 jobs are created for every $1 billion invested in transportation projects. So, an estimated 1.5 million jobs could be generated by transportation projects funded in this bill.

Second, it will fund water projects.

We have a huge water infrastructure problem in this country. The Government Accountability Office and EPA report that the nation faces a $300-500 billion water and wastewater funding gap over the next 20 years.
That's why it is so important that this bill includes a substantial investment in water infrastructure.

For the Army Corps of Engineers, the bill provides $4.6 billion for construction, maintenance, etc., that will create 37,000 direct jobs and 102,000 indirect jobs.

For Clean Water and Drinking Water State Revolving Funds, the bill provides $6 billion, of which California would receive $444 million.

The Bureau of Reclamation will receive $1 billion, including $126 million for Title XVI Water Recycling and Reuse Projects.

The U.S. Department of Commerce Bureau of Economic Analysis estimates that for each additional job created in the water and sewer industries, 3.68 jobs are created in all industries.

So, investing in these projects will help create millions of jobs here at home, and better protect human health and the environment. This is a vital investment.

Third, this bill will provide critical funds for housing.

It is widely recognized that the roots of this economic recession were in the bursting of the housing bubble. Last year, there were more than 830,000 foreclosures filed in California alone, an increase of more than 100 percent over 2007.

So, it is important that the bill makes a major commitment to stabilizing the housing market -- and to helping hardworking Americans avoid the devastating loss of their homes through foreclosure.

The bill provides the Public Housing Capital Fund with $4 billion to help local public housing agencies address a $32 billion backlog in capital needs. California's share by formula will be $118.5 million.

The HOME Investment fund will receive $2.25 billion for state and local governments to acquire, construct, and rehab affordable housing.

It is critical that Congress do whatever we can to help restore and foster the American dream of home ownership - and this bill is part of that effort.

Fourth, the bill will boost funding for our nation's healthcare and education systems and provides increases for other safety nets, including:

This means $87 billion will be provided for Medicaid, with California receiving an estimated $10 billion. Another $13 billion will fund0 Title I Education. Another $12.2 billion will fund Special Education. There will also be $2.1 billion for Head Start and Early Head Start.

A sum of $20 billion will go for additional food stamps benefits. And this bill also supplies an additional $100 per month in unemployment insurance benefits.

Finally, this bill funds Energy initiatives.

This legislation makes a serious down payment towards our permanent shift away from fossil fuels and towards a more sustainable energy system.

The bill invests in efficiency, providing $5 billion to weatherize the homes of low income individuals through the Weatherization Assistance Program.

It also establishes a tax credit for 30 percent of the cost to homeowners that weatherize their own homes, and provides cities with $3.2 billion in block grants to assist them with building codes, efficiency improvements to their own facilities, and renewable energy projects.

These efforts will help us realize the goal of weatherizing millions of homes.

It invests in a "smart grid," putting $4.5 billion into an effort to improve electricity delivery through technology.

The legislation will allow WAPA to build new powerlines, to deliver renewable electricity to California consumers who would otherwise continue to depend on coal power.

And finally, this legislation establishes a grant program at DOE and expands a loan guarantee program.

These two steps will help capital intensive wind, solar, geothermal, and cellulosic biofuels projects move forward even at a time when financing capital projects has become all but impossible.

Bottom line: these are all investments that will either provide an immediate benefit to local economies by adding jobs or will help shore up the safety net for Americans who have been hit by the crisis

This is a very welcome sum of investment in states that are facing grim scenarios today.

One headline recently asked whether the "Golden State is rusting." (Monterey Herald)

But the truth is, California is not alone in suffering these consequences. Every state in the Union is feeling the painful effects of this downturn, and every state needs this injection of investment at this critical time.

President Obama has stated clearly that this economic recovery package is the tool he needs to get our economy back on track and move this country forward.

The millions of people who are losing their jobs and their homes have no use for partisan bickering. Re-enacting Washington's usual ideological battles won't stop any companies from downsizing, free up any credit for businesses in need, or put food on the table of a family in need.

Candidly, I would have written a very different bill than the one before us. And there are some aspects of this bill that I would still like to change - I would have liked to see more job-creating infrastructure projects and fewer costly tax cuts.

But despite the imperfections in this bill, I believe we must recognize the enormous task at hand by providing the president with the resources he needs to get the job done.

This bill is a major part of that effort, and it should be approved.

Thank you.