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 Home > News & Policies > May 2008

For Immediate Release
Office of the Press Secretary
May 2, 2008

Fact Sheet: Addressing Economic Pressures Affecting American Families
President Bush And His Administration Are Helping American Taxpayers Through This Tough Time

Today, the Bureau of Labor Statistics released new jobs figures for April.  Both payroll employment and the unemployment rate fell slightly in April.  The unemployment rate decreased to five percent, below the averages for the past three decades, but nonfarm payroll employment decreased by 20,000 jobs.  While job losses are never welcome, this was a small decline in employment and we have been anticipating that the early part of 2008 will be the weakest part of the year.  Fortunately, President Bush and the Congress anticipated this period of slow economic growth and enacted a bipartisan economic growth package, which is expected to have beneficial effects this quarter and through the remainder of the year. 

  • This week, the Treasury Department began delivering the first of the tax rebates by direct deposit, as part of the bipartisan economic growth package.   During the first week alone, nearly 7.7 million Americans will receive their tax rebates electronically, and the IRS will begin mailing checks to millions more Americans across the country next week.  By this summer, the Treasury Department expects to have sent rebates to about 130 million American households.

  • This package will support consumer and business spending while adjustments continue in the housing and credit markets.  These rebate payments will inject more money into our economy, support job creation, and boost economic growth.  These rebates will return up to $600 for individuals, $1,200 for married couples, and $300 per child.  As these rebates start to go out, a family of four could receive a tax rebate of $1,800. The package also includes incentives for businesses to make investments in new equipment this year, which will help to create jobs.  These incentives have been in place for a few months.

The Administration Is Taking Targeted Action To Help American Homeowners Keep Their Homes

The President launched FHASecure, which the Federal Housing Administration (FHA) has used to help almost 180,000 families refinance their homes so far, and projects to help about half a million people by the end of the year in total.  FHASecure expands the FHA's ability to offer refinancing by giving it the flexibility to also work with homeowners who have relatively good credit histories but cannot afford increased payments resulting from a rate reset. 

  • The Administration has proposed building on FHASecure by allowing the FHA to assist more financially capable homeowners who have had some limited payment delinquencies qualify for FHA-insured loans.  This expansion will help more families stay in their homes and avoid foreclosure.  It will be targeted to those families who could otherwise make their mortgage payments, but need help finding a good refinancing option to avoid rising mortgage payments.  FHA will also provide additional flexibility when looking at a borrower's payment history, if lenders voluntarily agree to write down part of the outstanding mortgage debt before the refinancing.  This will protect the FHA insurance fund and the taxpayer, while enabling FHA to help even more families.

The President and his Administration helped facilitate the formation of the private-sector HOPE NOW Alliance, which has developed multiple strategies to help distressed homeowners.  HOPE NOW is a cooperative effort among mortgage counselors, servicers, investors, and lenders to maximize outreach efforts and provide professional counseling to struggling homeowners and to help homeowners refinance into a new mortgage or receive a modification.  HOPE NOW membership now covers over 90 percent of the subprime mortgage market.  

President Bush signed the Mortgage Forgiveness Debt Relief Act of 2007, which will help Americans avoid foreclosure by protecting families from higher taxes when they refinance their home mortgages.  This Act created a three-year window for homeowners to refinance their mortgage and pay no Federal taxes on any debt forgiveness they receive. 

President Bush Calls On Congress To Help Americans Weather This Difficult Period By Passing Sensible And Effective Legislation

President Bush continues to call on Congress to expand domestic oil production to address rising energy prices.  Congress should allow the environmentally-safe exploration in Northern Alaska.  The Department of Energy estimates that the Arctic National Wildlife Refuge could allow America to produce about one million additional barrels of oil each day – a 20 percent increase of crude oil production over U.S. levels.

President Bush continues to call on Congress to quickly pass responsible legislation modernizing the Federal Housing Administration.  A modernized FHA that is granted appropriate pricing flexibility could help thousands of additional homeowners by the end of this year, and passage of this bill is a good next step to help bring stability to the housing market.  Two years ago, the President first sent his FHA modernization bill to Congress – now is the time for Congress to act and ensure that this program, created during the New Deal, remains a good deal in the 21st century.

Congress should pass legislation that helps at-risk homeowners by permitting cities and States to issue tax-exempt bonds for refinancing existing home loans and by increasing existing bond caps.  Under current law, tax-exempt mortgage revenue bonds are only available to finance first-time homebuyers and cannot be issued for refinancing.

Congress should also act to strengthen the regulation of Freddie Mac and Fannie Mae to ensure they are adequately capitalized and focus on their statutory housing mission.

Congress should not increase taxes.    If the President's tax relief is allowed to expire at the end of 2010, 116 million taxpayers would see their taxes go up by $1,800 on average and our economy would suffer.

The President Calls On Congress To Expand Trade By Moving Forward With Pending Free Trade Agreements

House leaders recently changed the previously agreed to House rules in order to put off a vote on the U.S.-Colombia free trade agreement.  If this decision stands, it will kill the agreement and hurt American business and workers.  By obstructing this agreement, Congress is signaling to countries in the hemisphere and around the world that the United States cannot be trusted to support its allies. 

  • The U.S.-Colombia free trade agreement will level the playing field for U.S. companies that export to Colombia.  Over 90 percent of imports from Colombia enter our country duty-free, but the 9,000 American businesses that export to Colombia – including 8,000 small and mid-sized firms – face tariffs up to 35 percent on their non-agriculture products. Colombian tariffs on many U.S. agricultural products can be even higher.  Once implemented, the agreement will eliminate tariffs immediately on more than 80 percent of American exports of industrial and consumer goods and on the remaining 20 percent of American exports over time.  Leveling the playing field would make American products more competitive in Colombia, and would help support higher paying jobs here in the U.S. 

  • The U.S.-Colombia free trade agreement will also strengthen our national security by supporting a key democratic ally.  This trade agreement will bring new economic opportunities to Colombia's citizens and will reinforce democracy by supporting a country whose courageous leader is fighting corruption, increasing transparency, combating violence, and fostering accountability and rule of law. 

Approving the free trade agreements with Colombia, Panama, and South Korea will expand access to key export markets with three democratic allies.  Exports now account for a larger share of our GDP than at any other time in history, and jobs supported by goods exports pay wages 13 to 18 percent higher than the national average.    

The President has asked Congress to reauthorize and reform trade adjustment assistance, so we can help displaced workers learn new skills and find new jobs.

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