Posts Tagged ‘Republicans’

Want to Buy a Toxic Asset? The Treasury Department Is Selling Them

Monday, April 18th, 2011

The Treasury Department is planning to sell $142 billion worth of toxic assets that it acquired during the financial crisis.  According to Treasury, it wants to sell approximately $10 million worth of assets every month, depending on market conditions and hopes to end the program next year.  Treasury acquired the securities — primarily 30-year, fixed-rate mortgage-backed securities guaranteed by Fannie Mae or Freddie Mac –between October, 2008 and December, 2009 to stabilize the home loan market.

The Treasury has decided to sell the securities now because the market has “notably improved.”  According to Treasury officials, the sale could net $15 billion to $20 billion in profits for taxpayers.  The sale will have a negligible impact on the U.S. debt limit but could delay the ceiling’s arrival by a few days.  In early March, Treasury estimated the U.S. would hit the $14.294 trillion ceiling between April 15 and May 31.  The Treasury in 2008 retained State Street Global Advisors, a leading institutional asset manager, to acquire, manage and dispose of the mortgage-backed securities portfolio.

“We will exit this investment at a gradual and orderly pace to maximize the recovery of taxpayer dollars and help protect the process of repair of the housing finance market, Mary Miller, assistant secretary for financial markets, said.  “We’re continuing to wind down the emergency programs that were put in place in 2008 and 2009 to help restore market stability, and the sale of these securities is consistent with that effort.”

Congress gave Treasury the authority to buy securities guaranteed by Fannie Mae and Freddie Mac.  The value of these mortgage-backed securities declined significantly after the housing bubble burst, prompting fears that write-downs could drag down individual banks and further plunge the financial system into panic.  The Treasury said that three years after the worst point of the crisis, the market for asset-backed derivatives is now much more robust.

The government bought $221 billion of these bonds, as part of the Housing and Economic Recovery Act of 2008.  Treasury announced that it would buy the bonds on the day the government took over Fannie and Freddie.  “The primary objectives of this portfolio will be to promote market stability, ensure mortgage availability, and protect the taxpayer,” Treasury said at the time.  The portfolio is now just $142 billion.  The Congressional Oversight Panel, which supervised the Troubled Asset Relief Program, said that as of February of 2011, Treasury had received $84 billion in principal repayments and $16.7 billion in interest on the securities it holds.

“It was a bit of a surprise, though will likely be easy to digest,said Tom Tucci, head of government bond trading at Capital Markets in New York.  “We spent a year and a half at levels that were unsustainable because they weren’t based on economic fundamentals, they were based on fear.  “Now some of the fundamentals are starting to come back into place.”

Republicans are asking for deeper cuts in government spending before they will agree to raise the debt limit.  Treasury Secretary Timothy Geithner has cautioned that failure to raise the borrowing limit would cause an unparalleled default by the government on the national debt.  Without question, this would drive up the government’s cost of borrowing money.

As Spring Arrives, Companies Are Hiring Again

Monday, March 21st, 2011

January’s big snowstorms on the East Coast contributed to the creation of just 63,000 jobs nationally in that month.  In February, however, businesses started to hire workers. The economy added 192,000 jobs, the best showing since May of last year, the Bureau of Labor Statistics reported Friday.  The unemployment rate – which is politically important — fell from nine percent to 8.9 percent.  Economists said the employment numbers were “solid” but not “ebullient.”

The optimistic view is that the economy has at long last turned the corner.  “I think the economy has not only turned the corner: I am expecting the employment gains to accelerate slightly,” said Sung Won Sohn, a professor of finance at California State University, Channel Islands.  “We have definitely reached the point where the economy is self-sustaining.”  Sohn thinks that the Federal Reserve can halt its monetary stimulus program for the economy.  “There is a growing possibility they will cut short their bond-buying program before the end of June,” he said.  Improved job growth would also help cut the federal budget deficit, since income-tax revenues would rise and requests for unemployment benefits will be reduced.  States and cities would get a boost for the same reasons.  “The chances are the revenue projections may be slightly better than the government anticipates,” according to Sohn.

Other economists were not as sanguine about the pace of recovery.  “If we see 200,000 jobs added in March, April, and May, that will convince market participants that the recovery is self-sustaining,” said John Canally, economist at LPL Financial in Boston.  “You can’t make that call just by looking at February, because the numbers may have been distorted by the weather.”  According to Canally, the most accurate indications of how the weather affected the numbers were in construction, which gained 22,000 jobs in February after falling 33,000 in January; transportation, which added 22,000 jobs compared with losing 44,000 in January; and leisure and hospitality, which added 21,000 jobs after dropping 3,000 the previous month.  “All of those swings are because of the weather,” he said.

Manufacturing added 33,000 jobs in February, primarily in producing durable goods such as washing machines and refrigerators.  This comes as no surprise to Frank Fantozzi, president of Planned Financial Services in Cleveland.  “In talking to our corporate clients, we were hearing there was definitely hiring going on and activity improving,” Fantozzi said.  “My litmus test is when our corporate clients from manufacturing to services send me e-mails saying they are looking to hire someone and asking if we have anyone in our network who would qualify.”

Not surprisingly, the Obama administration was cheered by the February numbers.  “We are seeing signs the initiatives put in place by this Administration – such as the payroll tax cut and the investment tax credit – are creating the conditions for sustained growth and job creation,” said Austan Goolsbee, chairman of the Council of Economic Advisers.  Republicans countered, suggesting that the improvement was because they had convinced the Obama administration to extend the Bush-era tax cuts for two years.  “Removing the uncertainty caused by those looming tax hikes provided much-needed relief for private-sector job creators in America,” said House Speaker John Boehner (R-OH).

According to Esmael Adibi, an economist at Chapman University in California, “Three sectors – construction, financial activities and government – are taking the oomph out of the recovery.  Job creation is what is going to bring housing back, but with this pace of job creation, we’re not going to see a quick turnaround.”

House Republicans Want to Water Down Dodd-Frank Financial Reforms

Monday, March 7th, 2011

Republican congressmen searching for sizeable spending cuts are targeting Wall Street’s regulators over a plan to slash millions from the budgets of several vital agencies. They are setting their sights on the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC).  The workload of both agencies is expected to increase significantly as the Dodd-Frank financial reform law is implemented. House Republicans want to slash the CFTC’s funding by $56.8 million – nearly 33 percent of the agency’s entire budget — over the next seven months.  The SEC’s funding would be cut by $25 million over the same time.

CFTC Chairman Gary Gensler said he would have no option but to reduce his staff from 680 to fewer than 440 if the cuts are approved.  “We’d have to have significant curtailment of our staff and resources,” Gensler said.  “We would not be able to police…or ensure transparent markets in futures or swaps.”  Under Dodd-Frank, the CFTC regulates the multi-trillion dollar derivatives market that includes over-the-counter products called credit default swaps.  The story is similar at the SEC, which is working to augment its enforcement of Dodd-Frank.  “It (budget cuts) will have a very real effect on the SEC’s ability, not just with respect to Dodd-Frank implementation, but also with respect to our core mission,” SEC Chairman Mary Schapiro said in testimony before Congress.

Leading the charge in Congress is Representative Randy Neugebauer, chairman of the House Financial Services Subcommittee on Oversight and Investigations. One of Neugebauer’s top priorities is assuring that regulators are not “overreaching” and moving too quickly with their new authorities under Dodd-Frank.  Neugebauer expressed concern about whether regulators are adequately performing cost-benefit analyses on every rule in Dodd-Frank, a process required under federal rule-making procedures.  He expects to call SEC Chairman Schapiro and CFTC Chairman Gensler back to testify about the issue, especially since he believes that Gensler gave him “vague” responses about cost-benefit analyses on derivatives rules.  Neugebauer said another of his major priorities will be to rein in the powers of the Consumer Financial Protection Bureau, an entity created under Dodd-Frank.  The Texas congressman wants to move the bureau to the Treasury Department and out of the Federal Reserve’s control.

Another congressional Republican makes this point.  “When the House and Senate passed the Dodd-Frank Act, supporters continually purported that small financial institutions, like many I represent, were exempt,” Representative Shelley Moore Capito, (R-WV) said.  “As the provisions of Dodd-Frank are going through the rule making process, I am starting to hear concerns from small institutions about the unintended consequences that could adversely affect them.”

One point of contention with the Republicans is the orderly liquidation provision that authorizes regulators to seize large financial institutions that are about to fail and dismantle them in a way that is less disruptive than either taxpayer bailouts or bankruptcy.

“People are saying we won’t have the guts” to invoke orderly liquidation, acknowledged Democratic Representative Barney Frank, (D-MA), who co-sponsored the legislation with now-retired Senator Christopher Dodd (D-CT).  “Well, we had the guts with regard to the TARP to get the money back.  We got it back,” he said, referencing the $700-billion Troubled Asset Relief Program (TARP) that bailed out Wall Street firms and which has been largely repaid.  “I don’t have any question that we’re going to go through with it,” Frank said.

On Wisconsin!

Tuesday, March 1st, 2011

Wisconsin’s Republican Governor Scott Walker – a Tea Party favorite — accused the state legislature’s 14 Democratic senators of “vacationing” because they walked out of the State Legislature and took refuge in Illinois to avoid a vote that would strip most of the state’s employees of their collective bargaining rights.  Because of the Democrats’ absence, the Senate is unable to reach a necessary quorum to act. “Instead of stimulating the hospitality sector of Illinois’ economy, Senate Democrats should come back to the Madison, debate the bill, cast their vote, and help get Wisconsin’s economy back on track,” Walker said.

The Democrats are refusing to return unless Walker is willing to make concessions to the bill.  Republican legislative leaders – who are a majority with 19 seats — say they have enough votes to pass the bill as is.  Walker has rejected any compromise with thousands of pro-union protesters who have been camped out in the Capitol for a week, claiming that Wisconsin will lead America in weakening unions that have negotiated compensation packages.  Democratic lawmakers, union leaders and rank-and-file teachers and firefighters have asked Walker to revise his plan.

Writing in the Washington Post, columnist Ezra Klein notes that “The Badger State was actually in pretty good shape. It was supposed to end this budget cycle with about $120 million in the bank.

“More than half of the lower estimate ($117.2 million) is due to the impact of Special Session Senate Bill 2 (health savings accounts), Assembly Bill 3 (tax deductions/credits for relocated businesses), and Assembly Bill 7 (tax exclusion for new employees),” according to Klein.  “In English: The governor called a special session of the legislature and signed two business tax breaks and a conservative healthcare policy experiment that lowers overall tax revenues (among other things).  The new legislation was not offset, and it helped turn a surplus into a deficit.  As Brian Beutler writes, ‘public workers are being asked to pick up the tab for this agenda.'”

That’s not the complete story, Klein notes.  “Public employees aren’t being asked to make a one-time payment into the state’s coffers.  Rather, Walker is proposing to sharply curtail their right to bargain collectively.  A cyclical downturn that isn’t their fault, plus an unexpected reversal in Wisconsin’s budget picture that wasn’t their doing, is being used to permanently end their ability to sit across the table from their employer and negotiate what their health insurance should look like.”

Senator Jon Erpenbach (D-Middleton) expressed concern that Republicans might try to split off the union bargaining sections of the budget repair bill – which on its own would not be considered a financial bill – from the rest of the proposal. Republican senators have enough votes to pass a union bargaining proposal without adequate debate, Erpenbach said.  “Obviously we have a great deal of concern about it.  If they want this over immediately, that’s the only thing they can do.”

For Wisconsin’s teachers, the elimination of collective bargaining rights could mark a return to the days of regular strikes and workplaces where employees worry about taking too many sick days and the length of their breaks. “It is almost impossible for us to get our heads around the idea of no union,” said Miles Turner, executive director of the Wisconsin Association of School District Administrators.  The association supports changes to the collective bargaining law – which has been in effect since 1959 — but opposes its elimination.  According to Turner, eliminating collective bargaining would radically change what is now a mostly cordial working relationship between school administrators and teachers.  “There is an established method for doing business,” Turner said.  “There is an understanding between management and labor about how things will work.”

Goodbye to Fannie and Freddie

Wednesday, February 23rd, 2011

The Obama administration and the Treasury Department have decided that Fannie Mae and Freddie Mac — the public-private housing finance model in place for the past four decades – will come to an end, although they pledged to continue backing the agencies’ existing obligations. “The GSE (government-sponsored enterprise) model is dead,” an Obama administration official said.  The Treasury Department is currently working on three broad options for overhauling the mortgage lending system, but will let Congress make the final decision.  The government bailouts of Fannie and Freddie have cost taxpayers nearly $150 billion.

Obama administration officials have emphasized areas of agreement with Republicans, stressing that they favor a system that is less dependent on government support.  Approximately 90 percent of new mortgages are currently backed by Fannie, Freddie or other federal agencies.  The move pleased Republicans, who have long criticized the mortgage companies. “I’m encouraged to see the administration included a number of reform ideas that track closely with my own,” Representative Scott Garrett (R — NJ) said.  Garrett heads the House Financial Services subcommittee, which oversees Fannie and Freddie.  Representative Randy Neugebauer (R – TX), said he was pleasantly surprised by the focus on restoring the mortgage-backed securities market issued without the government’s guarantee.  Debate over the future of the mortgage giants is often contentious on Capitol Hill.  Republicans consistently criticized last year’s Dodd-Frank financial-overhaul bill for not addressing the fate of Fannie and Freddie.  Treasury Secretary Timothy Geithner said that winding down Fannie and Freddie and creating an alternative won’t happen overnight.  “Realistically, this is going to take five to seven years,” he said.  “We are going to start the process of reform now, but we are going to do it responsibly and carefully so that we support the recovery and the process of repair of the housing market.”

The Treasury Department report suggests that Fannie and Freddie purchase loans with smaller outstanding balances, reducing their risk.  The report also recommends phasing in a requirement that Fannie and Freddie borrowers make larger downpayments — at least 10 percent.  Lastly, the government wants Fannie and Freddie to wind down their own mortgage investment portfolios.  In their heyday, Fannie and Freddie were public companies that encouraged home ownership thanks to a Congressional mandate.  The companies buy home loans from lenders, which use the money to offer new loans to consumers.

The bad news is that mortgage costs could increase a bit once Fannie and Freddie are phased out. “Over the long run, the cost of a mortgage will rise modestly for the average American homeowner,” Geithner said.  “We think it’s very important for the government to continue to play a role, a targeted role” to make certain that “Americans who need help to find a home, to rent a home, or own a home get that help.”

Nor will the process of replacing Fannie and Freddie be easy.  Writing in the Wall Street Journal, David Reilly points out that “A return of private capital requires the revival of securitization markets for mortgages not backed by the government since bank balance sheets aren’t big enough to fill the gap”.  But 30-year loans in their current form aren’t attractive to investors without a government guarantee. The Treasury implicitly acknowledges the conflict, noting that the less government backing there is for housing finance, the less feasible the 30-year mortgage becomes.  It also admits the reward for losing that benefit, and largely removing government from mortgage markets, would be a reduced incentive to invest in housing so that ‘more capital will flow into other areas of the economy, potentially leading to more long-run economic growth and reducing the inflationary pressure on housing assets.’  That should be the clear goal of any housing-finance revamp.”

Government Looking to Require CMBS Insurance

Tuesday, February 22nd, 2011

President Barack Obama is proposing an option to create an insurance fund for mortgage-backed securities, similar to the Federal Deposit Insurance Corporation that protects Americans savings accounts. The proposal consists of three legislative options for making long-term changes to the housing finance system, while taking short-term moves to gradually reduce the government’s role in the mortgage market now dominated by Fannie Mae and Freddie Mac.  The Obama administration is asking the private sector to play the leading role in the residential mortgage market and is expected to unveil several scenarios detailing how that might come about.

More than 85 percent of residential mortgages are now backed by the federal government.  Republicans want to slash that to zero, though they acknowledge that a transition so extreme cannot be achieved overnight.  At its core, the debate over what to do about Fannie and Freddie is an ideological one: How much should the government pay to sustain the housing market?  House Republicans, who want to abolish the government backing altogether, contend that the private market can more accurately price the risk of home mortgages.  By contrast, Democrats believe that government backing is necessary to assure that mortgages are accessible to middle-class Americans.  Mark Zandi, chief economist at Moody’s Analytics, said the impact would be approximately one percent.  “Regardless of what policymakers say, global investors will almost surely continue to believe the U.S. government would backstop a badly foundering mortgage finance system,” said Zandi, who has proposed a hybrid system that charges for the guarantee.

Meanwhile, Treasury Secretary Timothy Geithner has warned against acting too quickly or making rash changes.  “Given Fannie Mae and Freddie Mac’s current role in the mortgage market, we must proceed carefully with reform to ensure government support is withdrawn at a pace that does not undermine economic recovery,” he said.  “We believe there is sufficient funding to ensure the orderly and deliberate wind down of Fannie Mae and Freddie Mac, as described in our plan.

Geithner has proposed three options, all of which favor seeing the government eventually wind down Fannie and Freddie, whose survival has required more than $150 billion from the Treasury Department since the government seized them in September of 2008.  The first option would privatize mortgage finance and limit the government’s role to narrowly targeted subsidies, like Federal Housing Authority (FHA), USDA and Department of Veterans’ Affairs financing.  The second option adds a layer of government support that could be implemented to ensure access to credit during a housing crisis.  The third option, the one that bears the closest resemblance to the current system, would allow the government to guarantee mortgages but under stringent capital and oversight requirements, termed “catastrophic reinsurance behind significant private capital.”

The probable winners from replacing Fannie and Freddie are mortgage lenders and insurers, analysts at Goldman Sachs said. “While higher rates could decrease origination volumes, growth should still outpace balance-sheet availability,” the Goldman analysts said.  In addition to lenders, mortgage insurers are also potential beneficiaries.  “The stated goal of returning the (Federal Housing Authority) to its traditional role as a targeted lender of affordable mortgages supports the view for better-than-expected private market top-line growth.”

Despite the uncertainty about what entity will ultimately replace Fannie and Freddie, the Obama administration remains upbeat about the cost of winding down the embattled agencies. The administration expects its losses from Fannie and Freddie to ultimately be cut nearly in half.  However, the Treasury Department estimates that after receiving dividends from the GSEs (government-sponsored enterprises) for that assistance, the total losses could shrink to $73 billion by 2021 — 45 percent less than current levels.

An outspoken critic of the Obama plan is Mike Colpitts, who writes for The Housing Predictor.  According to Colpitts, “Like a solider standing alone in the battlefield, the Obama administration’s housing finance reform proposal offers the U.S. a way of ridding itself of the most troubled mortgage giants, Freddie Mac and Fannie Mae in the real estate collapse.  But it stops short of offering any concrete long term solutions with a housing plan for the nation like a lone soldier Missing In Action.  Realtors, mortgage professionals, new homebuilders and the lending industry compose many of the most fractured industries in the current U.S. economy as a result of the real estate collapse.  They deserve a plan on which they can rest their futures with the rest of America to benefit the entire nation, and for once provide concrete change towards a real economic recovery.”

Dodd-Frank Bill Collides Head On With Deficit Realities

Wednesday, February 9th, 2011

Implementation of the historic Dodd-Frank bill – which President Barack Obama signed into law last July to regulate Wall Street against the excesses that led to the Great Recession — is in danger of being gutted if Republicans’ proposed deep spending cuts become a reality.  Representative Barney Frank (D-MA) pointedly criticized Republicans’ proposal to slash government spending to 2008 levels. According to Frank, that is not an option because the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) need funding to hire hundreds of employees to write and issue regulations to give the new law teeth.  Frank co-sponsored the bill with former Senator Christopher Dodd (D-CT).

Unfortunately, the positive things that Dodd-Frank was designed to accomplish have run head on into the non-partisan Congressional Budget Office’s (CBO) bleak warning about the direction of the nation’s debt.  According to NPR  Planet Money correspondent David Welna, “It was not a pretty picture that CBO director Douglas Elmendorf painted as he sat before the budget committee”. This year’s deficit, he said, will be nearly $1.5 trillion dollars, nominally the largest in history.  And if the tax breaks that got extended this year continue throughout the next decade, Elmendorf said the nation’s debt would grow to be the size of its economy, something that hasn’t happened since the end of World War II.  The time to do something about it, he told the grim-faced panel of senators, is now.”

Elmendorf warned that “The longer the necessary adjustments are delayed, the greater will be the negative consequences of the mounting debt, the more uncertain individuals and businesses will be about the future government policies, and the more drastic the ultimate policy changes will need to be.”  Senator Kent Conrad (D-ND), chairman of the Senate Budget Committee, said “The thing that makes the most sense is there is a summit between the White House, leaders in the House and the Senate, because at the end of the day, the White House has got to be at the table. And unfortunately, during the budget process, the president is left out.”  NPR’s Welna continues, “The revenue side of the equation, of course, is taxes and raising them has been a taboo topic for most in the GOP.  But the likely need for more revenues was underscored toward the end of today’s hearing when Conrad noted that the Social Security surplus that lawmakers have been raiding for years disappeared this year and instead, Social Security has started cashing in its IOUs with the Treasury.”  Social Security will post nearly $600 billion in deficits over the next 10 years as the economy recovers and millions of baby boomers begin retiring, according to new congressional projections.

House Republicans, led by Representative Scott Garrett (R-NJ), chairman of the House Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, wants to cut $55 to $60 billion in non-defense spending during fiscal year 2011.  “A dramatic spending increase to fund the SEC and CFTC, as envisioned by the authors of the Dodd-Frank legislation, would further the mindset that our nation’s problems can be solved with more spending, not more efficiency,” according to Garrett.  Frank countered that Garrett’s comments only reinforce his “fear that Republicans are attempting to cripple regulation by failing to fund it.  I had thought even among people in the Tea Party that credit default swaps were not that popular.  We’re arguing the security of the average American was far more endangered by the financial crisis than by a lot of other things that our military does.”

If the cuts are put into place, the SEC and CFTC would be frustrated in their mandates, such as setting up a new office of municipal securities, according to Frank.  The Republican response to Democratic concerns is that their goal is to make federal regulators more efficient.  Representative Spencer Bachus (R-AL), chairman of the House Financial Services Committee, said “Past experience indicates that a few investigative reporters have been more effective than the many employees at the SEC in addressing and exposing financial wrongdoing.”

Republicans May Underfund Dodd-Frank Implementation

Thursday, January 20th, 2011

Republicans May Underfund Dodd-Frank ImplementationPresident Barack Obama’s crackdown on Wall Street excesses could be hampered if the incoming Republican-controlled Congress refuses to fund two crucial regulatory agencies.  The Dodd-Frank financial reform law – passed with heavy Democratic support – promised a generous budget to regulate the $600 trillion over-the-counter derivatives market.  Now, the law’s implementation may be derailed by the incoming 112th Congress.  Randy Neugebauer (R-TX), who will chair the House Financial Services oversight subcommittee, wants to review the regulators’ expansion plans.  “Once you turn the money loose, it’s a little harder to stop that train,” he said.

The two regulatory agencies in question are the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).  The SEC, for example, had expected to receive an 18 percent increase to its 2011 budget, which would have allowed it to hire 800 new regulators to enforce Dodd-Frank.  Roadblocks are on the horizon, however, in the form of Representative Spencer Bachus (R-AL), who will chair the House Financial Services Committee, and Frank Lucas (R-OK), who will chair the agricultural committee that oversees the CFTC.  The two Congressmen wrote to regulators, saying “An overarching concern…is the need to get it done right, not necessarily get it done quickly.”  The Republicans’ attitude to enforcing Dodd-Frank could be a boon to Wall Street firms, whose lobbyists are advocating a go-slow approach.

Mary Schapiro, SEC Chairman, said “We will have to take some more steps to cut back.  At this stage, it will impact our work.”  The chronically underfunded and understaffed CFTC, which had expected a 50 percent budget increase, had planned to hire 240 new regulators this year to enforce its new oversight of the swaps market.  According to CFTC Chairman Gary Gensler, “I do think without sufficient funding next summer (2011) you’d see a significant number of registrants – swap dealers, swap execution facilities and so forth – whose legitimate applications would have to be slowed down.  Michael Greenberger, a University of Maryland law professor and previously the CTFC’s director of trading and markets, says.

2010 U.S. Census Shows Slowest Population Growth in 70 Years

Thursday, January 6th, 2011

2010 U.S. Census Shows Slowest Population Growth in 70 YearsNow that the long-awaited data from the 2010 Census has been published, the states are learning which places will gain congressional seats and precious electoral votes — a circumstance that could impact the outcome of the 2012 presidential election.  The U.S. Constitution requires a census count every 10 years to accurately reflect population shifts in the nation and determine congressional reapportionment as the states divide the House of Representatives’ 435 seats.  Inevitably, Democrats and Republicans will squabble over redistricting as states gaining or losing seats draw new districts.

“Many of the population increases are expected in Republican-leaning states in the South and West, while traditional strongholds of the Democrats in the North and Midwest are expected to lose population,” noted Keating Holland, CNN’s polling director.  Additionally, because Republicans in several states took control of the legislatures from Democrats in the mid-term elections, they will have significant control over how the districts are redrawn.

Ohio and New York each will lose two Congressional seats.  Poised to lose a single seat are Illinois, Iowa, Louisiana, Massachusetts, Michigan, Missouri, New Jersey and Pennsylvania.  California will retain its 53 Congressional seats – the largest in the nation.  States that will pick up seats include Florida, Arizona, Georgia, Nevada, South Carolina, Utah and Washington.

According to the U.S. Census Bureau,  the data gleaned will “directly affect how more than $4 trillion is allocated to state, local and tribal governments over the next 10 years.”  If preliminary estimates hold true, the 2010 census will reveal that America’s population growth fell to its lowest level in 70 years. Demographers believe the official 2010 count will be approximately 308.7 million, putting U.S. growth at nine percent, the slowest growth since the 1940 census.  During that decade, the Great Depression slashed previous population growth rate by more than half, to 7.3 percent.  The U.S. is still growing quickly relative to other developed nations.  The population in France and England each increased approximately five percent over the past decade; Japan’s population is largely unchanged and Germany’s population is declining.  China grew at about six percent; Canada’s growth rate is more or less 10 percent.

Illinois Governor Pat Quinn Antes Up $47 Million to Fund Jobs Program

Monday, January 3rd, 2011

Put Illinois to Work BlogIllinois Governor Pat Quinn’s efforts to keep the successful Put Illinois to Work program alive have come under fire from State Senate Minority Leader Christine Radogno (R-Lemont).  The issue is $47 million in bond money that Quinn used to extend the job-creation program through the first of the year.  The program was originally funded by the federal government through the stimulus program.  That money was used up by last September and Quinn has twice infused the program with state cash to keep it running. 

Since its inception, Put Illinois to Work has found jobs that pay approximately $10 an hour for 26,000 unemployed and underemployed Illinoisans.  Strategic programs by the Department of Transportation (IDOT), Department of Commerce and Economic Opportunity (DCEO) and the Department of Human Services (IDHS) have all supported continued improvement in the state’s economy.  Quinn had hoped that the federal government would provide new funding for the program, but that isn’t happening.  As a result, he decided to keep it alive through January by using money the state will receive from the tobacco settlement. 

 Curiously, Radogno said “Not only is it a waste of taxpayer dollars to expand the programs piece-by-piece without any plan or requirement that participants will ultimately see permanent employment, it’s cruel to the men and women who believe they’re working towards a long-term position.”  Quinn countered by saying “Putting people back to work is the best way to make our economy stronger.  I remain hopeful that Congress will extend the funding for the ‘Put Illinois to Work’ program, which has created more than 26,000 jobs in Illinois alone.  I am extending this program today to keep thousands of people in Illinois at work through the holiday season.” 

In October, the statewide unemployment rate fell again for the seventh consecutive month to 9.8 percent (seasonally adjusted) and the state created 8,000 new jobs.  Illinois has added more than 53,000 jobs in 2010, proof of a steadily improving economy.  Since January 2009, DCEO has created 103 business investment packages that have created and retained more than 23,900 jobs and leveraged $3.18 billion in private investment.  Additionally, IDOT is currently leading the largest road construction program in state history through the Illinois Jobs Now! capital construction program.  From 2009 through the end of this year the state will have invested approximately $7 billion to repair or rebuild 4,800 miles of roads and 500 bridges, creating an estimated 135,000 short-term and permanent jobs.