Kathy Dahlkemper on Budget & Economy

Voted YES on $192B additional anti-recession stimulus spending.

Congressional Summary:
• $7 billion Increase in Fund balance appropriation (without fiscal year limitation).
• With respect to the Unemployment Trust Fund and to the Black Lung Disability Trust Fund: Removes the FY2010 limitation as well as the specific dollar amount for such advances, replacing them with such appropriations as may be necessary.
• Increases from $315 billion to $400 billion the maximum loan principal for FY2009 commitments to guarantee single family loans insured under the Mutual Mortgage Insurance Fund (MMIF).
• Increases from $300 billion to $400 billion the limit on new Government National Mortgage Association (GNMA or Ginnie Mae) commitments to issue guarantees under the Mortgage-Backed Securities Loan Guarantee Program.

Proponent's argument to vote Yes:Rep. LEWIS (D, GA-5): This bipartisan bill will provide the necessary funds to keep important transportation projects operating in States around the country. The Highway Trust Fund will run out of funding by September. We must act, and we must act now.

Opponent's argument to vote No:Rep. CAMP (R, MI-4): [This interim spending is] needed because the Democrats' economic policy has resulted in record job loss, record deficits, and none of the job creation they promised. Democrats predicted unemployment would top out at 8% if the stimulus passed; instead, it's 9.5% and rising. In Michigan, it's above 15%. The Nation's public debt and unemployment, combined, has risen by a shocking 40% [because of] literally trillions of dollars in additional spending under the Democrats' stimulus, energy, and health plans.

We had a choice when it came to the stimulus last February. We could have chosen a better policy of stimulating private-sector growth creating twice the jobs at half the price. That was the Republican plan. Instead, Democrats insisted on their government focus plan, which has produced no jobs and a mountain of debt.

Voted NO on modifying bankruptcy rules to avoid mortgage foreclosures.

Proponent's argument to vote Yes:Rep. PETER WELCH (D, VT-0): Citigroup supports this bill. Why? They're a huge lender. They understand that we have to stabilize home values in order to begin the recovery, and they need a tool to accomplish it. Mortgages that have been sliced and diced into 50 different sections make it impossible even for a mortgage company and a borrower to come together to resolve the problem that they share together.

Sen. DICK DURBIN (D, IL): 8.1 million homes face foreclosure in America today. Last year, I offered this amendment to change the bankruptcy law, and the banking community said: Totally unnecessary. In fact, the estimates were of only 2 million homes in foreclosure last year. America is facing a crisis.

Opponent's argument to vote No:

Sen. JON KYL (R, AZ): This amendment would allow bankruptcy judges to modify home mortgages by lowering the principal and interest rate on the loan or extending the term of the loan. The concept in the trade is known as cram-down. It would apply to all borrowers who are 60 days or more delinquent. Many experts believe the cram-down provision would result in higher interest rates for all home mortgages. We could end up exacerbating this situation for all the people who would want to refinance or to take out loans in the future.

Rep. MICHELE BACHMANN (R, MN-6): Of the foundational policies of American exceptionalism, the concepts that have inspired our great Nation are the sanctity of private contracts and upholding the rule of law. This cramdown bill crassly undercuts both of these pillars of American exceptionalism. Why would a lender make a 30-year loan if they fear the powers of the Federal Government will violate the very terms of that loan?

Voted YES on additional $825 billion for economic recovery package.

Proponent's argument to vote Yes:Rep. DAVID OBEY (D, WI-7): This country is facing what most economists consider to be the most serious and the most dangerous economic situation in our lifetimes. This package today is an $825 billion package that does a variety of things to try to reinflate the economy:

1. creating or saving at least 4 million jobs
2. rebuilding our basic infrastructure
3. providing for job retraining for those workers who need to learn new skills
4. moving toward energy independence
5. improving our healthcare system so all Americans can have access to quality treatment
6. providing tax cuts to lessen the impact of this crisis on America's working families.

Opponent's argument to vote No:

Rep. JERRY LEWIS (R, CA-51): Most of us would agree that the recent $700 billion Troubled Asset Relief Program (TARP) is an illustration of how good intentions don't always deliver desired results. When Congress spends too much too quickly, it doesn't think through the details and oversight becomes more difficult. The lesson learned from TARP was this: we cannot manage what we do not measure. We cannot afford to make the same mistake again.

Sen. THAD COCHRAN (R, MS): We are giving the executive branch immense latitude in the disbursement of the spending this bill contains. We are doing so without any documentation of how this spending will stimulate the economy. Normally, this kind of information would be contained in an administration budget. For items that have a short-term stimulative effect, most of us will feel comfortable debating their merits as an emergency measure. But there is a great deal of spending that is not immediately stimulative.

Voted YES on monitoring TARP funds to ensure more mortgage relief.

Proponent's argument to vote Yes:Rep. BARNEY FRANK (D, MA-4): Last year, after we responded to the urgent pleas of the Bush administration to authorize the $700 billion deployment of Federal funds to unstick the credit markets, many of us became very unhappy, [because Bush] repudiated commitments to use a significant part of the fund to diminish foreclosures. If we do not pass this bill today, we will make no progress in what is the single biggest economic problem we've been facing, namely, the foreclosure crisis.

Opponent's argument to vote No:Rep. RON PAUL (R, TX-14): There has been a lot of money spent to try to bail out the financial industry, and nothing seems to be working. I think it's mainly because we haven't admitted that excessive spending can cause financial problems, & excessive debt and inflation can cause problems.

Actually, the recession is therapy for all of the mistakes, but the mistakes come, basically, from a Federal Reserve system that's causing too many people to make mistakes. Interest rates are lower than they should be, so they don't save. That contributes to what we call "moral hazard" as well as the system of the Fannie Mae and Freddie Mac system. With the assumption that we're all going to be bailed out, people say, "Well, no sweat because, if there is a mistake, the government will come to our rescue." A private FDIC would never permit this massive malinvestment. There would be regulations done in the marketplace, and there would not be this distortion that we've ended up with.

Establish a usury limit of 16% for consumer credit cards.

Section 107 of the Truth in Lending Act (15 U.S.C. 1606) is amended by adding at the end the following new subsection, entitled "National Consumer Credit Usury Rate":

1. LIMITATION ESTABLISHED--The annual percentage rate applicable to any extension of credit under, or any outstanding balance on, any credit card account under an open end consumer credit plan may not exceed 16 percent.
2. INCLUSION OF CERTAIN FEES IN DETERMINING APR--In determining the annual percentage rate applicable to any credit card account, membership fees or annual fees shall be included in the finance charge [calculation].
3. ADJUSTMENTS--the Board may make adjustments to the maximum annual percentage rate limitation when any such adjustment is in the public interest and economic conditions warrant. Any increase in the maximum annual percentage rate limitation [will be determined by] severe economic conditions, taking into account the prevailing bank prime rates, and statistical information the Board determines to be relevant. Source: National Consumer Credit Usury Rate (H.R.4300) 2009-H4300 on Dec 11, 2009

   Ban abusive credit practices & enhance consumer disclosure.

   Dahlkemper signed Credit CARD Act
   Credit Card Accountability Responsibility and Disclosure Act of 2009 or the Credit CARD Act of 2009:
   • Tile I: Amends the Truth in Lending Act to require advance notice of any increase in the annual percentage rate of interest (APR) pertaining to a credit card account under an open end consumer credit plan.
   • Imposes a freeze on interest rate terms and fees on canceled cards.
   • Sets limits on fees and interest charges, including a prohibition against penalties for on-time payments.
   • Allows imposition of an over-the-limit fee only once during a billing cycle. Prohibits its imposition in a subsequent billing cycle.
   • Requires fees for cardholder agreement violations and currency exchanges to be reasonable.
   • Prohibits a creditor from furnishing information to a consumer reporting agency concerning a newly opened credit card account until the credit card has been used or activated by the consumer.
   • Title II: Enhanced Consumer Disclosures: Requires the creditor to provide a toll-free telephone number at which the consumer may receive information about accessing credit counseling and debt management services.
   • Revises requirements relating to late payment deadlines and penalties.
   • Requires a periodic statement of account to disclose: (1) the date by which a payment must be postmarked, if paid by mail, in order to avoid the imposition of a late payment fee; and (2) any possible resulting increase in interest rates for late payments.
   • Title III: Protection of Young Consumers: Prohibits issuance of a credit card on behalf of a consumer under age 21, unless the consumer has submitted a written application meeting specified requirements.
   Source: S.414 & H.R.627 2009-S414 on Feb 11, 2009

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