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I propose the following Economic Reinvestment of America Act. - The current economic crisis has made 1 million children homeless and
23.8 million workers are unemployed or underemployed.
Loss of a job is now the main reason families are losing their homes. It also means the loss of health insurance, if one were lucky enough to have an employer offering coverage.
More than that, it’s the loss of dignity, a feeling of helplessness and depression. It can be the cause of family breakups and domestic violence.
America must go back to work and we must stabilize the housing market to speed recovery. - Initiating the following proposals, I
believe, will help hasten this recovery.
1. Eliminate credit check requirement for employment. Too many have had their credit affected by this economic crisis. They should not be prevented from obtaining future employment by their credit history. (Zero funding required)
2. Implement a work share program where employers reduce the hours of employees vs. layoffs and lost hours are supplemented by at least half of the loss through unemployment benefits. Unemployment benefits should be extended as necessary until this crisis is resolved. ($60 billion)
3. Change bankruptcy laws to include the cram down provision for all homeowners, not just those owning multiple homes, so all have the same advantages. The current rate of foreclosures is 150,000 per month and will result in 10% of homeowners losing their homes by 2012 unless this is checked. (Zero funding required)
4. Change foreclosure laws to allow homeowners the option to rent their homes following foreclosure for an extended period of time (up to 20 years), with an option to re-purchase the home after five years. (Zero funding required)
5. Modify the Making Home Affordable Act (using the existing funds) to implement an automatic loan (upon verification of unemployment) for those who have lost their jobs that would make supplemental payment for the amount of the mortgage over 31% for a period of 24-36 months. These would be low-interest loans (that would not accrue until repayment begins) that would be repaid when the homeowner’s income is sufficient to repay the loan. This would streamline the process and reduce the number of foreclosures. (Based on the Philadelphia Unemployment Project and the Save Our Homes Coalition plan.)
6. An alternate plan could be a Mortgage Extension Program that where the homeowner pays interest only (simple—not compound) on the mortgage at 3%, with no increase to the mortgage principal. The duration of the mortgage contract is extended for an equal time period. This way the banks don’t lose any money and many homeowners can ride out the storm.
6. End the usurious compounding interest rate on home mortgage loans so the consumer is no longer paying 20 years of interest before starting to make substantial payments toward the principle. Until we do this, we will continue to be renters from the banks, not home owners.
7. Expand Temporary Assistance for Needy Families (TANF) to include non-working families. This extreme recession has often put both parents out of work. TANF’s punitive rules tying benefits to strict work and other requirements during this period of high unemployment are an inadequate response to this recession. ($17 billion)
8. Increase the food stamp program providing an increase in benefits for the purchase of fresh fruits and vegetables to help combat obesity in our children. ($1 billion)
9. End COBRA - allow those eligible for COBRA benefits buy into Medicare on a temporary basis until they return to full time employment and be provided assistance, if necessary to pay for this non-profit, less expensive coverage. ($20 billion)
10. Establish funds to increase credit for small business at low interest rates through the Small Business Administration. If banks are unwilling to make these loans, then government should step in to do it. Small businesses are the economic engine and job creators. ($100 billion)
11. For those small businesses who do not qualify under SBA lower the qualification levels or create a sub-set for VERY small businesses so they can qualify for SBA loans.
12. Fund the following projects ($350 billion):
a. Upgrade the water quality in various communities where it is currently unsatisfactory.
b. Upgrade bridges that have been identified across the country that are in need of repair.
c. Upgrade dams in need of repair.
d. Upgrade roads in need of repair.
e. Upgrade/repair/weatherize and retrofit schools and other public buildings with energy efficient technology.
f. Invest in energy technology – wind/river turbines, solar and the smart grid.
g. Continue to provide incentives for private and commercial property owners to install energy-efficient technology and weatherize buildings to reduce energy use.
h. Extend tax credits for use of green technology.
i. Provide low interest loans for students pursing degrees in teaching, health care, science, math, engineering, and technicians studying green technology. (Interest rate penalties would be implemented for a career change.)
These investments will be paid for from the following funds. Once the crisis has ended, these funds will go to debt reduction.
1. Wall Street was the source of this crisis; they should help resolve it by paying a speculator’s transactions tax of 0.25% on trades in stock, options, credit default swaps, and other derivative instruments that will generate approximately $100 - $150 billion annually and would have little impact on the long term investor. ($1 trillion over 10 years – Great Britain nets approximately $30 billion annually from a similar tax.)
2. Reverse the Bush tax cuts for those making over $250,000 per year raising the tax rate from 35% to 36.9%, and increase the capital gains and dividends tax from 15% to 20%. ($43 billion annually)
3. Create a new 50% tax rate for incomes over $2 million annually. ($60 billion annually).
4. Pay a 10% whistleblowers fee for information on people or corporations hiding assets.
5. Allocate unused TARP funds to the above proposals. ($200 billion)
6. Close off shore tax loopholes that allow companies to claim that profits made in the U. S. were made overseas. GAO estimates 2/3 of corporations used this tax loophole to avoid paying taxes. (Over $100 billion annually)
7. Establish a progressive estate tax rate that taxes estates under $3.5 million/$7 million couples at 10% , increasing by 5% at 7.5% and then 20% at $10 and 5% higher for every additional $10 million with a cap of 35%. ($50 billion annually)
8. Tax companies outsourcing jobs to countries that have poor workers' rights protections at 50% of the value of all products they produce in these countries.
9. Tax companies outsourcing jobs to countries that allow them to exploit the environment at 50% of the value of all products they produce in these countries.
10. Require any product produced in any country that has poor workers' rights protections shall include a label stating same.*
11. Require any product produced in any country that exploits its environment shall include a label stating same.*
12. Institute an import duty/levy of 500% on any product that was produced using slave labor and the product shall be labeled accordingly.*
* A complaint will be filed against these companies in countries with whom we have trade agreements subject to WTO
jurisdiction.