Excerpts from Clinton's Economic Speech

Senator Hillary Clinton

Excerpts from Remarks

Philadelphia, PA

March 24, 2008

Ultimately, the true currency of today's American economy is confidence. When people lose confidence in the economy – and our President's ability to manage it – problems become crises, and crises lead to more crises.

So we need a President who can restore our confidence. A President who is ready to confront complex economic problems with comprehensive solutions…working to prevent crises, rather than just reacting to them once it's too late. We need a President who is ready on day one to be Commander-in-Chief of our economy. If you give me the chance, I will be that President.

I will start by facing our economic situation as it is, not as we hope or wish it would be. That means acknowledging that our economic crisis is, at its core, a housing crisis.

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Your home isn't just your greatest source of wealth – it's your greatest source of security. It's what anchors you to your neighborhood and community. It's the center of your family.

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Over the past week, we've seen unprecedented action to maintain confidence in our credit markets and head off a crisis for Wall Street Banks. It's now time for equally aggressive action to help families avoid foreclosure and keep communities across this country from spiraling into recession.

Today, I am announcing my four part plan to Protect American Homeowners: A plan to help our families keep their homes and help communities hard hit by the housing crisis get back on their feet.

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The time for action is now – not a month from now, or a year from now – but right now. And the reality is that many of our families need more than just basic refinancing. That's why I support new legislation proposed by my colleagues, Representative Barney Frank and Senator Chris Dodd, that would expand the government's capacity to stand behind mortgages that are reworked on affordable terms…

...The Frank-Dodd legislation would…[set] up an auction system for mortgage companies that hold hundreds of thousands of these mortgages. Through this system, these companies could sell mortgages in bulk to banks and other buyers. The buyers would be willing to purchase these mortgages – and restructure them to make them affordable for families – because they know the government will guarantee them once they're reworked…

…But given the severity of today's housing crisis, simply facilitating this auction process might not be enough to get our economy moving again. That's why I believe the Federal Housing Administration should also stand ready to be a temporary buyer – to purchase, restructure, and resell underwater mortgages.

Just as it has in the past, this kind of temporary measure by the government could give our economy the boost it needs and families the help they need. It would not require a single new government bureaucracy, and would be designed to be self-financing over time – so it would cost taxpayers nothing in the long run. It is a sensible way for everyone – lenders, investors, mortgage companies and borrowers – to share responsibility, keep families in their homes, and stabilize our communities and our economy.

In order to determine whether the approach outlined by Representative Frank and Senator Dodd is sufficient – or whether we need government to step in as a purchaser – I am calling on President Bush to appoint an emergency working group on foreclosures. That is the second part of my plan.

We simply cannot wait until Congress passes legislation to find the best way to help millions of families restructure their mortgages on affordable terms. That's why I'm proposing an Emergency Working Group on Foreclosures that could be led by a distinguished, non-partisan group of economic leaders like Alan Greenspan, Paul Volcker and Robert Rubin. This is the kind of proactive step that would help re-establish confidence in our economy by showing that this Administration was taking our economic crisis seriously.

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Just over a month ago, Congress passed, and President Bush signed, a $168 billion stimulus package. But this package did next to nothing to help homeowners and communities struggling with foreclosure. Congress is trying to combat a recession caused by the housing crisis without doing anything to address that crisis.

Well, if the Fed can extend $30 billion to help Bear Stearns address their financial crisis, the federal government should provide at least that much emergency assistance to help families and communities address theirs.