Transcripts

"Commentary"-Financial Aid For Low Income Families

SUZANNE PRATT: Tonight's commentator says lower-income Americans need more help coping with the economic downturn. He's Mark Zandi, chief economist at moody'seconomy.com.

MARK ZANDI, CHIEF ECONOMIST, MOODY'S ECONOMY.COM: The economy is in recession, struggling with the most serious housing downturn since the great depression and a financial crisis that is as bad as they come. The record gasoline prices and surging food prices are simply piling on and they are likely to rise more in coming weeks. With crude oil firmly over $100 per barrel, average nationwide gasoline prices will be near $4 per gallon by Memorial Day. The increase in our collective gas bill means that we will be effectively filling our gas tanks with those tax rebate checks that are coming soon, not much of an economic stimulus.

The financial pain is very deeply felt by lower-income households. Those that earn more than the median income wi ll spend about 5 percent of their budget on energy this year. Households that make less than the median, they'll spend closer to 11 percent. With no other financial resources, the more they spend on energy and food, the less they have for everything else. Policy makers need to provide more stimulus, the kind that takes the edge off those higher gas and grocery bills.

My suggestion would be to expand the food stamp program, something congressional Democrats are eager to do and adopt John McCain's proposal for a Federal gas tax holiday this summer. Policy makers should then use the resulting bipartisan sentiment and get down to the business of stemming the tsunami of mortgage foreclosures that threatens to turn what could be a mild and short recession into a long and painful one. This is Mark Zandi.