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Candidates Keep Tight Focus on the Economy

All three presidential hopefuls weighed in on current U.S. economic turmoil this week, outlining their solutions for issues ranging from soaring foreclosure rates to government oversight of investment banks.

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    The weak economy and what to do about it has been the focus of all three presidential candidates on the campaign trail this week.

    Hillary Clinton addressed the issue on Monday at the University of Pennsylvania in Philadelphia.

    SEN. HILLARY CLINTON (D), New York: 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 wish it would be. That means acknowledging that our economic crisis is, at its core, a housing crisis, a crisis caused in part by unscrupulous mortgage lenders and brokers and unregulated transactions in mortgage-backed securities, in part by speculators who were buying multiple houses to sell for a quick buck and other buyers who didn't act responsibly, and in part by a president and administration who failed to anticipate and continue to downplay the problems we face.

    Today, I'm announcing my four-point plan to protect American homeowners, a plan to help our families keep their homes, and help communities hard hit by the housing crisis.

    My plan starts with an aggressive new effort to help millions of at-risk families restructure their mortgages and stay in their homes. Of the tens of millions of Americans who have lost value in their homes, 8.8 million are struggling with these mortgages underwater; that is more than 10 percent of all homeowners, the highest percentage since the Great Depression. If home prices fall another 15 percent, one-third of all homeowners will find themselves in the same boat.

    The time for action is now, not a month from now or a year from now, but 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.

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

    We simply cannot wait until Congress passes legislation to find the best way to help millions of families. That's why I'm proposing this emergency working group on foreclosures.

    It could be led by a distinguished, non-partisan group of economic leaders, like Alan Greenspan, Robert Rubin, Paul Volcker. It's the kind of proactive step that would help re-establish confidence in our economy, by showing that the president and the administration is taking our economic crisis seriously.

    The third part of my plan is a new housing stimulus package to provide $30 billion directly to states and localities, like Pennsylvania and Philadelphia, hard hit by this crisis.

    Right now, concentrated clusters of foreclosures are devastating some communities. A recent study of 10 states by the U.S. Conference of Mayors found that the foreclosure crisis will lead to $6.6 billion in lost tax revenues in just those 10 states alone.

    That's why I'm calling for the creation of a one-time emergency $30 billion fund that would go directly to cities and states to address the housing crisis.

    This money could be used to purchase foreclosed or distressed properties, which cities and states could then resell to low-income families or convert into affordable rental housing. It could be used to help neighborhoods with high foreclosure rates avoid increased crime and blight by investing in everything from police and fire support to graffiti removal and better lighting.

    The fourth and final part of my plan involves passing new legislation to clarify legal liability for mortgage companies that act to help more borrowers stay in their homes.

    Right now, many mortgage companies are reluctant to help families restructure their mortgages because they're afraid of being sued by the investment banks, the private equity firms, and others who actually own the mortgage papers.

    That's why I will be proposing legislation when Congress returns to provide mortgage companies with protection against the threat of such lawsuits.

    I know this kind of policy isn't particularly glamorous, and it probably won't make headlines, but it will make a critical difference in helping families save their homes and getting our economy back on track.