February '09 Nevada Government—John Ensign Column

Ensign, Bayh Introduce Bill Giving Iraqis Stake in Oil Revenues

Plan Would Encourage Creation of Iraq Oil Trust

Senators John Ensign and Evan Bayh today (January 30, 2009) introduced legislation directing the United States to present a plan to the Iraqi government for the establishment of an oil trust, giving every Iraqi a share in the country’s oil wealth. This proposal aims to speed political reconciliation in Iraq, give every citizen a stake in the nation’s future, combat corruption and increase transparency. Secretary of State Hillary Clinton has supported this proposal in the past.

“Under the reign of Saddam Hussein, the Iraqi people suffered in poverty and many were tortured,” said Ensign, Chairman of the Republican Policy Committee. “Oil revenues were previously directed toward the bank accounts and palaces of Saddam. However, the Iraq of today is worlds apart from its past and the Iraqi people finally have a chance to share in the wealth of their nation. Our legislation will put the future of Iraq in the hands of its people and will limit corruption because every Iraqi will have a stake in its transparency. As the country embarks on a new election, the people of Iraq deserve to both elect their leaders and share in the country’s vast oil wealth.”

“To build a unified Iraq, its citizens must share the country’s prosperity as well as participate in its political process,” said Bayh. “Democratic elections remain an essential first step toward building a more stable Iraq. We must now continue our efforts to ensure that every Iraqi is fully invested in the success of a unified state. This legislation will help Iraq break free from a legacy of tyranny and greed and help all Iraqis enjoy stability and a vital sense of national unity.”

Senator Ensign previously introduced this legislation with then-Senator Hillary Rodham Clinton. The two have long advocated for the establishment of an oil trust fund for Iraq. In a 2006 Wall Street Journal column, they argued that securing the future of Iraq’s oil reserves is key to resolving the nation’s political crisis. With her new role as Secretary of State, Senators Ensign and Bayh hope that she will continue to champion an oil trust fund for Iraq.

Iraq will hold elections on January 31, 2009; however, due to ongoing disputes over the oil-rich region of Kirkuk, four provinces will not be taking part in the elections. This legislation will help to alleviate the political tensions in the region as it is essential that the Iraqi people have the chance to not only participate in the new-found democracy in their country but also share in its oil wealth. This legislation requires the administration to present the Iraqi government a plan to establish an oil trust.

Ensign Details Plan To Help Fix Housing, Create Jobs

“There is no wasteful spending in it. This is going to fix housing, and it is also going to stimulate the economy by creating jobs. And that is exactly what we should be focused on right now.” – Sen. John Ensign, Chairman of the Republican Policy Committee.

Today (February 3, 2009) on Fox News Senator John Ensign, Chairman of the Republican Policy Committee, spoke about his plan to fix housing and create jobs. Ensign hopes to include this in the stimulus plan as a way to improve the overall bill in a manner that targets one of the critical problems dragging down our economy – the housing market. Early estimates suggest 40 million Americans with mortgages would qualify for this plan.

Ensign’s plan would guarantee a 4 to 4.5% fixed-rate mortgage, which would provide a monthly savings of more than $400 for the average homeowner. This fixed rate would be available for a primary residence to new homeowners and for refinancing. Banks would issue these rates with government backing, and the average homeowner would save up to $150,000 on mortgage payments over the course of the loan. Compared to the current “so-called” stimulus bill, this proposal provides more bang for the buck because it targets the underlying problem in the economy, puts money back in the hands of the taxpayers and creates jobs.

Senator Ensign’s Website

Republican Policy Committee Website

Included below is a transcript of Senator’s Ensign appearance on Fox News.

Unofficial Transcript / February 3, 2009: Live at Noon on Fox News

Jane: Our guest now is John Ensign of Nevada, on the Finance Committee. Senator, thank you for being here. Let's talk about plans you have out there today. A lot of people have a lot of interest in them, concerning home mortgages. 4% interest rates is your plan. How much would that cost? Are you getting bipartisan support?

Senator Ensign: Our plan, just on the housing piece, would be around $300 billion. When you combine it with the tax cuts planned on for lowering the two lowest tax brackets, 10% to 5%, 15% to 10%, plus the business tax credit, it is around $500 billion, total. There is no wasteful spending in it. This is going to fix housing, and it is also going to stimulate the economy by creating jobs. And that is exactly what we should be focused on right now. We should be focused on fixing the housing industry because it is what has drug the rest of the economy down. And if we do not treat that cancer, we will not fix the rest of the economy. The over trillion dollar spending bill the Democrats have brought forward is a lot of wasteful spending, $200 billion, in new entitlement programs. It is going to cause inflation and higher taxes in the future, and that is the reason we are seeing a lot of the public support slip so seriously.

Jane: I don’t have to tell you what the critics are saying about this idea of this mortgage plan of yours. They think it is too complicated to redo millions and millions of mortgages.

Senator Ensign: It really is not too complicated. All you are doing is having the government guarantee them, and still letting the private sector do it. You are setting the difference between the 10 year and 30 year treasury. That would be a 4% interest rate. Anybody who would sign up and refinance their homes would get a 4% interest, 450 dollars per month. That would stimulate the economy more than anything in the bill, because it would be like a permanent tax cut. These are 30 year fixed mortgages, so they would have an extra $450 coming in a month, for the next years, as long as they have a mortgage.

Jane: let's look at the broad plan. We are at 888 billion as it stands today, and you and your fellow Republicans have talked about how there is too much spending. What is going to come out of this? Where is the final number going to be?

Senator Ensign: I don’t know where the final number is going to come. The first amendment we will vote on is to add another $28 billion. No offsets. There is so much wasteful Washington spending right now. If they want to create new programs and some of these may be meritorious, we need to eliminate other wasteful spending. Let's not just bring in new programs. Let's not do entitlements, things that will mortgage our children's future and make them pay higher taxes. Not just our children, actually, in just a few years, taxes will have to go up which will be even more devastating to the economy. Let's get back to fiscal responsibility in this country.

Jane: what would the package look like to get your yes vote?

Senator Ensign: It would have to fix housing. The President is saying we have to go to that next. If housing is the problem with the economy that started all of this, if you don’t fix the problem that started it, it is like having a patient that comes into the emergency room with a gaping wound and you put a band-aid on it. It’s not going to fix anything. You have to go to the underlying cause of the wound, fix that, and then fix the other problems with the patient. That is where our economy is. We have a lot of problems, but we need to fix the underlying cancer, and that is the housing crisis. Then you combine that with some tax cuts to stimulate the economy. If we are not giving small businesses incentives to create jobs, we're not going to find our way out of this appeared recession. In the Democratic bill, less than 3% of tax cuts are for small businesses, and that is just not going to cut it.

Jane: We will see what ends up in and what ends up out.

Ensign’s Fix Housing First Bill To Get Vote

Senator John Ensign, Chairman of the Republican Policy Committee, drafted an economic recovery plan that will help fix the housing market, create jobs and provide tax relief to middle-class families and small business owners. The bill, titled the Fix Housing First Act, is scheduled for a vote today.

“The underlying problem with our economy is the deteriorating housing market,” said Ensign. “In Nevada, just a few short years ago housing prices were through the roof. Now, we’re leading the nation in foreclosures. We need to address the root problem, and my bill does that by helping homeowners stay in their homes.”

Under Ensign’s plan, American homeowners would be able to refinance their current mortgages or finance the purchase of a new home for about 4 percent. On average, this means monthly payments would be $400 lower – a savings of up to $150,000 over the course of a 30-year loan. Estimates show that almost two-thirds of Nevadans could take advantage of this plan.

“People I talk to about this proposal immediately begin to do the math,” said Ensign. “This is real help that helps struggling families, and we do this in a much more fiscally responsible way because we removed the wasteful Washington spending that’s in the ‘so-called’ stimulus bill.”

Ensign’s plan costs half as much as the trillion dollar stimulus bill currently being considered. The Fix Housing First Act also includes a $15,000 homebuyer tax credit, tax cuts for the lowest tax brackets and tax relief for small businesses so they can help boost our economy. The lowest tax brackets would be lowered from 15% to

10% and from 10% to 5%.

“Let’s make sure that all taxpaying American families see immediate relief, whether they own a home or not,” said Ensign. “And we need to help small businesses because they are always the engine that drives us out of a downturned economy.

For small businesses, Ensign’s plan would eliminate capital gains taxes for start-ups and extend bonus depreciation, both helping to create jobs, stimulate spending and boost our economy.

“This legislation brings the emphasis back to where it needs to be -- on housing and targeted tax relief, not pet projects that bury future generations under insurmountable debt,” Ensign concluded.

Senator Ensign just spoke on the floor about his legislation to fix housing, create jobs and boost small businesses

As Prepared for Delivery

February 5, 2009

Mr. President, without a doubt, the collapse of the housing market is at the root of the economic crisis facing every single American. Just a few short years ago, in my home state of Nevada, housing prices were through the roof. If you were in the market for a home, you had to act quickly and plan on a bidding war. For a while, it seemed like there were more realtors and mortgage brokers than blackjack dealers.

The housing storm blew through many communities in our country at high force, and the aftermath has been brutal. If you don’t live in an area with a lot of foreclosures, let me describe the situation. You drive home from work to find one home—or several homes—in your neighborhood with dead lawns. That’s the first sign. Then the “For Sale: Bank Owned” sign pops up on the lawn. But the most painful part is when you find out how much that foreclosed house, down the street from yours, is going for. It is part of the reason that consumer confidence is at such an all-time low. When you find out that the biggest investment you have—the property that gives you leverage in this economy—is worth less than what you bought it for, it creates a sense of panic.

Left much worse off are the people who have lost jobs, been unable to pay their mortgages, and soon found themselves losing their homes. Nevada leads the nation in foreclosure rates, so these stories are a reality for too many of my constituents and too many families across the country.

If we don’t figure out a way to get this housing market back on track, nothing we do in the name of economic stimulus will matter. It has to be our number one priority. If we can fix housing first, bring security to homeowners and stabilize the housing markets and financial markets, our economy can begin to heal and grow again.

To do that, we absolutely must increase home sales and decrease foreclosures.

It sounds like an impossible task in light of the current economic climate. But, if we don’t succeed, our economy will continue to crumble under the weight of the failed housing market. We just don’t have a choice.

I have a plan that will jumpstart the housing market and breathe life back into our economy.

It’s very simple. A lower mortgage rate will provide more than 40 million creditworthy homeowners with what is basically a $400 a month tax cut for 30 years.

Here’s how it works. American homeowners would be able to refinance their current mortgages or finance the purchase of a home for between 4 and 4.5%. Homeowners who hear about this proposal immediately begin to do the math. You can literally see their eyes light up as they realize how this will benefit them.

It equals, on average, $400 a month in savings—a savings of up to $150,000 over the course of a 30-year loan.

That $400 a month will make a huge difference in the budgets of most families. And for many families who are barely hanging on, it could mean that they get to stay in their homes. Just think what your family could do with an extra $5,000 a year.

Banks would issue these government-backed, lower fixed-rate mortgages on primary residences. And they would be available until the end of 2010. The new lower rate would be based on the historic spread between the 10-year Treasury bill and the 30-year fixed mortgage rate.

The cost of the program is $300 billion, but economists believe it would actually be much less. It translates into $6.1 trillion in savings to homeowners over the course of the 30-year loan. We invest $300 billion and homeowners get $6.1 trillion. That’s an investment we cannot afford to pass up.

It’s also time to expand the current tax credit for first-time homebuyers. We need to encourage every creditworthy potential homebuyer to jump into the market, so we should expand the credit to all homebuyers and cover all properties, not just vacant or foreclosed properties. And we need to increase the credit to $15,000. This will encourage those who are watching and waiting to make the move and buy a home.

And we need to help people stay in their homes. The onslaught of foreclosed properties in Nevada and across the country is a significant hurdle to an economic recovery. They bring down property values and drag down consumer confidence. Privately securitized mortgages are at the core of the problem. These are mortgages that were originated without a guarantee from government-sponsored entities. They account for more than 50% of foreclosure starts, despite accounting for only 15% percent of all outstanding mortgages.

The Fix Housing First Act includes temporary incentives for privately held securitized mortgages to be modified. That would allow homeowners facing foreclosure to pay lower monthly payments and stay in their homes. It also provides temporary legal protection for those who do loan workouts in good faith. These two steps eliminate the economic and legal barriers that are currently preventing many homeowners from modifying their loans. This will have a huge impact on families who may be slightly under water on their loans but who are anxious to stay in their homes.

Unfortunately, more than 860,000 properties were repossessed by lenders last year. That means that nearly one million families lost their homes. It was easy, for a while, to blame irresponsible homeowners for taking risky loans and playing the system. But the cancer caused by the housing crisis has spread to every aspect of our economy: our financial markets, employment, the auto industry, retailers, and state budgets. The list goes on and on.

If we want to heal our economy, we have to start with housing. Mr. President, we have to fix housing first, and this proposal will do that.

But we also need properly targeted tax relief for American families and businesses that will put cash back into the hands of tens of millions of American households.

Let’s make sure that all taxpaying American families see immediate relief, whether they own a home or not. We can do this by reducing the lowest individual tax rates from 15% to 10% and from 10% to 5%. The average combined benefit of these cuts for middle-class families would be about $1700 for an individual filer.

We need to give small business a major boost. They create 80 percent of our jobs, and to ignore their role in a recovery is irresponsible. They are the engine of our economy and time and again they have pulled us out of a recession.

Extending bonus depreciation, eliminating capital gains taxes for start-ups and certain small businesses, and investing in broadband access are all measures that will spur job creation and help get this country back on its feet.

Finally, the Fix Housing First Act eliminates the laundry list of wasteful spending items in the current stimulus bill. The emphasis needs to be on housing and targeted tax relief not pet projects that bury future generations under insurmountable debt.

Mr. President, Americans are hurting right now. Many have lost jobs, many have lost homes, and almost all are losing hope in this economy. While they were supportive of a stimulus bill at first, they have grown more hopeless over Democrat attempts to spend their way out of this crisis. They understand that spending $1.2 trillion on programs that will do nothing to stimulate the economy is destructive and will only lead us into a deeper recession. The Democrats may be working on a job security plan for government programs, but we need a plan for American homeowners, workers, and businesses.

I challenge my colleagues. Let’s sit down and do this right. When we rush things through, we make mistakes. We should act quickly, but doing something wrong quickly, doesn’t make it right. Let’s join together as Americans, take good ideas from both sides, and do what’s right to fix this economy.

Additional Information on Ensign’s Fix Housing First Act