Horizon, Host: Ted Simons

February 19, 2009


Host: Ted Simons

Representative Mitchell


  • U.S. Representative Harry Mitchell talks about the economic stimulus plan and other important national issues.
Guests:
  • Harry Mitchell - U.S. Congressman, Arizona (Dem)
Category: Business/Economy

View Transcript
Ted Simons
>>It has been a busy week with economic news. in addition to the president's housing plan unveiled yesterday in Mesa, he signed the $787 billion federal stimulus plan into law on Tuesday, and today, the dow closed at its lowest level in more than six years. we have two of Arizona’s congressmen on tonight to talk about the economy and other issues. later in the program, we will speak with Republican Jeff Flake, but first tonight, Democratic congressman Harry Mitchell joins us, and congressman, thanks for being here. sorry about the lights and electricity and every, but we will make it through.

Harry Mitchell
>> Absolutely.

Ted Simons
>> Let's start with the foreclosure plan. Your thoughts on what the President said yesterday in town.

Harry Mitchell
>> The president was received very well. he made a good statement. he was very articulate but the problem in Arizona is huge. we're the third largest foreclosure state. the highest foreclosure state in the nation. our housing prices have gone down, plummeted. I’m not so sure until we see all of the details. he said he was going to release more details by I think march 4th. so to be wholly in favor or opposed to what he had to say, I’m glad he came and focused on foreclosure, because this is the place to do it because of the high foreclosure rates but he's giving hope. and we need to see what it is that he's talking about in terms of helping the homeowner.

Ted Simons
>>There's concerns that the gist of what was presented involves responsible folks, paying to bail out folks who weren't all that responsible at all. You respond.

Harry Mitchell
>> First of all, I understand that concern. but let me tell you. as home prices fall and there's more and more foreclosures, everybody's home prices are falling and that mean the amount of equity you have in your home is falling. It's a responsibility for all of us to be involved and stop the drop in home prices. you know, I -- I’m one who has been responsible. I’m not facing foreclosure, but I think we've got to stop this drop in the foreclosures because it's affecting all of us. It's a nationwide and a neighbor problem.

Ted Simons
>> Does it send though the wrong message. That once this is cleared up, should it get cleared up, to folks who might just go on out there and lenders and borrowers both, make the same mistake all over again?

Harry Mitchell
>> I hope we don't do that. I hope we don't reward those who bought more than they could afford and lenders that misled borrowers. We've got to make sure that we have regulations in place to keep that from happening.

Ted Simons
>> How do you separate the unfortunate, those who have lost their jobs, these sorts of folks from the unscrupulous? Those who, we were referring to earlier.

Harry Mitchell
>> I think you'll find not everybody will be saved by any plan that comes out. there are going to be those who lose their homes. But those who have jobs and can make the payments under a restructured plan, those are the ones we're trying to help. and it won't be all of them. It's estimated anywhere from 7 million to 9 million people face foreclosure. this plan, whatever it is, may only help three to four million. We've got to start somewhere and we have too many people losing their homes and forcing the price of homes, which affects everybody and local governments who depend on property taxes and you and I, whoever, equity in our homes, that affects us, we may not be able to borrow for what we need if we lose our jobs. They can't sell or downsize. I think the lower home prices affects everyone and we've got to do what we can to stop that.

Ted Simons
>> One more point on this. The cram-down loans, which is a new term that we are all getting familiar with, is popping up in this plan as well. The idea that a bankruptcy judge can go ahead and write down loans. The concern is you do enough of that and the interest rates for you and me go shooting up. concerned?

Harry Mitchell
>> Absolutely I’m concerned and I’m not so sure -- we need to see what's in the plan before we do that. to have a wholesale change in the foreclosure is wrong. We need to be responsible in that but I think anything that causes the interest rates to go up for the rest of us is not good.

Ted Simons
>> Let's get to the stimulus plan, which is a big deal. Were talking billions of dollars. Why did you vote yes?

Harry Mitchell
>> I think we're in a situation that's unparalleled since World War II. It's a very drastic situation, a real crisis and we need to act.

Harry Mitchell
>> It's said there's 10,000 homes facing foreclosure or foreclosure a day. people are losing thousands of jobs every day. People are losing their 401ks and savings and we've got to act. In this particular bill, and the crux of it is to save jobs. and it's estimated it will save or keep jobs up to 70,000 Arizonans. It’s going to add $60 billion in infrastructure. these are jobs and that's what is important about this bill. The important thing is saving jobs.

Ted Simons
>> And to that end, critics will say what the bill does, the plan does, is provides work. it does not make for jobs. Work that will come and go quickly as opposed to making jobs in the private sector that be there for a long time.

Harry Mitchell
>> 90% of the jobs will be in the private sector with this bill. 90% in the private sector. And these are investments. When you look at the investment in the infrastructure, these are investments. You walk around this campus here at ASU and you'll find that people are still using buildings that were built during the depression. I taught at Tempe high school. went there. how many years has that building been used? how many generations gone through that? we're not talking just about make-work by government. We're talking about private jobs and I think that investments that you see -- the Solano project in Gila bend where we are talking about 1,500 to 2,000 jobs, an investment of almost $1 billion in economic activity after that. this is an investment. And I think that's an important thing to keep in mind because we're concerned about jobs.

Ted Simons
>> Congressional budget office says it will be 10 years before we start to even pay off tarp, much less this particular stimulus. who is going to pay for it. and is it generational theft, because it's going to be paid off by folks way down the line.

Harry Mitchell
>> It's generational investment. We're investing in healthcare. investing in education and infrastructure that will be around. we're trying to do what we can. not only to get out of this mess we're in right now. but also to invest in the future and I think this is -- when you see the investment in I.T., information technology, and the other areas, which is the future of the state. it's not just spending. I might add when you talk about the almost $800 billion fund, 40% is tax credits. and tax relief. So it's not all spending. it is a mixture of tax relief as well as spending or investment.

Ted Simons
>> But why -- for those who say there's so much spending here, the spending in and of itself will bog down the economy, you say?

Harry Mitchell
>> I say that's not true. and remember, this is for two years. in two years, this spending stops, so if it does add to the inflation of the problems or bogs down, I think we'll take a look at that time and hopefully we're out of the mess in two years.

Ted Simons
>> Are you comfortable, though, with so much money coming out of government right now?

Harry Mitchell
>> Obviously we'd like to have left government spending or less government investment. but it's not everything that I wanted in this bill. I voted for a couple -- in fact, I sponsor a couple of amendments to cut taxes even more, particularly with the pay raise of the congressman. But also the tax on capital gains which I think would be a stimulus in itself. People who have money, if they can be assured that the investment they make will not be attacked at a higher rate later on they may be investing. It's not everything I wanted. There should be more tax cuts included in there.

Ted Simons
>> You voted for it and your party was behind it. Why are there things for global warming, golf course renovations and those things? Wouldn't it have been easier to get bipartisan support to get rid of that stuff?

Harry Mitchell
>> Everything I’ve seen, they're driven by formulas and grants. Formulas and grants. There's no earmarks in this program at all. So what they are, their formulas or grants that people apply for, governments apply for, for particular program. to say it's going to be a particular thing like a golf course, that's not going to be in there. You cant find those in there they’re grants and formula driven. all of them are that way.

Ted Simons
>> Going after congressional pay raises, why are you so strong on this?

Harry Mitchell
>> I introduced a bill with congressman Ron Paul to halt the pay raise in 2010. when people are losing their jobs and getting cuts in their salary, no one is getting pay raises and why should congress? as representatives of the people, hearing what our constituents are saying, they're hurting and we're setting the wrong tone if we accept a pay raise. I’m might say that I’m very pleased we had over 110 cosponsors on this bill. as a result, the bill didn't go anywhere except the leadership has said they'll include in the next appropriation bill a statement that we will not take the pay raise. so we feel very good about that.

Ted Simons
>> You've been around Washington enough though to look around the chamber there you get what you pay for and you might get better folks back there. That's the argument. You get better folks, you get better pay.

Harry Mitchell
>> The last two pay raises we had, '09 and '08. I returned the money to charity. I want it make a point for that. when our economy is in the shape it is right now -- I’ll tell you our nonprofits, charities are hurting. people aren't giving. they need help. many times they fill the gap. We're talking about food banks and shelters and talking about a host of nonprofit groups which I hope people will support.

Ted Simons
>> All right. congressman, it's great to have you here. Sorry the lights aren't working and the power is out. But we had a great discussion and a good conversation, thank you for joining us.

Harry Mitchell
>> Thank you, Ted.

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