Oberstar confers with area constituents
U.S. Rep. Jim Oberstar, traveling to confer with constituents, said the resounding concern he's hearing is jobs.
The 8th Congressional District DFL incumbent and chair of the Committee on Transportation and Infrastructure was on the road the past four days, making stops on the Iron Range - home turf - with Walker, Nevis and Park Rapids on the itinerary.
"People who are working are concerned the economy is not rebounding quickly - or as quickly as they would like - and those who are out of work have been out for a long time, longer than in the past," he said.
"The extension of unemployment benefits helps those out of work continue to make their mortgage payments and food," he said of the House initiative four months ago. "That money goes back into the economy."
Home foreclosures, another issue that's drawing national concern, is an "intriguing issue" in that it's not the community banks, for the most part, that are foreclosing mortgages, he said. These are mortgages that have been acquired through online sources, he said.
"They were done without sitting across the table with a hometown banker, getting advice on payment schedules" and other issues, he said.
When the meltdown occurred, the integral value of the house began to slide and the value of the mortgage was greater than the value of the house. "And because mortgages were sold and resold there was a worldwide collapse," he said.
And that's the difference, he said, from previous recessions seen in the early '80s and '90s. "We didn't have this worldwide financial meltdown. We didn't have trillions of dollars of mortgages repackaged and resold.
"The task of repairing the financial damage is colossal," he said. "But it's being mitigated."
TARP (Troubled Assets Recovery Program), addressing the sub-prime mortgage crisis, was originally expected to cost the U.S. government $356 billion.
But the most recent estimates of the cost, as of April 12 is down to $89 billion, which is 42 percent less than the taxpayers' cost of the savings and loan crisis of the late 1980s.
While it was once feared the government would be holding companies like GM, AIG and Citigroup for several years, those companies are preparing to buy back the Treasury's stake and emerge from TARP within a year.
Of the $245 billion invested in U.S. banks, over $169 billion has been paid back, including $13.7 billion in dividends, interest and other income, along with $4 billion in warrant proceeds as of April 2010.
"The investments paid off," Oberstar said. This was meant to prevent the collapse of major institutions, he said. "And we now have financial reform legislation. It could have been a calamity. Now there's strict oversight of investment banking.
"But all that created a loss of seven million jobs," he said. When Obama was sworn in as President, the economy lost 750,000 jobs the first month, 650,000 the second month because of the financial industry collapse.
"We passed the stimulus legislation of $780 billion dollars, $300 billion of which was a tax cut for middle class.
He cited the numerous benefits realized through the American Recovery and Reinvestment Act, noting 1.6 million jobs have been created since Jan. 1 through the Department of Transportation, $587 million avoided in unemployment.
In Minnesota, 535 lane miles of highways and 64 bridges have been improved, with 11,000 construction workers employed.
"We put people to work, who pay taxes and leave permanent benefits," and it creates jobs in the supply chain, he said, noting there were 300 iron ore mine employees in January 2009. "Now there are 4,000 working in Minnesota."
The housing sector is still struggling; but we're seeing recovery in the automotive sector.
He admitted to being skeptical of Cash for Clunkers, initially. "But it opened the door for production," creating 55,000 new jobs in the automotive industry. The automotive sector affects one in seven jobs, including carpeting, one-third of the product manufactured for cars.
Overall, he said, the job picture is turning around, from the 650,000 lost in February 2009 to the 290,000 jobs gained in March.
It's not going as fast as many would like, he said, but it's not going backward, like 2008-09.
As chair of Transportation and Infrastructure Committee, he's hoping his measure to reauthorize funding for transportation projects, creating six million jobs nationwide, will gain congressional approval.
He's not optimistic it will gain the nod in this session, but he's hoping highways - which account for 10 percent of the gross domestic product - will gain funding approval in the near future.