Press Conference with Senate Majority Leader Harry Reid (D-NV), Senator Richard Durbin (D-IL), Senator Charles Schumer (D-NY), Senator Patty Murray (D-WA), and Senator Jack Reed (D-RI); Subject: The Economy

Statement

Press Conference with Senate Majority Leader Harry Reid (D-NV), Senator Richard Durbin (D-IL), Senator Charles Schumer (D-NY), Senator Patty Murray (D-WA), and Senator Jack Reed (D-RI); Subject: The Economy

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SEN. DURBIN: Thank you, Senator Reid.

The bipartisan economic stimulus bill was necessary. It was necessary to put spending power back in the hands of working families. The priorities of the Bush administration for too many years have been tax cuts for those at the highest income levels, and those who work and struggle from paycheck to paycheck and month to month needed a helping hand. And so that stimulus package, which was good coming out of the House, made better in the Senate, reaches more Americans and gives them the spending power they need to start to turn this economy around. That was absolutely necessary, but it isn't sufficient.

What was the catalyst? What was the cause of this slide into economic recession? It was the housing market. And until we address that, this fundamental industry in America, I don't think we're going to set this economy on the right track.

And so this initiative by the Democrats is an effort to try to push the bills that can make a difference. If more than 2 million Americans are facing foreclosure, we want to find ways to reduce that number, ways to allow people to keep their homes. About a fourth of them are going to end up in bankruptcy court.

And when they go into bankruptcy court in desperation, trying to restructure their loans, they'll put all the loans in front of the bankruptcy court, and the judge will take a look at every secured loan and say, all right, let's look at your salary; now let's look at what you can pay; maybe we can restructure this loan when it comes to the automobile, when it comes to this or that, to the vacation home that you own, maybe the farm that you own.

But there's one thing that can't be put on the table: the principal residence of the person filing bankruptcy. For 30 years now, we have prohibited the bankruptcy court from restructuring that basic mortgage on a person's home. There is no earthly reason for this. That law was written at a time when very few people went into bankruptcy court because of a mortgage foreclosure on their own homes. Those were 30-year loans with local banks that were usually worked out.

We live in a different world now. We want to give the judge and the court the authority to restructure that mortgage loan on a primary residence no lower than the fair market value. So we're protecting the mortgager, the person who is the creditor in the circumstance, probably even better than a foreclosure proceeding could protect them, and we're trying to slow down this march toward foreclosure that will bring down property values across America, including the homes of those who are dutifully making their monthly payments.

I think this is an important part of the package, and I'm glad that Senator Reid has included it, and I hope that our Republican friends will join us.

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