Press Conference with Sen. Schumer (D-NY) on Response to President George W. Bush's Speech on the Economy
Statement
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SEN. SCHUMER: (In progress) -- and as long as the president stays in his ideological straitjacket and says that we're not going to deal with the problems caused by this economy, we're not going to get much better.
And so the president's speech was completely disappointing. We have a crisis in confidence in credit. Credit is confidence. Credit is the ability of people to believe that what they're buying will be worth something, and when there is a crisis in confidence of credit, you need the federal government to do things to reassure people that things will get better. And yet when the president said that everything is fine, when the president says he will not do simple things like deal with the foreclosure crisis, he's not going to make the economy much better.
Even today Mr. Bernanke disagreed with the president. The president said we should allow the large number of vacancies in housing that are caused by foreclosures to remain. Mr. Bernanke said we ought to do something about it. We in the Senate agree with Mr. Bernanke, and that's why we've proposed a housing program that deals with the bull's-eye of this crisis, which is foreclosure. Things are worse now because the president's proposal are always a day late and a dollar short. The kinds of things we were calling for nine months ago he's beginning to call for now, but his reluctance to roll up his sleeves and deal with this crisis stands in the way of any kind of real recovery.
The bottom line, it seems as if the president is on a different economic planet than most Americans.
It seems that the president is on a different economic planet than most New Yorkers. We've heard the same speech we've been hearing for months, but on a very different day.
I think that's -- yeah. I think I now will answer -- I just want to make sure that I've made the points I want to make. Leaving anything out? Nope. Go ahead, questions.
Q Senator, how much do you think that the -- this whole of -- the war in Iraq, the war on terrorism, is it taking a toll on the economy? What -- do you agree? What component is that of the downturn?
SEN. SCHUMER: Well, I think what most Americans see is the president regards the number one priority in this country as the war in Iraq. Most Americans regard the number one priority as the economy. And the White House continues to focus resources, energy, time on Iraq when they should be spending far more time dedicated to our economy.
Q Senator, Karen James with CNBC.
Would you comment, please, on a bailout Bear Stearns received by the Fed, and J.P. Morgan Chase?
SEN. SCHUMER: Yeah. Again, the bottom line is, credit equals confidence. And because financial firms have to refinance every day, if people lose confidence in credit, we're going to have trouble beyond Bear Stearns -- in most financial firms. And so there has to be a solution.
The temporary solution that the president talked about today is not going to solve the problem -- sorry, the temporary solution that the Fed implemented today is not going to solve the problem. Until people start gaining confidence in credit -- and that starts with dealing with the mortgage crisis and the foreclosures and the parade of horribles that emanate from them -- things aren't going to improve. So this is sort of a temporary band-aid that doesn't get to the heart of the issue, which is the lack of confidence in credit.
Q Senator, did you have any idea that this was coming? And two, do you expect that there might be other large firms that might need similar bailouts?
SEN. SCHUMER: Because financial firms have to refinance, often every night, every week, every month, when there's a confidence of -- when there's a crisis in the confidence of credit, it can spread even to firms that might be in fundamentally good shape. And the problem that this administration has, above all, they have not contributed to any confidence in the economy and in credit. They have not contributed to the view someone's in charge and knows what they're doing.
In fact, the president's speech today is going to make people less confident, because he seems to be talking a totally different tune than all the economics, whether you look on Wall Street or on Main Street, seem to be indicating.
Q Senator, you just declared that we're in a recession. We had a similar debate about seven years ago. And I wanted to bring up something you said at the time, which was that a president should not be telling the American public that the economy is sputtering or tanking or heading into a recession without good reason. You went on to say that the president should stop talking down the economy.
What's changed in seven years that that advice no longer applies?
SEN. SCHUMER: There's a totally different economic situation today than seven years ago. Because you have a housing crisis that is deep and you have, that's emanated out from that, not only a decline in consumer spending but more importantly a crisis in the confidence of credit. And if people don't have confidence in credit, and whether you be a student, a homeowner or a small business, and you can't get loans, that will deepen and widen the recession. We're in a far more serious place today than we were seven years ago.
Q So you're not talking down the economy.
SEN. SCHUMER: The economy is talking down itself.
Q On the solution to the mortgage situation, the Republicans have offered -- (off mike) -- one, keeping people in their houses but two, also trying to increase liquidity to get houses bought up, not just by state and local government but by private investors and individuals.
Do you think that's appropriate, to try and work on both --
SEN. SCHUMER: Jawboning is fine, but the solution that Secretary Paulson has proposed, both six months ago and now, is not enough and it's not working.
Q Not the secretary but lawmakers here are talking about tax credits for people who buy --
SEN. SCHUMER: Look, we would -- the kind of proposal, made by Johnny Isakson and others, we'd certainly entertain. And up to now, Mitch McConnell has prevented the bill from moving forward.
Harry Reid has said, you want to do amendments on housing, such as the Isakson amendment, we'd love to have a debate on those and a vote and we'll let the chips fall where they may. The Isakson amendment might well pass. I think it's a good idea, although I'd like to see certain parts of it modified.
But thus far Senator McConnell has prevented us from moving forward. And the first thing we're going to do when we come back is housing legislation.
And I hope and pray that the minority here, the Republican minority, will let us move forward and debate it. They'll offer their amendments, we'll offer our amendments, and we'll go forward.
Okay. Thank you --
Q Senator?
SEN. SCHUMER: Yup?
Q If I could ask you -- (off mike) --
SEN. SCHUMER: Okay. Yeah. We'll take this as the last question because I got to catch a flight.
Q I'd like to ask you, there's so much concern about Republican filibusters -- (off mike) -- legislation. As you look out over the landscape on this day right now, what do you think the chances are that you can pick enough seats to have a 60-seat majority in the Senate? Is that realistic? Do you get close but not there? Give me, if you could, an assessment of that.
SEN. SCHUMER: You'd have to have every star aligned in the right direction to pick up 60 seats. On the other hand, we're feeling very optimistic in many, many seats throughout the country.
The bottom is, the public wants change. They see the economic problems we have. They're unhappy with the continued direction in the war in Iraq. And they want change. They know that Democrats are trying to change things away from the Bush direction, and the Republicans in the Senate are just blocking every attempt to do that and that's hurting them. So every day I think we gain, and I expect we will pick up a significant amount of seats. It's too early to say how many.
Thanks, everybody.
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