Obama’s Forthcoming Financial Plan to Include Mortgage Help

In a weekend address, President Barack Obama promised to act with a “sense of urgency” to meet the economic challenges, alluding to the pending release of a new program to stabilize the financial system. “Soon my Treasury [Department] secretary, Tim Geithner, will announce a new strategy for reviving our financial system that gets credit flowing to businesses and families,” he said in his weekend address. “We’ll help lower mortgage costs and extend loans to small businesses so they can create jobs. We’ll ensure that CEOs are not draining funds that should be advancing our recovery. And we will insist on unprecedented transparency, rigorous oversight, and clear accountability — so taxpayers know how their money is being spent and whether it is achieving results.” Unnamed sources told the Wall Street Journal last week that a revamped financial bailout could top as much as $2 trillion in additional spending to restore the banking system’s vitality and get credit flowing. The funds would come in excess of the $700 billion already granted through the TARP, as well as the $800 billion-plus economic stimulus package circulating through Congress; the House has passed its version of the bailout legislation, designed to stimulate spending and economic growth through a combination of tax cuts and government spending programs, all constructed with the flailing financial market in mind. In his address Saturday, Obama urged the Senate to pass the House’s financial stimulus bill, which was passed by the House last week in a Democratic majority vote and which aims to save or create more than 3 million jobs over the next few years. The American Recovery and Reinvestment Act of 2009, as the bill is called, includes a change to the $7,500 first-time home buyer tax credit previously implemented in Housing Recovery Act of 2008. The new change would remove the requirement that the buyer repay the tax credit over 15 years, making it a tax incentive for anyone buying a home as a primary residence and who has not owned a home in the past three years. Even with the home buyer incentive, the government spending programs and tax cuts inherent in the bill, Obama acknowledged in his weekend address that the “economic recovery will take years — not months.” “No one bill, no matter how comprehensive, can cure what ails our economy,” he said. “So just as we jumpstart job creation, we must also ensure that markets are stable, credit is flowing, and families can stay in their homes.” He also expressed faith in the American people to have patience while they wait for the effects of the recovery act and — in the more short-term future — the Senate to recognize the merit of the act and pass “the strongest possible bill” for Obama to sign. Write to Diana Golobay at [email protected].