With the passing of widely publicized and highly contentious health care reform legislation last week, congressional leaders must now refocus efforts to address the interrelated employment and housing crises which continue to impact millions of Americans.
While imperfect, there are benefits from health care reform, including providing health insurance and medical care to society’s most vulnerable populations. However, the heated, partisan battle for health care reform has effectively stalled solutions for more urgent economic issues.
Lawmakers’ obsession with health care reform has had a dramatically negative effect on the job and housing markets. Washington has taken its eye off the ball when it comes to the economy, and as a result, continuing record joblessness has remained unchecked, creating the greatest financial backslide since the great depression. A natural effect of this historic downturn is a tidal wave of defaults on existing debt, especially mortgages.
Employment is the cornerstone to financial recovery that legislators must address. Half of all real estate foreclosures are directly attributable to job loss, and 3.5 million people, 1.35 million of them children, are likely to experience homelessness this year. Existing programs, including the administration’s Housing Affordable Mortgage Program have also failed to serve targeted beneficiaries. Obama's announcement Friday that additional tools and resources would be added to HAMP was encouraging, but, and pardon the cliche, its time for the administration to put its money where its mouth is. To date, only about $22 billion of the $75 billion allotted to HAMP has been spent, and less than 170,000 of the intended 3 million to 4 million homeowners have achieved permanent mortgage modifications under the plan.
The bottom line is we won’t come close to reaching a recovery until the unemployment figures improve, but so far any progress has been paralyzed by the distraction of health care reform. Unless our leadership in Washington can address the true underlying causes of the recession, housing being key among those, the poor and middle class will continue to suffer and there will be no economic recovery.