The president's action would overhaul and expand the program for mortgages covered by Fannie Mae and Freddie Mac, potentially putting an extra $2,500 a year into the pockets of 1 to 2 million families. In the past, the HARP program was available only to people who owed less than 125 percent of what their houses were worth after the housing bubble burst.
With the new rules, HARP will be open to anyone whose house is underwater as long as they haven't missed any mortgage payments in the past six months. Depending on which expert you talk to, that would add $2.5 billion to $7.5 billion in annual consumer spending, which would be spent on good and services, and stimulating the economy.
No way will this fix the crisis of falling home sales or save the homes of the 3.5 million borrowers already in foreclosure or seriously delinquent in their payments. Nor will it make a dent in the unemployment rate. But it's something. And so is the program that Obama is expected to announce today, which will aid veterans to train for work in the health-care industry. And so is the program Obama is to announce tomorrow that will revamp the rules on student loans and lighten the crushing burden that many young people are carrying.
By themselves, they are only small steps toward finally turning away from the phony obsession with the deficit that has wasted nearly three years to what people really care about: creating jobs. Putting people back to work may cost money in the short run, but is more effective at reducing the deficit in the long term: People with jobs don't need unemployment insurance or food stamps and contribute to government revenue through taxes.
A few weeks ago, Senate Republicans unanimously filibustered Obama's $447 billion jobs bill. Last week, they also blocked $35 billion to states that would have saved the jobs of teachers and first responders. The White House vows that if Congress won't act, the president will. We just wish it hadn't taken so long for Obama to see that Congress isn't going to act. Or to understand just what Republicans can and can't wait for.
