There are several important issues on the domestic and foreign fronts this summer. Domestically, the big issues are the jobs and economy, BP oil spill, immigration, financial reform, and the debt. International issues topping the list are Israel, Iraq, and Afghanistan.
Jobs and economy is number one because it is effected by all the other issues that follow. However, independently there are too many people that are long-term unemployed and we have no issue with discussing cutting or letting expire unemployment benefits and other programs that assist these people in surviving. These jobs have been lost after other issues created problems. The first stimulus did create or save some jobs. We, however, need to do more to support small businesses which create most of the jobs.
The downturn began bcasue of the burst of the housing bubble which was fueled by many government and non-government actions. The overarching action that created the environment for all that followed was the encouragement for all to own a home which accelerated under George W Bush's Ownership Society platform. This created the environment for the Federal Reserve to keep the interest rates too low for two long. The historically low interest and other pressures preceded creation of various designer loan products and lending to borrowers that it should have been clear if an actual income analysis had been complete would not have qualified for the loan. It should not have surprised anyone that under these conditions many people would default on their mortgages and that eventually this condition could potentially leak into the prime mortgages. It is impossible to approve a No Doc or NINJA mortgage and not expect that there would be a default when income, assets, and liabilities were not examined in the approval process or underwriting were ignored.
The issue that has yet to explode is the commercial real estate bubble. This bubble was also created by the low interest rates and the rush to build to many malls that are now empty because no business can afford to pay the rent. This saturation and pricing leads to less jobs for even unemployed individuals to claim.
There is also the issue that some long-term unemployed or underemployed individuals will stay in this status because employers have begun using credit checks to approve or deny job applicants., sometimes after two or three interviews. However, it is impossible to improve your credit score without a job that allows you to pay the bills and eliminate open collection accounts.
The BP oil spill is number two on my list because it is and economic, jobs, health, and environmental disaster. On the economic score it destroys tourism and seafood industries in the Gulf region. This leads to loss of employment or just a lack of available jobs because people are not coming to the beaches, the shrimpers can not cast their nets, and other seafood industry workers or those who depend on the industry, such as restaurants can not expect the money that usually flows from tourists. The final economic impact is the amount of money BP, which promised to pay all legitimate claims in full, will be required to pay, as they should.
The health impact of the spill will is already being felt because the volunteer workers that are assisting in the cleanup are already becoming ill because of the dispersants being utilized in the cleanup. These sicknesses will burden the health care system in the area and will subtract from productive economic activity because some of these individuals could potentially, although not likely, become disabled. Even if they are not disable and unable to work treating their illnesses could cost us much.
The full environmental impact of the spill is still yet to be determined. we know that to this point the oil has appeared on Dolphin Island off the coast of Alabama, where brownish-red oil and tar balls were collected yesterday. Florida is concerned that the oil slick will reach their shores completely destroying their tourism industry. Adding to this problem is that hurricane season began on 31 May. This adds to the trick of cleaning up and completing the relief procedure, which is supposed to continue into August. People on the East coast are concerned that a turn of the jet stream could bring the oil slick around Florida and up the coast, causing a wider disaster than containing it in the Gulf and thus making the problems associated more expensive and difficult to clean up.
The next issue is illegal immigration which is always a hot button issue, but even more so when the economy is in recession and jobs are not plentiful. One side argues that illegal immigrants take jobs from American citizens; while the other counters that they do jobs Americans will not take. In most cases it is simply that an American can not afford to take a job for less than a given amount of money, while the illegal can afford to because they, for example, will live together in groups in a house. There are other reasons that are apparent that enforcement is not forthcoming. Republicans tolerate, in good times, this flow of people to allow businesses less expensive labor. Democrats, on the other hand see this group of people as potential supporters and unions want more potential members.
The lack of enforcement has instigated the State of Arizona to enact a law that would require local law enforcement to enforce immigration laws. However, the law enforcement can only ask for the individuals papers if they have committed a civil wrong or criminal act. This law has blown the debate wide open. Republicans are quickly supporting the law and Democrats are quickly questioning and criticizing the law. The Arizona law enforcement community is divided between supporters and opponents of the law. The opponents are concerned that local law enforcement enforcing this law will drain resources and drive a wedge between the police and the community; through making crimes more difficult to solve.
The response from the national leaders should not be this division over weather the Arizona law is the right or wrong thing to have done. This action by Arizona should encourage the people and their leaders to debate proper reform of the immigration system including enforcement. There should be a Comprehensive Immigration Reform package enacted weather it be as one piece of legislation or a series of legislative initiatives.
The base for this package needs to be enforcement of current laws and more agents on the border and while we train the new agents the National Guard should assist in patrolling the border. There should also be technological methods to assist the agents and soldiers. This idea entails carefully thinking through the balance of human and technological enforcement strategies and determining the number of borer agents that we can realistically place on a 2,000 mile border. This includes discussing the funding for training, enforcement, and human and technological resources.
Secondly, we need to examine the role of state and local governments in relation to interior enforcement of the immigration law. This involves looking at the burden placed on the corrections system by illegal immigrants that commit crimes. The two programs in question here are 287g and the State Criminal Alien Assistance Program (SCAAP). In the case of 287g, designated law enforcement officers would be trained to perform immigration related law enforcement functions according to a memorandum of understanding signed by the State and the Department of Homeland Security. The SCAAP program guarantees payment from the federal government for Criminal aliens that are sitting in state correctional facilities. Funding is required for training and repayments to states.
A third issue is verification of citizenship status for employment, benefits administration purposes. The E-Verify system could be used to achieve this end. Employers should be required to check a job applicants work/citizenship status before a job is made and should also be required to check the status of workers already employed on the effective date of the law. The citizenship/work status check should be a part of the standard pre-employment screening. The entire screening would include citizenship/work status verification, background check, credit check, and drug test. If after completing the citizenship/work status check the employer finds that a potential or current employee is illegal and they continue employing that person or the hiring process they will be required to pay fines and repay any tax credits allowed for the particular worker. The worker who finds out they are illegal also has libility for a fine for breaking the law. The penalty for a company who is caught employing illegals will be to pay ten percent of its gross income for the year plus returning any tax benefits gained for the illegal new hires. For example, a company makes $1 million in a year. If that company after verification of status continues employing an individual they know to be illegal and continue with the hiring process for two others (individual a qualifies for the $2,400 Work Opportunity Tax Credit and individual two qualified for the $9,000 credit for hiring a long-tern TANF recipient. In this legal structure the total fine would be $111,400.
In the case above, one of the individuals was a TANF recipient for 18 months. The state that grants these benefits to illegals should have to repay the portion of the matching grant that they allowed to be received by the individual. This is occurring at a time when they routinely turn down verified American citizens. The individual received $5,600 in benefits during the 18 months that they were not employed. This occurred because the state administrator did not verify or chose to ignore the verification of the person's status as illegal which had to be verified for the employment placement component of the program. In this case the taxpayers of the state are on the hook for $2,800 in benefits to the illegal immigrant. The state must pay the matching $2,800 back to the Federal government. The individual's fine will be $5,600 for the immigration violation. The state administrator who allowed the benefits would be fired from their position and would owe a personal fine and serve jail time.
State schools and community colleges will use this tool as a determining factor in which tuition rate to offer the child of an illegal immigrant. In the first year they must charge the out of state rate. This means that the state school must either require the student or student's family to pay the difference between in state and out of state tuition or can apply to the federal government to pay the difference.
In the case of the individuals they must pay a fine, return to their country and register with the consulate, and learn English. They must pass all background checks given to potential citizens. This means they will not be violent criminals, white collar criminals, a drain on our system. They must go to the end of the line which means if the waiting list is 2 years long they are the last entry and it will take two years to go through the initial phase.
Then there is financial reform, which is being debated in the congress. There need to be some prudent changes, including more consumer protection and resolution authority, to the financial regulatory structure. I understand that we want the reforms yesterday and before the election and I have said in the past that this issue should have been tackled last year. we can pass legislation creating a Consumer Financial Protection Agency, OTC derivatives, and resolution authority. we also need to do something about the credit rating agencies. However, any other tweaking needs to be completed after the Financial Crisis Inquiry Commission completes its work and we carefully examine the final report.
Some of the changes can take place from within absent new regulation. Banks and lenders can decide to implement stricter underwriting standards fro loans and not originate No Doc or NINJA loans. Bankers and lenders need to fully understand the financial position of the potential borrower and recommend the proper product or refuse to send the application if there is not a demonstration that borrower may default. This stands for commercial loans also. There needs to be collateral and sufficient resources to repay the loan. Cash flow based-lending should not occur except where there is a demonstration that there is consistently enough cash flow to cover the loan or enough in reserves to make payments during hard times. Credit rating agencies could do as Moody's has done and complete an internal analysis and implement changes.
The concern over the national debt needs to be dealt with as soon as possible and bridges the two sets of issues: domestic and international. Domestically, we need to be willing to honestly discuss all budget items. There can be no sacred cows: not defense and not entitlements. Cut programs that are not needed or do not provide enough of a benefit to continue. Discuss prudent reforms and enforcement for entitlement programs. Eliminate duplication and waste, fraud and abuse. Learn to discuss the true costs of military operations and foreign aid. This would also be a fine time to carefully examine and reform the budgetary process.
Turning to international issues, Israel poses the most challenge to our foreign policy initiatives. There needs to be an open and honest civil discussion regarding how to best deal with Israel. They do have a right to exist and to self-defense, but that does not necessarily include boarding a humanitarian ship and inciting violence. Israel realizes they created a public relations nightmare and the importance of Turkey being critical can not be understated. We need to condemn the act of blockading those who have humanitarian intent. The flotilla people did not allegedly take up arms until they felt threatened. There has got to be a better way to deal with this issue that we caused by wanting to spread democracy. The people of the Palestinian territory elected Hamas in that election and as a result we decided not to recognize the government. The reason people affiliated with Hamas received enough support to get elected was because they were providing food while Western powers sat back and allowed Israel to carry out the blockade.
The other large international issue which are also budgetary concerns are Iraq and Afghanistan. These two military operations are draining money form other area of the economy. It is fair to also criticize the utility of continuing the operations, but we also can not just pull out all at once. We need a plan for exit from these contingencies and then think about how much money we need to repay. I dare suggest that the government is responsible for keeping watch for external threats and should start building up the proper forces when they first see a threat as well as preparing the American people and international community for the possibility of war so all have a chance to act accordingly to prevent the situation from escalating and then we know there is absolutely no other way and are ready we go to war. This action needs to be supported by the American people.
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