A Weekly e-Newsletter from
Senator Johnny Isakson (R-GA)

June 20, 2008

Dear Friends,

The price of gas continues to be the most pressing issue facing my constituents, and I wanted to share with you an article I wrote that was published in The Atlanta Constitution on June 13, 2008, in which I lay out what I believe needs to happen to bring some relief. Click here to read it: http://www.isakson.senate.gov/opinion/061308ajc.htm.

I believe it is in America’s environmental and geopolitical interest to reduce carbon emissions, and am working hard to expand incentives for the expansion of renewable energy production and for the development of renewable fuels. I believe strongly that when we reduce our use of oil, we improve air quality and limit the amount of revenue flowing to our adversaries such as Iran and Venezuela.

I believe the only way to accomplish a real reduction in our use of oil is to pursue every alternative at our disposal, and that nuclear energy must be one of the alternatives we pursue. During the climate change debate in the Senate, I planned to offer an amendment to add nuclear energy to the climate change legislation. The amendment provided for incentives for pursuing the development of nuclear energy in the United States.  I also planned to offer an amendment on conservation easements that would provide tax credits for private landowners who agree to keep their land undeveloped. However, Majority Leader Reid refused to allow a vote on my amendments or any other amendments. The legislation will likely not come up again this year. 

Foreclosure Crisis
On Thursday, I spoke on the floor of the Senate about the American Housing Rescue and Foreclosure Prevention Act of 2008, which seeks to address the record number of foreclosures across this country. I am still pushing to include a tax credit for homebuyers in an effort to spur more folks to buy homes and to lower the inventory of houses on the market. This approach worked in 1975 when we had a similar large inventory of homes on the market, and I believe it will work again today. Giving folks an incentive to buy foreclosed and new homes helps them and helps their neighbors whose home values are suffering because of all the homes for sale in their communities.

The FHA refinance program in this legislation is not a bailout for the lenders. This program allows for the refinancing of a troubled subprime loan in which the payoff amount is more than the value of the house because of the decline in the marketplace. For it to be refinanced, it requires the lender to take the hit between the amount owed and the market value, but the homeowner stays in the house and the values in the neighborhood stabilize. We are doing a good job of putting an end to what is a desperate downward spiraling in the housing market that is affecting the economy.

We hear a lot about bailing out lenders and lenders being bad guys.  However, the people who originated these loans – Moody’s and Standard & Poor’s – underwrote securities that were bought around the world by investors that paid a high dividend but were on very risky subprime credit. That is where the fault lies – with Moody’s and Standard & Poor’s and with the investment banking community.  This bill doesn’t bail anybody out, but it incentivizes buyers to come back to the marketplace. It provides liquidity to refinance loans that are underwater. It motivates, inspires, and provides liquidity in the marketplace through Freddie Mac and Fannie Mae that does not exist right now. Failure of the Congress to act, in my judgment, is going to cause us to have a protracted and devastating economic decline resting solely on the fact of the decline in the values of homes in America, the increase in the number of foreclosures, and the lack of liquidity in the lending market.

Supreme Court Ruling on Detainees
Last Friday, the Supreme Court of the United States ruled in a 5-4 decision that the detainees being held at Guantanamo Bay have the constitutional right to contest their detention before federal judges. The Court ruled that the constitutional protection guaranteeing a Writ of Habeas Corpus to prisoners applies to them and that Congress’ enactments provided an inadequate substitute.  As a result, they can take their case to federal court.

I am a firm believer in the Constitution of the United States and believe that the laws set forth must be followed. However, I believe the people being detained at Guantanamo Bay are the enemies of our nation and were captured in battle in the worldwide war on terror.

What’s on Tap for Next Week?

The Senate will continue debating the housing legislation.

Sincerely,
Johnny Isakson