President Barack Obama is venturing out of the White House on Tuesday for a Western swing that will see him sign into law the $787 billion stimulus package and roll out a plan meant to keep struggling families from losing their homes.
The two-day trip to Denver and Phoenix reflects a decision by the president to escape the Beltway at least once a week in hopes of staying in closer contact with ordinary Americans. The visit also taps into Obama’s political strength, placing him in front of supportive crowds eager for any financial relief the stimulus will deliver.
The president is to sign the stimulus bill Tuesday in Denver, then announce details of a plan to avert home foreclosures Wednesday in Phoenix.
“Denver is emblematic of the crisis that America’s economy is facing, but also of the benefits that American communities can see from this recovery plan,” said Bill Burton, a White House spokesman. “A lot of middle-class families will be able to take advantage of the tax cuts in the plan. Arizona is a place where the housing crisis is most felt.”
Last week Obama traveled to Elkhart, Ind., and Ft. Myers, Fla., for town hall-style events intended to pressure Congress into passing the stimulus bill. Recognizing that congressional Republicans were gaining traction in the debate, Obama aides scheduled the trips to refocus attention on people most in need of the stimulus.
In the Denver area, unemployment has climbed sharply. The jobless rate stood at 6.3 percent in December, according to preliminary data compiled by the Bureau of Labor Statistics. By contrast, the rate was 4.4 percent the year before and 3.9 percent in December 2006.
In using Arizona as the backdrop to announce his housing plan, Obama is choosing a state hit hard by foreclosures. In January, more than 4,500 homes in Arizona were repossessed, third most in the nation, according to RealtyTrac, a company that collects foreclosure data. California ranked first last month, Florida second.
Obama has dropped hints about the broad outlines of his housing plan, estimated to cost $50 billion to $100 billion. In Indiana last week, he said he would push for a new law to allow judges to rewrite the terms of mortgages for homeowners who land in bankruptcy court.
Without such a law, people are being forced into foreclosure “who potentially would be better off, and the bank would be better off, and the community would be better off, if they’re at least making some payments, but they’re not able to make all the payments necessary,” Obama said at the event in Elkhart.
The next day in Florida, Obama outlined an arrangement in which banks would accept lower payments from homeowners in return for an equity stake once housing prices recover.
A congressional Democratic aide said Monday that there will be two pieces to Obama’s housing plan. One will involve changes in law that can be made by only Congress — such as empowering bankruptcy judges to restructure mortgages. The other will involve actions Obama can take by executive fiat.
Fixing the housing crisis is nothing that can be done in isolation, experts said. Obama also needs to create jobs and stabilize the financial markets, steps that will help improve the broader economy, for housing prices to rebound, they said.
“Job losses are most damaging to the housing market, so taking on this challenge in the face of continuing job losses in the months ahead will be very difficult,” said Nicolas Retsinas, director of the Joint Center for Housing Studies at Harvard University. “It’s pretty clear that standing on the sidelines as a spectator — which might be a harsh criticism of government over the past year but is not too far off the mark — certainly didn’t do the job.”
Obama’s appearance in Denver is a coda to the first major legislative challenge of his tenure — the stimulus plan. While it may take months or even years to see if the stimulus worked, the political reverberations already are being felt. Obama won, but the victory was messy. He got only three GOP votes in the Senate, none in the House. Even some Democrats are complaining about a process in which Obama’s priorities seemed subordinated to influential figures in Congress.
That Obama is visiting two important states on the electoral map may not be an accident. He won Colorado in the 2008 election, picking up a state that had voted for George W. Bush four years earlier. Obama lost Arizona to Republican John McCain but was at a disadvantage because that is McCain’s home state. The president would like to win both states in 2012.
———–
pnicholas@tribune.com
Stimulus bill, stem to stern: Click to get a look at how the $787 billion measure evolved at chicagotribune.com/arra
