Tony Payton Event

Rep. Tony Payton Jr. has been inviting me to events for several months but scheduling conflicts seem to get in the way.  Yesterday I was able to piggyback his with the debate between Rep. Babette Josephs and Gregg Kravitz.  Tony held a campaign fundraiser at Devil’s Alley on Chestnut Street in Philadelphia and he was introduced by attorney Scott Reid.  Tony is one of the good, young State Representatives in Harrisburg.

Bryan Lentz Addresses Young Professionals

It’s been a very busy week chock full of events.  Already I’ve rolled 600 miles on the old car and I’ll be in Philadelphia for a third consecutive day to cover an event with the Secretary of Commerce this afternoon.  Wednesday Congressional candidate Bryan Lentz held an event with young professionals at The Warwick Hotel.  Bryan is running for Joe Sestak’s seat in the Seventh Congressional District.  He was an original candidate for this seat four years ago then opted to run for the State House when Admiral Sestak stepped up.  After serving two distinguished terms in Harrisburg Bryan is running to succeed Joe.  I interviewed Bryan in early December (not for the blog) and he’s not only a very nice guy but a true progressive.  Pat Meehan was the U.S. Prosecutor in Philadelphia for George W. Bush, John Ashcroft, Karl Rove and Alberto Gonzales.  These “Loyal Bushies” only survived in their positions if they toes the White House line and prosecuted Democrats.  This enabled State Se. Vince Fumo a legitimate defense to corruption charges and deeply tarnished the reputations of the prosecutors and the Justice Department.

There is a clear choice in the 7th CD this year between a man of integrity, a former soldier in the Army Rangers, and a Loyal Bushie.  Bryan is introduced by Gaetano Piccirilli in the video:

Today’s Events

Things are picking up as we near the May 18th primary election.  There are scads of events and though I’d like to cover all of them it simply isn’t possible.  I was in Philadelphia yesterday for a Bryan Lentz event at The Warwick (the video is uploading now) and hosted Democratic Talk Radio this morning with guest Mike Horton who is running for State Representative in the 131st District around Allentown.  Today I go back to Philadelphia for two events, one for Rep. Tony Payton Jr. and the other a debate between Rep. Babette Josephs and Gregg Kravitz.  It’s a big state with lots of races.

How Republican do you have to be to be a Republican in Florida?

If you’re Charlie Crist, the current Florida Governor, apparently a hell of a lot more Republican than he already is.

Poor Charlie is set to go Independent as he runs for the U.S. Senate.

The GOP appears to be embracing his GOP opponent Marco Rubio who is the new darling of the tea-bagger movement despite being caught up in a federal investigation into alleged credit-card abuses by top Florida Republicans (color me shocked)!!

It’s no surprise that the GOP keeps moving to the right. There seems to me less and less room for a “moderate” Republican in the Republican party.

I have wondered, for some time now, in, in a hundred years or so, we won’t have 2 Americas…a “Conservative” America and a “Liberal” America.

More fun in the south.

Sestak Hits Specter on Economic Votes

The problem with switching parties after 29 years is that all those votes come back to haunt you and Joe Sestak is hanging Arlen Specter with his Republican voting record in the U.S. Senate.  Darlin’ Arlen was Snarlin’ Arlen towards Democratic legislation before switching parties a year ago today.  The Republican alliance with Wall Street versus Main Street is nothing new and Specter voted for the laws which aided in deregulating the financial industry and which crashed our economy:

“As we emerge from the brink of economic collapse, we must restore the market safeguards that were dismantled as Arlen Specter supported the failure of oversight, accountability and transparency that permitted the Wall Street excesses that led us into this crisis.

“Now, with the Senate unable to repair the damage done by Specter and his Republican colleagues, the Senator is doing everything he can to divert attention from his record of:

   * Voting to remove important safeguards, such as the Glass-Steagall Act, which would have protected Americans’ savings from financial collapse by maintaining a wall between investment and consumer banks.

   * Casting a critical vote to pass the Enron Loophole and to exclude derivatives from regulatory oversight. [HR 4577, 6/30/00]

   * Voting against “cramdowns,” stripping a key provision from the Helping Families Save Their Homes Act that would have saved homes by empowering bankruptcy judges to reduce principal and interest rates for homeowners in bankruptcy [SAMDT 1014, 04/30/09]

   * Having, under his watch, Philadelphia lose employment to the point that the city now has fewer jobs than any other time in modern history.

“Arlen’s former Republican colleagues are now busy filibustering this necessary financial reform bill, and he is doing absolutely nothing to stop this. That is why today I am urging Arlen Specter to call on his colleagues to support this common sense financial reform to protect the savings of hardworking Americans.”

Congressman Sestak will note the anniversary of Specter’s big switch tonight in Washington with what he calls “a major speech.”  He intends to illustrate how his life and values shaped his political ideology as compared with the way the incumbent’s political opportunism shaped his.  Former White House National Security Council adviser Richard Clarke will introduce the Congressman.

Gun Nuts Targeting “ObamaCare”

Conservative gun nuts are staging an event in Lancaster where invited Gubernatorial and U.S. Senate candidates can fire at targets representing “ObamaCare” and other liberal ideals.  I suppose this is their warped idea of changing progress and turning the country back to regressive social policies where white men reigned supreme, women were subjugated and Blacks “knew their place.”  All four Republicans are expected to be there (no surprise).  Maybe we’ll get lucky and they’ll turn on one another.

The Commonwealth Foundation said Tuesday it invited 10 Republican and Democratic candidates to the May 8 event at a Lancaster County shooting range.

The Harrisburg-based group says attendees can “pump a few rounds or fire a cannon into a beat-up car” bearing icons or conservative nicknames of liberal policy ideas, such as “Obamacare.”

Republicans Side With Wall Street

The GOP has always been the Party of rich people and Big Business.  It has been for decades and yesterday and today they proved their bona fides by voting for Wall Street over Main Street.  The Party which repealed Glass-Steagall and refused to regulate Wall Street’s giant gambles with derivatives and other exotic financial instruments meant to poison the financial sector with toxic assets they then allowed these huge bankers unfettered opportunities to bet against their own handiwork and profit yet again.  The Republican ideology of pure free markets and laissez faire resulted in the worst global economic meltdown since the Great Depression.  Only immediate action by Presidents Bush (TARP) and Obama (ARRA) saved us from another Great Depression.

This week the Senate is attempting to enact a decent bill aimed at reforming the markets.  Though not as strong as I’d hoped it has been crafted over more than a year and includes some significant features:

·    End Taxpayer Bailouts.  As long as giant financial firms believe the government will bail them out if they get into trouble, they only have the incentive to get larger and take bigger risks.  This bill guarantees that taxpayers will never again be forced to bail out reckless Wall Street firms by creating a safe orderly liquidation mechanism for the FDIC to unwind failing significant financial companies; shareholders and unsecured creditors will bear losses; and management will be removed.

·    End “Too Big To Fail.”  The bill provides for strict new capital, leverage, liquidity, risk management and other requirements as companies grow in size and complexity, with significant requirements on companies that pose risks to the financial system. The Federal Reserve will be authorized, as a last resort, to require a large complex company, to divest some of its holdings if it poses a grave threat to the financial stability of the United States.

·    Put a New Cop on The Beat.  The bill establishes the Financial Stability Oversight Council to focus on identifying, monitoring and addressing systemic risks posed by large, complex financial firms as well as products and activities that spread risk across firms.

·    Bring Sunlight and Transparency to Shadowy Markets.  The legislation eliminates loopholes that allow risky and abusive practices to go unnoticed and unregulated – including loopholes for over-the-counter derivatives, asset-backed securities, hedge funds, mortgage brokers and payday lenders.

·    Guarantee Clear Information in Plain English.  The bill creates the Consumer Financial Protection Bureau, which will have the sole job of protecting American consumers from unfair, deceptive and abusive financial products and practices and will ensure people get the clear information they need on loans and other financial products from credit card companies, mortgage brokers, banks and others.

·    Protect Against Bernie Madoff-Type Scams.  The SEC has failed to perform aggressive oversight and is unable to understand some of the very companies it is supposed to regulate.  This bill creates a program within the SEC to encourage people to report securities violations and mandates an annual assessment of the SEC’s internal supervisory controls.  The bill also establishes a new Office of Credit Rating Agencies at the SEC to strengthen regulation of credit rating agencies, many of which failed in the past to warn people about risks hidden throughout layers of complex structures.

Every single Republican Senator voted against this bill and they were joined by Democrat Ben Nelson who is again trying to extort the American people into helping his state above all others.  Nelson may now be the biggest whore on the planet.  Unfortunately it is the American people he is screwing.  The financial sector has been pouring cash into Republican coffers and have flooded Washington with lobbyists.  There are now five lobbyists for every Member of Congress.

We know what side Republicans are on and Sen. Bob Casey reminds us in case we’ve forgotten:

Hammering Out a Contract: Exploiting Low-Paid Workers at a Vo-Tech School

Hammering Out a Contract:

Exploiting Low-Paid Workers at a Vo-Tech School

by Walter and Rosemary Brasch

           Art Welch, the in-school suspension supervisor at the Columbia-Montour Area Vocational Technical School (Vo-Tech) in Bloomsburg, Pa., earns $8 an hour, only 75 cents above minimum wage. In the six years he has been at Vo-Tech, he has never had a raise.

           Mary Avery, who has worked in the cafeteria for 28 years, earns $9 an hour; some years, she only received a nickel an hour increase.

           Wendy Zajac, who also works in the cafeteria, has been employed at Vo-Tech seven years; she is the only one of a bargaining unit of 25 workers who received a raise in four years. She now earns $7.25 an hour. The school’s management had no choice except to raise her salary so it would be in compliance with the federally-mandated minimum wage.

           Welch, Avery, Zajac, and 22 others, went on strike in March after more than three years of patiently waiting for the school’s Joint Operating Committee (JOC) to ratify a contract. The support staff had voted in October 2006to become a part of the Pennsylvania State Education Association (PSEA). Since then, there have been no raises and no contract for the school’s lowest-paid workers, many of whom are forced to work second jobs; three are receiving public assistance, their wages so low they fall below the federal poverty line. More than half of the members of the bargaining unit have annual wages below $22,050, the federal poverty line for a family of four; about one-third have salaries barely above $14,570, the federal poverty line for two persons.

           In an industry in which degrees matter, and which usually result in higher wages, the support staff, about half of whom have at least an associate’s degree, are not compensated for their post-high school education.

           Prior to Summer 2005, when the last raises were given, pay raises were haphazard, says Welch. Paula Fritz, who has been at Vo-Tech 25 years, cites a case where the male custodians one year received 50-cent an hour raises, but she, the only female custodian, received a raise of only 35 cents an hour. “There was no logic behind it, no evaluations, and I was sure that it was based upon gender rather than performance,” says Fritz.

Dr. Thomas Rushton, Vo-Tech’s administrative director and former principal, simply declares that wage increases “come from the JOC.” While technically correct, prior to Rushton becoming administrator during the middle of the contract negotiation, wage increases were always recommended by the principal and administrator. In addition to arbitrary pay raises, Vo-Tech never had a formal evaluation process for its staff until three years ago. It also has a history of arbitrary hiring practices, with senior administrators hiring friends and colleagues; never in the school’s history has it employed a female in any of the top five administrative slots.

           The Vo-Tech, opened in 1969, has about 700 students in 17 training programs. Seven local public school districts are “sending schools”; the Vo-Tech JOC, essentially a school board, is comprised of 14 members, two from the boards of each district. A major problem with the JOC/Vo-Tech system is its unwieldy structure and a perceived, although not open, bias against vocational-technical training. Board members and the public say they support the concept of vocational and technical training programs in high school, but the reality is that some don’t necessarily believe that Vo-Tech education is parallel to that of the other public schools. Board members who voted against the proposed contract have given workers in their home districts better contracts and wages than they do for Vo-Tech. The low wages has led to a heavy turnover among administration at the Vo-Tech. “I’m on my sixth principal in 12 years,” says Holly Diltz, union president and the school’s Child Accounting/Transportation Specialist and administrative specialist for the Pennsylvania Information Management System.

           Several members of the JOC claim they are merely watching out for the public, that economic times are bad, and that the $4.30 an hour raise spread over a five year contract, which was asked for by the union was too much. However, even with heavy turnover and generally lower incoming salaries, the JOC granted its five administrators a combined $22,367 raise between their 2006-2007 and 2009-2010 salaries. It also granted in the 2009-2010 school year a combined $10.60 an hour raise to four employees of the classified non-union staff, and a $6,190 raise over two years to its adult education coordinator. The current administrative director earns $85,348 a year; the principal earns $70,000 a year; the business manager earns $68,000 a year. The school has also already paid its lawyer almost $22,000 to negotiate its side of the contract. However, the union estimates the cost by the time the contract is settled will be closer to $31,000. Labor lawyers in Pennsylvania typically earn $200-$350 an hour, or about 20-30 times an hour that of the bargaining unit’s median wage.

           Contrary to claims of protecting taxpayer interest, Vo-Tech has about a $1.5 million surplus, about 20 percent of its budget. Because it receives funding from the seven sending districts and not directly from the taxpayers, it isn’t restricted to the state-mandated 8 percent limit. Rushton says that the balance isn’t a “surplus,” but a “fund balance.” Because of heavy costs associated with the maintenance of equipment not used by other public schools, Vo-Tech needs a balance higher than other schools. Diltz says a balance is necessary; but says the current balance is excessive, especially since she was responsible for writing about $500,000 in grants over a three year period that covered significant equipment repair and replacement. She earns $23,000 a year.

           If the Committee would agree to the proposal currently on the table, it wouldn’t even increase the proposed budget,” says Welch, one of the union’s negotiators and budget specialists, who points out the raises have already been figured into the budget.

           A tentative agreement had been reached, and signed off by lawyers for both  Management and the workers. But in December 2009, the JOC arbitrarily declared it wanted 44 substantive changes; several of the changes involved items previously proposed by the JOC, agreed to by the union, and then deliberately changed by Committee negotiators. A 10-1 vote blocked acceptance of the tentative contract. Among those who voted against the contract were the director who had moved to accept the contract, the director who had seconded that motion and, surprisingly, two board members who are retired teachers, both of whom were PSEA members.

           “The members were cherry-picking” at the contract,” says John Holland, PSEA field director, who believes that one of the major reasons why JOC members didn’t accept the agreed-upon contract was “because they may have been influenced by their own districts.”  In response, Bob Fogarty, chair of the JOC and the Negotiating team, says he “doesn’t believe it was cherry-picking at all.” Nevertheless, recent negotiations have been stalled because Management continues to pick apart issues that were previously decided. Fogarty, the only one of the Committee who had voted to approve the contract in December, says one of the reasons the contract wasn’t approved by Management was because the union made changes to the contract. “We made absolutely no changes,” says Diltz emphatically. “We knew in December the contract was voted down,” says Diltz, “but we didn’t see the counter proposal until March.”

           Among issues the JOC decided weren’t acceptable were the agreed-upon pay raise, which had been about 3 percent a year, but was arbitrarily reduced by the JOC to less than 2 percent a year. Other changes from the agreed-upon contract were elimination of both overtime pay for snow removal and two emergency/personal days a year, a provision to eliminate walkouts and layoffs, the number of holidays, which would have been less than what teachers and administrators receive, and the refusal to allow more than one year’s retroactive pay, thus assuring that the lowest-paid workers would not receive a raise for at least the first two years after they organized.

           Prior to organizing, Vo-Tech staff workers did not pay for their health insurance. However, in what is legally known as anti-union animus (commonly known as retaliatory actions), Management required the workers to pay the same amount for health care costs as the school’s higher-paid teachers, and twice what the administrators pay. That amount (originally about $1,500 a year) was later reduced by negotiation. However, not taken out of the proposed contract was a provision that Management, at its discretion, could change health care coverage and fees at any time during the contract.

           However, one of the most critical negotiating point is Management’s refusal to yield to “Just Cause” provisions, which requires full and fair grievance procedures, including progressive discipline, and forbids the employer from reprimanding, disciplining, and suspending support staff without having “just cause.”  Some members of the JOC claim that because Pennsylvania Act 195 covers the right of public workers to organize and mentions “just cause,” it is not necessary in the contract. However, if it is in Act 195, then Management should have no qualms about allowing its inclusion. The reality is that some board members are ignorant of the scope of Act 195; others reveal their own opposition to unions, and a belief that employers should be allowed near unlimited rights to run a company any way they wish, even to the extent of trampling the rights of the working class. “If ‘Just Cause’ isn’t in the contract,” says the PSEA’s Paul Shemansky, “employees can become targets of the employer.” An employer, who isn’t subject to “Just Cause” protections, will often adhere to Management’s will, even if the employer’s actions are ethically questionable. The absence of the “Just Cause” provision, says Shemansky, “can make life so miserable that the employee will quit.” He says the PSEA is convinced that Management’s insistence to keep “Just Cause” provisions out of the contract may be because “they want to punish the workers for having gone out on strike,” and don’t wish to be subjected to having to prove charges against employees. If “Just Cause” is not part of a contract, says Shemansky, “we can’t argue for the workers during arbitration.”

           In contrast to what the JOC wants for Vo-Tech, the contracts from the “sending districts” include provisions, including “Just Cause,” that the JOC denied to the Vo-Tech staff.

           Renegotiating after agreeing to a contract is “unheard of in any union negotiation; it is the most egregious act I have ever seen in 20 years,” says John Holland, who was employed by school boards and the Pennsylvania Department of Labor and Industry before his employment 11 years ago with PSEA. Two separate independent mediators, who had been active in the bargaining for the past three years, had even cautioned Management’s attorney against certain inflammatory comments, and stated they had never seen such action on the part of Management in their own experiences, according to a source present during negotiation sessions.

           Shortly after the union went on strike, the school’s computer system went down, forcing staff to do all work on paper, and delaying the issuance of grades for more than a week. Had Jeremy Adams, the school’s technology specialist not been on strike, the problem would have been solved quickly. It was almost a week after the problem was detected that the systems were back online. The Administration had to call in an outside consultant from a “sending” school district. Adams, the bargaining unit’s highest paid employee, receives $18.46 an hour, significantly less than outside consultants or what he could make in private industry.

           To cover for the strikers, Vo-Tech administration has taken some of the duties, even though they aren’t qualified for those jobs. The Administration has also recruited “volunteer” students to do the cleaning, mopping, and sweeping. It has used students to tutor other students; it has used students to prepare food and serve it in the cafeteria. To a question of whether Vo-Tech has used students to cover for union employees, Rushton only answers, “No.” He doesn’t elaborate. However, several of the workers say the Administration has several times taken students out of their academic classes to cover duties previously associated with the striking workers. One student wrote into the local newspaper’s comments column, “[W]e’re running just fine without the support staff,” missing the irony that if the school was, indeed, “running just fine” without support staff, perhaps any future job she would have would become irrelevant if “anyone” could do it. Another student claimed, “We don’t appreciate being called scabs, we are not doing anything different from what we have been doing when the workers were there.” Every member of the bargaining unit has avoided direct talks with students, and has refrained from issuing any public derogatory comments or calling anyone, especially students, scabs. The students, says Diltz, “are being fed misinformation,” but it is definitely not from union members.

           Management also suggested that a prolonged strike by support staff could lead to prolonged class sessions, delayed graduation, and the withholding of grades, distinct threats to students and, quite probably, unfair labor attempts to force students to reject strikers’ issues.

           The PSEA has filed charges with the Pennsylvania Labor Relations Board (PLRB) against the school and its JOC for failure to bargain, conditional bargaining, and bad faith bargaining, all violations of state law. Resolution of the complaints could be several months, mostly because the PLRB is underfunded, and has fewer hearing officers than the workload demands.

           Several community residents have called into the local newspaper to complain that the workers should be happy just to have jobs and shouldn’t be protesting low wages and exploitation benefits. Evy Lysk, who had been a board member from Benton School District, one of the seven “sending districts,” and a member of the Vo-Tech JOC from January 2004 through November 2007, has repeatedly written into the local newspaper to oppose unions and raises for workers. Becky Heller, who had been a school board member from the Berwick Area School District for the first three of the four years the workers didn’t have a contract, in the public comment section of the local newspaper argued that Management should “Fire striking Vo-Tech union members and replace them with people who want to work,” a violation of Pennsylvania law. Heller also erroneously claimed that the strikers “got ample raises each year before they unionized.” She falsely claimed, “The union moved in and now they are on strike. So, how’s that union working for you? They got their dues, you didn’t get a raise. Do you GET IT yet?” The PSEA has not collected dues in the three and a half years since the members voted to organize, and by law cannot collect dues until a contract is in place.

           However, even in a rural area in which the local newspaper and a large number of residents who frequently write into the newspaper’s “30 Seconds” and letters-to-the-editor sections have a strong anti-union bias, community residents have been “largely supportive,” says Diltz. “They have driven past the picket lines, and given “thumbs-up” signs, sometimes stopped to chat or donate food,” she says. In support of the strikers, most of the teachers have refused to take on additional duties at the school. Other unions, including the Teamsters, have refused to cross the picket lines. Deliveries are made to the “sending” schools, and then trucked to Vo-Tech by district personnel.

           Following the JOC monthly meeting, April 20, at the request of the union, negotiating resumed for four days. Fogarty believes “We are close” to a contract. Diltz says the two sides “are still far apart.” Diltz says the union, as part of its rights, will continue to demand that the contract include the “just cause” discipline, which would forbid Management from admonishing, reprimanding, or suspending any employee without having “just cause.”

           The support staff say they didn’t have a need to organize prior to October 2006. “We were like a family,” says Diltz. What changed was when Dr. Cosmas Curry became administrative director in the 2006-2007 school year. Curry, who had been principal, believed in top-down rule, not taking in worker suggestions or opinions and, say the strikers, treated them not with the respect they had earned. Fogarty says he never “saw any instance” of Curry not respecting the workers. Nevertheless, it was at the beginning of the Curry’s administration that the workers organized after not receiving raises. Curry’s tough stance may have been a tactic to scare the certified teachers, also members of PSEA, whose contract was also coming into negotiation. The support workers realized at that point, says Diltz, they were no longer family. Rushton, the current administrative director, was principal at the time the workers voted to organize. (Curry, whose final salary was $86,993, an increase of $4,993 over slightly less than three years, left the district in November 2008 to become superintendent at another local school district; Rushton, who did not meet state certification guidelines, became administrative director on an emergency credential.)

           A strike is the last act not only indicative that bargaining has gone wrong, but also of worker exploitation. For three and a half years, the workers didn’t have a contract, wage increases, or a reasonable procedure to handle grievances. It was too much for the 25 workers of the newly-formed PSEA bargaining unit. To strike, when every other remedy had failed, they fully understood the financial and emotional sacrifices they would have to make. But they were willing to make those sacrifices to achieve a greater good for all workers.

           On April 29, about four weeks after the strike began, the union voted 15-2 to return to work two days later. The members, however, also voted, 14-3, to go back on strike if conditions didn’t improve. “The kids really needed us,” says Diltz. Other members talked about students who worried that without the tutors they wouldn’t be able to pass their courses by the end of the semester. “We couldn’t do that to them,” says Diltz.

           There was also another reality to the strike. The workers honestly believed Management would bargain in good faith, and that the two sides would be able to negotiate a fair contract. But, one month after the strike began, the lowest paid workers at the school also realized that Management was obstinate in some of its demands. Although the PSEA gave members loans with no interest, the members still have to pay back those loans. “Some of our members who were sole support for their families just couldn’t handle the stress anymore,” says Diltz.

           “We’re all aware there will be vindictiveness [by Management] when we return,” says Diltz. Without a contract that includes the “Just Cause” provision, Management actions, which could include undocumented retaliation against workers, will undoubtedly continue until there is a contract.

           Union membership throughout the country has declined from a high of 35.5 percent of all workers in 1940 to 12.3 percent in 2009. Part of that decline is that as the nation moved from an agrarian economy into the Industrial Age, and now into an Information Age, more workers consider themselves to be professionals and not in need of a union. It is an incorrect perception, unsubstantiated by the reality of forced layoffs, arbitrary discipline and terminations, outsourcing of work to other countries, and a failure to provide adequate health care and workplace safety.

            The Vo-Tech workers made two mistakes. The first mistake was that they, like many workers in most American companies, believed that even if there were arbitrary and capricious actions by Management, the administration, professional, and support staff were family. The second mistake was not to have formed a union when they were still feeling they were part of a family, in order to protect themselves against that time when their family would turn against them.

[Walter M. Brasch is a former union officer, a member of The Newspaper Guild/Communications Workers of America and the Association of Pennsylvania State College and University Faculty, and a former member of several unions, including the Writers Guild of America and the United Auto Workers. He is a former newspaper and magazine writer and editor and currently a professor of journalism. His latest book isSex and the Single Beer Can: Probing the Media and American Culture; among his 17 other books is With Just Cause: Unionization of the American Journalist. He holds a Ph.D. in mass communications. Rosemary R. Brasch is a former secretary, Red Cross family services specialist, staff officer of the largest AFSCME local in the nation, a specialist in both labor history and grievance actions, and instructor at Penn State. She has an M.S. in labor studies. The Brasches are award-winning syndicated columnists.]  

House Passes Kanjorski Mortgage Bill

Rural America depends upon government programs so many people can become homeowners.  There are several mortgage programs available and this one is specifically designed for rural communities.  Hundreds of these mortgages are guaranteed every year in Pennsylvania alone and with funding set to expire within days the House passed the  Rural Housing Preservation and Stabilization Act of 2010 sponsored by Congressman Paul Kanjorski:

“Today, the House passed my much needed legislation to help ensure that families living in rural America can continue to access USDA loan guarantees so that they can buy homes with affordable mortgages,” said Chairman Kanjorski.  “Many people living in rural communities do not have as much access to affordable home loans.  The USDA program works to fix this problem, but it could run out of federal funding in a matter of days.  We must ensure that families continue to have options for accessing affordable home loans.  My bill will enable the program to continue its good work at no cost to the taxpayers.  I am hopeful that the Senate will soon act on these matters as Senator Bennet of Colorado has already taken the lead in pushing this issue in that chamber.  I urge the Senate to act quickly and pass this legislation.”

The House Financial Services Committee unanimously passed H.R. 5017 last week.  The bill ensures the continued access of rural homebuyers to affordable mortgages through the U.S. Department of Agriculture’s (USDA) loan guarantee program.  The financial crisis has spiked consumer interest in the program, tripling the number of loans annually made since 2006.  Because demand continues to grow, the program will exhaust its federal funding within days.   H.R. 5017 would solve this problem by making the program self funded, enabling families living in rural communities to continue to access these loan guarantees.

“As a result of this program, I was able to purchase my first home which I have wanted all my life,” said Virgie Spruiell from Bushkill, Pennsylvania.  “I enjoy it every day and it is a blessing.  I greatly appreciate Chairman Kanjorski’s efforts to enable the program to continue so that other people can access these guaranteed home loans just as I did.  It has had helped me tremendously.”

Chairman Kanjorski’s legislation will correct the Section 502 Single Family Housing Guaranteed Loan Program funding shortfall by enabling the program to pay for itself, rather than relying on federal funding.  In order to pay for the program, lenders will pay up to a 4 percent fee on new home mortgages and the USDA will have increased loan authority of $30 billion dollars for this fiscal year.  As a result of these changes, financing of the program will move from a combination of government funding and industry fees to a self-sustaining initiative.

The USDA’s Rural Housing Service manages the Section 502 program, which provides a vital source of mortgage credit for people living in rural communities.  Low- and moderate-income individuals and families in rural communities often have fewer mortgage credit options than those households in urban areas.  The program aims to fill that void and lower the costs of homeownership by giving rural areas access to a home loan guarantee program.  These guarantees decrease the exposure of home lenders to defaults so that they will underwrite more mortgages.  In 2009, loans to more than 115,000 homebuyers guaranteed under the program averaged $112,000.  To qualify for the program, borrowers must have good credit and reliable incomes to sustain homeownership.

House Passes Kanjorski Mortgage Bill

Rural America depends upon government programs so many people can become homeowners.  There are several mortgage programs available and this one is specifically designed for rural communities.  Hundreds of these mortgages are guaranteed every year in Pennsylvania alone and with funding set to expire within days the House passed the  Rural Housing Preservation and Stabilization Act of 2010 sponsored by Congressman Paul Kanjorski:

“Today, the House passed my much needed legislation to help ensure that families living in rural America can continue to access USDA loan guarantees so that they can buy homes with affordable mortgages,” said Chairman Kanjorski.  “Many people living in rural communities do not have as much access to affordable home loans.  The USDA program works to fix this problem, but it could run out of federal funding in a matter of days.  We must ensure that families continue to have options for accessing affordable home loans.  My bill will enable the program to continue its good work at no cost to the taxpayers.  I am hopeful that the Senate will soon act on these matters as Senator Bennet of Colorado has already taken the lead in pushing this issue in that chamber.  I urge the Senate to act quickly and pass this legislation.”

The House Financial Services Committee unanimously passed H.R. 5017 last week.  The bill ensures the continued access of rural homebuyers to affordable mortgages through the U.S. Department of Agriculture’s (USDA) loan guarantee program.  The financial crisis has spiked consumer interest in the program, tripling the number of loans annually made since 2006.  Because demand continues to grow, the program will exhaust its federal funding within days.   H.R. 5017 would solve this problem by making the program self funded, enabling families living in rural communities to continue to access these loan guarantees.

“As a result of this program, I was able to purchase my first home which I have wanted all my life,” said Virgie Spruiell from Bushkill, Pennsylvania.  “I enjoy it every day and it is a blessing.  I greatly appreciate Chairman Kanjorski’s efforts to enable the program to continue so that other people can access these guaranteed home loans just as I did.  It has had helped me tremendously.”

Chairman Kanjorski’s legislation will correct the Section 502 Single Family Housing Guaranteed Loan Program funding shortfall by enabling the program to pay for itself, rather than relying on federal funding.  In order to pay for the program, lenders will pay up to a 4 percent fee on new home mortgages and the USDA will have increased loan authority of $30 billion dollars for this fiscal year.  As a result of these changes, financing of the program will move from a combination of government funding and industry fees to a self-sustaining initiative.

The USDA’s Rural Housing Service manages the Section 502 program, which provides a vital source of mortgage credit for people living in rural communities.  Low- and moderate-income individuals and families in rural communities often have fewer mortgage credit options than those households in urban areas.  The program aims to fill that void and lower the costs of homeownership by giving rural areas access to a home loan guarantee program.  These guarantees decrease the exposure of home lenders to defaults so that they will underwrite more mortgages.  In 2009, loans to more than 115,000 homebuyers guaranteed under the program averaged $112,000.  To qualify for the program, borrowers must have good credit and reliable incomes to sustain homeownership.