America needs a federal program that protects homeowners, especially in a state where the mortgage crisis and ensuing broader financial crisis hit harder than in other places, U.S. Sen. John McCain said Thursday.
Last fall, when the economic ripples from failed mortgage lenders were spreading across the nation, McCain and others suggested the government step in and buy mortgages to allow homeowners to sidestep expensive loans, he said.
“I still think that would have been a way to address this,” McCain told a gathering of Tucson Metropolitan Chamber of Commerce members at the group’s annual National Issues Forum.
Pima County has been hit hard by foreclosures, with more than 1,100 in March (a local record) and more than 9,000 in 2008, according to the Pima County Department of Community and Economic Development.
Though Wall Street seems to be responding to government actions, the economy will not recover fully until the housing market recovers – especially in Arizona, which has been among the nation’s leaders in home construction for at least a decade, McCain said.
In much the same way it did during the Great Depression of the 1930s, the government should buy “toxic” loans and refinance them, he said.
Throwing money at the problem is not the answer, he said.
“We’re going to spend $11 trillion this year, by far the most in our history,” he said.
A day after a “tea party” protest that drew about 3,000 people to El Presidio Park, McCain said he understands their frustrations with taxes, the stimulus package and government debt.
“I think that was a manifestation of frustration about a lot of things, not just taxes,” he said.
He called for a guest worker program to stem the flow of illegal immigrants from Mexico and an increase in the use of nuclear power and said he agrees with President Obama’s timeline for a pullout of troops in Iraq.
Afghanistan is another story, he said.
“In Afghanistan, it’s going to be long and hard. You will see an increase in both casualties and combat,” McCain said.
The senator, who asked Congress for no earmarks last year, decried the process, which avoids the full vetting of most federal funding mechanisms.
“Earmarking . . . is the gateway drug to corruption,” he said.
McCain also joked about his failed attempt at the presidency last fall. He is not the first Arizona politician to make an unsuccessful bid; others include former Gov. Bruce Babbitt, former Rep. Mo Udall and former Sen. Barry Goldwater.
“Tragically, Arizona is still the only state in the nation where mothers don’t tell their children if they work hard they can grow up to be president,” McCain joked.