[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H. Res. 365 Introduced in House (IH)]

112th CONGRESS
  1st Session
H. RES. 365

  Expressing the sense of the House of Representatives that Congress 
    should cut the United States' true debt burden by reducing home 
 mortgage balances, forgiving student loans, and bringing down overall 
                             personal debt.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 22, 2011

 Mr. Clarke of Michigan submitted the following resolution; which was 
referred to the Committee on Financial Services, and in addition to the 
     Committee on Education and the Workforce, for a period to be 
subsequently determined by the Speaker, in each case for consideration 
  of such provisions as fall within the jurisdiction of the committee 
                               concerned

_______________________________________________________________________

                               RESOLUTION


 
  Expressing the sense of the House of Representatives that Congress 
    should cut the United States' true debt burden by reducing home 
 mortgage balances, forgiving student loans, and bringing down overall 
                             personal debt.

Whereas the threat of default stands to exacerbate an already dire situation for 
        citizens of the United States with regard to personal debt by increasing 
        the cost of debt service and future borrowing;
Whereas the average person in the United States, much like the Federal 
        Government, owes more in monthly bills than he or she has on hand, but, 
        unlike the Federal Government, individuals and households who suffered 
        employment setbacks during the financial crisis face extraordinarily 
        high costs to finance their debt;
Whereas while 30-year Treasury bond yields have hovered around 4.3 percent, some 
        credit card borrowers who have missed payments face interest rates of up 
        to 29 percent, rates that would only go up should the government 
        default;
Whereas average borrowers in the United States often face terms that are more 
        severe than market conditions warrant, and additional uncertainty 
        brought on by approaching the debt ceiling or actual default are likely 
        to increase the mark-up that lenders demand;
Whereas according to Nobel Prize-winning Economist Joseph Stiglitz, the credit 
        card debt situation faced by many United States citizens is similar to 
        ``partial indentured servitude'', where ``an individual with debts equal 
        to 100% of his or her income could be forced to hand over to the bank 
        25% of his gross, pre-tax income for the rest of his life, because the 
        bank could add on 30% interest each year to what a person owed.'';
Whereas in 2009, nearly half of people in the United States had credit card 
        debt, with a median balance of $3,300;
Whereas credit card interest payments alone now total approximately 
        $94,000,000,000 per year;
Whereas in 2011, the average borrower graduating from a 4-year college left 
        school with roughly $23,000 of student debt, but compounding this 
        burden, only 56 percent of 2010 graduates were able to find work 
        following completion of their studies according to a study by the John 
        J. Heldrich Center for Workforce Development at Rutgers University;
Whereas in 2009, average mortgage payments surpassed $1,000 per month;
Whereas as of March 2011, 2,400,000 United States homeowners with mortgages, or 
        27.9 of the total population of home mortgagors, had less than 5 percent 
        equity on their homes;
Whereas if home prices fall between 5 and 10 percent by the end of 2011, as some 
        forecast, nearly one-third of United States homeowners with mortgages 
        would owe more on their homes than the properties are worth;
Whereas Mark Fleming, the chief economist for the business analytics firm 
        CoreLogic, has stated that ``Negative equity holds millions of borrowers 
        captive in their homes, unable to move or sell their properties. Until 
        the high level of negative equity begins to recede, the housing and 
        mortgage finance markets will remain very sluggish.'';
Whereas increases in credit card interest rates have the same negative impact on 
        consumer demand for goods and services as price increases, creating a 
        drag on the economy that is made worse by uncertainty over the debt 
        ceiling;
Whereas student loans, mortgage debt, and credit card debt create a vicious 
        economic cycle as consumers avoid spending on account of their debts and 
        businesses forego hiring because they lack customers;
Whereas reducing household debt and increasing savings directly ameliorates the 
        United States' trade deficit;
Whereas when United States citizens save more, they are able to finance United 
        States imports rather than borrowing from abroad;
Whereas given that savings finance investment and that investment drives 
        economic growth, increasing the savings rate should be a priority;
Whereas under bankruptcy rules, corporations are allowed to write down the debt 
        restructure because it is essential to keep them functioning;
Whereas corporations are deemed to be systemically important to the United 
        States economy and keeping families in their homes is also 
        systematically important;
Whereas evictions have destructive consequences not only for families but also 
        for neighbors, municipal governments, the environment, and the fiscal 
        health of the United States;
Whereas high personal savings economies tend to be high growth economies;
Whereas the experiences of the ``Asian Tiger'' economies (South Korea, 
        Singapore, Taiwan, and Hong Kong) during the late 20th century or China 
        in the present period illustrate this notion;
Whereas just as importantly, high savings countries tend to be more economically 
        resilient; and
Whereas after suffering the lessons of the Financial Crisis of 1997, East Asian 
        countries' savings levels skyrocketed, which is widely cited as a reason 
        they have suffered minimal impacts from the recent financial crisis: 
        Now, therefore, be it
    Resolved, That it is the sense of the House of Representatives 
that--
            (1) the high rate of personal debt is an urgent national 
        concern for the health of the United States economy, on par 
        with the urgency of addressing the Federal debt and debt limit;
            (2) Congress should cut the United States' true debt burden 
        by reducing home mortgage balances, forgiving student loans, 
        and bringing down overall personal debt;
            (3) having the Federal Government avoid default and 
        reducing the Federal debt will not make the United States 
        stronger alone, but household debt should be cut too in order 
        to make the United States strong; and
            (4) helping citizens of the United States become free of 
        debt to promote personal financial security and to strengthen 
        the Nation's economy should be a top priority of the United 
        States.
                                 <all>