[Congressional Record Volume 147, Number 177 (Wednesday, December 19, 2001)]
[Senate]
[Pages S13701-S13704]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ALLEN:
  S. 1848. A bill to provide mortgage payment assistance for employees 
who are separated from employment; to the Committee on Health, 
Education, Labor, and Pensions.
  Mr. ALLEN. Mr. President, today I rise to introduce the Homestead 
Preservation Act.
  It is a bill to provide displaced workers with access to low-interest 
loans to help cover monthly home mortgage payments while they are 
looking for a new job. This is commonsense, compassionate legislation 
designed to help working families, who through no fault of their own, 
are adversely affected by international competition.
  During the past months, all Americans have been deluged with grim 
news

[[Page S13702]]

of recessions, plummeting consumer confidence and rising unemployment. 
Since October of last year, unemployment has jumped 1.8 percent, 
bringing the unemployment rate to 5.7 percent, the highest in over 6 
years. This is more than just a statistic. The 5.7 percent represents 
8.2 million people who are now without a job, a paycheck, and the means 
by which to provide their family with a sense of economic security, 
knowing that the bills will be paid, food is on the table, gifts will 
be under the Christmas tree.
  Virginia has not escaped the effects of the recession. While the 
unemployment is not as high as the national average, we have seen a 1.4 
percent increase in unemployment from October 2000 to October 2001. 
There were 20 mass layoffs in October, an increase of 8 from the year 
before. And there have been 2,713 new claims for unemployment benefits 
in October--almost double from October 2000.
  While these are uneasy times for everyone, regions such as Southwest 
Virginia and Southside, with heavy concentrations in manufacturing--
especially the textile and apparel industries--have been especially 
hard hit. Nationwide, employment in apparel manufacturing lost more 
than 10,000 jobs just last month. Factory employment has plummeted in 
the past year and a half. One of every three layoffs in Virginia is 
from the manufacturing industry, although only one in six jobs 
throughout the Commonwealth are in this sector. In Virginia, October 
was the 15th consecutive month of factory job losses.
  Virginia's Southside and Southwest regions are already suffering from 
the economic effects of international competition, such as NAFTA. 
Nationwide, an average of 37,500 Americans lose their jobs because of 
NAFTA-related competition each year. During the 1990s, Virginians saw 
the loss of 15,400 apparel jobs--a decline of 54.3 percent--and 15,300 
textile jobs--a decline of 36 percent.
  Fair and free trade is necessary if American businesses are to have 
the opportunity to promote their goods and services and continue to 
expand through growth abroad. NAFTA has created a net increase in 
employment. As Governor of Virginia, I led several trade missions 
abroad to promote our products. We brought back agreements that 
initially meant half a billion dollars in new investment and sales for 
Virginia, investments made possible only through fair and free trade.
  But, while trade is helping our economy as a whole, there are many 
good, hard working families, who have been adversely affected by 
international competition--especially in the textile and apparel 
industries. Anytime a factory closes, it is a devastating blow to all 
of the families and businesses in the community and region.
  While I was proud of the outstanding way the close-knit Southside and 
Southwest communities in Virginia came together to help those who lost 
their jobs, when companies like Pluma and Tultex closed their doors, 
they should not be forced to go through these times alone. After the 
Tultex plant closing in Martinsville in early December of 1999, people 
donated toys to the Salvation Army to make sure that Christmas came to 
the homes of the thousands of laid off workers.
  I am proposing that the Federal Government do its part to help people 
through these tough times. There are already thoughtful programs in 
place, such as the NAFTA Transitional Adjustment Assistance program, 
that helps workers get additional job skills training and employment 
assistance, and, provides extended unemployment benefits during job 
training. These programs are the result of the commonsense, logical 
conclusion that good, working people can lose their jobs because of 
trade--not because they did anything wrong or because they don't want 
to work.
  We ought to find a way to ease the stress and turmoil for people 
whose lives are unexpectedly thrown into transition after years of 
steady employment with a company that suddenly disappears. While these 
hard-working folks are finding appropriate employment, they should not 
fear losing their homes. For most people and families, their home is 
the largest investment they make in life. Many have considerable equity 
build up.
  Government agencies already have low-interest loan programs in place 
to help families who have met with unexpected economic disaster, such 
as a natural disaster like a hurricane, flood or tornado.
  When a factory closes, it is an economic disaster to these families 
and their communities. The effects are just as far reaching and 
certainly as economically devastating. Like a natural disaster, 
families displaced by international competition are not responsible for 
the events leading to the factory closings. The Federal Government 
ought to make the same disaster loan assistance programs available to 
our displaced workers.
  This is my rationale for introducing the Homestead Preservation Act. 
This legislation will provide temporary home mortgage assistance to 
displaced workers, helping them make ends meet during their search for 
a new job.
  Specifically, the Homestead Preservation Act authorizes the 
Department of Labor to administer a low-interest loan program--4 
percent--for workers displaced due to international competition. The 
loan is for up to the amount of 12 monthly home mortgage payments. The 
program is authorized at $10 million per year, for 5 years. It 
distributes the loan through an account, providing monthly allocations 
to cover the amount of the worker's home mortgage payment. The loans 
could be paid off or repaid over a period of 5 years. No payments would 
be required until 6 months after the borrower has returned to work 
full-time. The loan is available only for the cost of a monthly home 
mortgage payment and covers only those workers displaced due to 
international competition and those who qualify for benefits under the 
NAFTA-TAAP and TAA benefits programs.
  Like the NAFTA-TAAP and TAA benefits programs, the Homestead 
Preservation Act recognizes that some temporary assistance is needed as 
workers take the time to become retrained and reeducated, expand upon 
their skills and search for new employment.
  As Governor, there was nothing I enjoyed more than being able to 
recruit and land investment from new or expanding enterprises in 
Virginia. By recruiting businesses, we brought new and better jobs for 
the hard-working, caring people of Virginia. One example is Drake 
Extrusion from the United Kingdom, which chose Martinsville Industrial 
Park for its new carpet and bedding fiber manufacturing plant. It was 
announced as a $12 million investment. It doubled in value at the 
official opening in 1996. It brought in additional small businesses. As 
of last year, Drake employed over 180 people.
  Unfortunately, it can take time to bring in new companies and 
industries to a region, just as it takes time to learn a new skill or 
earn a degree. Displaced families do not have time; they have monthly 
bills that must be paid, in full, no excuses. The Homestead 
Preservation Act provides the financial assistance necessary to bridge 
the time it takes to find employment. Without this bridge, many working 
families would not be able to take advantage of the opportunities our 
there for them. They would be denied the necessary tools to help them 
succeed in the changing economy.

  The current recession has made it even more vital that the Federal 
Government do what is right by our workers in the textile and apparel 
industries--in all industries suffering high rates of job losses due to 
international competition. Because of international competition, 
textile and apparel workers are even more vulnerable to the current 
economic situation making them ill-equipped to weather an economic 
downturn. For example, in 1999, the average wage rates in Virginia for 
a textile or apparel worker were 77 percent and 57 percent, 
respectively, of the overall average wage rate for Virginians. This 
provides for less money in the family's ``rainy day'' savings account. 
And right now, it is storming for these families. These jobs are not 
coming back. Only about 70 percent of displaced factory workers find 
reemployment, well below the access-industry average.
  Losses are expected to continue accumulating as the industries brace 
for worldwide open trade, which is scheduled to begin in 2005. When 
these workers are displaced, meager savings and temporary unemployment 
benefits are

[[Page S13703]]

frequently not enough to cover expenses that had previously fit within 
the family budget. Without immediate help, these families, at the 
minimum, risk ruining their credit ratings and, in the worst-case 
scenario, could lose their home or car.
  The Homestead Preservation Act would provide families vital temporary 
financial assistance, enabling them to keep them to keep their homes 
and to protect their credit ratings as they work toward strengthening 
and updating their skills and continue their search for a new job. 
Hard-working Americans, facing such a harrowing situation, ought to 
have a response to help them. People need transitional help now.
  The Homestead Preservation Act provides the temporary financial tools 
necessary for displaced workers to get back on their feet and succeed. 
It is a caring, logical and responsible response.
  Mr. President, as I said, I rise today to introduce the Homestead 
Preservation Act. This is a commonsense, compassionate place of 
legislation that is designed to help working families who, through no 
fault of their own, lose their jobs as a result of international 
competition.
  It is a bill to provide displaced workers with access to low-interest 
loans to help cover monthly home mortgage payments while they are out 
looking for a job.
  During the past few months, all Americans have been deluged with grim 
news of recessions, plummeting consumer confidence, and rising 
unemployment
  Clearly, these are uneasy times for everyone in all regions of the 
country, whether in the South, the Midwest, the Northeast, and out West 
as well, but particularly in the areas where there are heavy 
concentrations of manufacturing. The textile and apparel industries 
have been especially hard hit. That industry is generally in the South 
and, to some extent, in the Midwest.
  Nationwide, employment in apparel manufacturing lost more than 10,000 
jobs just last month. That is in Virginia, North Carolina, South 
Carolina, Mississippi, Alabama, Georgia, Arkansas, Missouri, and 
various other States.
  Factory employment has plummeted in the past year and a half. In 
Virginia alone, about one out of every six jobs is in manufacturing. 
But as far as the layoffs, one out of every three layoffs in Virginia 
is from the manufacturing industry.
  I am a supporter of fair and free trade. I think trade is good for 
American consumers. It is good for our retailers and our farmers. I 
think it is necessary for our businesses and farmers to have 
opportunities to promote their goods, their products, their services 
abroad. That allows them to expand and grow.
  I think NAFTA has created a net increase in employment. As Governor 
of Virginia, I led several trade missions abroad, whether to Canada, 
Mexico, various countries in Western and Central Europe, as well as 
East Asia. We brought back agreements that initially meant over a half 
a billion dollars in new investment and sales for Virginia products. 
These investments and sales in Virginia were only made possible by fair 
and free trade.
  But while trade is helping our economy as a whole, there are many 
good, hard-working people and families who have been adversely affected 
by international competition, particularly in the textile and apparel 
industries.
  Any time a factory closes, it is a devastating blow to all of the 
families and, indeed, all of the businesses in the communities in that 
region. You can see, with great pride, how communities come together--
close knit communities--and try to help out if a major manufacturer 
shuts down.
  I remember back in December 2 years ago--in early December, 1999--
when Tultex shut down. Thousands of jobs were lost. People donated toys 
to the Salvation Army, though, to make sure Christmas would come to 
every family.
  What I am proposing is that the Federal Government does its part to 
help people through these tough times, so that people and communities 
are not alone during these transitions.
  There are already thoughtful programs in place. The NAFTA 
Transitional Adjustment Assistance Program helps workers get additional 
job skills in training and employment assistance, as well as provides 
extended unemployment benefits during job training.
  These programs are the result of the good, commonsense, logical 
conclusion that working people can lose their jobs because of trade, 
not because they did anything wrong or because they did not want to 
work. They do want to work.
  We ought to find a way to help ease the stress and turmoil for people 
whose lives are unexpectedly thrown into transition after years of 
steady employment with a company that suddenly disappears. Especially 
in textile areas, you see folks who have worked there for decades; some 
of their parents may have worked at that same mill or facility.
  These are hard-working people. They are trying to find employment. 
But while they are doing so, they should not have to worry about or 
fear losing their homes.
  For most people, and most families, their home is the largest 
investment they will make in their lives. Many have considerable equity 
built up in their homes that could be lost.
  Government agencies already have low-interest loan programs in place 
to help families who have been hit with unexpected disasters--such as a 
natural disaster, such as a hurricane or a tornado or a flood.
  Whan a factory closes, it is truly an economic disaster to these 
families and communities. The effects are just as far reaching and 
certainly as economically devastating. Like a natural disaster, 
families displaced by international competition are not responsible for 
the events leading to those factory closings.
  The Federal Government ought to make similar disaster loan assistance 
programs available to our displaced workers. That is the rationale of 
my introduction of the Homestead Preservation Act.
  This legislation would provide temporary mortgage assistance to 
displaced workers, helping them make ends meet during the search for a 
new job.
  Specifically, the Homestead Preservation Act authorizes the 
Department of Labor to administer a low-interest loan program--4 
percent--for workers displaced due to international competition.
  The loan is for up to the amount of 12 monthly home mortgage 
payments. The program is authorized at $10 million per year for 5 
years. It distributes the loan through an account providing a monthly 
allocation to cover the amount of the worker's home mortgage payment. 
The loans would be paid or repaid and paid off over 5 years, but no 
payments would be required until 6 months after the worker has gotten 
back on his or her feet in gainful employment. The loan would be 
available only for the cost of the monthly home mortgage payment and 
covers only those workers displaced due to international competition 
and who would qualify for the benefits under the NAFTA-TAAP and the 
transitional adjustment assistance benefits programs.
  Working within the parameters and the certification and 
qualifications of the NAFTA-TAAP and the TAA benefits programs, the 
Homestead Preservation Act recognizes some temporary assistance is 
needed as workers take time to retrain and be reeducated and expand 
upon their skills and search for new employment.
  This will provide, in effect, a bridge loan assistance to these 
displaced workers. If you look at it, the unemployment benefits are 
fine, but usually they are not enough to cover the expenses which 
previously fit within a family budget.
  Without immediate help, these families, at a minimum, risk ruining 
their credit ratings and, in the worst case scenario, could lose their 
car or even their home. The Homestead Preservation Act would provide 
families with vital temporary financial assistance, enabling them to 
keep their homes, protect their credit ratings, and, as they work 
toward strengthening and improving their skills, to continue to be able 
to search for a job without worrying about losing their homes. They are 
under a harrowing situation. We ought to have a response to help them.
  There are many people who need transitional help right away. As we 
move forward to expand trade opportunities, let's also improve the 
transitional adjustment assistance programs.

[[Page S13704]]

The Homestead Preservation Act provides the temporary financial tools 
necessary for displaced workers to get them back on their feet and to 
succeed. In my view, it is a very caring, logical and responsible 
response.
  I trust my colleagues will agree and support this reasonable, 
balanced idea.
  I ask unanimous consent that the text of the bill and the section-by-
section analysis be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1848

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Homestead Preservation 
     Act''.

     SEC. 2. MORTGAGE PAYMENT ASSISTANCE.

       (a) Establishment of Program.--The Secretary of Labor 
     (referred to in this section as the ``Secretary'') shall 
     establish a program under which the Secretary shall award 
     low-interest loans to eligible individuals to enable such 
     individuals to continue to make mortgage payments with 
     respect to the primary residences of such individuals.
       (b) Eligibility.--To be eligible to receive a loan under 
     the program established under subsection (a), an individual 
     shall--
       (1) be--
       (A) an adversely affected worker with respect to whom a 
     certification of eligibility has been issued by the Secretary 
     of Labor under chapter 2 of title II of the Trade Act of 1974 
     (19 U.S.C. 2271 et seq.); or
       (B) an individual who would be an individual described in 
     subparagraph (A) but who resides in a State that has not 
     entered into an agreement under section 239 of such Act (19 
     U.S.C. 2311);
       (2) be a borrower under a loan which requires the 
     individual to make monthly mortgage payments with respect to 
     the primary place of residence of the individual; and
       (3) be enrolled in a job training or job assistance 
     program.
       (c) Loan Requirements.--
       (1) In general.--A loan provided to an eligible individual 
     under this section shall--
       (A) be for a period of not to exceed 12 months;
       (B) be for an amount that does not exceed the sum of--
       (i) the amount of the monthly mortgage payment owed by the 
     individual; and
       (ii) the number of months for which the loan is provided;
       (C) have an applicable rate of interest that equals 4 
     percent;
       (D) require repayment as provided for in subsection (d); 
     and
       (E) be subject to such other terms and conditions as the 
     Secretary determines appropriate.
       (2) Account.--A loan awarded to an individual under this 
     section shall be deposited into an account from which a 
     monthly mortgage payment will be made in accordance with the 
     terms and conditions of such loan.
       (d) Repayment.--
       (1) In general.--An individual to which a loan has been 
     awarded under this section shall be required to begin making 
     repayments on the loan on the earlier of--
       (A) the date on which the individual has been employed on a 
     full-time basis for 6 consecutive months; or
       (B) the date that is 1 year after the date on which the 
     loan has been approved under this section.
       (2) Repayment period and amount.--
       (A) Repayment period.--A loan awarded under this section 
     shall be repaid on a monthly basis over the 5-year period 
     beginning on the date determined under paragraph (1).
       (B) Amount.--The amount of the monthly payment described in 
     subparagraph (A) shall be determined by dividing the total 
     amount provided under the loan (plus interest) by 60.
       (C) Rule of construction.--Nothing in this paragraph shall 
     be construed to prohibit an individual from--
       (i) paying off a loan awarded under this section in less 
     than 5 years; or
       (ii) from paying a monthly amount under such loan in excess 
     of the monthly amount determined under subparagraph (B) with 
     respect to the loan.
       (e) Regulations.--Not later than 6 weeks after the date of 
     enactment of this Act, the Secretary shall promulgate 
     regulations necessary to carry out this section, including 
     regulations that permit an individual to certify that the 
     individual is an eligible individual under subsection (b).
       (f) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section, $10,000,000 for 
     each of fiscal years 2003 through 2007.
                                  ____


      The Homestead Preservation Act--Section-by-Section Analysis

       A bill to provide mortgage payment assistance for employees 
     who are separated from employment.


                         section i. short title

       This Act may be cited as the ``Homestead Preservation 
     Act''.


                section ii. mortgage payment assistance

       This section establishes the program, sets program 
     perimeters, and defines eligibility for program 
     participation.
       The Secretary of Labor (Secretary) is authorized to 
     establish a low-interest loan program to cover the cost of 
     mortgage payments of the borrower's primary residence.
       Eligibility for participation is defined as a displaced 
     worker who has received a certification of eligibility by the 
     Secretary under chapter 2, title II of the Trade Act of 1974 
     (NAFTA-TAAP; TAA) or would be qualified if his or her State 
     of residence had entered into an agreement allowing for 
     NAFTA-TAAP and TAA participation. The borrower must be 
     enrolled in a job training or job assistance program.
       The terms of the loan must require the borrower to use the 
     loan to make monthly payments on the mortgage of his or her 
     primary residence.
       The loan perimeters are established to limit the life of 
     the loan to a period of one year and to an amount that does 
     not exceed amount of the mortgage payments due over the 
     number of months for which the loan is provided. The interest 
     rate on the loans is capped at 4 percent.
       The loan shall be deposited into an account from which the 
     monthly mortgage payment will be made.
       Loan repayment begins one year from the date of loan 
     approval or the date on which the borrower has been employed 
     full-time, for six months.
       Loan repayment shall be completed within five years with a 
     monthly payment determined by dividing the total amount of 
     the loan, plus interest, by 60. Borrowers may pay the loan 
     early or pay more than the per-month amount required without 
     penalty.
       The Secretary has six weeks to promulgate the regulations 
     necessary to implement this Act, including regulations that 
     permit a resident of a non-participating State in NAFTA-TAAP 
     or TAA, to certify that he or she is qualified for loan 
     participation as a displaced worker.
       There is authorized to be appropriated, $10 million, per 
     year, for five years.

  Mr. WELLSTONE. Mr. President, I thank the Senator from Virginia. His 
proposal sounds very interesting and very important. I look forward to 
looking at the specifics of it. I appreciate his words. I appreciate 
what he is talking about. It may be legislation that provides people 
with that temporary assistance because people want to get the jobs on 
which they can support their families. I think it is an important 
endeavor. I thank my colleague.
                                 ______