February 14, 2007
DODD URGES BERNANKE TO USE FED POWERS TO ACHIEVE GREATER SECURITY, OPPORTUNITY, PROSPERITYChairman Chris Dodd expressed concerns about the financial challenges facing Americans when he addressed the Chairman of the Federal Reserve, Ben Bernanke, at the Senate Banking, Housing, and Urban Affairs Committee hearing this morning. Chairman Dodd noted the persistence of economic struggles despite some positive U.S. economic developments, and urged Chairman Bernanke to use the Fed’s authority to help Americans achieve greater economic security, opportunity and prosperity. Senator Dodd cited the following issues that are contributing to growing insecurity about the future in households across the country: • Everyday essentials: The cost of providing healthcare for their families, paying for gas and home heating oil, and rising college tuitions are taking an increasing toll on Americans’ financial security and flexibility. • Housing: Rising rates of defaults and foreclosures indicate that housing, a major source of wealth and economic security, is being jeopardized. Resorting to exotic and subprime mortgages, Americans face potentially sharp increases in monthly payments that they are not prepared for. • Upward mobility: The prospect of falling out of the middle class is far greater today than in the past, especially in the face of unemployment. There are also barriers that block movement into the middle class, such as lack of access to financial institutions and affordable credit options. • Global competition: U.S. trade policies are unsustainable with a record trade deficit and heavy reliance on foreign investors to finance economic growth. To keep domestic industry strong, all nations must play on an equal economic playing field. “I don’t think that anyone can look at all the facts and reach any conclusion other than that we can do better,” said Dodd. “For the sake of the people we serve and generations coming after them, we must do better. There are steps we can and should take to build a stronger foundation for a more secure and prosperous future.” Chairman Dodd recommended several initiatives for a stronger economy, including keeping interest rates at levels that promote full employment and price stability, and ensuring that the Fed and the other federal financial regulatory agencies are vigilant in assuring the safety and soundness of economic institutions as well as in protecting consumers from predatory mortgage lending practices.
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