By Joseph DeCaro, BosNewsLife Special Correspondent reporting from the United States
WASHINGTON DC, USA (BosNewsLife) — United States President Barack Obama ordered the U.S. Treasury Saturday, February 21, to implement tax cuts for 95 percent of Americans, shortly after unveiling a multi-billion plan to prevent foreclosures for millions of home owners.
The tax cuts announced Saturday, February 21, are part of a $787 billion stimulus plan passed by the Democratic-controlled Congress over Republican opposition.
Obama said the aim is to put more money in the pockets of Americans facing the worst crisis since the Great Depression and stimulate the economy by increasing consumer spending, as he promised during his election campaign.
“I’m pleased to announce that this morning the Treasury Department began directing employers to reduce the amount of taxes withheld from paychecks, meaning that by April 1st, a typical family will begin taking home at least $65 more every month,” Obama said in his weekly radio address.
“Never before in our history has a tax cut taken effect faster or gone to so many hard-working Americans,” he added.
It came after he unveiled a $75 billion lending plan, a full $25 billion bigger than the administration had been suggesting, to prevent as many as 9 million homeowners from being evicted and to stabilize housing markets that are at the center of the ever-worsening U.S. recession.
Of nearly 52 million American homeowners with mortgages, about 13.8 million, or nearly 27 percent, owe more than their homes are worth after many months of declining prices, according to Moody’s Economy.com, a major financial Website.
Obama says his plan, known as the Homeowner Stability Initiative, will help families facing foreclosure by restructuring or refinancing their mortgages.
In addition, the Obama administration has pledged to double support for mortgage giants Fannie Mae and Freddie Mac to $400 billion, as part of an effort to encourage them to refinance bad loans, by removing restrictions on both institutions.
So far Fannie Mae and Freddie Mac were prohibited from refinancing mortgages when more money is owed on a home than it is actually worth.
However, Obama said the Initiative will not aid anyone who took bets buying homes in order to resell them, or lenders who deliberately misled buyers, or buyers who knowingly signed on for loans they couldn’t afford.
“This plan will not save every home,” warned Obama, a day after he signed into law the economic stimulus plan, which he claims will revitalize the economy and save 3.5 million jobs.
Not everyone is impressed. In the weekly Republican radio response, Representative David Camp of Michigan said his party wants to work with Obama to rescue the nation’s economy, but only in what he called “a responsible way” that does not “burden future generations with a mountain of debt.”
Republicans in the Democratic-controlled Congress largely opposed the stimulus bill, complaining it has too much federal spending and too few tax cuts.
The president warned Saturday that the stimulus measure is only a first step toward turning around the economy, which has been hit hard by problems in the banking and housing sectors. He is due to discuss the economy at his first major speech to Congress on Tuesday, February 24. (BosNewsLife’s NEWS WATCH. A regular look at key news developments impacting the Church and/or compassionate professionals. With reporting by BosNewsLife’s Stefan J. Bos).