Bush Offers Holiday Gift for Suffering Americans

Santa has come early for unemployed workers and troubled homeowners.  President Bush recently signed into law an extension of unemployment benefits and a moratorium on home foreclosures.  With more jobs being lost every day, and Fannie Mae and Freddie Mac in deep trouble, will this gift last longer than the holidays?

Whether motivated by Christmas cheer, or desperate to stop the economic slide, President Bush recently delivered financial help to Americans unable to find employment.  He signed into law a bill that extends unemployment benefits over the Christmas holidays, and puts a moratorium on foreclosures until the New Year.

Some of the nation's largest lenders followed suit, establishing foreclosure moratoriums, and joining a nationwide effort to help homeowners in financial trouble.  Will it be enough to ward off the effects of the economic recession?

Foreclosures hit a speed bump

Foreclosures have been on the rise during the past year, prompting the President's action to have Fannie Mae and Freddie Mac freeze them until January.  An estimated 6,000 borrowers in the midst of foreclosure sales will be given a reprieve during these troubled times.  Officials at Fannie Mae believe that the action will help at least 10,000 homeowners stay in their residences while lenders search for ways to halt the foreclosure rate.

The federal government is not alone in this effort.  Citigroup has enacted a similar moratorium, and JPMorgan Chase is considering restructuring more than 100 billion dollars of real estate loans.  Bank of America is also looking to modify mortgages for nearly 400,000 homeowners.

Unemployment benefits extended

The extension of benefits for those without employment is also welcome news to Americans.  The White House bill adds an extra seven weeks of insurance to workers who can't find jobs, bringing the total to 45 weeks.  In areas where employment rates have significantly declined, benefits have been extended to a total of 59 weeks.

The news is welcome in a country that has been hammered by rising unemployment, and the beginning of what looks to be a protracted recession.

The big question is whether all these initiatives will stop the bleeding, or only delay the inevitable.  Right now, things are dire in the housing market.  Fannie Mae and Freddie Mac posted third-quarter loses totaling $54.3 billion dollars, and officials from these organizations are asking for more money from the U.S. Treasury to stay afloat.

The surefire cure for the economic slump is a healthy housing market, but the numbers from the fall were dreary at best.  Home prices in 20 metropolitan areas dropped during the summer, and sales of existing homes this fall were nearly 30 percent below 2005 levels.  

Drastic actions like those taken by President Bush have appeared on a regular basis in the last year.  Beleaguered Americans are thankful for the help, but can't help wondering how many more of these initiatives will be needed. The President has helped lighten the burden for this holiday, but no one knows whether his efforts will lead to a happier New Year.