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Chris Dodd on Budget & Economy

Democratic Sr Senator (CT)


Federal budget much more complicated & diverse than states’

Q: [to Richardson]: Would it be a priority of your administration to balance the federal budget every year?

RICHARDSON: Well, as a governor, I have to, by law, balance budgets. I’ve balanced five. And it would be a major priority of mine.

DODD: Well, listen, the federal government’s much different than a state government, I say respectfully to Bill Richardson here. It’s much more complicated and diverse. I’ve been a strong supporter, authored, in fact, pay-as-you-go budgets back in the early 1980s, which failed. I was a strong supporter of Gramm-Rudman, which is designed as well to inject some fiscal discipline into the process. So we need to have an economy here that’s driving to growth, creating jobs, which is the best social program anyone ever created. And then, simultaneously, bring an end to the war in Iraq, & begin to put that discipline back into our process. But the national government is a very different entity than a state government; requires a lot more flexibility to it.

Source: 2007 Des Moines Register Democratic debate Dec 13, 2007

Freeze rates on subprime mortgages to avoid foreclosures

Q: Pres. Bush proposes “mortgage rates for homeowners with spotty credit histories would be temporarily frozen under a nearly completed agreement between top Bush administration officials and a broad alliance of Wall Street’s biggest banks, mortgage investors, non-profits and consumer groups.” Is this a good idea?

A: It is. In fact I made the recommendation about a month ago to the administration, and I’m glad to see they are picking up on it. I thought this would help everybody here. If you freeze the “teaser rates”--those rates they drew people into these subprime mortgages on--that would be a good idea. And this way, the homeowner can stay there, maintain at least some payments without losing their home and going into foreclosure. And obviously the lending institution or those that hold the mortgages would get something other than zero. So it looks to me a good solution here that would provide everyone with some relief.

Source: CNN Late Edition: 2007 presidential series with Wolf Blitzer Dec 2, 2007

People of color lured into sub prime lending

Q: This week the administration proposed freezing the interest rates for a lot of sub prime mortgages around the country that are about to trend up in interest rates. The burden of that lands disproportionately on minority home owners. Some are suggestin that merely freezing home rates for people who are in bad mortgages and can’t get out just delays the reckoning that is surely going to come. Do you agree with the proposal?

A: I think it’s a pretty good idea. In fact we made a similar suggestion. Freezing that rate would allow a couple of things to happen. One, people stay in their homes. But also the financial institutions, they’re better off getting 3-4% back than nothing whenever foreclosures occur. [Furthermore], I’m trying to make sure this doesn’t happen again. This was outrageous what went on here. There were no cops on the beat in this administration--they basically walked away from this and you have three times people of color in this country are being lured into sub prime lending.

Source: 2007 Iowa Brown & Black Presidential Forum Dec 1, 2007

Chairs Banking Committee; hedge fund managers donated $727K

Q: Regarding hedge funds. Your home state paper, the Stanford Advocate, reports: “Among Democrats running for president, Connecticut’s Dodd, the Senate Banking Committee chairman who has stated his reluctance to hike taxes on hedge fund profits, leads in political contributions, $726,950, from the booming investment sector. The tax code allows hedge fund executives to pay capital gains taxes at 15% instead of paying the personal income tax rate at 35%.” You raise money from these guys, and then the legislation which would raise their tax rate gets killed. Old time politics?

A: It hasn’t been killed at all. In fact, I haven’t come out even in favor or opposed. Look, there’re unintended consequences to these actions. Having some idea of capital formation of the country, having a pro-growth Democrat that cares about these issues: What happens to endowments? What happens to retirement accounts? What happens to pensions? As chairman of that committee, the responsible answer is, let’s examine this.

Source: Meet the Press: 2007 “Meet the Candidates” series Oct 28, 2007

Mortgage market has seized up; provide more market liquidity

Q: We’ve seen all this turmoil in the markets caused by the credit crunch and the crisis in the mortgage markets. The Federal Reserve lowered the discount rate for banks. Should they lower rates for everyone else, yes or no?

A: Yes, I think it will happen [soon]. But we also need more liquidity. And they ought to be allowing Fannie and Freddie Mac to put more liquidity in the market. It has seized up. You can’t get a mortgage in America today.

Source: 2007 Democratic primary debate on “This Week” Aug 19, 2007

The next generation may be less well-off than us

Bush and the leadership of the House and Senate were given one of the best economies in history. Now the nation faces a deficit that soon could be as large as $4 trillion. We run the risk, in my view, of having the next generation be less well-off than their parents and grandparents.
Source: CT Senate Debate, in Stamford Advocate Oct 11, 2004

Voted YES on $192B additional anti-recession stimulus spending.

Proponent's argument to vote Yes:Rep. LEWIS (D, GA-5): This bipartisan bill will provide the necessary funds to keep important transportation projects operating in States around the country. The Highway Trust Fund will run out of funding by September. We must act, and we must act now.

Opponent's argument to vote No:Rep. CAMP (R, MI-4): [This interim spending is] needed because the Democrats' economic policy has resulted in record job loss, record deficits, and none of the job creation they promised. Democrats predicted unemployment would top out at 8% if the stimulus passed; instead, it's 9.5% and rising. In Michigan, it's above 15%. The Nation's public debt and unemployment, combined, has risen by a shocking 40% [because of] literally trillions of dollars in additional spending under the Democrats' stimulus, energy, and health plans.

We had a choice when it came to the stimulus last February. We could have chosen a better policy of stimulating private-sector growth creating twice the jobs at half the price. That was the Republican plan. Instead, Democrats insisted on their government focus plan, which has produced no jobs and a mountain of debt.

Reference: Omnibus Appropriations Act Amendment; Bill H.R. 3357 ; vote number 2009-S254 on Jul 30, 2009

Voted YES on modifying bankruptcy rules to avoid mortgage foreclosures.

Congressional Summary:Amends federal bankruptcy law to exclude debts secured by the debtor's principal residence that was either sold in foreclosure or surrendered to the creditor.

Proponent's argument to vote Yes:Rep. PETER WELCH (D, VT-0): Citigroup supports this bill. Why? They're a huge lender. They understand that we have to stabilize home values in order to begin the recovery, and they need a tool to accomplish it. Mortgages that have been sliced and diced into 50 different sections make it impossible even for a mortgage company and a borrower to come together to resolve the problem that they share together.

Sen. DICK DURBIN (D, IL): 8.1 million homes face foreclosure in America today. Last year, I offered this amendment to change the bankruptcy law, and the banking community said: Totally unnecessary. In fact, the estimates were of only 2 million homes in foreclosure last year. America is facing a crisis.

Opponent's argument to vote No:

Sen. JON KYL (R, AZ): This amendment would allow bankruptcy judges to modify home mortgages by lowering the principal and interest rate on the loan or extending the term of the loan. The concept in the trade is known as cram-down. It would apply to all borrowers who are 60 days or more delinquent. Many experts believe the cram-down provision would result in higher interest rates for all home mortgages. We could end up exacerbating this situation for all the people who would want to refinance or to take out loans in the future.

Rep. MICHELE BACHMANN (R, MN-6): Of the foundational policies of American exceptionalism, the concepts that have inspired our great Nation are the sanctity of private contracts and upholding the rule of law. This cramdown bill crassly undercuts both of these pillars of American exceptionalism. Why would a lender make a 30-year loan if they fear the powers of the Federal Government will violate the very terms of that loan?

Reference: Helping Families Save Their Homes Act; Bill HR1106&S896 ; vote number 2009-S185 on May 6, 2009

Voted YES on additional $825 billion for economic recovery package.

Congressional Summary:Supplemental appropriations for job preservation and creation, infrastructure investment, energy efficiency and science, assistance to the unemployed, and State and local fiscal stabilization, for fiscal year ending Sept. 30, 2009.

Proponent's argument to vote Yes:Rep. DAVID OBEY (D, WI-7): This country is facing what most economists consider to be the most serious and the most dangerous economic situation in our lifetimes. This package today is an $825 billion package that does a variety of things to try to reinflate the economy:

  1. creating or saving at least 4 million jobs
  2. rebuilding our basic infrastructure
  3. providing for job retraining for those workers who need to learn new skills
  4. moving toward energy independence
  5. improving our healthcare system so all Americans can have access to quality treatment
  6. providing tax cuts to lessen the impact of this crisis on America's working families.

Opponent's argument to vote No:

Rep. JERRY LEWIS (R, CA-51): Most of us would agree that the recent $700 billion Troubled Asset Relief Program (TARP) is an illustration of how good intentions don't always deliver desired results. When Congress spends too much too quickly, it doesn't think through the details and oversight becomes more difficult. The lesson learned from TARP was this: we cannot manage what we do not measure. We cannot afford to make the same mistake again.

Sen. THAD COCHRAN (R, MS): We are giving the executive branch immense latitude in the disbursement of the spending this bill contains. We are doing so without any documentation of how this spending will stimulate the economy. Normally, this kind of information would be contained in an administration budget. For items that have a short-term stimulative effect, most of us will feel comfortable debating their merits as an emergency measure. But there is a great deal of spending that is not immediately stimulative.

Reference: American Recovery and Reinvestment Act; Bill H.R.1 ; vote number 2009-S061 on Feb 10, 2009

Voted YES on $60B stimulus package for jobs, infrastructure, & energy.

Congressional Summary:
    Supplemental appropriations for:
  1. Infrastructure Investments: Transportation: DOT, FAA, AMTRAK, and FTA
  2. Clean Water (EPA)
  3. Flood Control and Water Resources (ACE)
  4. 21st Century Green High-Performing Public School Facilities (ED)
  5. Energy Development (DOE)
  6. Extension of Unemployment Compensation and Job Training
  7. Temporary Increase in Medicaid Matching Rate
  8. Temporary Increase in Food Assistance

Proponent's argument to vote Yes:Rep. DAVID OBEY (D, WI-7): Congress has tried to do a number of things that would alleviate the squeeze on the middle class. Meanwhile, this economy is sagging. Jobs, income, sales, and industrial production have all gone down. We have lost 600,000 jobs. We are trying to provide a major increase in investments to modernize our infrastructure and to provide well-paying construction jobs at the same time.

Opponent's argument to vote No:Rep. JERRY LEWIS (R, CA-41): Just 2 days ago we were debating an $800 billion continuing resolution. Now in addition to being asked to pay for a bailout for Wall Street, taxpayers are being asked to swallow an additional $60 billion on a laundry list of items I saw for the first time just a few hours ago. The Democratic majority is describing this legislation as a "stimulus package" to help our national economy. But let's not fool ourselves. This is a political document pure and simple. If these priorities are so important, why hasn't this bill gone through the normal legislative process? We should have debated each of the items included in this package.

It doesn't take an economist to tell you that the economy needs our help. But what does this Congress do? It proposes to spend billions more without any offsets in spending. The failure to adhere to PAYGO means that this new spending will be financed through additional borrowing, which will prove a further drag on our struggling economy.

Reference: Job Creation and Unemployment Relief Act; Bill S.3604&HR7110 ; vote number 2008-S206 on Sep 26, 2008

Voted NO on paying down federal debt by rating programs' effectiveness.

Amendment intends to pay down the Federal debt and eliminate government waste by reducing spending on programs rated ineffective by the Program Assessment Rating Tool (PART).

Proponents recommend voting YES because:

My amendment says we are going to take about $18 billion as a strong signal from the Congress that we want to support effective programs and we want the taxpayer dollars spent in a responsible way. My amendment doesn't take all of the $88 billion for the programs found by PART, realizing there may be points in time when another program is not meeting its goals and needs more money. So that flexibility is allowed in this particular amendment. It doesn't target any specific program. Almost worse than being rated ineffective, we have programs out there that have made absolutely no effort at all to measure their results. I believe these are the worst offenders. In the following years, I hope Congress will look at those programs to create accountability.

Opponents recommend voting NO because:

The effect of this amendment will simply be to cut domestic discretionary spending $18 billion. Understand the programs that have been identified in the PART program are results not proven. Here are programs affected: Border Patrol, Coast Guard search and rescue, high-intensity drug trafficking areas, LIHEAP, rural education, child abuse prevention, and treatment. If there is a problem in those programs, they ought to be fixed. We ought not to be cutting Border Patrol, Coast Guard search and rescue, high-intensity drug trafficking areas, LIHEAP, rural education, and the rest. I urge a "no" vote.

Reference: Allard Amendment; Bill S.Amdt.491 on S.Con.Res.21 ; vote number 2007-090 on Mar 22, 2007

Voted NO on $40B in reduced federal overall spending.

Vote to pass a bill that reduces federal spending by $40 billion over five years by decreasing the amount of funds spent on Medicaid, Medicare, agriculture, employee pensions, conservation, and student loans. The bill also provides a down-payment toward hurricane recovery and reconstruction costs.
Reference: Work, Marriage, and Family Promotion Reconciliation Act; Bill S. 1932 ; vote number 2005-363 on Dec 21, 2005

Voted NO on prioritizing national debt reduction below tax cuts.

Vote to table [kill] an amendment that would increase the amount of the budget that would be used to reduce the national debt by $75 billion over 5 year. The debt reduction would be offset by reducing the tax cut in the budget framework from $150 billion
Reference: Bill S Con Res 101 ; vote number 2000-55 on Apr 5, 2000

Voted YES on 1998 GOP budget.

Approval of the 1998 GOP Budget which would cut spending and taxes.
Status: CR Agreed to Y)78; N)22
Reference: H. Con. Res. 84 as amended; Bill H. Con. Res. 84 ; vote number 1997-92 on May 23, 1997

Voted NO on Balanced-budget constitutional amendment.

Approval of the balanced-budget constitutional amendment.
Status: Joint Resolution Defeated Y)66; N)34
Reference: S. J. Res. 1; Bill S. J. Res. 1 ; vote number 1997-24 on Mar 4, 1997

Require full disclosure about subprime mortgages.

Dodd sponsored requiring full disclosure about subprime mortgages

Sen. DODD: Today we are facing a crisis in the mortgage markets on a scale that has not been seen since the Great Depression: over 2 million homeowners face foreclosure at a loss of over $160 billion in hard-earned home equity; over one out of every 5 subprime loans is currently delinquent. These high default rates have frozen the subprime and jumbo mortgage markets and infected the capital markets to the point where central banks around the world have had to inject liquidity into the system to avoid the crisis from spreading to other segments of the market.

One of the fundamental causes of this serious crisis is abusive and predatory subprime mortgage lending. The Homeownership Preservation and Protection Act of 2007 is designed to protect American homeowners from these practices, and prevent this disaster from happening again. The legislation will:

It is important to keep in mind that only about 10% of subprime mortgages have been made to first time home buyers. This market has not been primarily about creating a new set of homeowners; a majority of subprime loans have been refinances. While maintaining access to subprime credit on fair terms is important, too much of the subprime market has actually put the homes and home equity of American families at risk.

In the coming months, the housing crisis is going to get worse. We will need to continue to press lenders and servicers to provide real relief for homeowners threatened with foreclosure.

Source: Homeownership Preservation and Protection Act (S.2452 ) 2007-S2452 on Dec 12, 2007

More enforcement of mortgage fraud and TARP fraud.

Dodd signed Fight Fraud Act

Source: S.386&HR1748 2009-S386 on May 4, 2009

Sponsored bill banning abusive credit & enhancing disclosure.

Dodd sponsored Credit CARD Act

Source: S.414 & H.R.627 2009-S414 on Feb 11, 2009

Other candidates on Budget & Economy: Chris Dodd on other issues:
CT Gubernatorial:
Jodi Rell
CT Senatorial:
Linda McMahon
Richard Blumenthal
Rob Simmons

Newly appointed in 2009;
special election in 2010:

DE:Kaufman (D)
CO:Bennet (D)
IL:Burris (D)
MA:Brown (R)
NY:Gillibrand (D)

Announced retirement as of 2010:
CT:Dodd(D)
DE:Kaufman(D)
FL:Martinez (R)
FL:LeMieux(R)
IL:Burris(D)
IN:Bayh(D)
KS:Brownback(R)
KY:Bunning(R)
MO:Bond(R)
ND:Dorgan(D)
NH:Gregg(R)
OH:Voinovich(R)
PA:Specter(R)
UT:Bennett(R)
WV:Byrd(D)
WV:Goodwin(D)


Senate races in 2010:
AK:Miller(R) vs.McAdams(D) vs.Murkowski(I)
AL:Shelby(R) vs.Barnes(D)
AR:Lincoln(D) vs.Boozman(R)
AZ:McCain(R) vs.Glassman(D)
CA:Boxer(D) vs.Fiorina(R) vs.Lightfoot(L)
CO:Bennet(D) vs.Buck(R)
CT:Blumenthal(D) vs.McMahon(R)
DE:Coons(D) vs.O`Donnell(R)
FL:Rubio(R) vs.Crist(I) vs.Meek(D) vs.DeCastro(C) vs.Snitker(L)
GA:Isakson(R) vs.Thurmond(D)
HI:Inouye(D) vs.Cavasso(R)
IA:Grassley(R) vs.Conlin(D)
ID:Crapo(R) vs.Sullivan(D)
IL:Giannoulias(D) vs.Kirk(R)
IN:Ellsworth(D) vs.Coats(R)
KS:Johnston(D) vs.Moran(R) vs.Bellis(Rfm)
KY:Conway(D) vs.Paul(R)
LA:Vitter(R) vs.Melancon(D)
MD:Mikulski(D) vs.Wargotz(R)
MO:Carnahan(R) vs.Blunt(D)
NC:Burr(R) vs.Marshall(D)
ND:Potter(D) vs.Hoeven(R)
NH:Ayotte(R) vs.Hodes(D)
NV:Reid(D) vs.Angle(R)
NY6:Schumer(D) vs.Townsend(R)
NY2:Gillibrand(D) vs.DioGuardi(R)
OH:Fisher(R) vs.Portman(D) vs.Deaton(C)
OK:Coburn(R) vs.Myles(D)
OR:Wyden(D) vs.Huffman(R)
PA:Toomey(R) vs.Sestak(D)
SC:DeMint(R) vs.Greene(D)
SD:Thune(R) unopposed
UT:Lee(R) vs.Granato(D)
VT:Leahy(D) vs.Britton(R) vs.Freilich(I)
WA:Murray(D) vs.Rossi(R)
WI:Feingold(D) vs.Johnson(D)
WV:Manchin(D) vs.Raese(R)
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Page last updated: Oct 28, 2010