NATIONAL URBAN LEAGUE CALLS FOR TARP REPAYMENT AND UNUSED TARP DOLLARS TO FINANCE SIX-POINT JOBS PLAN TO CREATE 3 MILLION NEW JOBS

National Urban League President & CEO Marc H. Morial, by letter to Lawrence Summers, Harry Reid, Nancy Pelosi and Barbara Lee, has urged President Obama and the Congress to take immediate steps to create at least 3 million new jobs through a six-point plan proposed this week.

Taxpayers have bailed out Wall Street and the stock market has improved. Now is the time to take bold action to create Main Street jobs in areas where human misery is high due to record unemployment. There is reportedly hundreds of millions of dollars in both TARP repayment and unused TARP dollars that should rightfully be redeployed to create new Main Street jobs.

*** See letter below.


November 24, 2009

Mr. Lawrence Summers
Director, National Economic Council
The White House

Honorable Harry Reid
Senate Majority Leader

Honorable Nancy Pelosi
Speaker, U.S. House of Representatives

Honorable Barbara Lee
Chair, Congressional Black Caucus


Dear National Leaders,

I am writing to you on behalf of the over 27 million underemployed Americans in desperate need of full-time employment. This includes not only the unemployed, but also the marginally attached and those working part-time for economic reasons, all of whom are struggling to make ends meet during these difficult economic times. As you are well aware, the news that in October, the national unemployment rate exceeded ten percent for the first time since the early 1980s was a sobering wake-up for the leadership of this country even to the point of soliciting a call for a Jobs Summit to be held after the Thanksgiving holiday. While I applaud the Administration for publicly acknowledging the gravity of our nation’s employment situation, I would add that double-digit unemployment has been a reality for communities of color since last summer –for African Americans since August, 2008 and for Latinos since February, 2009.

As President and CEO of the National Urban League, the nation’s oldest and largest community-based movement devoted to empowering African Americans to enter the economic and social mainstream, I have firsthand knowledge of the tremendous obstacles these families have been facing, not just since national unemployment reached 10.2% in October, but for over a year now. In fact, demand for workforce development, business development and housing counseling services through the Urban League’s more than 100 affiliates located in 35 cities and the District of Columbia increased by 74 percent between 2006 and 2008. Our local affiliates are on the front lines of this jobs crisis and witness the devastating impact it is having on the individuals and families that walk through their doors. In response, the National Urban League went on record last fall drawing attention to the deepening unemployment crisis in urban America and calling for a second stimulus plan that would invest directly in job creation and training for the very communities we interact with and serve every day.

It is now a year later, and I am again calling on our nation’s leaders to invest in a long overdue plan for putting urban America back to work that is targeted, temporary and timely. The National Urban League’s Plan for Putting Americans Back to Work meets these criteria. Targeted because it provides solutions for communities with the highest rates of unemployment and the long-term unemployed who often face the greatest barriers to getting a job the longer they are without one. Temporary in that the recommended investments require less than a three year commitment. Timely because the bulk of the plan involves direct job creation as a means of bringing recovery to those most in need more quickly.

Most economists agree that the pace of recovery will be slow. Yet, the individuals to which this plan is targeted are often the last to experience the effects of even a more rapid economic recovery. Therefore, the National Urban League’s Plan for Putting Americans Back to Work is a comprehensive six-point plan to make a direct investment of $168 billion over 2 years to address the most urgent needs of American families in economic crisis by investing in direct job creation, job training for the chronically unemployed, greater access to credit for small businesses and additional counseling relief for those caught in the backlog of the foreclosure process. The plan also proposes tax incentives for clean energy equipment manufacturers who employ individuals in the targeted communities. The plan proposes to do these things in the following ways:

1. Fund Direct Job Creation by offering financial support to cities, counties, states, universities, community colleges and non-profit community based organizations to hire the personnel necessary to provide critical services in communities across the nation. Eligibility for support will be based on local unemployment rates with a focus on the long-term unemployed. At least twice in American history, the government has responded to high rates of unemployment with investments in direct job creation – the 1935 Works Progress Administration, when nearly one-fourth of the labor force was out of work, and the Emergency Jobs and Unemployment Assistance Act of 1974, which established Title VI of CETA as a temporary countercyclical employment program at a time when unemployment was quickly approaching 9 percent. We propose an investment of $150 billion to create 3 million jobs, a number that represents only half of the current unemployed with a high school diploma or less.

2. Expand and Expedite the Small Business Administration’s Community Express Loan Program through a reduction of the interest rate to 1 percent targeted for those businesses located in areas where the local unemployment rate exceeds the state average. A ten-fold expansion of the program (from $1 billion to $10 billion) should make credit available to an additional 50,000 small businesses nationwide.

3. Create Green Empowerment Zones in areas where at least 50 percent of the population has an unemployment rate that is higher than the state average. Manufacturers of solar panels and wind turbines that open plants in high unemployment areas will, for a period of three years, be eligible for a zero federal income tax rate and a zero capital gains tax under the condition that they hire and retain, for a minimum of three years, at least half of their workforce from the local area.

4. Expand the Hiring of Housing Counselors Nationwide by investing $500 million to fund housing counseling agencies nationwide to help delinquent borrowers work with their loan servicers to secure more affordable mortgages. Over the past 18 months more than $400 million in federal funds have been invested by the Administration to help mitigate the mortgage crisis through housing counseling and, according to a recent report by the Urban Institute, borrowers facing foreclosure are 60% more likely to hold onto their homes if they receive counseling and receive loan modifications with average monthly payments $454 lower than those who did not see counselors.

5. Expand the Youth Summer Jobs Program for 2010 by investing $5-7 billion to employ 5 million teens. While the unemployment rate for African-American youth is over 40 percent, the employment population ratio makes clearer the desperate situation faced by many urban youth. Since the late 1990s, this number has declined from a high of 33 percent down to 15 percent, and labor force participation for this group is now at a record low of 26 percent. A critical factor in eliminating racial and socio-economic disparities in unemployment is providing a solid foundation upon which African American youth can build positive future labor market expectations and experiences.

6. Create 100 Urban Jobs Academies to Implement an Expansion of the Urban Youth Empowerment Program (UYEP) to employ and train the chronically unemployed. UYEP, a four year demonstration project created in partnership with the U.S. Department of Labor in 2004, is a youth career preparation initiative designed for at-risk, out-of-school, and adjudicated youth and young adults between the ages of 18 and 24. With 27 Urban League affiliate sites and a total of $29.3 million, the program served 3,900 youth, 65 percent of whom either had job placements (paying an average wage of $9.32/hour) or completed their high school diploma or GED. Two hundred participants were placed in postsecondary schools or college upon completion of their secondary education. Scaling this program up to 100 sites would more than triple the program at a cost of $108.5 million.

At a time of the year when we traditionally give thanks and prepare to share generously with those around us, the American people are both frustrated and disappointed. When the financial industry was hemorrhaging, there was great urgency in devising the TARP plan for its rescue. Despite the ambivalence of most Americans with regards to spending billions of dollars to bail out the very businesses they felt had previously taken advantage of them, they understood the need to take swift and deliberate action to avoid a major national, or even global, financial crisis. We ask that the same urgency be given to the people experiencing a personal financial crisis in cities throughout this country. Recognizing the tremendous amount of work that is required to implement a plan of this magnitude in the most efficient and beneficial manner, I make myself available to meet with you to discuss the ideas proposed herein.

Sincerely,

Marc H. Morial
President and Chief Executive Officer
National Urban League