The Campaign Spot

Mortgage Plan Tries to Mitigate an Unemployment Problem That the Administration Just Worsened

An early point about the Obama administration’s new plan to help homeowners by forcing banks and lenders to reduce monthly mortgage payments to 31 percent of income, usually unemployment insurance:

The new push, which the White House is scheduled to announce Friday, takes direct aim at the major cause of the current wave of foreclosures: the spike in unemployment.

As noted in several places, the new health-care bill has already made the cost of employees more expensive and taken away capital that could otherwise have been used to hire workers.

Farm-equipment manufacturer John Deere “said it expects its expenses to rise by around $150 million on an after-tax basis, mainly in the second quarter, as a result of the legislation.”

Verizon “told employees in an email Tuesday that Verizon’s costs will go up in the near term, pinpointing a tax-subsidy reduction for retiree health benefits.”

Heavy-equipment manufacturer Caterpillar “said that its first-quarter earnings will be hit with a $100 million after-tax charge under tax law changes attached to the new health care reform legislation.”

AK Steele Holding Corp., “the third largest U.S. steelmaker by sales, said it will record a non-cash charge of about $31 million resulting from the health-care overhaul signed into law by President Barack Obama. The charge will be recorded in the first quarter of 2010.”

Valero Energy “will take a $15 million to $20 million charge to second-quarter earnings for the same reason.”

Medical-device maker Medtronic “warned that new taxes on its products could force it to lay off a thousand workers.”

If you want to reduce unemployment, stop passing legislation that kicks the snot out of employers.

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