Journalists Roundtable

Nov. 14, 2008

Transcript:

Ted Simons
>>> Tonight on "Horizon," the negative news about the economy continues. Arizona is now in second place nationwide when it comes to foreclosures. The governor is in Washington this week, trying to get more money by way of a stimulus package. And change in the air at the legislature. That's next, on "Horizon."

Ted Simons
>>> Hello, and welcome to "Horizon," I'm Ted Simons. Joining me tonight are Paul Giblin of the "East Valley Tribune," Catherine Reagor of "The Arizona Republic," and Howard Fischer of "Capitol Media Services." We are now number two on a list of foreclosures in the country. Catherine, let's get started here. Not really a surprise here. Talk about the numbers and what they mean.

Catherine Reagor
>> It is unfortunate, the list we don't want to be at the top of, but we are for the area with the biggest drop in home price, a 30% drop, so they kind of correspond. Foreclosures continue to rise. There's supposed to be help out there, there are some programs. But so far, not a lot of anything happening. Foreclosures continue to drive down home prices, of course, and people are just struggling. With the other hits to the economy, the job loss, it's just going to get worse unless we get more help. That's the issue with the whole bailout plan now.

Howard Fischer
>> Many of the plans either being pushed in congress or even as the banks are doing, only help people already behind; whereas, if you're in a situation where you're current on your mortgage, and you know you're going to be in trouble with some readjustment or you know something's changed, they don't want to deal with you. You've really got to be in trouble, as opposed to helping the people who are there trying to stay in their homes.

Ted Simons
>> Talk about some of the plans out there. Some deal with neighborhoods, some deal with loans. What's going on?

Catherine Reagor
>> One area we are seeing help is Bank of America, which bought Countrywide last summer, and actually pulled 2,000 foreclosures out in Maricopa County. There was a gun, they had to do this. Chase and Citibank have said they're going to do the same thing. We'll see. We have identified 28,000 foreclosures across the Valley pending right now. If all those lenders follow through, it could take 8,000 out of the market homes. If they're in the system, if there's a notice of trustee filed, they are stopping them and putting them through on this. But there needs to be some kind of pressure, and it just can't be volunteer. The whole Fannie Mae, Freddie Mac plan came out and this is how you modify, but much, much more has to be done.

Howard Fischer
>> That's really the key point. It's one thing to pull them out. How are they going to restructure them? Give them 40-year mortgages? Are they going to lower payments to something more reasonable? That's yet to be seen. It's fine to say we're going to hold off. But until we see what relief they are going to offer --

Catherine Reagor
>> I'm sorry. The 2,000 that got held out, they are offered a plan in December. By the guidelines of the attorney general, it has to be affordable, within 30% of their income. There have to be guidelines. Some may say, no, I'm going to walk away, I feel underwater.

Paul Giblin
>> That offers relief to people that are going to get their mortgages changed. Should I care if you're being saved from your mortgage?

Catherine Reagor
>> If you live next door, that's one fewer foreclosure. I know across the street from me an investor let the house go into foreclosure, and the renters gutted it. I am happy to say, someone bought it and they are working on it, that quickly. That's a good sign, but it affects us all.

Ted Simons
>> Why, if I'm paying my bills, didn't try to buy a house I couldn't afford, I've got a job, I'm okay, why am I having to pay for Mr. Living high on the hog over here? But the answer is --

Howard Fischer
>> Mr. High on the hog lives next to you and your neighborhood goes right down the drain. So. Money put in, so. Grants we've gotten through the state housing department have been neighborhood preservation. Even when the houses have been abandoned, they get to buy them up and fix them up, or raise them if they're in that bad of shape. You don't want the house being used for kids, drug, the lawns not being mowed. It brings down your homes. You're right, I paid my mortgage. I don't like the fact that I'm responsible and that somebody else is getting a thing, a break. But I understand how it is. But that's the same thing we're doing nationally. The little banks that weren't in trouble now feel that they have to apply for money, otherwise it looks like they've not qualified. We're bailing out A.I.G. and the big banks and the firms, is there fairness there? No.

Ted Simons
>> The $40 million that went to Phoenix, wasn't that awarded in September?

Catherine Reagor
>> They don't have the money yet. Statewide we're going to get about $150 million. The department of housing is working on the plans. That is, that's money for, community by community, the hardest hit areas. And it'll be to rehab houses, to buy -- I mean, there are neighborhoods where a third or a fourth of the homes are in foreclosure. It'll go towards that. They have to submit a plan by the first of December. Their final plan, right now there's a comment review. Go to the website and look and see what you think, and then the money comes back. Some of the money -- I hope there is counseling involved, but there's not.

Paul Giblin
>> There's still an oversupply of houses, correct?

Catherine Reagor
>> Oh, yes.

Paul Giblin
>> How long will it take that to be absorbed?

Catherine Reagor
>> It's community by community. It used to be Buckeye and others were hurting the most. They're about to 13 months, in some cases. Like Surprise, there are more foreclosures than actual sales.

Howard Fischer
>> Next week we'll get the latest unemployment stats. Assuming we hit six point something, if people are moving, nobody is moving in to get the supply, and we still have a few builders building spec homes. I don't know how we dig out of this.

Paul Giblin
>> Right. If we don't have jobs, it's kind of dead, isn't it.

Catherine Reagor
>> We survive on growth and that's how we've been. We've tried to diversify.

Ted Simons
>> Some of these numbers look one way. But when you look deeper they look another.

Catherine Reagor
>> We're having some funny things going on. A huge jump in preforeclosures last month, because there were duplicates just overwhelming to the system. When you throw those out, we were flat from September so that's pretty good. We had more new foreclosures go in, but we didn't have the jump initially thought. We did have 2,000 come out from the Bank of America. I'm watching Chase and Citi to see if they're doing the same thing.

Paul Giblin
>> Which is the one city ahead of Phoenix in foreclosures?

Catherine Reagor
>> Number two, Miami is really high, Las Vegas is ahead of us. I'm sure that's number one now.

Ted Simons
>> Actually I think it's Arizona is number two and Nevada I think is number one. We're neck and neck towards the finish, depending on the growth of the economy.

Catherine Reagor
>> They have gambling, you know.

Ted Simons
>> Different kind of gambling, but I see. Howie, we're talking about the economy here. The governor was back in Washington pushing for, among other things, an infrastructure plan. Lets get those W.P.A. stamps back in the sidewalk, huh?

Howard Fischer
>> Exactly. It's a variation of what the governor has been trying to do here. She got the legislature to approve the bonding for the universities, we're going build our way out of this, create construction jobs. She figures there's about $500 million in security projects. Let's advance all of these, and we'll have all these construction jobs and obviously in Arizona, where we've got the construction employment down to maybe half what it was at its peak, that'll help us. The problem is, it's the same sort of thing with stimulus packages and everything else. We don't have the money coming in. We're going to be borrowing the money to do it up front. It's sort of a bit of a payday loan scene there.

Ted Simons
>> How likely is Congress to go ahead with this idea?

Howard Fischer
>> I think the new Congress is very interested in this, I think everyone recognizes that you can't leave the economy alone. Now, the problem becomes -- and we'll talk about Phil Gordon, and everybody wants a piece. The auto industry wants a piece of this. The states want a piece of this. The governor said the next stimulus package should go to her directly and the state, rather than the $600 checks we got. The fight isn't going to be, are we going to have money. The question is how much for whom.

Ted Simons
>> You had an interview with Jon Kyl. From what you interviewed him, is this the kind of thing where republicans will fight or say, you know, stand back and let this happen.

Paul Giblin
>> That's a hard thing to read right now. Jon Kyl told me voters are taking the Republicans to the woodshed, worse than the caricatures of Democrats. Those people were voted out. He foresees, at least in the Senate, the Republicans getting more narrowly focused, more smaller government. The other factor involved in all this, another reason the Republicans were thrown out, because the economy is in the tank and Obama is talking about jazzing up the economy. Even Republicans are impressed. You have these two conflicting factors right now. I think Howie's probably right, there will be some money, but it depends on who gets what.

Howard Fischer
>> If you're a congressman from Michigan, you bet you're going to vote for that. If you see defense contracts and you've got Sierra Vista in your district, you bet you vote for that. If your Frank's, and you're saying, there's money coming to Arizona.

Ted Simons
>> If it's a safe yes and you're in a district that's relatively conservative, you can make a lot of noise voting no.

Howard Fischer
>> Again, that's becomes who gets to have that luxury. Remember, the first bailout package, everyone voted no so they got to beat their chest a little bit. Then they came back and said, I guess we need it.

Ted Simons
>> Real quickly, we talked about the governor back there with the stimulus package. How did the state aid packages go?

Howard Fischer
>> I don't think she expected to come back exactly with a check. Her belief is -- and we've talked about this on the show before -- in the earlier stimulus package everybody got a $600 check. They went out and spent it and we're still in the doldrums. She says, give it directly to me, give it to the states, money for projects, for the border, for highways, for mass transit. And also give us more money for Medicaid which is AHCCS in Arizona. The economy goes down, the need for the insurance plan goes up. I think there is some belief they will put more money into the AHCCS or Medicaid programs in Arizona, and we'll get a share.

Ted Simons
>> Phil Gordon back in Washington, as well, everyone and their brother seems to want to get more money. The mayor says, why not the cities?

Catherine Reagor
>> Phoenix will be a tarp city. Yeah, he's facing the 225, Phoenix says $250 million shortfall, everything from pensions to services will have to be cut. Atlanta, as well, an area very dependent on housing, like Phoenix and Philadelphia.

Ted Simons
>> Pensions, cash flow problems, infrastructure problems. And these are cities getting at the back of the line, but certainly lining up with everyone else.

Paul Giblin
>> Phil Gordon targeting part of the bill he thinks should be diverted towards the city for him to spend how he likes.

Ted Simons
>>> The governor is back in Washington, let's play the game we play every week on this program and other places.

Howard Fischer
>> She did not meet with Barack.

Ted Simons
>> Anything new on the rumor front? Attorney general? Possibly White House counsel?

Howard Fischer
>> Before the election, the line was, I enjoyed being the governor. The day after the election was, I'm not prepared to talk about that, go away. This week, including today when I talked to her, it was well, you know, there's nothing for me to talk about. To me the sign was, excuse me, Barack, I'm here, come get me. I think if she's offered something she'll take it. Well, attorney general I think she would take. Homeland security, I think she would take. The latest rumor is White House counsel. The problem I said with that is it's not a visible position. She's a very visible person and she likes talking. Counsel for the president is not out there making speeches and answering questions.

Ted Simons
>> Pretty good jump for Gonzalez.

Howard Fischer
>> Well, of course, we had some problems there.

Ted Simons
>> The way he jumped was a problem, but the fact is it can catapult you to a certain degree.

Howard Fischer
>> And that's really the key. We can play this game since we've got four of us who Janet is not sharing anything with. I need White House Counsel, a non-Washington insider. I can't give you A.G., but probably if I'm here eight years, there may be one or two Supreme Court openings. What do you think, Janet? He did this today. He met with Hillary in Chicago, and they're doing this little dance about whether Hillary will take Secretary of State. The question is what's Colin Powell going to do.

Paul Giblin
>> Let's go back to Harriet Meyers, they didn't go well. I don't think that's a position to vault someone up to the Supreme Court.
Ted Simons
>> Are you comparing the White House Secretary to the Governor of Arizona?

Paul Giblin
>> She was general counsel to President Bush.

Ted Simons
>> But before that she was a secretary.

Howard Fischer
>> And this gets tricky. We can play this out. Will Janet leave the state in Republican hands?

Ted Simons
>> Here's the question: how concerned are they in this?

Howard Fischer
>> When I talked to Don Bivens, the party chairman, he's counting on Janet running for the U.S. Senate in 2010. That's his dream, his wonderful ticket. They both have shown that they can get elected in a Republican state. Is Janet going to hang around just to keep him happy? Not a chance. Of course they're worried. They were worried when they first started floating her name as vice president. She didn't add anything to the ticket as vice president, but she certainly is qualified to be attorney general. She probably is qualified to be homeland security chief. If she does run again in 2010 as the incumbent, that's not what the Democrats are counting on.

Ted Simons
>> Let's move on. We've got some elections still outstanding. I want to get to the vote count and what is still out there. Real quickly here, the mayor's race in Scottsdale still technically undecided, or the lead is spreading a little bit for Lane. How does that change things if he becomes mayor of Scottsdale?

Paul Giblin
>> It could be a dramatic change with things there. Mary Manross has been there forever, behind a lot of big-ticket items. She likes to spread around money a lot, giving them these sweetheart deals, tax cuts, that sort of thing. Her idea is she's bringing up the city. Jim Lane is very much different than that. He's a more budget-conscious guy. We'll see a lot of that sort of thing go away if he is elected.

Ted Simons
>> Have we seen a lot of developments go by the wayside in Scottsdale? Has commercial development there survived a little better than other parts of the Valley?

Catherine Reagor
>> It has a little better, also because it is Scottsdale and retail there and developments. It's feeling the hit, as well. They have also given a lot of incentives for retail over time.
Paul Giblin
>>You see things like car dealers picking up and moving down to Tempe. A lot of money did go to car dealers to help out with their marketing after land, too.

Catherine Reagor
>> There are a lot of projects on hold. They are moving forward as can.

Ted Simons
>>Will he continue with the high-rise look or back to the west's most western town look?

Paul Giblin
>> I think the west's most western town look.

Ted Simons
>> Corporation Commission, that's almost done?

Howard Fischer
>> It seems to be done. It was very -- two democrats who were elected, Sandra Kennedy and Paul Newman. Sam George was on the, quote, Solar Team. It looks like Stump is going to be elected, which keeps Republicans in charge of the Commission. It was five Republicans up until now. We have a couple of House races still outstanding, one from the Chandler area and one from the Apache Junction-Pinal area. We'll go from 33-27 to cement their lead in the House. That also helps them. Again, now we're down to the scenario of which governor we're dealing with.

Paul Giblin
>> Presumably a lot of nonregistered voters were going to vote democratic.

Howard Fischer
>> That's the problem, they didn't vote.

Howard Fischer
>> We were counting on an 85% turnout. We had somewhere around 60% turnout.

Ted Simons
>> Helen Purcell thinks it'll get up very close to 80%. That's what she's saying.

Howard Fischer
>> I think perhaps in Maricopa County every two years the Democrats go out and register all these new voters, and then they don't follow up. They've got phone lists, did you vote, did you get an early ballot. That's been the problem. They are very good at registering people but not so good at getting out the vote.

Paul Giblin
>> I'm sure everyone where is the same story, this is the year all these compelling interests are going to make the nontraditional voters show up and vote, and they never do.
Howard Fischer
>> Here's the other piece of it. A lot of them who voted for Obama, they didn't make it further down the ticket. There is a dropoff that occurs. They came out to vote for Obama, the ones that did, and said, corporation commission? Why do you care about corporations?

Paul Giblin
>> I didn't realize that. The other question is, if these people can't register themselves to vote without someone holding them by the hand and walking them through the process, do we want those people making up our minds or deciding who's going to represent us?

Catherine Reagor
>> They have other things on their mind, they are going through foreclosures.

Howard Fischer
>> Here's the larger issue. Helen Purcell was on. We had 89,000 who couldn't follow directions on how to mark them. They used a heavy felt pen and it bled through. I said to Helen, why are you counting the votes of stupid people?

Catherine Reagor
>> Sounds like a media leak.

Ted Simons
>> I was going to say, we were kind of marching down a weird path here. Let's move back over here a little bit.

Howard Fischer
>> None of whom I'm sure are viewers of this station.

Ted Simons
>> Is this piling on now?

Howard Fischer
>> Of course it is.

Paul Giblin
>> Curiouser and Curiouser. Busted on charges back in February, and now a bunch of new ones. It'll be an interesting court case.

Ted Simons
>> Howie, I do want to get to his defense. The speech and debate clause defense is either brilliant or something that comes out of Jupiter. I can't figure out which one.

Howard Fischer
>> If the prosecutor is throwing stuff against the wall, figuring they will get him to plead, the defense lawyer says, I am a member of congress. Anything I do that relates to any possible legislation, I have absolutely immunity. The fact that he may have been taking money for a vote somehow escapes the whole argument. If he somehow convinces the U.S. supreme court that by virtue of the fact that this is related -- that cash in my freezer I related to my goal as a congressman.

Ted Simons
>> Is that going to cut it for you?

Paul Giblin
>> Not when you're breaking the laws, that's not going to cut it.

Howard Fischer
>> One place he may have an entree, how did they get into this investigation? You have the F.B.I. looking at members of Congress. You better have a darn good reason for snooping around where they do have privilege. If he throws out some of the early stuff, we talked about the concept of the free and the poison tree. If the basis of the search warrants gets thrown out, everything goes.

Ted Simons
>> We do not have to ask further questions, but maybe we'll hit more up next Friday on the "Journalists Roundtable."

Ted Simons
>> Thank you so much for joining us on the "Journalists Roundtable."