Menendez Talks Gateway Tunnel Funding and Solving the Foreclosure Crisis

Bad enough that the states Transportation Trust Fund to fix roads and bridges is running on fumes, the Federal Transportation Fund’s in trouble too. Funding’s been extended for the holiday. Just until next Friday, giving Congress only days to cut a long term deal. The House of Representatives’ current deal cuts millions from state highway funds and $50 million from NJ Transit and contains no funding for the new Gateway train tunnel under the Hudson. I asked the Senate Mass Transit Subcommittee’s ranking Democrat, Senator Bob Menendez where the House and Senate transportation bills stand.

Williams: The Federal Transpiration Funding bill’s deadline has been extended to Dec. 4. What’s up for negotiation between the House and Senate versions of that bill?

Menendez: Well this is the large Federal Transportation bill that is so critical to New Jersey as a corridor state where mass transit is a big part of our economic vitality, cross borders. So, what the bill is about is trying to reconcile a more robust transportation bill because it’s a five year bill, but right now only has three years of funding. Which means that at the end of this three years we will be back in the same boat, and its hard to plan long term projects, like Gateway the Trans-Hudson tunnel in three years. We’re in negotiations to build it up, to have it more robustly funded and to include some provisions that the Senate passed that are important to New Jersey, like a high density state, that the House took out. That’s what our challenge is.

Williams: And what the high density state the House took out means is a loss of $50 million to NJ transit.

Menendez: Absolutely. Which NJ Transit cannot afford and NJ Transit riders cannot afford. If you take 50 million out, how do we ever get to the type of money Gateway?

Williams: That’s my question, how do we to the money for Gateway?

Menendez: Well, this is going to have to be, when I passed the last Federal Highway Bill we had provisions for projects of national or regional significance. Well, we generate about 20 percent of GDP for the entire nation out of our region. This has to be a project of national significance, and we have to get the funding necessary in that category to make sure we start our way and have a long term commitment to Gateway. The government, the federal government said they’ll match 50 percent. That’s great, but saying that and having the money to do it is two different things. I am working to try to make sure the money is there.

Williams: Do you think you can do it given that both the houses are controlled by Republicans?

Menendez: Like I said this has to be one in which the administration, the Obama administration, uses it muscle and its ability to negotiate with Congress to make this a national projects of significance. If we make this a national project of significance, which it is, I mean this is a corridor region, the Amtrak goes through this region. This is about the nation’s economy, the nation’s security in a post September 11 world, and um it is about growth and economic opportunity.

Williams: Does this throw the agreement with Obama Administration made with both Governor Cuomo in New York and Governor Christie in New Jersey to go half and half for the funding on Gateway. If we take that kind of a cut can we do it?

Menendez: That commitment is going to stay. Now, the question is you got to put the funds into the commitment, right? So, that won’t be done necessarily in one bill alone and there are a series of other pots we will draw from. But, at the end of the day it’s starts with a robust federal highway and mass transit bill to lay the foundation for the type of funding that the federal government has to come up with 50 percent. And then the state, which has challenges with its Transportation Trust Fund, is going to have to put its house in order, as well.

Williams: And Fast.

Menendez: And Fast.

Williams: The foreclosure crisis, you’ve introduced a bill that would help people stay in their homes longer and transfer some of the responsibility to the mortgage servicers. Can you tell us how that would work?

Menendez: We have the highest rate of foreclosure in the nation here in New Jersey. We have more zombie foreclosures than any other part of the country, which means that a bank or a mortgage company starts a foreclosure the owner says, ‘well, I don’t have the wherewithal to pay for it’ and then walks away from the property and then bank changes their mind and doesn’t finish their foreclosure because the value isn’t big enough. This is just bad.

Williams: So, the property just sits there derelict and abandoned?

Menendez: It just sits there derelict. It creates a tremendous challenge for the community, property values go down and a family is out of their home. So, principle reduction, which is being done in the private sector, where you reduce the principle of the debt. You take a future interest in any appreciation in the value. It lets the homeowner stay be a responsible borrower, keep the property values in tact, keep families in their home. It’s something I want to see that the Fannie and Freddie and FHA do they are prohibited under federal law to do so. This is working in the private sector, Ocwen is doing it. 80 percent of the people they offer it to take it, and there’s less than three percent default. So, this is a proven success rate, we just need to let Fannie, Freddie and FHA do the same—keep more families in, keep property values stable, build our communities.