Sen. Dianne Feinstein talks economy, housing on visit to Valley

08/29/2012 11:25 PM

08/29/2012 11:29 PM

MODESTO -- Economic issues dominated the speech Sen. Dianne Feinstein gave Wednesday to a lunchtime audience in downtown Modesto.

The San Francisco Democrat called the lingering U.S. recession "unusual," saying, "Productivity has gone up but unemployment hasn't gone down."

Nowhere is that more evident than the Central Valley, where hundreds of businesses have closed or downsized in the past five years and the unemployment rate has not dipped below 15 percent.

Jobs are leaving the country at an increasingly alarming rate, Feinstein said. In an effort to stanch the flow, she plans to introduce a bill that will reduce taxes for companies making products patented here that keep their jobs in the United States.

"We must capture a manufacturing base back," she said. The problem is even more evident in California, where tougher environmental and other regulations make it more expensive for manufacturers who might want to locate or expand here.

"A lot of California law moves manufacturing outside of the state," she said. "The Legislature needs to take a look at the laws and mandates they have passed."

Feinstein told the more than 350 people at the Modesto Chamber of Commerce lunch in the DoubleTree Hotel ballroom that there has been a "trickle-up" phenomenon in this economy, with those making more than $250,000 doing well and most everyone else lagging behind.

Feinstein also was mindful of being surrounded by farmers, addressing an issue top of mind in this area: water.

California doesn't have nearly enough storage for its water, she said. "We are on our way to a warmer state, a drier state and a more fire-prone state," she said, adding that with global climate change, California's snowpack is in very real danger over the next 100 years. "We need to be able to store water from the wet years for the dry years."

She also was well-aware of the Modesto Irrigation District proposal to sell water to her hometown of San Francisco.

"I have nothing to do with that," she told the crowd. "I'm not going to make a comment on whether that is good or bad. But we are on our way to running out."

Feinstein said she has been asking various groups to hold events such as Wednesday's so she can get out and talk to people throughout the state. Tuesday night, Bill and Suzy Lyons had a fundraising reception in her honor.

Outside the hotel Wednesday, a small collection of protesters held signs on the sidewalk. Demonstrators ranged from those promoting water for crops to advocating that she debate her Republican challenger in the November election, Elizabeth Emken, to asking Feinstein to stop foreclosures.

In response to a question from the audience, Feinstein said she doesn't plan to debate Emken, whom she is expected to defeat handily.

And she addressed the housing bust, pointing out what most in the crowd knew already: This area is among the nation's highest in foreclosure rates. According to DataQuick statistics released in July, more than 14,600 Merced County homes have been taken back by lenders or sold to the highest bidders on the courthouse steps since 2006.

Feinstein said she is promoting a bill that would provide federal insurance to private lenders who modify mortgages. She said she hasn't had any luck working with banks one on one, despite sending 50 letters on behalf of constituents trying to hang onto their homes. She's received zero response.

Modesto Bee staff writer Patty Guerra can be reached at pguerra@modbee.com or (209) 578-2343.

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