On a brighter note, ADP said "though it accounted for most of the weakness in goods production job growth in March, construction growth picked up in April and the industry added 15,000 jobs over the month." "Job growth appears to be slowing in response to very significant fiscal headwinds," Moody's chief economist Mark Zandi said in the press release, adding that "tax increases and government spending cuts are beginning to hit the job market. Job growth has slowed across all industries and most significantly among companies that employ between 20 and 499 workers." The "fiscal headwinds" include defense budget cuts, some of which were caused by federal budget sequestration beginning March 1, that include mandatory budget cuts of $85.4 billion for fiscal 2013. The major tax increase this year is the end of the temporary 2% reduction in the Social Security payroll tax.
House Financial Services Committee Chairman Jeb Hensarling (R., Texas) said in a statement later on Wednesday that "Mel Watt is a senior and well respected member of the committee, but he is not the issue. The issue is the administration's continued inaction and refusal to put forward an actual plan to reform our nation's unsustainable housing finance system." Fannie Mae and Freddie Mac were taken under government conservatorship in September 2008. Hensarling said that following "the largest, most costly taxpayer-funded bailout in history . . . the administration's response to the crisis, the Dodd-Frank Act, did nothing to reform these failed mortgage giants." "Unlike the administration, our committee is working to create a sustainable housing finance system that ends taxpayer bailouts and abolishes Fannie and Freddie as government-sponsored enterprises," Hensarling said. "This is a heavy lift, especially with divided government. That is why leadership from the administration is so crucial, and why the administration's silence and refusal to release a reform plan is so disappointing." Breckenridge Insurance Group/OSC CEO Tracey Carragher said later in a statement that Watt's "experience with issues of housing and homeowner finance and his Congressional record as a consumer champion qualify him well for this role." OSC is a provider of lender-placed insurance to cover lenders' collateral risk, when borrowers allow homeowner's insurance policies to lapse, or the lender is unable to obtain proof of insurance coverage. Lender-placed insurance (LPI) is also known as force-placed insurance. "Rep. Watt will face many challenges ahead, but we urge him to maintain the agency's focus on lender-placed insurance reform," Carragher said. "We hope that he will advance the agency's recent initiatives to investigate and end inappropriate practices in the LPI industry, which have been detrimental to homeowners and taxpayers."