"I want to say that the financial crisis is stabilizing and the economy seems to be recovering," he stated. "That's the good news. Now, there are clouds on the horizon. Future shocks are certainly possible."
The congressman pointed to a large sector of homeowners with sub-prime mortgages who may still be in danger. He added that the government has put into place a program to allow homeowners to refinance with long-term stable home loans in order to help residents maintain their homes without risk of foreclosure.
While California's fiscal situation remains bleak for the moment, McNerney said the Bay Area in particular is poised to make a strong recovery based on several points.
"We're right in the nexus between Silicon Valley and the resources of the San Joaquin Valley; 580/680 is a tremendous transportation region," he said. Other points were that the housing decline had not hit here as hard as other places, the strength of small businesses, and the quality of the schools.
"The reason people move here is our schools," he said. "The reason businesses move here is the schools. They want a good, healthy safe community and that's what this is. This a community that cares about their kids."
At the federal level, the congressman said he feels leaders are making significant strides in moving the country forward.
"We've put a financial system in place that will require loans to be backed with the proper amount of equity," he said.
In addition, under the Obama administration he said that they are continuing to put together a health reform package that will be usable by all Americans.
"If you have a health care package you like, you'll still be able to keep it. What we're going to offer is a public health option that allows people to participate in a health insurance program regardless of where they're employed, regardless of who they work for, and regardless of any pre-existing conditions," McNerney explained.
In addition, he said the administration will be pushing for more wellness and prevention, as well as reform of both the health and insurance industries.
It all adds up to a lot of change, McNerney told the business council members.
"It's a challenging time, it's an exciting time, it's a scary time," he said. "I know there's pain out there, and yet we have to move forward. We have to create a great economy, one that is not subject to the whims of the oil market. One that doesn't threaten our environment through catastrophic climate change."
He added, "Those are the changes that are happening. There's an urgency because there's momentum. The American people demanded change and we're going to go ahead and move to the best of our ability."
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