CQ TODAY PRINT EDITION
– BANKING & FINANCIAL SERVICES
April 8, 2008 – 8:10 p.m.
White House Opposition to Housing Package Takes Senators by Surprise
By Benton Ives, CQ Staff
Unanticipated White House criticism, along with introduction of a substantially different House plan to help borrowers, is clouding long-term prospects for a Senate housing package.
As the Bush administration on Tuesday assailed the current shape of the Senate bill, House lawmakers indicated they will pursue more consumer-oriented legislation to stimulate the flagging housing market. That means the Senate package (
After easily clearing a procedural hurdle Tuesday, the Senate remains on target to wrap up work on the package Wednesday.
But the surprise attack by the administration posed a threat to the bipartisan bill, drafted by Christopher J. Dodd , a Connecticut Democrat, and Richard C. Shelby , a Republican who represents Alabama. They are the chairman and ranking member, respectively, of the Senate Banking, Housing and Urban Affairs Committee.
White House Press Secretary Dana Perino said the housing package “is not a bill that we could support.”
“The bill will likely do more harm than good by bailing out lenders and speculators and passing on costs to other Americans who play by the rules and honor their mortgage debt obligations,” Perino said at a Tuesday briefing.
The criticism came just before the Senate voted, 92-6, to limit debate on the package.
All six of the “no” votes came from Republicans: Jim Bunning of Kentucky, Tom Coburn of Oklahoma, Jim DeMint of South Carolina, James M. Inhofe of Oklahoma, Jon Kyl of Arizona and Arlen Specter of Pennsylvania.
The package includes an overhaul of the Federal Housing Administration (FHA), supported by the Bush administration, and a series of tax breaks aimed at stimulating the housing sector.
Perino took aim specifically at provisions written by Senate Republicans, including a tax credit for the purchase of homes on the way to foreclosure.
“We have serious concerns that these elements and others would do little to help homeowners avoid foreclosure or reduce housing inventories,” she said.
Perino urged lawmakers to send President Bush the FHA modernization, a $10 billion expansion of mortgage revenue bonds designed to help homeowners refinance their mortgages and a regulatory overhaul of Fannie Mae and Freddie Mac, the government-sponsored enterprises that provide a secondary market for mortgage loans.
The White House criticism clearly startled senators of both parties. Asked about it, Minority Leader Mitch McConnell , R-Ky., said, “You’re telling me something I was unaware of.”
White House Opposition to Housing Package Takes Senators by Surprise
Mel Martinez , R-Fla., said he was “surprised” by Perino’s remarks. The bill “doesn’t do everything, but it does a lot of good things,” he said.
Johnny Isakson , R-Ga., was the principal author of one of the provisions Perino singled out: a $7,000 tax credit to spur the purchase of homes in or near foreclosure. Isakson said he would be meeting with administration officials Tuesday. “I’m not sure that’s the end of the story,” he said of Perino’s statement.
Majority Leader Harry Reid , D-Nev., said senators should “feel good” about the bill, which he said would help stimulate the slumping economy.
The Senate still must deal with a handful of amendments, but none are controversial enough to threaten the bill’s passage. Reid said an amendment to extend a set of tax breaks for renewable energy, due to expire at the end of 2008, likely would be adopted by a “pretty good vote.”
The extension of those tax breaks could run into trouble in the House, however, because the cost is not offset. House Democrats have been insisting that Congress abide by pay-as-you-go budget rules.
Other amendments include an offering from Benjamin L. Cardin , D-Md., that would provide a temporary $7,000 tax credit, spread over two years, for homebuyers who are purchasing their first house.
An amendment by Democrat Bill Nelson of Florida and Republican Norm Coleman of Minnesota would allow homeowners who are behind on their mortgage payments to withdraw funds from retirement and tax-free savings accounts without early withdrawal penalties.
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