Scroll down for updates…10:50am Eastern A bit of chaos on the House floor as Repubs and Dems scrap over procedural rules…
There is no constituency for fiscal responsibility, thrift, and restraint. As I’ve reported to you before, the Suck It Up caucus in Congress is a caucus of one in the Senate–Jim Bunning—and 25 in the House.
What does that mean for all of us tax-paying angry renters and honorable homeowners who have paid their loans on time? We’re screwed. While I noted that President Bush threatened a veto of the bailout boondoggle yesterday, Treasury Secretary Henry Paulson this morning is signaling that the administration will deal. Because the Do Something imperative outweighs the Do Right By Taxpayers imperative:
Treasury Secretary Henry Paulson on Thursday said that problems with a housing relief bill under debate in the House of Representatives are “not insurmountable” and he would work toward a bill that President George W. Bush could sign.
“I can’t talk about a compromise now, other than the problems here are not insurmountable, and it’s my job and others working for the president to get to a housing bill that is acceptable and one that he can sign,” Paulson told Fox Business News in an interview from Kansas City, Missouri.
The WSJ boils it down:
Wall Street Journal columnist David Wessel boils down the debate to a question of whether Washington should push the lenders to help Americans whose home values sank below the size of their mortgages “even if it may cost taxpayers some money,” with the White House saying “No!” and Mr. Frank, quietly backed by Federal Reserve Chairman Ben Bernanke, saying “Yes!” Citing research from Economy.com, Mr. Wessel puts the number of families with such “underwater” mortgages at about four million, and notes that number is predicted to reach around 12 million by early next year. While many of those families will keep paying their mortgages, “many won’t, and are at risk of losing their homes,” he says. Since “no one in Washington wants to help the ‘speculators'” who bought homes as investments, and most there agree people who bought houses they can’t afford are probably beyond aid, “the debate revolves around the ‘preventable foreclosures,'” he adds.
And no one, from the homeowners to the lenders to the politicians and economists like Mr. Bernanke, wants to let “preventable foreclosures” go unprevented. The bill, while crafted to exclude people who don’t need the help or wouldn’t benefit, “could allow some homeowners to get a deal they don’t deserve; that’s the unfortunate byproduct of any rescue,” Mr. Wessel notes. But the Treasury and Fed, he argues, “surrendered the let-the-market-work-it-out high ground when they agreed to risk nearly $30 billion of taxpayer money to shield Bear Stearns, its creditors and counterparties from losses.” Democratic legislators yesterday were mentioning the Bear Stearns bailout again and again.
The housing downturn is an economic problem with as much political resonance as gas prices, and if no relief is provided, it could be a poignant issue ahead of November’s elections. Even as Mr. Bush was threatening a veto yesterday, Keith Hennessey, director of the White House National Economic Council, was saying the differences between congressional Democrats and the administration aren’t “insurmountable,” the Journal reports, adding that this leaves the door open for an eventual deal.
Remember what I said after the Bear Stearns bailout?
I warned from the start of stimulus-palooza that we were headed in this direction. Both political parties support these massive government interventions–from empowering judges to meddle with private contracts to backing billions in mortgage securities. This isn’t the last step. It’s the first. And you know who will end up getting screwed: The responsible and the frugal.
Told you so.
Will Republicans at least be able to strip out the earmarks for open-borders radical grouip La Raza-The Race, the left-wing Urban League, and the trial lawyers’ slush fund?
House business begins at 10:00am and votes on the two housing bills are expected today. I’ll report again on the floor debate throughout the day.
We know what the inevitable outcome will be. The question is how much fight fiscal conservatives have left and will show, and which few, lonely, sane Republicans still deserve your support.
Karl at Protein Wisdom: Meet the new trough, same as the old trough.
God save us from bipartisanship.
10:52am Eastern. Grumbling on the House floor right off the bat. The first vote just took place on an amendment by Jeb Hensarling to one of the housing bills. A GOP member objects to a procedural motion that held open the vote; the Republican says the vote was purposely held open too long in violation of rules. There’s shouting and dissent. There’s been a challenge to the chairman’s decision on a point of order. Barney Frank’s barking.
11:28am Eastern. Vote taking place now on an amendment by Pa. Dem. Jason Altmire regarding the eligibility of illegal immigrants for foreclosure aid. Amendment passes; illegal aliens formally excluded from getting the aid. At least, on paper.
The ongoing House floor summary from the Clerk’s office is here.
HR5818, the $15 billion boondoggle bill for loans and grants to states and cities to buy foreclosed properties, advances for debate.
3:32pm Eastern. Bringing you up to date…
A little bit after noon, HR 5818 passed. Here’s the roll call vote. It won 239 – 188. Eleven Republicans joined the Democrat majority. 1 Democrat dissented and voted no with the GOP minority.
Debate is continuing on the Frank and Bachus housing bills.
3:47pm Eastern. Frank is giving his concluding statement, in denial about the massive government intervention his housing bill represents. He claims the bill is “true to free-market principles.”
Reality check here.
7:23pm Eastern. I said it was inevitable. And yea, it came to pass. The massive mortgage bailout passed this afternoon. 39 Republicans bolted and voted with the Dems.
House Democrats defied a veto threat from President Bush on Thursday as they approved a broad housing bill that would provide up to $300 billion in federally insured loans to refinance the mortgages of debt-strapped homeowners.
The measure passed by 266 to 154, more than a dozen “yes” votes short of the two-thirds needed to override a veto. Thirty-nine Republicans broke with their party’s leadership to vote for the measure, whose main backer has been Representative Barney Frank, the Massachusetts Democrat who heads the Financial Services Committee.
Similar legislation has been working its way through the Senate, which has a much narrower Democratic majority and where the legislation’s supporters have even less chance to muster a veto-proof majority.
The Congressional Budget Office has estimated that Mr. Frank’s bill would generate about 500,000 refinanced mortgages over the next five years at a cost to taxpayers of roughly $2.7 billion.
The roll call vote is here.
The 39 bailout boondoggle Republicans: