Stimulus-palooza: Here comes the next wave
You knew it was coming. Just like I warned here and here and here and here. Washington is on the borrow-spend-repeat cycle–and Democrats don’t want to get off. Harry Reid has proposed a “foreclosure prevention” act that would pile on billions of dollars more in stimulus-palooza spending on top of the $152 billion already passed into law and radically expand government’s role in meddling with private contracts:
U.S. Senate Majority Leader Harry Reid said on Wednesday he planned to defy a threatened White House veto and try to win passage of a bill to curb rising home foreclosures by changing bankruptcy law.
“I have no expectation of reaching any agreement with the White House,” said Reid a day after the administration warned the bill would need changes to get President George W. Bush’s signature.
“I have tried for seven years” to reach agreements with Bush on a variety of issues, but have repeatedly failed, said Reid, a Nevada Democrat, at a news conference.
“So we are going to do what we think is best for the country,” Reid said. “If we get 67 votes (in the 100-member Senate to override a possible Bush veto), that’s great.”
The Senate could turn to the housing bill in the next few days, but it must first overcome a possible Republican procedural hurdle that would take 60 votes to clear.
“I think we are going to get more than 60 votes,” said Reid, whose fellow Democrats control the Senate, 51-49.
Senate Republicans must draw a line in the sand:
The measure would let bankruptcy judges erase some mortgage debt and provide billions of dollars to rehabilitate abandoned properties. The White House said the bill was too costly and an unacceptable bailout for lenders and speculators. It had been expected to be taken up Tuesday by the Senate, but got pushed back for consideration of an Iraq measure.
Reid said he opposed dropping the controversial provision to modify present bankruptcy law by letting bankruptcy judges erase some mortgage debt. He said the bill has drawn support from community banks and credit unions.
House Democrats are pushing for $15 billion more in spending to “rescue” borrowers and $20 billion more for the government to buy up homes. Stop them:
In the House of Representatives, another key Democratic lawmaker is crafting a plan to provide about $15 billion to help a million troubled borrowers, an aide said on Wednesday.
House Financial Services Committee Chairman Barney Frank, a Massachusetts Democrat, is developing the proposal which would involve the Federal Housing Administration and government purchases of distressed mortgages.
The five-year plan would apply only to owner-occupied homes and exclude investor-owned and second homes.
Frank is also working on another plan to provide as much as $20 billion in grants and loans to buy foreclosed or abandoned homes at or below market value.
Anyone who has paid attention to the Fannie Mae and Freddie Mac racket should balk at the prospect of this massive takeover.
The OMB responds to the Dems’ proposals:
The Administration understands that H.R. 3221 will be amended on the Senate floor by the substitution of the text of S. 2636, the Foreclosure Prevention Act of 2008, as introduced by Senator Reid. Earlier this month, Congress and the Administration worked expeditiously to pass the Economic Stimulus Act of 2008, a robust economic growth package that will put $152 billion into the hands of American individuals and businesses in FY 2008. When the President signed that Act, he stated that Congress can further assist the housing sector by passing legislation quickly to modernize the Federal Housing Administration (FHA) and reform regulatory oversight of Fannie Mae, Freddie Mac, and the Federal Home Loan Banks. These bills have bipartisan support and are the appropriate next steps to address the housing downturn; Congress needs to make these important bills an immediate priority. As discussed below, the Administration strongly opposes many of the provisions in S. 2636 as unnecessary, costly, and counterproductive. If S. 2636 were presented to the President, his senior advisors would recommend he veto the bill.
The Administration strongly opposes the provision of S. 2636 that would appropriate $4 billion for assistance to State and local governments for the redevelopment of abandoned and foreclosed homes through a new program in the Department of Housing and Urban Development (HUD). In addition to being extremely costly, this new program would constitute a bailout for lenders and speculators, while doing little to help struggling homeowners. This new program would also be slow to expend money and thus would not provide timely stimulus or immediate relief. In fact, it is more likely that this proposal would prolong the time it would take for the housing market to recover.
The Administration also opposes more than tripling the funding for the Neighborhood Reinvestment Corporation (NRC) in FY 2008 from its FY 2007 funding levels. Such an increase would tax NRC’s capacity to effectively administer its programs, given that NRC has already received a 156 percent increase from its FY 2007 funding level.
The Administration strongly opposes providing bankruptcy judges with power to modify the terms of mortgages for debtors in bankruptcy proceedings. Amending the bankruptcy code in this manner would undermine existing contracts, leading to contraction in mortgage credit availability and affordability. These and other bankruptcy-related provisions in the bill would rewrite long-standing tenets of bankruptcy law in ways that would fundamentally alter the expectations of parties to hundreds of thousands of home purchases after the fact. These provisions would also likely prolong the time it will take the market to recover from the current downturn.
The Administration proposed and supports a number of initiatives that are designed to help homeowners through the Nation’s subprime mortgage crisis, including the HOPE NOW alliance, FHASecure, increased funding for housing counseling, and reforms to the Real Estate Settlement Procedures Act (RESPA). The Administration supports the Federal Reserve’s proposed rule to improve disclosure requirements and develop new national standards for unfair and deceptive practices through its authority under the Home Ownership and Equity Protection Act. In addition, the Administration endorses the actions of the Federal banking regulators to improve underwriting criteria. The Administration looks forward to working with Congress on legislation such as FHA modernization and Fannie Mae, Freddie Mac, and Federal Home Loan Bank regulatory reform already moving through the legislative process.
Treasury Secretary Henry Paulson signals his opposition:
The Bush administration is hardening its opposition to the chorus of Democrats, bankers, economists and consumer advocates calling for a big-money government rescue program for struggling homeowners.
[Henry Paulson]In an interview yesterday, Treasury Secretary Henry Paulson branded many of the aid proposals circulating in Washington as “bailouts” for reckless lenders, investors and speculators, rather than measures that would provide meaningful relief to deserving, but cash-strapped, mortgage borrowers.
Mr. Paulson’s comments came amid signs that the nation’s housing market is getting worse, not better. Indeed, at a House hearing yesterday, Federal Reserve Chairman Ben Bernanke kept the door open to further interest-rate cuts to boost the economy, even as he warned that inflation pressures have intensified in recent weeks.
President Bush and other administration officials have voiced skepticism before about a major government effort to ease the burden of the nation’s housing slump. But Mr. Paulson’s comments are the most explicit to date in laying out the administration’s opposition to the recent spate of rescue plans.
Mr. Paulson, citing estimates that as many as two million Americans could lose their homes to foreclosure this year, predicted that the administration’s market-based approach will be enough to keep the situation under control. Its centerpiece is a plan that encourages the mortgage industry to voluntarily ease up on certain borrowers.
“I don’t think I’ve seen any scenario where the American taxpayer needs to be stepping in with more taxpayer dollars,” Mr. Paulson told The Wall Street Journal.
Message: H-E-DOUBLE-L NO!
***
Related:
Michael Jackson is facing foreclosure, inspiring Kevin Depew to rewrite “We are the World” for potential bailout recipients everywhere…
We are the Foreclosed
We’re the defaulters
We are the ones who make a brighter day
For subprime lending
There’s a choice we’re making
To simply walk away
It’s true, our debt has gone away
We’re clear and free
When you’re down and out
And nothing seems to sell
But if you just believe
We’re much too big to fail
Well, well, well, well, let us realize
That the bailout soon will come
When we stand together as one
[Chorus]
We are the Foreclosed
We’re the defaulters
We are the ones who make a brighter day
For subprime lending
There’s a choice we’re making
To simply walk away
It’s true, our debt has gone away
We’re clear and free
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Washington wants to play awfully fast and loose with our money. And, what do I get out of it – a new home? Nope.
Because my wife and I are responsible with our finances, we get to bailout irresponsible people with money that should be going to provide for our children and us.
I already work the first 5 months of the year, before we ever realize any income that really counts for us.
Morons! Geez!
This is just simply buy the vote crap. If people can not read the small fine print in the columns that tell of the massive balloon payment coming up. It is their fault and I SHOULD NOT HAVE TO PAY FOR IT!!
What happened to buyer beware? Not only will these people not learn but the finacial institutes that promoted the schemes of these interest only loans are getting a free pass.
The economy is not in such dire straights as claimed by the MSM. It is doing a self correction. The consumer is wiseing up. Many people are learning from their mistakes and no longer jumping on the jones bandwagon.
This is why used vehicals are outselling new ones. They are affordable. People are not interested in paying $400,000 for a home worth only $175,000. Is it my fault that the PROFIET MARGIN for companies , developers, and finacial institutes is no it what the projected. NO IT IS NOT.
For those wise and all impotent elected officials who think our tax money will never end. They need to get in touch with reality.
When a person purchases a major finacial investment such as a house or car. The loaning institutes always look at the gross income. This is the first mistake made. It is not a real thing. What needs to be looked at is net income after bills and living expenses are paid. This is the investment net. If this net is low then one should not purchase the big ticket item. However the loaner will always say you can afford it because he gets your signature on a piece of paper and makes you responsible for your bad decision.
CONSUMER/BUYER BEWARE DAMMIT JANNET!
Seven years of bad luck, boo hoo Harry you crapweasel.
I’d swear we have nothing but sociopaths in Congress.
How do you deal with one?
Ignore them, defeat them, and HOLD your money so no one can get it.
Again; where was this allowed for in the Constitution?
Ugh, this makes me so f’ing sick. A bailout is bad on so, so many levels, but to now add direct interference with free commerce between individuals (by throwing out bankruptcy protections) is a path to absolute madness. The Constitution was written in many respects to protect freedom of commerce … where’s the Supreme Court now?? We need all 3 branches doing their jobs for once! The Presidential veto will be the first good step.
I hope that Reid can some day begin to realize why he’s been losing so often to Bush: you’re just wrong, Harry.
How does buying up dilapidated homes and fixing them up stimulate the economy? There is no shortage of houses available for purchase. The problem is getting those who own them to pay for them. Am I missing something here? This just seems bass-ackwards.
So what’s the problem? The children of our society run amuck and the adults pick up the tab. Isn’t this the Utopian society liberals have been talking about? So you’re one of the adults and feel you’re being treated unfairly, suck it up. Sarc/off
Harry must have gotten his new math training from his buddy Tommy …
The Dems have only been back in power in the congress for 14 months … the other 6 years they were in the minority doing nothing but obstructing anything the administration wanted to put forth for consideration …
I think he has spent too many years in those Nevada mines he loves to talk about breathing all those mind altering mine gasses …
This is all nothing but posturing for votes in November .. they know it won’t come to pass … but they get to have all their MSM buddies condemning the Bush White House for not caring …
Another predictable crock from Reid …
Watch what happens next:
This idiot-tolerant bill passes and lenders will make it more difficult to get a loan because their risk is now greater.
Then comes the “You must give them loans” law.
Then the lenders go out of business and the government makes the loans.
It’s all about the control by the “elites” who know better then the rest of us what we need and how we should live.
and you think we have inept and corrupt judges on the bench now? … just wait until these clowns get that kind of financial power over people and companies … not a good thought
A simple soultion as I see it and you can fix the tax code at the same time and bust it down to two lines:
How much did you make?
Send it in.
Most of the loans were no down and interest only payments. That means the reckless people that got them only rented the houses.
Looks like I will be writing my Congress critters when I get home tonight. I am really getting tired of this rush to socialism by these lying crapweasels. Too bad I only have two congressmen in the House. I have a bad feeling both of these idiots might support this load of BS. There is nothing that infuriates me more than rewarding those that make poor business and personal financial decisions with my money. It is time to sharpen our pitchforks and light up the torches again that appears the only way to get the attention of the idiots in Congress anymore.
#5 – It’s not in the Constitution. No no taxation without representation? There is county tax, state income/sales tax and federal income tax. We should NOT be bailing out stupid and/or illegal. Fight this with whatever tools available.
Hey, great, go Harry!!! Now I can go buy that little ranch I’ve had my eye on, and let the gummint worry about my old mortgage.
They want complete control of all money!
They will drive banks out of business and those that are in the private sector will be forced to sell out.
Look at the big picture!
Illegals will own our country and the government will rule over OUR money….deciding who can get loans and who cannot.
They will own OUR money and let YOUR borrow it at a huge profit.
That should read, let YOU borrow….
This is on the heels of the largest tax increase, (Transportation Spending bill – $7.7 Billion dollars including a gas tax,) that we just got thanks to our Democrats in Minnesota. And to add insult to injury, there’s an ad that has been running on the radio, “After 3 sessions, the people of Minnesota have won!..” lauding the tax increase. If the “people won” why didn’t they put it to the people to vote on it? And we don’t have tax on clothing or food in Minnesota because they are considered necessities – yet gas isn’t a necessity? Our hard earned money has to fund their fiscal ineptitude? I’m so mad I can hardly speak. I guess the only consolation is that while we’re headed into a recession and the Dummacrats exacerbate that on state and national level, hopefully they will get the blame and the GOP can see at least 12 years of political dominance afterward and we can be restored to sanity. That’s after we all survive the next 4 years of having nothing. My advice: pay down your debt as much as possible in this year, get all of your dental work done, stock up on food, (because that’s going to go way up in price,) and prepare for a full-on, Carter-style recession.
This is like a never-ending carousel ride of fantasy. I have one question for the Dems: where’s the money? Where are we getting the money from? Huh?
What’s that called, kids? That’s right, socialism.
Come on, what’s the big deal. The government will pay for it all.
/sarc
AJ, Harry “Land Swindle” Reed is the very definition of crapweasel. My only disagreement with you is that I would just remove the weasel from the word. This scumbag has been in office too long. The only reason he’s still in office is that Las Vegas likes their pork and their entrenched politicians. The rest of Nevada disgrees on that score.
Really, you do the weasel a disservice by associating Reed in any way with it. They’re quite intelligent creatures unlike the dopey senator. Now the crap part is definitly more apt.
By eliminating tax cuts for the RICH! You know, those hard working entrepreneurs who have spent 15+ years building up businesses and now, in order to be “fair” to everyone else, must be taxed higher, so everyone can “share”.
Once again we reward the irresponsible, the buyers that lied and couldn’t afford a house, the flippers and speculators and the mortgage companies that winked, blinked and wrote them.
Ayn Rand had it right in ‘Atlas Shrugged’, just 50 years to early.
To think that we worried about communists in the 50’s when the real problem is the liberal marxist democraps in 08.
Repetitive and redundant.
Taxing gasoline at the state level has been the big secret for years now …
Most can probably remember that not that many years ago every gasoline pump in the country had a sign on it telling you how much of the price of each gallon of gasoline was tax …
That sign is no longer there because that became the dirty little secret in the state legislatures … add a couple of cents per gallon and sneak it into another bill and no one knows any different since the signs no longer tell you how much tax is on each gallon …
Check the last few years … add the federal tax of 18.4 cents per gallon to get the total for each state …
2005
2006
The 2007 numbers will be out soon … but I am sure many do not know how much these taxes are …
The other areas of secret tax increase are cigarettes, liquor, wine, and beer taxes … some of which are collected at the wholesale level then passed on in the retail prices …
Reid wants to give handouts with the taxpayers money to those that most closely mirror the principles of the Democratic party. i.e. irresponsible.
Our Governor just screwed up instead of asking our state legislators to sneak an increase into our states 25 cent a gallon tax he went for the big increase on vehicle registration. He wants a new flat rate vehicle registration fee of $150.00 (a significant increase). Instead of reducing social programs and more responsible spending by the Idaho Department of Transportation we are going to soak the taxpayers again. Needless to say the good folks of Idaho (a slave wage state thanks to illegal invaders) are sharpening their pitchforks and gathering their torches. It was announced yesterday in the news and the state legislators are getting an earful.
It’s the same old “it’s not my fault. The evil lender screwed me because I didn’t understand the contract. If you don’t understand basic legal language hire a lawer.
Boomer,
I feel your pain … I have an ex that lives in Boise and she complains to our daughter all the time … so I hear about it …
Default now and get a free house. Gee, isn’t socialism wonderful?
Hey, Congress…how about cars? Can we default on our car loans too, and be a “victim”? Wow, free house and car. Do that and you have my vote.