Housing Bill Still Has a Ways to Go
The announcement today that Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) have reached a basic agreement on the outline of a housing stimulus bill is certainly news. The two leaders don't agree often, and Republicans and Democrats have been attacking each other on this issue for the last several days.
But while the Reid-McConnell deal is a definite breakthrough, the housing package still faces a long road from here to President Bush's signature.
First, while Reid and McConnell have agreed on how to proceed, landmines still await the agreement in the Senate. In particular, Senate Majority Whip Richard Durbin (D-Ill.) will likely push an amendment to allow bankruptcy judges to rewrite the terms of mortgages, a provision that was excluded from the current agreement because of strong opposition from Republicans and the lending industry that helped kill a similar bill in February.
If the bill can clear that hurdle and any other potential poison-pill amendments in the Senate, it still has to get through the House gauntlet. Although House Financial Services Chairman Barney Frank (D-Mass.) has supported some elements of the current Senate package, he was not a party to the Senate negotiations and will surely want to put his own stamp on the bill.
Because House rules so strongly favor the majority, Democrats in the chamber have less reason to compromise than their Senate counterparts do. But a House bill that tilts too far toward Democrats would make a House-Senate conference tough and a veto threat from Bush likely. The best way to avert those outcomes would be for House Democrats to bring Republicans to the bargaining table. And therein lies more problems.
House conservatives have been eyeing the Senate discussions warily, as they fear the worsening economic climate will lead to a flurry of ill-advised regulations rather than a recognition that the market will likely correct most of the current problems on its own. Without having seen the Senate compromise, House Minority Whip Roy Blunt (R-Mo.) warned generally today against any package "that needlessly makes the mortgage market more difficult." And House GOP Conference Chairman Adam Putnam (Fla.) said he feared a "summer-of-an-election-year overreaction."
Now, Republicans know as well as Democrats do that Congress has to do SOMETHING to deal with the current housing crisis. So the momentum exists for both parties in both chambers to reach a deal they can all live with. Just don't expect it to happen too quickly.
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