New York Times - Housing Aid Bill Passes Senate Test
NYT: By DAVID STOUT and DAVID M. HERSZENHORN
A bill aimed at helping hundreds of thousands of homeowners in danger of foreclosure cleared an important test vote in the Senate on Tuesday, raising the prospects for final passage of an aid bill by mid-summer.
By 83 to 9, the Senate agreed to end debate on the assistance package and move to a final vote, which could come very soon. The test vote was considered crucial, since 60 votes were required under Senate rules to bring the debate to a close.
Housing legislation still has other obstacles to overcome, notably a veto threat from the White House. Differences between the Senate and the House, which approved a somewhat different housing-rescue bill by 266 to 154 last month, will have to be ironed out. And the senators will have to work out differences among themselves on various amendments to their version.
But the overwhelming vote in the Senate was nevertheless a good omen for those hoping to see passage of an assistance bill, as were reports on Capitol Hill that intensive negotiations are under way between Senate and House architects of housing legislation. There have also been reports that lawmakers are willing to excise or tweak sections most objectionable to President Bush.
Moreover, the White House signaled that it is not dead-set against the measure. "We do think that there are some really good aspects of that Senate bill," President Bush's chief spokeswoman, Dana Perino, said shortly after the vote. "And we have been working closely with them to try to change the bill in a way that, we think, it could be something that the president could sign."
Mr. Perino said the White House was most concerned about a section of the bill that would provide $4 billion to states to purchase homes already foreclosed upon. "And our concern is that that just helps the banks," she said. "That doesn't help the consumers and the people who are trying to stay in the homes."
Senator Christopher J. Dodd, Democrat of Connecticut and a major figure behind the legislation as chairman of the Banking, Housing and Urban Affairs Committee, said before the test vote that the bill was not perfect. But he said the package was the best that could be achieved, and he said passage was essential in view of the "deeply troubling" wave of foreclosures.
The bill would create an affordable housing fund, financed by Fannie Mae and Freddie Mac, the government-sponsored financial institutions that purchase mortgages from lenders. In the first year after final approval of the legislation, the fund would provide about $500 million for the foreclosure-rescue campaign.
Under both the House and Senate plans, lenders could limit their losses from potential foreclosures by agreeing to reduce the principal balances of loans at risk of default. Borrowers, many with expensive adjustable-rate loans, could then apply to refinance with a more stable, 30-year, fixed-rate mortgage insured by the government through the Federal Housing Administration.
Just before the House approved its rescue plan last month, President Bush threatened to veto it, saying it would put taxpayers' money at risk and "reward speculators and lenders." And the margin by which the House approved its measure, while substantial, did not reach the two-thirds that would be necessary to override a veto.
The issue is further complicated by differences among Democrats. Some fiscally conservative Democrats have voiced concerns over how to pay for the assistance measure, while members of the Congressional Black Caucus have argued that it would not do enough to help African-Americans.
Still, the big margin in the Senate test vote on Tuesday was encouraging for those pushing for passage of some kind of plan. Mr. Dodd said it would be heartening for the American people to see that "this, their Congress of the United States, can come together, despite political differences, and craft legislation to make a difference for our country."
Senator Richard C. Shelby of Alabama, another important figure behind the legislation as the ranking Republican on the committee that Mr. Dodd heads, said the bill nearing a final vote in the Senate "will not save everybody -- it shouldn't save everybody."
All nine votes against the bill were cast by Republicans: John Barrasso and Mike Enzi, both of Wyoming; Christopher S. Bond of Missouri, Jim Bunning of Kentucky, Mike Crapo of Idaho, Jim DeMint of South Carolina, John Ensign of Nevada, Jon Kyl of Arizona and David Vitter of Louisiana.
The presidential candidates John McCain, Republican of Arizona, and Barack Obama, Democrat of Illinois, were among the eight senators who did not vote.
Mr. Obama later issued a statement saying he was pleased that the Senate bill had advanced. "As more American families lose their homes and our economy continues to suffer, it's time for Washington to step in to provide relief to homeowners and stability to our housing markets," Mr. Obama said.