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Amid a continuing U.S. economic downturn, Capitol Hill lawmakers have been debating how to effectively provide relief for the housing crisis. Two members of Congress discuss their positions on the housing bill and how to best revive a slumping housing market.
Now the housing bill passed today by the House of Representatives to help homeowners in trouble.
NewsHour congressional correspondent Kwame Holman begins with this report.
The Democratic measure aims to stem the tide of foreclosures that have helped drag down the U.S. economy. But most Republicans say the plan goes too far and today opposed it, as did President Bush yesterday, issuing a veto threat.
GEORGE W. BUSH, President of the United States: We are committed to a good housing bill that will help folks stay in their house, as opposed to a housing bill that will reward speculators and lenders.
REP. BARNEY FRANK (D), Massachusetts: I guess, when you don't have a serious argument, Mr. Speaker, you just make things up.
That's Barney Frank, chairman of the Financial Services Committee, and chief architect of the Democratic proposal.
The bill's most contentious provision would allow the Federal Housing Administration to insure up to $300 billion in new mortgages at more favorable terms for homeowners, and require lenders to assume some of the loss.
The Congressional Budget Office estimates it would help half-a-million borrowers, at a cost of $2.7 billion. The bill also calls for an overhaul of the FHA, favored by many Republicans. It also would tighten regulations on loans made by the federally-backed mortgage companies Fannie Mae and Freddie Mac, and provide a variety of tax breaks and tax credits to help the housing industry.
Democrats argued, the bill is timely and necessary.
Vermont’s Peter Welch:
REP. PETER WELCH (D), Vermont: It addresses very specifically in a practical way the housing crisis that has been brought on by the subprime foreclosure debacle.
What it does is that it shares the opportunity of relief and it shares the pain of getting the relief, so that we can end up, at the end of the day, with several hundred thousand American families still in their homes, lenders having been able to mitigate their loss, homeowners being able to keep a roof over their head.
But a number of Republicans insisted, the bill was nothing more than a bailout for irresponsible lenders and borrowers.
Spencer Bachus of Alabama is the top Republican on the Financial Services Committee.
REP. SPENCER BACHUS (R), Alabama: One hundred and ten million American families who are making their mortgage payments on time, who are renting, or who have paid off their mortgages, they are being drug in to this process and are being made liable and are on the hook now for these bad loans. They have been reading about it, and now they're going to be responsible for them. Now they're going to have to start paying.
Earlier in the day the House voted separately to provide $15 billion to states to buy and maintain foreclosed homes.
Mr. Speaker, I move the House to now adjourn.
Republicans repeatedly used parliamentary maneuvers to forestall debate yesterday. But, today, there were fewer procedural roadblocks, and the Democrats' bill passed. The Senate is acting on similar measures.
Margaret Warner has our own debate on the subject.
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