Momentum grew Wednesday for a Senate bill aimed at easing the slumping housing market and helping families threatened by foreclosure after lawmakers reached a tentative deal on a scaled-back version of the legislation. The architects of the compromise, Senators Chris Dodd, D-Conn., and Richard Shelby, R-Ala., discuss the bill.
Read the Full Transcript
As we reported earlier, the Bear Stearns rescue may have spurred the Senate into bipartisan action on a new proposal to help homeowners and homebuilders caught up in the current mortgage downturn. Under the deal, the government would ease some lending caps and provide tax breaks for homeowners struggling with foreclosure.
Here to discuss the details are the architects of the compromise: Democrat Chris Dodd of Connecticut is chairman of the Senate Banking Committee. And Senator Richard Shelby of Alabama is the ranking Republican.
Welcome to you both.
SEN. RICHARD SHELBY (R), Alabama: Thank you.
Senator Dodd, when Congress left town a couple of weeks ago, and about a month ago, actually, a proposal like this went down to defeat. In fact, it couldn't get the votes for debate on the Senate floor. What changed?
SEN. CHRIS DODD:
Well, a number of things. I think you point out that the Bear Stearns-JPMorgan issue, which we'll be talking about tomorrow at a hearing before the Banking Committee, I think had some motivation.
Clearly, the decline and the contagion effect, Gwen, this went beyond a housing foreclosure issue. It's now spreading to other areas of the economy.
You may have seen the stories, or your viewers have, of the difficulty with student loans in the states of Michigan and Pennsylvania, car loans, the unemployment rates getting larger. Over 100,000 people have lost their jobs. Inflation rates are the highest they've been in years.
All of these factors, the accumulating factors — the fact that between 7,000 and 8,000 people a day are filing for foreclosure on their homes, that as many as 44 million to 50 million people could be adversely affected, while not directly with foreclosure, but declining value of the most important asset they have, that's their home, where debt now is exceeding equity in far too many homes.
All of these factors have come together. And I think many Republicans who in the past have been hesitant about this decided this was a time for us to act and to try and find some common ground on these issues. And that's what Senator Shelby and I were asked to do by our leaders and what we've been able to do over the last 24 hours.
Senator Shelby, is that true? Did your Republican colleagues or colleagues of either party come back from their break and say, "This is all we've been hearing about at home and you've got to do something?"
SEN. RICHARD SHELBY:
Well, I'm sure that was part of it, but part of it was something you alluded to earlier. When the Federal Reserve stepped in to staunch some bleeding on Wall Street, we figured it is time to staunch some bleeding in the housing market, which is hemorrhaging daily all over this country. And this is a first big step that we're working together in a bipartisan way to do.