 By Julie Hirschfeld Davis
The Associated Press
WASHINGTON — Congress approved mortgage relief for 400,000
struggling homeowners Saturday as part of an election-year housing plan
that also aims to calm jittery financial markets and bolster the
sagging economy. President Bush said he would sign it promptly, despite
reservations.
The measure, regarded as the most significant housing legislation in
decades, lets homeowners who cannot afford their payments refinance
into more affordable, government-backed loans rather than losing their
homes.
It offers a temporary financial lifeline to troubled mortgage
companies Fannie Mae and Freddie Mac — pillars of the home loan market
whose losses have sparked investor fears — and tightens controls over
the two government-sponsored businesses.
What began as a showdown between the White House and the
Democratic-led Congress over how far the government should go in
rescuing homeowners evolved into a bipartisan effort that could be the
last such compromise before Bush leaves office in January.
In a rare Saturday session, the Senate voted 72-13 to send the bill to the president; the House passed it Wednesday.
North Carolina Senators Elizabeth Dole and Richard Burr, who are Republicans, did not vote.
Bush had withdrawn his veto threat earlier in the week over $3.9
billion in neighborhood grants. He contended the money would benefit
lenders who helped cause the mortgage meltdown, encouraging them to
foreclose rather than work with borrowers.
“Because of the Democratic Congress’ delays and the need for action
now, President Bush will sign this bill when he receives it, despite
our concerns with some provisions, including nearly $4 billion to help
lenders, not the homeowners this legislation is intended to serve,”
said Tony Fratto, deputy White House press secretary.
Many Republicans, particularly those from areas hit hardest by
housing woes, were eager to get behind a housing rescue as they looked
ahead to tough re-election contests. Treasury Secretary Henry M.
Paulson’s request for the emergency power to rescue Fannie Mae and
Freddie Mac helped push through the measure. So did the creation of a
regulator with stronger reins on the government-sponsored companies, as
Republicans long have sought.
Democrats won cherished priorities in the bargain: the aid for
homeowners, a permanent affordable housing fund financed by Fannie Mae
and Freddie Mac, and the neighborhood grants.
“This is far more than sending a bill to the president’s desk for
his signature. It’s sending a message to the American people that the
Congress of the United States — despite an alternative reputation — can
actually get things done, and can work together to achieve a good
result,” said Sen. Christopher J. Dodd, chairman of the Senate Banking,
Housing and Urban Affairs Committee.
Reluctant GOP
Still, Republicans weren’t eager to celebrate. Bush was not expected
to hold a White House signing ceremony, and Senate GOP leaders didn’t
mention it at a news conference following the vote. In the House, more
than three-quarters of Republicans voted against the bill.
Democratic leaders, recognizing that the measure could be one of the
last items to become law during what’s left of their abbreviated
election-year schedule, tacked on an $800 billion increase, to $10.6
trillion, in the statutory limit on the national debt.
Conservative Republicans were vehemently opposed to the bill,
particularly the help for Fannie Mae and Freddie Mac. Critics charge
that the companies enjoy lavish profits in good times and wield their
outsized political clout to resist regulation while depending on the
government to bail them out should they falter.
Sen. Jim DeMint, R-S.C., delayed the final vote because Democrats
refused to allow him a vote on a proposal to ban the companies from
lobbying or making political donations to lawmakers.
“We can’t have the people who are supposed to watch over these
organizations getting money from these organizations,” DeMint said. “At
least if we’re going to ask the American taxpayer to be on the hook for
billions, possibly trillions of dollars, let’s stop this.”
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