House votes to end third housing program

The House on Wednesday passed legislation that would terminate the Neighborhood Stabilization Program (NSP), which is currently authorized to spend $1 billion to help local communities buy and maintain foreclosed and abandoned properties.

The bill was approved in a 242-182 vote in which just five Democrats joined all but two Republicans in support of passage. Republicans have been steadily losing the little Democratic support they had for ending federal housing programs. Last Thursday, 18 Democrats supported a bill to end the FHA mortgage assistance program, and on Friday, eight Democrats supported a bill to end a HUD mortgage program.

{mosads}The five Democrats voting with Republicans were Dan Boren (Okla.), Ben Chandler (Ky.), Jim Cooper (Tenn.), Tim Holden (Pa.), and Collin Peterson (Minn.). The two Republicans voting against the bill were Steve LaTourette and Michael Turner, both of Ohio.

As they did during last week’s votes, most Democrats on Wednesday argued that Republicans are gutting federal aid just when people need it the most.

“The answer is not to simply repeal one of the only instruments that we have to keep families in their home, with only the vaguest of assurances that someday, somehow, Congress might think up a better plan,” Rep. Jared Polis (D-Colo.) said.

Republicans countered that the NSP has long been in need of improvement, and that Democrats failed to look for ways to improve it.  Rep. Pete Sessions (R-Texas) noted that Democrats failed to take any steps to improve the program even after its various problems were being reported.

“Why did the Democrats, why did this administration continue a failed program?” Sessions asked. “That’s because they were happy with it.”

The debate grew tense in the middle of the day, when Rep. Joe Baca (D-Calif.) implied that Republicans wanted to shut the program down because some of the money went to a group called Chicanos Por La Causa (CPLC). Rep. Gary Miller (R-Calif.), the sponsor of the bill, rejected the idea that Republicans are opposed to Hispanic groups or any others getting funding, and said his main complaint is that CPLC received more money than many counties, and that there are almost no limitations on how the organization spends it.

Members accepted four amendments to the bill, including one from Rep. Keith Ellison (D-Minn.) that would require a listing of NSP funding allocations that would not be made as a result of terminating the program. Members agreed to this amendment by voice vote.

They also accepted two amendments from Rep. Kathy Castor (R-Fla.) requiring the Government Accountability Office to study the impact of the first and second rounds of NSP funding, and the impact that the third round of funding for $1 billion would have had on communities around the country.

In two prior authorizations, Congress gave $6 billion in funds to NSP, which has been obligated already. Last year’s Wall Street reform bill authorized another $1 billion, but this has not yet been obligated.

Also accepted by voice vote was an amendment from Rep. Robert Hurt (R-Va.) requiring all recaptured funds to go toward deficit reduction.

But members rejected eight other amendments, all of which were offered by Democrats. These included amendments delaying the termination of the project until the housing market improves, and requiring the government to identify the number of homes that might have benefitted from the program.

The House will consider legislation to terminate the Home Affordable Modification Program when it returns from next week’s recess. The White House has said it would veto each of these bills, as well as two other GOP bills to end other mortgage programs, and the Senate is likewise not expected to approve them.

During the debate, Rep. Barney Frank (D-Mass.) said the $1 billion in NSP funds would likely be dispersed soon, rendering moot the GOP’s effort to pass the bill.