White House reiterates threat on housing

The White House Wednesday reiterated its threat to veto the housing bill if it contains a provision backed by the Congressional Black Caucus (CBC) and liberal Democrats that would give communities money to buy foreclosed properties.

"There's been no change in our position on that point," White House press secretary Dana Perino said in an e-mail.

{mosads}Democrats were considering dropping the provision at the beginning of this week, but when the White House and Treasury Department sought new authorities in order to extend an unlimited line of credit to Fannie Mae and Freddie Mac, Democrats sensed leverage.

The administration has called for Congress to move quickly on the overall housing package, which includes provisions requested by the Treasury to prop up the two mortgage heavyweights.

The latter point has created a rift with congressional Republicans, as some are insisting they will vote against the bill if it includes the uncapped help for the two mortgage houses. The White House said it cannot envision getting a housing bill that does not include the assistance.

The provision attracting the ire of the administration would grant $4 billion in Community Development Bloc Grants (CDBGs) to local governments to buy foreclosed properties. The White House maintains that provision "helps the lenders, not the homeowners," according to Perino.

Perino added later that the president is hopeful Congress will move quickly, "and we are hopeful that they get it to us in a form that he can sign, which would include stripping out that CDBG money."

Perino said the administration thinks Congress will pass the bill next week in light of the housing crisis.

"I just can't imagine that they would go home for the August recess without getting this done," Perino said.

Perino added that the White House is optimistic that the U.S. will be able to pull out of the housing crisis by the end of the year.