Senate passes housing bill

Senators found a rare chance for consensus Saturday on a broad housing bill aimed to benefit borrowers, mortgage firms Fannie Mae and Freddie Mac and communities hurt by the housing crisis.

The 72-13 final vote sends the bill to President Bush, who this week dropped a longstanding veto threat against the measure over $4 billion on community block grants. The legislation already passed the House on a 272-152 vote on Wednesday. All 13 'no' votes were Republicans.

{mosads}"We've taken a long time to get where we are," said Majority Leader Harry Reid (D-Nev.). "It's remarkable that when we work together, we can accomplish things."

Reid said he would press to get the bill to Bush on Monday.
However, the bill could be one of the only significant pieces of legislation likely before the November election. Republicans are insisting that Reid re-open an energy bill debate, where a key cloture vote failed Friday, and are blocking efforts to move to other topics. The GOP wants a more open amendment process that could allow a vote on lifting a congressional moratorium on offshore oil drilling.

"We want to address the issue of gas prices now," said Minority Leader Mitch McConnell (R-Ky.). "The important thing to do is stay on the subject."

Indeed, Democrats already began trying Saturday to move to a vote on a low-income heating assistance bill, but Republicans successfully blocked the effort. The effort brought a 50-35 vote, well short of the necessary 60 votes.

In a possibly ominous sign, Senate Policy Committee Chairwoman Kay Bailey Hutchison of Texas said Republicans would "absolutely" push to attach a pro-drilling amendment to the continuing resolution that is funding the government. That raises the potential for a government shutdown later this year.

"For us to fund continuing government operations that keeps this moratorium that is against the wishes of America, it's against our longstanding interest in national security as well as our economic security," Hutchison said.

The present and future acrimony left Democrats crowing about the housing bill victory, since it could be one of the last of the year. Banking Committee Chairman Chris Dodd (D-Conn.), who led negotiations on the bill with ranking Republican member Richard Shelby of Alabama, extended a rare gesture of praise to President Bush for reversing himself.

"It takes an awful lot to change your mind in this town," Dodd said. "But he did the right thing. That’s an important message for markets and homeowners."

Dodd emphasized, though, that the bill cannot cure the country's ailing economy overnight. He also noted that he plans to push federal housing officials to implement the bill’s provisions as soon as possible.

"I can't promise it's going to work in every detail. I can't promise we've designed a silver bullet here," Dodd said. "All I can tell you is that the majority leader, Senator Shelby, our staffs and others recognized that inaction was unacceptable. … What we've done here is fundamentally alter the way we do business when it comes to housing."

Saturday's session was forced by Sen. Jim DeMint (R-S.C.), who had objected to a provision in the bill that allows the two mortgage giants to lobby Congress. The senator had pressed Reid for the chance to amend the bill, but Reid's refusal prompted DeMint to demand a full post-cloture period of 30 hours before the Senate could vote on the bill. That, in turn, forced the rare Saturday session in the chamber.

In the end, Democrats and Republicans struck a deal to end the post-cloture period slightly earlier, thereby allowing the 11 a.m. vote.

The bill props up Fannie and Freddie, known as government-sponsored enterprises (GSEs), allows the refinancing of up to $300 billion in distressed mortgages, enacts a package of tax breaks to help the housing market and tightens federal oversight of Fannie and Freddie. The two mortgage giants saw their stock plunge this month as fears rose about their solvency.

Specifically, the bill would give Treasury officials temporary authority to offer the GSEs an unlimited line of credit and to invest in the companies. It would also allow the Federal Reserve Bank the power to consult with regulators on the companies' financial health. That authority would expire in December 2009.

For homeowners at risk of foreclosure, the bill offers a new program within the Federal Housing Administration that would allow them greater latitude to refinance their housing loans at a discount.