The U.S. taxpayer dodged a bullet last night when Senate conservative succeeded in stalling the latest deficit spending project, this time sold as a housing relief package. The bill was a disaster from stem to stern not just for taxpayers, but for anybody who hoped to buy a home in the near future. The most troubling aspects of the bill included:
- A provision allowing bankruptcy judges to unilaterally rewrite mortgage terms for distressed borrowers at the expense of lenders. The Congressional Budget Office reports this policy would lead to higher mortgage rates for future home buyers as lenders offset the new risk of judge-rewritten contracts they used to be able to depend on. Also, marginal borrowers would be completely frozen out of the market as lenders avoided the subprime loans.
- A provision providing for $4 billion for the Department of Housing and Urban Development to redevelop abandoned and foreclosed homes. To the extant that some lenders may allow foreclosed property to deteriorate, existing blight laws should be more than sufficient for communities to take the initiative without federal subsidies. A federal program would just throw good money after bad properties and feckless lenders.
- A $10 billion increase for the national cap on bonds state and local governments can issue to refinance subprime loans for distressed borrowers. The loose and ambiguous terms for eligibility would have allowed any borrower who took on more credit than appropriate to qualify for relief. This at a time when even the New York Times recognizes taxpayers do not want to bail out the undeserving.
Senate conservatives should be roundly applauded for fighting off the latest deficit spending spree sold as an economic stimulus. As bad as this package was on its own merits, stalling measures like this help prevent future boondoggles already in the pike. Sen. Chris Dodd (D-CT) is already proposing creating an entire new government agency to buy troubled mortgages and Sen. Kent Conrad (D-ND) wants to spend another $75 to $95 billion on jobless benefits, food stamps, heating bills, and new infrastructure. Fighting tooth and nail on this housing proposal will help delay consideration of even worse legislation.
- According to new polling from Pew: “Public perceptions of the situation in Iraq have become significantly more positive over the past several months, even as opinions about the initial decision to use military force remain mostly negative and unchanged.”
- According to the Media Research Center, TV news coverage of Iraq has fallen as news from Iraq has gotten better.
- Angelina Jolie wrote yesterday in the Washington Post: “My visit left me even more deeply convinced that we not only have a moral obligation to help displaced Iraqi families, but also a serious, long-term, national security interest in ending this crisis.”
- Former Rep. Cal Dooley (D-CA) tells the Wall Street Journal: “I think Lou Dobbs took the pulse of America and realized he could drive his ratings up by engaging in protectionist rhetoric and pandering. I think there are an increasing number of politicians who are also pandering to the less informed emotional impulses of a lot of U.S. voters … our national leaders, in many respects, they know better.”
- Democrats in California have introduced legislation to unionize … your grandmother. Senate Bill 867 would create a union to organize family members who provide child care for their kin and are paid by the state so that mothers can work outside the home.