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The Hill: House kills second mortgage program

March 11, 2011
In The News

By Pete Kasperowicz
House Republicans for the second day in a row on Friday voted to eliminate a federal mortgage program.

In a 242-177 vote, the House approved legislation rescinding $1 billion that was authorized last year for a Housing and Urban Development (HUD) program that helps unemployed people make their mortgage payments for up to 12 months. Eight Democrats voted with Republicans in support of the bill, and only two Republicans voted against it.

The vote comes a day after the House voted to repeal an $8 billion Federal Housing Administration mortgage assistance program. House Republicans are preparing to eliminate two more mortgage programs next week.

Neither of the approved bills is expected to become law or even move forward in the Senate, and both have drawn veto threats from President Obama.

In supporting H.R. 836, Republicans argued that the U.S. is piling up too much debt, and that ending the unused $1 billion program would help chip away excessive government spending. House Majority Leader Eric Cantor (R-Va.) noted estimates that only two cents of every dollar spent in the program would be repaid, and said this is unacceptable.

"So we are borrowing money we don't have to give loans to certain homeowners that can't repay, and that other American families will have to pay back in higher taxes in the future," Cantor said. "This program truly does not make sense, and leaves everyone worse off."

Democrats cited a slightly more optimistic estimate that 16 percent of the $1 billion would ultimately be recovered, but said the $840 million cost is still far less than other spending programs Republicans have supported.

Rep. Barney Frank (D-Mass.) again hounded Republicans for their support of agricultural subsidies and costly wars in Iraq and Afghanistan, and said he would introduce a bill next week that would have large financial institutions pay for the costs of federal mortgage programs.

"They can afford this billion dollars," Frank said of the large banks, specifically naming Goldman Sachs, Wells Fargo, Bank of America, Citicorp, and Morgan Stanley.

Democrats in general took offense at the idea that Republicans would cut aid to people who need it the most. Late in the debate, Maxine Waters (D-Calif.) took offense to GOP claims that spending the money would be throwing money down a "rat hole."

But Republicans turned around Democratic comments from years past when they accused Republicans of "fiscal child abuse" by running up debt that future generations would have to pay. Rep. Jeb Hensarling (R-Texas) said he is glad to vote in favor of reducing spending to avoid committing "fiscal child abuse."

"We have got to stop spending money we don't have," Hensarling said.

The House accepted amendments to the bill that would ensure money saved goes to debt reduction, and that mortgage assistance needs of U.S. veterans be examined in a study required by the bill. By a 185-237 vote, the House rejected an amendment from Waters that would have required the Department of Housing and Urban Development to post a notice on its website saying the mortgage program has been terminated.

Republicans also raised a point of order against an amendment from Rep. Loretta Sanchez (D-Calif.) that would have delayed the termination of the mortgage program until the national unemployment rate falls to 7.5 percent.

As Frank noted during the debate, the Senate is unlikely to take up H.R. 836 or the bill approved on Thursday, H.R. 830, and the White House has said it would veto both bills.

Next week, Republicans will try to pass legislation that repeals the Home Affordable Modification Program, H.R. 839, and the Neighborhood Stabilization Program, H.R. 861.