Housing Woes Moving to Center Stage in 2008 Election

Senate Democrats used horrible unemployment figures released last Friday as an opportunity to remind American voters that the economy — and by extension, housing and mortgages — will figure prominently in the jockeying between parties heading towards November. Senator Chris Dodd (D-CT), chairman of the Senate Committee on Banking, Housing and Urban Affairs, called Friday’s jobs data a “wake-up call for those who do not think that we need to address this crisis.” “The Banking Committee has passed bipartisan legislation that will help address the root cause of our economic problems, the foreclosure crisis,” he said in a press statement Friday. “We must enact this legislation quickly in order to bring some stability to the markets, help hardworking Americans who are on the brink of losing their homes, and contribute to turning this economy around.” Dodd’s comments come as a report on Capitol Hill Monday suggested that both he and House Financial Services Committee chairman Barney Frank (D-MA) are negotiating the terms of a final housing bill, ahead of even the Senate’s formal adoption of a plan passed by the Senate Banking Committee on May 20. The Washington Post reported Monday that both House and Senate lawmakers want to bring a compromise housing measure up for vote before the July 4 break. Frank has said publicly in recent weeks that he dislikes a proposal added into the Senate bill that would divert money form a new affordable-housing fund to backstop a $300 billion expansion of refinancing efforts by the Federal Housing Administration. That provision was added after Dodd negotiated a compromise with Senator Richard Shelby (R-AL), the ranking Republican on the Senate banking committee. The Bush administration had vowed a veto of the House’s version of the mortgage relief bill, but appeared to signal support for the version being considered in the Senate. It’s unclear at this point what sort of compromise measures are under considerateness between both House and Senate banking leaders. Frank took Friday’s unemployment numbers as a chance to take a swipe at Bush administration officials, however, suggesting that any compromise with Senate leaders may be difficult to come by. “Additional fiscal stimulus is necessary and the President should end his opposition to Congressional efforts to respond,” Frank said in a press statement. “It is essential that we must immediately provide funds to allow local governments to purchase and rehabilitate foreclosed properties that scar too many neighborhoods. “Such a package can be adopted promptly if the President cooperates.” Democrats are increasingly putting their focus on economic issues, as it’s becoming clear that weakness in the economy helps their case for winning a White House bid in November; it’s a shifting focus that has Republican presidential hopeful John McCain’s strategic advisors running for cover. Douglas Holtz-Eakin, McCain’s chief domestic policy advisor, broke party ranks in an interview with Bloomberg Television last week and suggested that President Bush “knew little” about the economy beyond implementing tax breaks — giving credence to the idea that McCain will seek to distance himself from the President on economic policy in the upcoming campaign trail. With foreclosures only set to increase throughout the remainder of this year, it appears to be a good bet that the housing issue is one that could very well help sway voter sentiment at the polls later this year.