Both Democratic and Republican leaders in the U.S. Senate announced this evening that they have agreed in principle on a housing stimulus bill. The bill calls for $4 billion in grants for state and local governments to buy foreclosed homes, a temporary $7,000 tax credit for those who buy either new or foreclosed properties, more money for counseling for homeowners facing foreclosure, and the ability for homebuilders to recover taxes already paid on built properties.
Senate Majority Leader Harry Reid (D-NV) and Minority Leader Mitch McConnell (R-KY) issued a joint statement praising the bill. “Senior Senate Democrats and Republicans have reached an agreement in principle to strengthen the economy by addressing the nationwide foreclosure crisis. Getting to this point has required compromise by all sides. This is a solid, bipartisan start to keeping families facing foreclosure in their homes, helping other families avoid foreclosures in the future, and helping communities already harmed by foreclosure to recover.”
I disagree with the Senators’ statement. This bill actually does very little for people who are facing foreclosure. The chairman and ranking member of the Senate Committee on Banking, Housing and Urban Affairs, Sen. Chris Dodd (D-CT) and Sen. Richard Shelby (R-AL) were less enthusiastic about the bill then the two leaders were. Their statement said in part, “The package that we agreed to is not perfect, nor will it solve all of the problems that the economy and American homeowners are facing today. But it is an important step, and sends a strong message to the American people that Congress is willing to put aside our partisan differences and come together to tackle the challenges at hand.”
I think that Dodd and Shelby have it right. This bill has more to do with giving the appearance of doing something in an election year, than really trying to work out a solid bill that would help at risk homeowners. The White House has expressed reservations about some of the provisions of this bill, and when the Bush administration comes out on record wondering how much this bill will really help homeowners, then it is a pretty safe bet that this is going to be one weak piece of legislation.