It was a busy last week in Congress, as major deals were reached on the Farm Bill and Congress' response to the mortgage crisis. The stalled nominations process for the Federal Elections Commission received a new twist with big ramifications for the 2008 presidential election, the Senate Ethics Committee cleared Sen. David Vitter (R-La.), Rep. Vito Fossella (R-N.Y.) got into trouble with the law, Barack Obama picked up 24 superdelegates, Hillary Clinton picked up 7, and North Carolina and Indiana had their congressional primaries.
On Thursday the House passed a new, catch-all housing bill that combines several bills already passed by the House and Senate by a 265-153 vote. The House bill's most remarkable feature is a program championed by Rep. Barney Frank (D-Mass.), the powerful head of the House Financial Services Committee. Under the program, the government would offer banks a deal: taxpayer-backed insurance on the mortgages of homeowners likely to default in exchange for making the terms significantly easier for the homeowners to make. While this would cost banks substantial amounts of money versus what they would receive if the mortgages were all paid off, it would also reduce the number of homeowners who default on their mortgages, keeping them in their homes and theoretically saving the banks money in the long run.
Homeowners who are behind in their payments and whose home values have fallen below the amount of their mortgage (thus creating an incentive for them to walk away from the loan) would be eligible for the program. The FHA would offer to insure their mortgages if the bank lowered the amount of the loan to no more than 90 percent of the current market value of the home (thus giving the homeowner positive equity in the home) and reducing the monthly payments. If the value of the insured homes rise and the homeowners sell or refinance at a profit, a portion of that profit goes back to the FHA. The Congressional Budget Office estimated that up to 500,000 homeowners would qualify for the program.
For more on the week's legislation and other developments, click through.
The cost? With the COB estimating that more than a third of the homeowners insured under the program will end up in default anyway, the government would be forced to buy the mortgages from banks to the tune of $1.7 billion in taxpayer money.
The rush is on to pass something, however, as sale prices of houses have decreased by over 10 percent, hitting hits in state and local tax revenues hard. An estimated 1.2 million houses are in foreclosure, with 3 million more projected to join them.
Turning to the Farm Bill, it appears that the Bush administration and congressional negotiators have reached a tentative deal that leaves the version passed by Congress largely intact at $290 billion over five years. Details on the deal are expected next week, and be sure that we'll cover them on Congresspedia.
President Bush this week announced three nominations to the Federal Election Commission, the oversight body tasked with enforcing campaign-finance laws. The nominations threaten to continue a year-long stand off over the board. Four of the six positions remain vacant due to partisan fighting over the one nominee in particular: Hans von Spakovsky. A former Justice Department lawyer, von Spakovsky was installed on the FEC during a recess appointment in January, 2006. Since he was not confirmed by the Senate, he no longer holds a seat on the commission.
Democrats in the Senate have accused von Spakovsky of using voting rights laws for poitical purposes, and Majority Leader Harry Reid (D-Nev.) has refused to hold a vote on a slate of nominees (including von Spakovsky). Reid wants to vote on each nominee individually, while Minority Leader Mitch McConnell (R-Ky.) has blocked such efforts.
There is, however, a new twist: President Bush announced a nomination to replace Commissioner David Mason. Democrats have argued that Mason is being forced out because he questioned whether presidential candidate Sen. John McCain (R-Ariz.) could legally withdraw from a public financing system.
Rep. Vito Fossella (R-N.Y.) found himself in hot water this week following a DUI arrest in Virginia on May 8. Fossella allegedly ran a red light and could not pass a roadside sobriety test. Following his release, Fossella apologized but would not comment on whether he would seek reelection in the fall.
The Senate Ethics Committee on Thursday issued a letter dismissing a complaint filed against Sen. David Vitter (R-Louis.). Vitter was named as accused by Citizens for Responsibility and Ethics in Washington (a non-partisan watchdog group) of “improper conduct,” stemming the revelation that he had frequented brothels in Washington D.C. and New Orleans. Since Vitter was not action in his capacity as a Senator, the Ethics Committee argued Vitter should be admonished.
In superdelegate news, Sen. Hillary Clinton's picked up 8 endorsements to Sen. Barack Obama's 24, which included three defections from Clinton's camp. Obama was endorsed by Edward Espinoza (Calif.), Vernon Watkins (Calif.), Wilbur Lee Jeffcoat (S.C.), Laurie Weahkee (N.M.), Rep. Mazie Hirono (Hawaii), Joe Johnson (Va.), John Gage (Md.), Rep. Peter DeFazio (Ore.), Donald M. Payne (N.J.), Rep. Rick Larsen (Wash.), Rep. Brad Miller (N.C.), Jennifer L. McClellan (Virg.), Jerry Meek (N.C.), Inola Henry, Barbara Currie (Ill.), Todd Stroger (Ill.), Richard M. Daley (Ill.), Michael Cryor (Md.), Lauren Glover (Md.), Kalyn Free (Okla.), Parris Glendening (Md.), Inez Tenenbaum (S.C.), Brian Colón (N.M.), Jaime Paulino (Guam), Jaime Gonzalez Jr. (Texas), and Herman Farrell (N.Y.). Clinton was endorsed by Rep. Chris Carney (Penn.) and Rep. Ciro Rodriguez (Texas), Theresa Morelli, Rep. Heath Shuler (N.C.), Jeanette Council (N.C.), Dan Gelber (Fla.), Robert Martinez (Texas) and Kathleen Kennedy Townsend (Md.).
Be sure to check in at the Superdelegate Transparency Project for the best and most accurate (and citizen-produced) reporting on Superdelegates.