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ICYMI: Despite Calls for Action, White House Has No Plans To Send Housing Bill to Hill


Washington, Feb 10 -

By Stacy Kaper

National Journal

President Obama took a jab at lawmakers this week, saying “Congress still needs to send me the bill I've proposed" on housing. But the White House has not sent any legislative language to Capitol Hill for lawmakers to consider, and does not intend to, according to sources briefed on the administration’s plans.

Although the White House says it often does not send legislation to Congress, it certainly has for priority initiatives, such as the Dodd-Frank financial reform act, which was much more complicated than Obama’s latest set of housing proposals.

 

Officials from the Treasury and Housing and Urban Development departments this week briefed staffers for both Republican and Democratic members of the Senate Banking and House Financial Services committees. During those meetings, the administration officials said they would not send Congress any language.

Instead, a 10-page fact sheet the White House issued earlier this month that explains its proposal to enable underwater borrowers to refinance into lower interest rates is all the administration intends to give to Congress, officials told the staffers.

 

"They said the 10-page fact-sheet was their 'highly detailed' proposal and they will not be sending Congress any additional language," said a House staffer who attended the briefing but would only speak on condition of anonymity.

Obama’s latest housing initiative, proposed in January, always appeared more of a campaign-year platform than a viable policy proposal. That’s largely because of the plan’s proposed funding mechanism, a tax on big banks – something Republicans overwhelmingly oppose and which even a Democratic-controlled House and Senate rejected in 2010. There is nearly no chance a bank tax could move through the current, deeply polarized Congress, especially in an election year.

At best, the plan was seen as giving Obama more ammunition to cast Republicans who oppose the idea as defenders of Wall Street and to shift some of the blame for the housing sector's frailty onto a do-nothing Congress.

 

In addition, the proposal tacks on more controversy, which could seal its fate, by calling for conducting loan refinancings through the Federal Housing Administration. Expanding the FHA is a source of worry for many lawmakers who fear that already low reserves plus any additional risk might threaten the agency's solvency.

 

Of course even without those issues, the likelihood of action in this Congress, which cannot even muster the consensus to enact must-pass spending bills without a near shutdown, is low.

 

Now, without legislation from the White House, the housing proposal might go not even get a hearing, much less a mark-up or vote. That means it cannot be shot down -- something some congressional staffers quietly speculated could be part of the administration's motivation for not sending language. Why would the administration subject itself to more criticism and failure by submitting a plan that Republicans will pick apart and has no chance of becoming law?

 

Still, Obama is publicly calling on Congress to deliver.

 

When Obama announced details about the refinancing plan in a major housing speech Feb. 1, he said it was a "make-or-break moment for the middle class," adding "we're going to need Congress to act."

 

On Thursday, Obama touted the landmark $25 billion mortgage servicing settlement as part of the administration's "we can't wait" for Congress to act initiatives and underscored the importance that lawmakers pass his bill.

 

"To build on this settlement, Congress still needs to send me the bill I've proposed that gives every responsible homeowner in America the chance to refinance their mortgage" the president said. "It's only going to happen if Congress musters the will to act."

 

Might the White House benefit from some of the president's own advice?