Conflict over housing crisis threatens rescue package

WASHINGTON — President Bush and Congress are clashing over how to address the housing crisis, clouding the prospects of an election-year rescue package.

Bush said Wednesday he would veto the Democrats' broad housing aid plan, saying it wouldn't help struggling homeowners.

"We are committed to a good housing bill that will help folks stay in their house, as opposed to a housing bill that will reward speculators and lenders," Bush said at the White House after meeting with House Republican leaders.

The measure, aimed at preventing foreclosures, would have the government step in to insure up to $300-billion in new mortgages for distressed home­owners. A House vote is expected by today.

The bill by Rep. Barney Frank, D-Mass., would relax standards at the Federal Housing Administration so it could back more affordable, fixed-rate loans for borrowers currently too financially strapped to qualify.

Those homeowners could refinance into new loans if their lenders agreed to take substantial losses on the original mortgages. Borrowers would have to show they could afford to make payments on the new loans. They would have to share with FHA at least half of their proceeds if they profited from selling or refinancing again.

Despite growing GOP support for the plan, especially among Republicans from areas hardest hit by the housing crisis, it could fall victim to an election-year fight over which party is doing more to help homeowners in need.

"Democrats have a plan to stabilize the housing market and the economy as a whole; President Bush has a plan to sit on his hands for nine more months," Rep. Steny H. Hoyer of Maryland, the majority leader, said in a statement.

The White House calls the plan a burdensome bailout that would open taxpayers to too much risk.

The White House has also threatened that Bush would veto a separate bill to send $15-billion to states to buy and fix up foreclosed properties. Officials say that measure rewards lenders and investors who own the property and could act as an incentive for them to foreclose rather than find ways to help struggling borrowers stay in their homes.

The opposition comes despite Democrats' attempts to attract Republican support for their housing package by including a grab-bag of measures Bush has called for.

Those include legislation to overhaul the FHA, the Depression-era mortgage insurer, and to more tightly regulate Fannie Mae and Freddie Mac, the government-sponsored companies that finance home loans.

WASHINGTON — Senate Democrats on Wednesday called for a windfall profits tax on oil companies and a rollback of $17 billion in oil industry tax breaks as part of an energy package. The proposal also would impose federal penalties on energy price gouging and calls for stopping oil deliveries into the government's emergency reserve.

Senate Republicans strongly oppose any additional oil industry taxes, which are widely viewed as having little chance of being enacted. Even then, they would almost certainly prompt a veto by President Bush.

The proposed 25 percent profits tax would apply only to windfall oil company earnings above what would be considered "reasonable" and only if those profits are not reinvested in refinery capacity expansion or renewable energy sources, according to a summary of the proposals.

The Democrats' energy package ignores recent calls by presidential candidate Sen. Hillary Rodham Clinton for a gasoline tax holiday to ease motorists' fuel costs. A fact sheet released by the Democratic leadership said "that can't be our first answer" and that the aim was to focus on longer-term solutions.

>>Fast facts

Windfall oil profits tax sought

Senate Democrats on Wednesday called for a windfall profits tax on oil companies and a rollback of $17-billion in oil industry tax breaks as part of an energy package. The proposal also would impose federal penalties on energy price gouging and calls for stopping oil deliveries into the government's emergency reserve.

Senate Republicans strongly oppose any additional oil industry taxes, which are widely viewed as having little chance of being enacted. Even then, they would almost certainly prompt a veto by President Bush.

The proposed 25 percent profits tax would apply only to windfall oil company earnings above what would be considered "reasonable" and only if those profits are not reinvested in refinery capacity expansion or renewable energy sources, according to a summary of the proposals.

. Fast facts

Hed goes here

Senate Democrats on Wednesday called for a windfall profits tax on oil companies and a rollback of $17 billion in oil industry tax breaks as part of an energy package. The proposal also would impose federal penalties on energy price gouging and calls for stopping oil deliveries into the government's emergency reserve.

Senate Republicans strongly oppose any additional oil industry taxes, which are widely viewed as having little chance of being enacted. Even then, they would almost certainly prompt a veto by President Bush.

The proposed 25 percent profits tax would apply only to windfall oil company earnings above what would be considered "reasonable" and only if those profits are not reinvested in refinery capacity expansion or renewable energy sources, according to a summary of the proposals.

The Democrats' energy package ignores recent calls by presidential candidate Sen. Hillary Rodham Clinton for a gasoline tax holiday to ease motorists' fuel costs. A fact sheet released by the Democratic leadership said "that can't be our first answer" and that the aim was to focus on longer-term solutions.

Conflict over housing crisis threatens rescue package 05/07/08 [Last modified: Monday, November 7, 2011 4:29pm]

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