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ASSESSING THE BAILOUT BILL.
Now that there is a final bailout plan to be voted upon, we can assess how the negotiations went for progressive public policy. In other words, how focused on "Main Street" is this bill, really? Will it help prevent foreclosures and provide assistance to the millions of Americans taken in by deceptive marketing offering them credit they couldn't afford to pay back?
The good news is that the bill strengthens the Hope for Homeowners Act, which was introduced by Sen. Chris Dodd and signed into law by President Bush earlier this year. That law, which comes into affect on Oct. 1, allows the Federal Housing Authority to work with HUD-approved lenders to refinance sub-prime mortgages into traditional, 30-year fixed-rate mortgages. If the bailout proposal passes, more homeowners with higher debt burdens will be eligible for the program.
Sprinkled throughout is language requiring Secretary Paulson to work with HUD to avoid foreclosures through other means, as well. But there are few specifics as to how he might do so.
What was lost in the negotiations was a provision, supported by some Democrats, that would have allowed judges to restructure sub-prime mortgages into traditional ones built around an individual's ability to pay. During the Depression, an entire federal agency was created to keep people in their homes through means like this, the Homeowners' Loan Corporation.
--Dana Goldstein
COMMENTS (3)
No it should not be passed.
Paulson's phony 3 page initial document was allowed to set the parameters of the debate. That was the first mistake.
Yes the bail-out may be necessary. We are being told that this is the biggest crisis since the Great Depression. Therefore changes of the whole domesitc economic system are obviously needed. Not just this bail-out. Therefore hold it hostage: No bail-out without tying that vote to support for ALL the needed fundemental changes, all of the progressive agenda (I call it jujitsu to the Shcok Doctrine):
Specific poliies to increase incomes for the other 90 percent of America, including increasing and accelerating the rise in minimum wage, real fix to AMT and EITC; workers and union rights. The real underlying problem is not mortagages not being paid, but rather working class and middle class income stagnation ever sine the mid 1970s resulting in the inability to pay those mortgages (among other things).
Need to pay for the bail-out, and the Wars, and everything else. Therefore, there has to be an increased tax on the wealthy and increased progressivity all the way through. No differentiation of capital gains. Treat all income, regardless of source, the same.
Money for infrastructure, mass, tranist, alternative energy, education, housing and real universal health coverage (single payer, duh).
Specific policies to regulate and enforce corporate America and Wall Street. And anything predictably going to need tax dollars if it goes belly-up, gets heavy dose of regulation and oversight.
That's my three page starting point for negotiations.
Posted by: Anonymous | September 29, 2008 11:14 AM
I can't believe that, after all the drama that went in to this, the only thing they really did was trim the Treasury Secretary's sought-for powers in the original proposal.
There is nothing progressive in this thing--nothing for strapped homeowners, no HOLC, no nothing.
It's exactly the kind of proposal a Republican administration would propose.
Posted by: John Petty | September 29, 2008 11:27 AM
Robert Kuttner, in writing in support of voting for this bill, and who I respect a lot, is just wrong about voting for this crap heap of a bill. He is, however, absolutely right in all of his criticisms. Which is why he is wrong on the vote – it’s bad bill, the repubs will throw it around the dems’ necks, we’ll lose the white houise and we’ll end up with even worse. Democrats keep doing “the responsible thing”, then lose election after election to right wing thugs.
99 House republicans my ass. 200 House republicans, 45 Senate republicans, and let the Blue Dog slugs drag this pig across the finish line. Wake up.
Posted by: Paul Waterhouse | September 29, 2008 12:10 PM