CT Blue

Dean Baker, writing at Truthout, reports that Senator Dodd’s bill, which allegedly helps homeowners avoid foreclosure, may end up being financed by diverting money from rental assistance programs for the poor. According to Baker, Dodd’s bill does too much for the banks, and not enough for the homeowners, who may still end up losing their homes in time:

Congress has shown little interest in ensuring the new guarantee prices reflect fundamentals, making it likely many of the people “helped” under the program will end up facing foreclosure a second time. However, to make matters worse, they came up with the idea of financing the plan by taking away a stream of funding that had been dedicated to help low-income renters.

That’s right; Congress wants to take away money from low-income renters to help bankers that made bad loans in the housing bubble. As we all know, when the banks are in trouble, it is not the time to talk about the free market.

Once again the root cause is Republican intransigence. While they had no problem getting taxpayers to pony up to help Bear Stearns, or to provide money for homebuilders, it’s a different story when it comes to any bill that will help regular people, even if that help is being inefficiently delivered:

Reports are that Senator Shelby will only agree to the new FHA program if it is paid for by non-taxpayer funds. Senator Dodd’s bill also creates a housing trust fund with resources from Fannie Mae and Freddie Mac to build or preserve rental housing for extremely low and very low income people. Senator Shelby wants those funds to be used to pay for the new FHA program instead.

“After the $30 billion taxpayer guaranteed bail out of Bear Sterns and the $25 billion Senate-passed taxpayer funded bail out for homebuilders, for Committee Republicans to insist that the taxpayers should not pay $1.7 billion to prevent homeowners from losing their homes, has to be called what it is – hypocrisy,” said Sheila Crowley, President of the National Low Income Housing Coalition.

As Senator Dodd has learned to his sorrow, it takes 60 Democrats to pass a bill, and only one Republican to stop it, given the Harry Reid filibuster rules. It might behoove the Democrats to consider that every time the Republicans do this sort of thing they make yet another small contribution to the crushing defeat they seem poised to endure in the fall. They have been in power so long, and have gotten away with this sort of hypocrisy for so long that they are unable to see that times have changed. The Democrats should call their bluff. Let the country watch them filibuster a bill to help people avoid foreclosure. Make them really stand up and put their mouths where their money is. Will they really want to do that in an election year?