Funny enough, none of the news stories with the big blaring headlines actually have much in the way of details.
The proposed legislation would a create a Federal Housing Administration program to insure up to $300 billion in refinanced mortgages for struggling borrowers after loan holders reduce principal. The Banking Committee is scheduled to debate and vote on the plan tomorrow.
Lawmakers in Congress have been at odds over whether to use government funds to stem foreclosures amid the worst housing slump in a quarter century. Republicans oppose using taxpayer funds, saying they would flow to rescue speculators and irresponsible lenders. Democrats say government spending is needed to stabilize neighborhoods and help struggling borrowers.
If approved by the full Senate, the package would be combined with a bill passed this month by the U.S. House of Representatives over a White House veto threat. Congressional analysts had estimated the House bill would cost taxpayers $1.7 billion.
`Creative Solution'
``It's a pretty creative solution to the administration's objections to using taxpayer money to what they perceive to be a bailout,''[*] said Gilbert Schwartz, a former Federal Reserve attorney and a partner at Washington law firm Schwartz & Ballen LLP. ``If you use Fannie and Freddie's money, that resolves that issue and it seems to me that the administration should not object to it.''`
Shelby, an Alabama Republican, said he thinks President George W. Bush will support the Senate measure.
``This is a victory for the taxpayers,'' Shelby said today in an interview with CNBC. ``I think it's a win-win, a double win for all of us.''
Dodd said he planned to get it to the president's desk by July 4, adding that he didn't know whether Bush would support it.
``We appreciate and encourage the efforts to create a strong, independent regulator for the GSEs,'' White House spokesman Tony Fratto said today.
``We look forward to seeing the details of the bill as it goes through Senate markup -- especially provisions to expand programs of the Federal Housing Administration,'' he said.
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[*] = I'll say!