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Housing Rescue Delayed Over Energy Provision

Senate progress toward approving a sweeping housing rescue plan was delayed Wednesday by the objections of a Republican lawmaker who wants to attach an amendment dealing with renewable energy.

AP

Nevada Sen. John Ensign -- whose state is among the hardest hit by a deep housing market slump -- was refusing to allow the housing bill to proceed without a vote on extending tax incentives for renewable energy technologies.

"I'm going to do everything I can to try to get my renewable tax credit amendment done," Ensign told Reuters.

"We've got a lot of procedural tools. We can delay this (housing) bill quite a bit unless they allow us a vote on our amendment. That's all we want," he said.

Ensign's position drew criticism from senior Democratic backers of the housing measure, which would create a multibillion dollar fund to help hundreds of thousands of troubled homeowners refinance their mortgages.

The legislation would also overhaul regulation of Fannie Mae and Freddie Mac , the nation's largest mortgage finance companies, while sending federal money to states and communities to buy and fix foreclosed properties.

"One United States senator has decided this bill isn't going to go forward," Democratic Sen. Christopher Dodd, chief architect of the housing bill, said on the Senate floor.

Dodd said the housing bill has broad, bipartisan support in the Senate and in the House. It cleared a key Senate procedural hurdle Tuesday by an 83-9 vote.

"I had hoped that before we left here for the Independence Day recess, we would be able to send a bill to the president for his signature," said the Connecticut lawmaker.

But, he said, "One United States senator has decided we shouldn't do anything but his bill. Unfortunately that's the way this institution works too often."

The Bush administration has threatened to veto the bill, citing objections to the provision that would send federal money to states and localities. But it has indicated a willingness to work with lawmakers on it.

Illinois Democratic Sen. Richard Durbin, a member of the Senate leadership, told reporters:

"We're facing one obstacle, one senator, Sen. Ensign. Sen. Ensign has decided that he wants to bring in a matter that has nothing to do with housing and is threatening this housing bill. It's unfortunate that he's doing this."

Ensign played a key role in getting a renewable energy tax credit amendment attached to an earlier Senate housing bill in April. The House later took up portions of that bill in its version of a housing market rescue plan. But Ensign's amendment was excluded from the House bill and the new Senate plan.

"This amendment represents the most realistic option to encourage renewable energy development," Ensign spokesman Tory Mazzola said. "... Sen. Ensign wants a vote."

Under Ensign's bill, a tax credit that encourages electricity from wind, biomass, geothermal and other alternative sources would be extended for one year through 2009.

Other tax credits that encourage businesses and homeowners to install solar or fuel cell equipment would be extended, while additional provisions would affect electric utilities, home contractors and appliance manufacturers.

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  • Diana Olick serves as CNBC's real estate correspondent as well as the editor of the Realty Check section on CNBC.com.