In a vote of no confidence in the housing market, President Bush this morning revoked his threat to veto the housing rescue bill, which is making its way to a vote on the House floor today.
He is still opposed to the $4 billion in community block grants to buy foreclosed properties that’s included in the bill, but, as White House Press Secretary Dana Perino said in an unscheduled call to reporters, “This is not the time for a prolonged veto fight.”
Tell me about it. Apparently Treasury Secretary Henry Paulson had to convince Mr. Bush to drop the fight. “This is a very important message that we are sending to investors around the world,” he told reporters today. Yep, no worries there.
The housing rescue bill is enormous, especially since it just got a whole new provision to backstop Fannie and Freddiemashed into it last week. It would allow the Treasury to open up a new line of credit to the two as well as buy equity in them. Yesterday the Congressional Budget Office estimated that if F and F had to use all that Treasury cash, it could cost you and me about $25 billion.
The bill still has the same old other stuff in it that lawmakers have been arguing over for eons:
- Allows the FHA to guarantee and additional $300 billion in new loans for at-risk subprimers
- Overhauls Fannie and Freddie oversight
- Overhauls the FHA
- Sets the conforming loan limit at $625,000 (up from $417,000)
- Creates an affordable housing fund from Fannie and Freddie dollars
- 10% tax credit for first-time home buyers
- and a whole bunch more tax provisions
We’re told that the House chiefs have been negotiating all this with the Senate chiefs as well as the Treasury Secretary, so clean passage at this point is more likely than it has been in the past. Notice how I couched that, given that any lawmaker can throw any wrench into it at any time. Who was that old Russian comedian who always said, “I love this country!”
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