PHOENIX Locked out of input in the new stimulus law, Arizona's two senators outlined Tuesday some of what they hope Barack Obama will and will not announce today in his housing fix legislation.
|
|
But Kyl signaled that Republicans will oppose it as they did the stimulus package if it is not to their liking.
"If all it is is taking care of people who are in foreclosure, you could create the perverse incentive to go into foreclosure,'' he said. Kyl said he has heard the plan Obama is set to unveil will include a provision that will help people whose homes already are being repossessed, or who are 30 to 60 days late on payments.
That, he said, is the wrong approach. Kyl said Republicans instead want to help those who are "abiding by the rules.''
He also warned that Republicans would oppose any effort to include a "cram down'' provision which would allow a bankruptcy judge to reduce or eliminate mortgage payments.
"That will force the lenders to raise their interest rates for everyone else,'' Kyl said. "That's the wrong solution to the housing problem today.''
John McCain said what's also needed is a tax credit for everyone who buys a home.
The stimulus package does have an $8,000 credit but only for firsttime buyers.
"I think it would be an important incentive for homeowners and home buyers in America,'' McCain said. He said that alone "could stimulate the housing market more rapidly'' than just about anything else.
But McCain, who lost the presidential race to Obama, said the decision of the new president and his administration to push a $787 billion stimulus package through as his first act shows "their priorities are wrong.''
"It was the housing crisis that started this conflagration,'' McCain said of the recession. "It will be the resolution of the housing (crisis), the leveling of home values, that brings about the end of it.''
Both senators also used the press conference to hammer their message that the fact that Republicans controlled the White House for the last eight years, and Congress for six of those, did not make them in any way responsible for the housing mess.
Kyl said the Bush administration proposed a major overhaul of the housing finance industry in 2003, including new regulations of Fannie Mae and Freddie Mac, the two government chartered corporations that buy up mortgages made by lenders on the secondary market.
"From that time on, every year, the Bush administration proposed legislation to regulate these entities,'' Kyl said. But the measure never went anywhere as Democrats, even in the minority, threatened to filibuster.
"So don't blame Republicans for not appreciating this was a real problem,'' he said.
McCain said the problem also has roots in the 1977 Community Reinvestment Act, which he said led to "quotas for lending in lowincome areas.'' McCain said Republicans opposed the law.
And Kyl said Republicans did push some suggestions for dealing with the housing issue in the stimulus bill.
One would have had Fannie Mae and Freddie Mac provide 30year fixedrate mortgages with the rate tied to a federal index and payments guaranteed by the government. Kyl said the rate would be about 4.2 to 4.3 percent.
"So if everybody could either buy a home for 4.3 percent, let's say, or could refinance the mortgage ... doing that would have two big results,'' Kyl said.
First, it would have resulted in homeowners, on average, getting to keep an extra $470 a month,'' he said. "And it would pay off those mortgages for the lenders that hold them today,'' separating out the "toxic assets'' from the good loans.
McCain said Republican ideas were ignored once the Democrats figured out they had enough votes to pass the stimulus package without most of their votes: Only three Republican senators went along.
Comments