Projo Politics Blog

WASHINGTON -- Despite a veto threat from President Bush, the Senate is prepared to press ahead this week with a sweeping rescue of the housing market that could protect hundreds of thousands from foreclosure.

With Rep. Barney Frank, D-Mass., in the lead on the House side, work on a compromise between the two versions of the bill could begin as early as tomorrow, when Senate Majority Leader Harry Reid, D-Nev., has scheduled a key parliamentary vote in the Senate.

If it succeeds, full Senate passage could come swiftly. The goal would then be to reconcile the House and Senate bills and get a final version on the president’s desk well before Congress goes on its August recess.

Sen. Jack Reed, D-R.I., who helped craft a financing mechanism to bridge differences between Democrats and Republicans on this issue, said the measure would address a housing crisis in Rhode Island that has become acute.

"You can have renters who are doing all they can and paying every month and suddenly the owner is foreclosed upon – they’re out of the house. So where do they go?’’ Reed said. Foreclosures can thus have a snowball effect on neighborhood blight, he said.

The Rhode Island Democrat’s contribution to the bill is a permanent housing assistance fund, financed by fees on the mortgage industry, that in its first year would go largely to address the mortgage foreclosure crisis. But as the mortgage rescue function phases out, the fund would become principally an affordable rental housing program for low-income families.

"Good housing is essential to families, not just for shelter but for whether have a chance to live decently, whether they can hold a job, how they can hold a job with a permanent address, whether the kids can do well in school. It’s hard if you go to two of three different schools moving house to house,’’ Reed said.

-- John Mulligan, Journal Washington bureau

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