Dems Plan Major Political Push Against GOP On Subprime Mortgage Crisis
So it looks as if national Dem strategists are planning a major political offensive against House Republicans on the subprime mortgage crisis -- an issue Dems think will help them capture more House seats in 2008. And the polls appear to suggest that there's plenty of voter angst out there to speak to.
In an interview with Roll Call, DCCC chief Chris Van Hollen made it clear that national Dems think the issue could play out as a winner for them and knock Republicans onto the defensive heading into next year's elections. “You are already hearing candidates talk about it,” Van Hollen said. Roll Call adds that House Dems will bring a big mortgage overhaul bill to the House floor today that has considerable support from rank-and-file House Repubs but is opposed by Republican leaders.
House Dem leaders think this will give them a big opening to paint the GOP leadership as in the pocket of mortgage industry groups and callously out of touch with the American people on the issue -- and feed their argument that the GOP is indifferent to the economic squeeze felt by the middle class.
Painting Republicans as having failed to act to head off the crisis when they were in charge, of course, also could help Dems in another sense -- it could perhaps help Dems redirect public anger with Congress towards the Republicans at a time when the Dem-controlled Congress' approval rating is sinking in multiple polls
Polls have shown public anguish over both general economic issues and the subprime crisis in particular -- for examples, see here and here.
The political question is whether Dems can persuade voters to hold Repubs responsible for their problems and thus throw the Republicans on the defensive -- and whether Dems can figure out a way to translate this into political gains in 2008. To that end, Dems are hoping that a number of recent quotes on the crisis from top Republicans -- in which they appeared to minimize the crisis -- will make it that much easier to paint them as out of touch with middle class anguish.
Among the choice GOP quotes Dems will be highlighting:
Brian Kennedy, spokesman for House GOP leader John Boehner:
“So what, we’re supposed to have a bunch of mortgage nannies now?”Rep. Adam Putnam (R-Fla.), chairman of the House Republican Conference:
“The national subprime crisis is essentially a Florida, California and Las Vegas crisis. And while there clearly are things that can be done to give short-term relief to borrowers, they are using this as an opportunity to overreact and use a sledgehammer on a gnat.”
"Mortgage nannies?" One might suggest that folks want not "nannies" but elected leaders who think their problems matter. And a "sledgehammer on a gnat"? Some might point out that the problem is just a little bit bigger than a gnat.
Look for Dems to be making liberal use of these and other GOP quotes in the days ahead.
Comments (18)
wes2 wrote on November 15, 2007 12:09 PM:Surely there's a risk here too: I suspect a fair number of voters will be skeptical of any plan that gives relief to people they see as irresponsible. "I pay my mortgate even though it hurts, why can't they?" or "I saved for years for a down-payment, and they bought with nothing down, what do they expect?"
I'm not saying that it isn't a good idea; it just would need a fair amount of political finesse to make sure that it is perceived as addressing real abuses in the system, rather than overextension by regretful buyers.
Jake D wrote on November 15, 2007 12:14 PM:Some might point out that the mortgage overhaul bill is just a little bit bigger than a sledgehammer too -- with not enough "short term" relief, I might add. That's where the GOP are going to counter-attack (did you hear that Bush is already looking at lessening the lines for everyone at airports over Thanksgiving holidays?).
Wait a minute. Did I just read a quote dismissing the mortgage crisis as pertaining only to "California, Florida, and Las Vegas" - and therefore of no interest to national lawmakers - from a Congressman of the great state of, uh, Florida?
That ought to play really well with Rep. Putnam's constituents. It might be productive to ask other Republican legislators from Florida whether they agree with Rep. Putnam's statement.
John H. Farr wrote on November 15, 2007 12:52 PM:This is an idiotic idea that will mainly benefit speculators. In any event, there's no money for bailouts, and it most certainly won't help the feckless Democrats.
Flora wrote on November 15, 2007 1:16 PM:I'm one of the voters wes2 is talking about, who doesn't have that much sympathy for people who are losing their shirts in the mortgage crisis. My husband and I couldn't afford to buy a home five years ago, and by the time we did have a down payment saved up prices were soaring beyond our reach. We didn't buy in because we couldn't see how the market could keep expanding indefinitely. So we've been renting all this time and getting sneered at by our colleagues with their own huge mortgages. If those irresponsible buyers get bailed out and prices stay high, how are people like us who played by the rules ever supposed to get a chance to buy in?
To the extent that lenders actually lied to borrowers or cheated them in other ways, I say throw the book at 'em, whether that means taking them to court or tightening regulations. But just bailing out banks and borrowers is not going to solve the bigger problems of NIMBY zoning against affordable housing and the way local school spending is so closely tied to home prices. It would be great to see Congress address those issues, by tying infrastructure funding to smart-growth policies and by spending more federal funds on schools in every district to ease the funding pressure on local property taxes, but I'm not holding my breath.
manraygun wrote on November 15, 2007 1:24 PM:I'm a Democrat and I too consider this idiotic. The "economic discontent" I feel doesn't mean supporting a massive taxpayer-funded bailout of speculators, idiots and wall street investment banks. For a long time I've been confident of the Democrats running the table in '08, but between this and immigration, I'm not so sure.
DisappointedDem wrote on November 15, 2007 1:35 PM:So to make up for not doing anything about torture, surveillance and the Iraq war, the dem leadership is going to bail out house flippers in trouble and people who "cashed out" their equity to buy a Harley?
chophouse wrote on November 15, 2007 1:46 PM:I come down on the side of this being just plain stupid. There is absolutely NO bailout for borrowers that doesn't actually bail out the lenders. Once again, the Dems are serving the interests of the corporate masters while dressed in populist clothing.
Let's focus on the Constitution and the erosion of our liberties and the insane war in Iraq. That's why I voted Dem in the last election. Given their (Dems) performance on these critical issues I may just sit out 2008.
If they are not going to take on the dangers facing our country I'm not going to vote for them just because they're Dems. I'm tired of being suckered in to that game
my2petpeeves wrote on November 15, 2007 2:00 PM:Flora,
Whatever rules you played by were your own. Sounds like you decided to be cautious and not get into any risky situation. My hat is off to you for that. Your experience sounds similar to my own. But I think we need to distinguish between greedy speculators and homebuyers who were being encouraged by President Bush et al and the mortgage industry to hurry and jump in, to buy before everything was no longer affordable. Speculators,(the big boys, anyway) were trying to ride the market to the top and then unload their investment. Many were smart enough to sell before the market turned. Some held on too long and are now loosing their investments. I am seeing this a lot where I live: out of state investors are upside down in their loans and are trying to sell for much less than what they purchased for. During 2005 and half of 2006, realtors were busing large groups of out of state investors around the area to check out newly built properties to invest in. Speculation rapidly drove up prices. at about 2.5 % points per month. Many buyers panicked, thinking they were going to be priced out of the market if they waited. And guess what? Mortgage brokers were right there to "help" these buyers get risky loans. Sometimes the loans were riskier than they needed to be, allowing the broker to pocket more money, unbeknownst to the buyer. Do these buyers have some responsibility for overextending themselves? I believe they do. But I also believe that the greed of the mortgage industry, deceptive industry practices, and lack of regulation should carry the heavier burden of responsibility in this mess. They knew exactly what they were doing. Preditory is just the right word.
my2petpeeves, so why should we reward those speculators with a bailout now? I mean, President Bush and the mortgage industry and all my coworkers were urging me to buy into the pyramid scheme too, but I looked at my income and at the terms of the mortgages I could get, and I didn't. Where's the bailout to compensate me for still being a renter?
Fresh Wind wrote on November 15, 2007 2:15 PM:This summer my wife and I took out a construction loan to build a home to retire in. It appeared to be a good time to do so. Interest rates were still low, we had considerable equity in our existing home, the housing market was still very good in our area, and with the full effects of the Bush economic policies sure to hit down the road, it only made sense to strike while the iron was hot.
The week our house went on the market, the first scare stories about the impending impact of the subprime mess hit the national media. Today there are scores of houses on the market in my neighborhood, sales are off substantially, buyers are skittish, and loans hard to come by.
We have lowered our price by $65,000 and may have to come down another $60,000-$70,000 before it will move. No, we're PROBABLY not going to go bankrupt or lose our house, but we are almost certainly going to enter retirement with a substantially lower standard of living as a result. Far from our "irresponsibility," I see this as bad luck and bad timing, primarily owing to bankers with no regard for how their greedy actions affect the lives of others.
Powkat wrote on November 15, 2007 2:31 PM:Watching Bill Moyers last Friday, I struck by something Tim Cahill said about differnt societies and their values. He said the US was a 'cruel society.' Judging from the comments here, he was correct.
All of us have, at one time or another, been caught in a bad bargain not of our own making. Those who rushed into the market unprepared and ignorant were caught in one, those who waited and tried to follow the rules were caught in a different one. Agreed, the bailout is less than perfect - so write, call, pester your congress critter to improve it - don't take your distress out on the other folks who are as in thrall to the real estate/mortgage licensed theft as you are.
Flora wrote on November 15, 2007 2:43 PM:If it were just a bailout for the hapless buyers who got sucked in by the evil mortgage industry, that would be one thing. But you can't bail out the buyers without bailing out the investors too. And after all I've heard about how brave investors are to take risks on investments and that's why they deserve to pay a lower tax rate on capital gains than working stiffs do on earned income, I really have no interest in bailing them out.
Anonymous wrote on November 15, 2007 2:49 PM:Powkat says: "All of us have, at one time or another, been caught in a bad bargain not of our own making"
Actually I've never been caught in a bad bargain that involved assuming $700k of debt I'd never be able to pay off. Many of my neighbors have knowingly made such a gamble, and as a result decent housing in LA has become completley unaffordable. This has been a DISASTER for the middle class, and all the weeping sheeple who were guided by their greed or swallowed whole what some shyster realtor fed them, deserve what they get. And in what sense exactly is taking out a loan that you can't pay back "not of your own making"? There are fewer victims here than you imagine.
DisappointedDem wrote on November 15, 2007 2:59 PM:An affordable mortgage is no more than three times your gross income. The problem is that during the housing bubble over the last 5 or so years, due to lax lending, banking deregulation and irrational exuberance, house prices have been sent up into the stratosphere in most areas.
The level of debt you'd have to assume these days to buy a house isn't healthy for anyone, and ever-skyrocketing house prices shouldn't be something any of us (except for the lenders) wants.
The only way out is for house prices to come down.
Maybe as I can't read the Roll Call story I haven't found it, but is there someplace that says these moves are going to be in the form of financial compensation, rather than implementation of a different legal structure within which the mortgage industry would operate?
As to this whole political/legal reform movement, on general terms I'm quite a bit cynical. An ear to the ground for the last 3-5 years would have seen this result. Why wait until it's hit the fan before making a change? The damage is now done.
manraygun wrote on November 15, 2007 4:57 PM:dp,
"A different legal structure within which the mortgage industry would operate" sounds benign, but it isn't. There's legislation that Schumer is considering which would raise the conforming limit of GSE loans up to one million. That means taxpayers would fund/insure an attempt to reinflate a bubble that should be left to burst under it's own corrupt weight.
Just about everyone here is jumping to woeful conclusions. Why do you assume that this bill is a bailout?
To wes2, I ask you: Can you describe one provision of HR 3915? Just one? To John H. Farr: Please explain how this bill benefits speculators. To Flora: How exactly does HR 3915 result in "bailing out banks and borrowers?" Can you cite wording from the bill that does that? Powkat, when you say this "bailout is less than perfect," will you please tell us how it's a bailout and how it could be improved? Can you cite which section of the legislation you're referring to?
I suggest y'all find out what the bill does before you start venting your prejudices and resentments. You can click on my name to read my article about it, if you want. But to give you the Cliffs Notes version: This bill requires lenders to make sure that borrowers can afford their loans, requires refinances to have a net tangible benefit, and imposes licensing on brokers and loan officers.
It doesn't "bail out" anyone. It doesn't give money to borrowers or lenders. I'd like to know why people think it does.
The bill passed in the House a couple of hours ago by a comfortable margin. Many Republicans voted for it. That wouldn't have happened had it been a bailout. Give Barney Frank more credit than that.
