July 25, 2008 – 1:05 p.m.
The Senate moved closer Friday to clearing a landmark housing package, as lawmakers voted overwhelmingly to limit debate and set up a Saturday morning vote to clear the bill.
The Senate voted 80-13 to invoke cloture on the House version of the package. With the strong showing in support of the bill, the measure is almost certain to pass and be sent to President Bush for his signature.
The package marks the most robust congressional response to ongoing problems in the nation’s housing and credit markets. It would create a new federal regulator for mortgage giants Fannie Mae and Freddie Mac while setting up a Treasury Department lifeline for the two companies, if they run into financial trouble. It also provides support to ailing homeowners.
After shares of Fannie and Freddie plunged in recent weeks, the Bush administration urged Congress to grant Treasury broad authority to extend new credit and buy stock in the two companies. Fearing a further erosion of investor confidence, and the potential for massive problems in worldwide debt markets, lawmakers quickly agreed with Treasury’s request.
Including the backstop for Fannie and Freddie produced some speed bumps for the overall package. Much of the House GOP caucus voted against the overall package, in part because they fear taxpayers could end up covering a significant portion of Fannie and Freddie’s $1.5 trillion in outstanding debt.
And Republican Sen.
The bill also includes provisions aimed at helping struggling homeowners. It would overhaul the Federal Housing Administration, in an effort to make the Depression-era agency’s insurance products more competitive in the real estate market. At the same time, the bill would allow the FHA to insure up to $300 billion worth of new, refinanced loans for borrowers who are struggling to make their current mortgage payments.
The measure also includes $15.1 billion package of housing-focused tax breaks.
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