Sunday night congressional leaders and the White House created a new bailout bill to present to Congress today. The bill will offer up to $700 billion dollars to Wall Street’s failing institutions. The bill calls for the government, as a shareholder of a large number of mortgage securities, to “encourage” loan servicers to modify more troubled loans and for servicers of mortgages to do all they can to stem foreclosures . But there is no specific language requiring mortgage servicers to adjust mortgage interest rates in the case of ARMs as was the case in Senator Dodd’s proposal. This new proposal is much weaker in protecting homeowners and does nothing to guarantee that homeowners facing a financial meltdown benefit from the $700 billion being doled out to banks and Wall Street corporations.
From the Dallas Morning News – Below are some Texan legislators’ opinions on the bill:
U.S. Reps. Pete Sessions, R-Dallas, and Kay Granger, R-Fort Worth, said the bill was an improvement over earlier proposals because changes were made to accommodate Republican proposals.
The bill “will provide victory on the floors of both bodies if the American people understand what’s at risk,” Mr. Sessions said.
Ms. Granger said the new bill was an easier concept for Republicans to support. Ms. Granger noted that the upfront commitment from taxpayers would be $350 billion – instead of the $700 billion requested by the White House.
“Essentially, you’ve cut it in half,” Ms. Granger said.
Rep. Michael Burgess, R-Lewisville, said that Republican leaders had “certainly gotten significant concessions going through the weekend.”
“But it’s still a pretty unpopular concept back home,” Dr. Burgess said.
Several Texas Democrats said they would oppose the bill because it still looks much like the proposal that Treasury Secretary Henry Paulson presented to Congress last week.
“This is a very expensive bailout,” said Rep. Lloyd Doggett, D-Austin. “This will be a bailout effectively of the entire world.”
Rep. Ciro Rodriguez, D-San Antonio, said he was also inclined to vote against the bill – mostly because it still looks like Washington is mopping up Wall Street’s failures, he said.
Whether “it passes or fails, you’ll see Republicans and Democrats on both sides,” Mr. Rodriguez said. “Everybody is having difficulty with this.”
Rep. Joe Barton, R-Ennis, called himself a “softly no” on today’s vote. He said many Republicans still had questions about the basic mechanics of the plan – including what kind of businesses and investors would benefit.
“I wouldn’t vote for it in its current form but I’m not adamantly opposed to it,” Mr. Barton said. “I would say the winner in the Republican caucus is ‘undecided.’ I really do think that over half the caucus is truly undecided.”
“It’s going to be hard to get an informed vote on a bill that people are just now getting to see the contents,” Mr. Barton said.