Democrats Seek Edge on Mortgage Issue
Roll Call Staff
House Democrats hope the subprime mortgage crisis will help them capture GOP seats next year as they paint Republicans as asleep at the switch while they were in charge and standing in the way of efforts to increase regulation of the deeply troubled mortgage industry.
Democrats will bring a major mortgage overhaul bill to the House floor today that has significant bipartisan support but has been vigorously opposed by Republican leaders.
More than a million American families could be evicted from their homes in the next year as they face soaring monthly payments — with battleground states like Ohio and Florida among those with the biggest problems — and banks large and small have been rocked by tens of billions of dollars in losses on murky real-estate-backed investment vehicles. Top Democratic political strategists say the housing issue fits snugly into their plan to attack Republicans for a range of economic troubles that are squeezing the middle class.
“You are already hearing candidates talk about it,” said Rep. Chris Van Hollen (Md.), chairman of the Democratic Congressional Campaign Committee, referring to the housing crunch. Van Hollen said that in districts like Rep. Steve Chabot’s (R-Ohio), Democrats are pointing to a run of foreclosures and blaming Republicans for failing to crack down on unscrupulous lending practices.
“They had an opportunity to show Americans what their priorities were,” Van Hollen said. “They’ve spent the last six years trying to do favors for the super-rich in this country and ignoring the rest of America.”
Van Hollen said “total mismanagement of the economy” will go alongside Iraq and the response to Hurricane Katrina as examples of Republican ineptitude. He also said Democrats would be able to avoid blame for economic woes in the meantime. “You can’t turn around the ship on a dime,” he said.
Van Hollen said Republicans who have downplayed the housing troubles and have repeatedly talked up the strengths of the economy — which they repeatedly attribute to tax cuts — will face a credibility gap next year.
“What I think it will show is that a lot of these guys have been living in fantasy land,” Van Hollen said. “They’re not in touch with middle America with all of their happy talk over the past few years.”
Rep. Rahm Emanuel (Ill.), chairman of the House Democratic Caucus, said that while the economy is not technically in a recession, many Americans feel pressured by the housing credit crisis, health care costs and other issues, and Democrats are responding.
“It was under George Bush’s watch,” Emanuel said of the credit crunch.
“The economy is going to be the dominant domestic issue next year — housing, health care, jobs, energy components,” Emanuel added, “and I’m not limiting myself to that.”
Republicans, meanwhile, are deeply divided over how to react on housing, with some calling for more regulation and others calling for a take-it-slow response, wary of making the situation worse.
Financial Services Chairman Barney Frank (D-Mass.) successfully wooed ranking member Spencer Bachus (R-Ala.) and other Republicans to join his mortgage regulation overhaul expected to pass on the floor today, to the chagrin of House GOP leaders.
“It’s been well received by a lot of Members on this side,” Bachus said, adding that he’s also aware that many Republicans have concerns.
He said Members are worried about the legislation being morphed into something else during conference. Others see the move as a knee-jerk reaction to a situation that might be best left to correct itself or could be made worse by impetuous government intervention.
“There’s legitimate concerns about legislating in a crisis,” he said.
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