I think that as this thing has played out, its become more and more clear to a lot of people and a lot of economists that the underpinnings of the economy and the foundation of this problem was credit-related and most of it was related to the housing bubble, so if you want to fix the problem, thats where you start, Thune said.
Thune also said part of the difficulty has been in finding a middle ground between the practical need for some kind of government action while maintaining a free-market approach.
A lot of it too will come down to the mechanics of how our proposal will work. Most of the proposals that the Democrats have put on the floor in terms of housing bills have been very heavy on government intervention, and I think most Republicans want to see a private-sector delivery system for this but government support in some way, he said.
In fact, several Senators said they were not yet fully in support of the leaderships proposal.
Im very intrigued by it. ... Im not persuaded that somewhere theres not a cost to this, Sen. Jeff Sessions (R-Ala.) said. But he noted that he likes the general outlines, saying, It looks like a simple program. It would be a temporary program that could provide direct stimulus, and it would focus on the housing, which is clearly something that we have to do. So it has a lot of key things that I think should be in a stimulus package.
Senate Minority Whip Jon Kyl (R-Ariz.) also appeared reluctant to embrace the talking points in full. He said Republicans were focused on three things: The housing issue is one, wasteful expenditures is another and the lack of actual stimulative provisions in the Democrats bills is the third.
The details of the Senate Republican proposal are still being crafted, Senators said, but the goal is to have a largely consumer-driven program that would allow homeowners to refinance their mortgages at a fixed, 4 percent interest rate with some sort of government backing.
Senate Republicans about-face on the housing issue comes as party leaders struggle to break their party from the often-rigid adherence to traditional conservative policies and chart a new course to electoral success.
McConnell will give a speech Friday criticizing the fact that Republicans have backed themselves into a geographical corner, with much of their representation in Congress coming from the South and a shrinking portion of the West.
Alexander, McConnell and others have privately and publicly begun urging their party to find what they term new solutions to economic and social issues, which, while based on traditional conservative philosophies, avoid the rigidity and often polarizing political effects that their policies have had in recent years.