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What to do about the nations housing crisis is becoming a family feud Republican leaders arent keen to talk about or even acknowledge.
The heart of the debate on the right is whether government should intervene directly and massively to refinance mortgages and help prop up housing prices, or whether tax cuts and less costly market reforms should be the primary GOP prescription.
With the housing market continuing to deteriorate and various housing bills likely to come to the floor of both the House and Senate in the coming weeks and months, the crisis is a growing challenge to long-held GOP views that government should avoid meddling in the market.
Senate Republicans led by Minority Leader Mitch McConnell (Ky.) and Conference Chairman Lamar Alexander (Tenn.) have made a marked turn this year in favor of interventionist housing policies urging a housing first policy during the stimulus debate, which more conservative House Republicans have yet to match.
As part of the stimulus fight, Senate Republicans proposed a massive new entitlement giving subsidized mortgages with interest rates as low as 4 percent to up to 40 million American homeowners. The plan would potentially cover trillions of dollars of real estate and cost taxpayers up to $300 billion in subsidies.
Its the sort of big-government spending plan that House Republicans have been railing against at least when they come from the lips of Democrats.
But House Republican leaders have avoided criticizing their more centrist Senate brethren, preferring to focus their fire on Democratic plans to bail out struggling homeowners instead, like Obamas $275 billion proposal announced last week to rework distressed mortgages to prevent foreclosures.
House Minority Whip Eric Cantor (R-Va.) questioned whether Obamas plan would reward irresponsible homeowners and lenders at the expense of the vast majority of Americans who have paid their mortgages on time.
Cantor specifically denied any rift with the Senate GOP on housing in a conference call with reporters earlier this month, noting a $7,500 House GOP-proposed tax credit for buying a house as a sign the two chambers were in sync. Senate Republicans led by Sen. Johnny Isakson (Ga.) succeeded in attaching a more robust $15,000 credit to the stimulus, although the final bill signed by Obama shrank the credit to $8,000.
We are much in sync with what the Senate Republicans are talking about as far as the home prices and the situation with the real estate market, Cantor said.
Cantor spokesman Brad Dayspring also preferred to accentuate the positive.
House and Senate GOP agreement was plainly evident on the Isakson amendment, which was an expanded version of the housing credit in the House Republican economic recovery plan designed to encourage responsible buyers to enter the market and stabilize home prices, Dayspring said.
But the far larger Senate GOP interest rate plan has come under sharp fire from some conservatives.
Rep. Scott Garrett (R-N.J.) said House Republicans will not support either the Obama plan or a subsidized 4 percent rate like Senate Republicans.
Garrett, a member of the Financial Services Committee, said that in most areas of the country, real estate prices are still too high.