President Barack Obama greets people Monday after disembarking from Air Force One at McCarran International Airport in Las Vegas. Obama chose the foreclosure-ridden area to announce his new housing policies to help boost the economy.
With the president’s jobs bill going nowhere and Congressional Democrats increasingly frustrated, the White House is taking the initiative, starting with housing.
Republicans have shown little interest in giving President Barack Obama the significant new stimulus package that he has been barnstorming the country to tout. So the White House has added to its job-creation push a series of administrative actions intended to boost the economy — albeit modestly — on its own.
“We can’t wait for an increasingly dysfunctional Congress to do its job,” Obama said in prepared remarks Monday. “Where they won’t act, I will.”
Dubbed “We Can’t Wait” by the White House, the new push started with the announcement of a plan to streamline a housing refinance program that has woefully underperformed early estimates.
The initiative comes after three years in which numerous federal housing programs pushed primarily by Democrats have failed to dent the $7 trillion in home equity that was wiped out by the 2008 financial crisis. The White House rollout arrives amid growing frustration among rank-and-file Democrats who have for months wanted a far bolder approach to the issue.
Though the administration has long been planning to unveil its new housing policies as part of Obama’s trip this week to foreclosure-riddled Nevada, tensions on housing policy came to a head in a Senate Democratic Conference meeting Thursday.
In a back-and-forth session with Federal Reserve Chairman Ben Bernanke, who was ostensibly invited to speak on the global effects of the financial crisis in Europe, rank-and-file Democrats pushed the top economic official to address the domestic housing crisis. Bernanke promised then that new policies would be announced this week.
Leaving that meeting, Sen. Mark Warner (D-Va.) said Members have begun to believe that any significant plan for economic recovery will have to include more help for the housing market. He said attempts by Congress and the administration to address housing in 2008 and 2009 “haven’t been that successful” because they were not “dramatic” enough.
“And that was a long period of just like, ‘Do no harm, the housing crisis will work its way through the snake’ — it just hasn’t,” Warner said. “There’s a growing recognition that that is a huge overhang on our economy, and we were pressing pretty hard on that.”
Rep. Dennis Cardoza (D-Calif.), who represents a district hit hard by foreclosures, has also ripped the administration repeatedly and called its inaction “infuriating” when he announced his decision not to run for re-election last week.
For Congressional Democrats, the White House’s move Monday — one part politics, one part exasperation with partisan gridlock in Congress — is nice, but not nearly enough.
“Obviously lawmakers on the Hill wouldn’t consider this is a cure-all and would be interested in working with the administration on greater initiatives,” one senior Democratic aide said. “Any attempt legislatively to get the economy going has to consider the housing market.”
And Democratic sources seemed to echo the idea that housing issues have become an increasingly larger part of the caucus’s dialogue because Members “worry about how sustainable this recovery that we’re supposedly in is” and believe that without addressing the continuing foreclosure crisis, economic gains — especially for the middle class — could stagnate or even reverse.
Republicans also have been harshly critical of how the president has handled the housing dilemma.
“‘We Can’t Wait’ is way too late,” Rep. Patrick McHenry (R-N.C.) quipped. McHenry called the announcement just the latest in a “floundering strategy” that has “done more harm than good.”
The White House, while touting the new initiative, also tried not to oversell it, declining to estimate how many people would benefit.
At best, the new rules may provide a modest boost to the economy, helping homeowners save several billion dollars a year in interest after they refinance. But it’s not enough on its own to turn around the housing market, the White House acknowledged.
“Unfortunately, there is no silver bullet. There is no simple fundamental restructuring that will wipe away the damage done by the bursting of the housing bubble,” White House spokesman Jay Carney said Monday.
The move did get some bipartisan applause from Congress. Rep. Elijah Cummings (D-Md.) praised the proposal, but said: “We must not stop here. Economists warn that the housing crisis is ground zero for the economy and jobs, and this is only one modest step toward addressing it.”
Cummings and Cardoza had led an effort in the House to put pressure on the administration and the Federal Housing Finance Agency to approve a bolder plan to spur the housing market.
Sens. Barbara Boxer (D-Calif.) and Johnny Isakson (R-Ga.) jointly praised the new rules, which they said reflect proposals from a bipartisan bill that they authored. Americans who have been making their payments every month “deserve the benefit of today’s lower interest rates,” Isakson said.
But perhaps more importantly for the White House, taking the administrative route avoids the morass of trying to get anything significant through Congress and helps the administration argue that Obama’s taking action and not just waiting for the legislative wheels to turn.
Still, don’t expect the president to stop pushing for his stalled jobs bill anytime soon.
“The only way we can put hundreds of thousands of people back to work right now is with bold action from Congress,” he said. “That’s why I’m going to keep forcing these Senators to vote on common-sense, paid-for jobs proposals.”
A House GOP aide, however, said Obama has been running around the country campaigning instead of working with Republicans on bipartisan approaches to jobs.
“With 14 million people out of work, Republicans understand that we can’t wait, and we have acted by passing 15 bipartisan job-creating bills that are currently stalled in the Senate,” the aide said. “If the president agrees that ‘we can’t wait,’ then we’d ask him to join us to pass these common-sense, bipartisan solutions.”