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Minibus Could Face Trouble Over Mortgage Insurance Fight

Scott J. Ferrell/CQ Roll Call File Photo
Rep. Scott Garrett (R-N.J.) is a staunch opponent of raising the size of home loans that the federal government can insure, saying it would only help purchases of the most expensive homes.

The provision “is clearly going to create some heartburn for some Members, especially on the Financial Services Committee,” a second GOP aide said.

Rep. Tom Latham, the chairman of the Appropriations subcommittee dealing with transportation matters and a close ally of Boehner, literally shrugged off conservative complaints while walking onto the House floor to vote.

“I have concerns, sure, but ...” the Iowa Republican said, trailing off while he shrugged his shoulders. Latham also mentioned support for the provision in the Senate.

Rep. Barney Frank (Mass.), the top Democrat on the Financial Services Committee, defended raising the loan limits.

“House prices vary more geographically than anything else,” Frank told Roll Call. “I’m disappointed they didn’t raise the limits for [Fannie Mae and Freddie Mac] as well.”

He added that he didn’t expect the issue to pose a major threat to the minibus.

Garrett said in a phone interview shortly after he heard that the FHA’s loan limits would be raised that “the compromise might be worse than the original proposal” and predicted “policy and political” problems from the provisions.

But he stopped short of saying he’d vote against the bill because it was included. “I’m still willing to talk to them and see if this can be fixed,” he said.

Last week, the Club for Growth, a conservative group known for backing primary opponents to moderate Republicans, issued a pre-emptive threat to include the minibus among its “key votes” if it raises the loan limits.

“If the conferees strip out this big-government rider, then the club will reassess the bill for consideration of a key vote,” the notice said.

Dan Holler, a spokesman for Heritage Action for America, another key outside group, said in an email today that his organization has “reserved the right to key vote” in reference to the loan limits provision and other conservative concerns.

Another issue attracting scrutiny is the disaster funding mechanism in the Budget Control Act, the legislative result of the eleventh-hour debt ceiling deal.

Members of the Republican Study Committee have complained to GOP leaders that it was unclear at the time of the law’s passage that the mechanism could result in spending above the discretionary spending caps also in the law.

A GOP aide familiar with the process said the package is a compromise, with no one “getting everything they want.”

“This provision prevents increases for Fannie and Freddie, the entities that have benefited from billions in taxpayer bailouts, while still allowing FHA to maintain higher limits,” the aide said. “In effect, those that want lower limits have scored two out of three, and that’s not a bad deal for a provision that passed the Senate with 60 votes.”

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