President Kickstarts Mortgage Reform Debate
Obama draws line in housing before over 30-year fixed rate mortgage. NYT: "The president praised a bipartisan Senate effort to replace Fannie and Freddie with a system that would charge lenders for explicit government guarantees of some mortgage loans. [But] Obama also said that he wanted to preserve the wide availability of the 30-year, fixed-rate loans that are preferred by most Americans. House Republicans are proposing a sharper retreat, preserving only the government’s support for lending to lower-income families. Proponents say it, too, would preserve the availability of 30-year fixed-rate loans, though they are not widely available in countries without government-backed systems ... it will be difficult to alter the government’s role in housing finance ... because Americans like cheap mortgage loans and it is hard to preserve the benefits without the costs of the current system."
Obama effectively endorses Corker-Warner bill. National Journal: "Warner and Corker would wind down Fannie and Freddie over five years and also close the Federal Housing Financing Agency. It would stand up a new agency, the Federal Mortgage Insurance Corp., and require 10 percent of capital be permanently available as a hedge against default and bailout. The bill would continue to prioritize affordable housing goals in the real-estate and rental markets and retain a sliver of federal backstopping by charging a fee of five to 10 basis points on every new FMIC loan ... There are critics of Corker-Warner who fear it will not do enough to protect affordable-housing goals because it is largely silent on access, geography, and income priorities ... Free-market critics denounce Corker-Warner for keeping the government involved in the housing market through a fee-based backstop ..."
President also proposes reforms to ease refinancing. "Is it too late?" asks W. Post's Ylan Q. Mui: "New government efforts might help streamline the process for refinancing, but there’s one roadblock Obama can’t remove: rising interest rates. Mortgage rates have shot up nearly a percentage point since the start of the year ... and their prospects are unlikely to get any better. That’s partly because the Federal Reserve is weighing pulling back its support for the housing market ..."
Obama nomination to FHFA could get filibustered. Politico: "Senate Majority Leader Harry Reid (D-Nev.) recently pushed off a vote on [Rep. Mel] Watt’s nomination until after Congress’s August recess, a move that the veteran Democratic House member’s proponents and critics both cite as evidence that he doesn’t have the 60 Senate supporters needed ... Watt is worried enough about his prospects that he asked fellow Congressional Black Caucus members to lobby their home-state senators on his behalf ... Republicans could get away with filibustering Watt, according to a senior Democratic aide as long as the move wasn’t part of a broader effort to stall confirmations."
Fed might withdraw monetary stimulus earlier than expected. NYT: "Charles L. Evans, the president of the Federal Reserve Bank of Chicago, said he would not rule out the possibility that the Fed could start tapering as early as next month ... the president of the Federal Reserve Bank of Atlanta, Dennis P. Lockhart, also indicated a September move was an option ... Mr. Bernanke has said he envisions the stimulus program coming to an end by the middle of next year if unemployment falls to about 7 percent ... Mr. Bernanke has not said, however, when the tapering will begin..."
Conservatives Amp Up Pressure For Shutdown
Conservative senators look to intensify pressure to shut down government. The Hill: "Sens. Ted Cruz (R-Texas) and Marco Rubio (R-Fla.) are spearheading the effort to build a 'grassroots army' to influence GOP leadership after entreaties to their colleagues fell short. So far, only 13 Senate Republicans have signed onto a plan to block any stopgap spending measure funding the government beyond Sept. 30 unless it cuts funding for the healthcare law. Supporters of the push are taking their message directly to the Republican base this month [with] an online petition ..."
Mitt Romney urges GOP to give up on shutdown. W. Post quotes: "...in the final analysis, Obamacare would get its funding, our party would suffer in the next elections, and the people of the nation would not be happy."
"Obamacare isn't destroying jobs" explains CBPP's Jared Bernstein and Paul Van de Water, in Politico oped: "...the critics are mistaken: Recent data provide scant evidence that health reform is causing a significant shift toward part-time work ... Part-time workers represent 19.0 percent of total employment — below the post-recession peak of 20.0 percent and exactly the same as a year ago ... If the ACA’s employer mandate were distorting hiring practices in the way critics claim, we’d expect the share of involuntary part-timers to be growing. Instead, it is down about one percentage point off of its peak."
