Clinton Unveils Plan to Ease Housing Crisis
Tuesday, March 25, 2008
PHILADELPHIA, March 24 -- Sen. Hillary Rodham Clinton sought on Monday to pitch herself as the remedy to the nation's housing crisis, a claim that drew an aggressive pushback from Sen. Barack Obama's campaign as the two candidates continued to wrestle for the upper hand on the issue of the economy.
As the economy has overtaken Iraq in recent months as the dominant issue in the campaign, Clinton (N.Y.) and Obama (Ill.) have increasingly turned their attention to darkening forecasts about the nation's financial health.
The Democratic contenders have flayed President Bush for embracing policies they say have fueled the economic slide. They have criticized the stimulus package he hammered out with Democrats in Congress as insufficient and have pressed for more relief for low- and middle-income Americans.
On Monday, Clinton laid out a plan in Philadelphia aimed at slowing mounting foreclosures, renewing her call for greater lender transparency and for $30 billion in assistance for individual homeowners and communities to help most Americans through the credit crunch.
Clinton used a speech at the University of Pennsylvania to argue that the federal government should apply the same kind of resources to assist individuals as it did in bailing out investment giant Bear Stearns.
"Let's be clear: When families are losing their homes, that's also a financial crisis," Clinton said. She spoke not far from the site where Obama last week delivered a rousing address on race -- and her campaign was pleased with the juxtaposition in the hope that blue-collar voters will be swayed more by pocketbook matters than the loftier subject of social harmony.
Aides to Obama responded by saying Clinton was simply echoing proposals offered by their candidate and by accusing her of hypocrisy on the issue because she had accepted contributions from the mortgage lending industry. Obama has offered a $10 billion relief package.
The Obama campaign focused in particular on Clinton's proposal to establish a high-level emergency working group to show that the government is "taking our economic crisis seriously." She suggested that the group include former Treasury secretary Robert E. Rubin and former Federal Reserve chairmen Paul A. Volcker and Alan Greenspan.
Aides to Obama distributed a letter the candidate sent last March to Federal Reserve Chairman Ben S. Bernanke and Treasury Secretary Henry M. Paulson. In it, Obama suggested they convene a "homeownership-preservation summit" to address the foreclosure situation.
Obama aides also said Clinton is in no position to stiffen oversight after taking contributions from mortgage industry lobbyists, including funds from representatives of Countrywide, which has been at the center of the mortgage meltdown.
"If we're really going to crack down on the practices that caused the credit and housing crises, we're going to need a leader who doesn't owe these industries any favors," campaign manager David Plouffe said. Clinton aides charged in turn that Obama had accepted more than $1 million in donations from firms involved in subprime lending and their employees.
A key difference between the two Democrats is whether to cap interest rates on mortgages, as Clinton has proposed, in order to prevent foreclosures. Obama has opposed that approach, which critics argue could drive up rates for newer homeowners as investors pull out of mortgage lending in search of better returns.
Clinton has called for a 90-day moratorium on foreclosures on subprime-mortgaged houses in which the owners are residents. She would also freeze subprime adjustable-rate mortgages for as long as five years, or until the mortgages have been converted into affordable, fixed loans.
Each campaign asserted that its candidate was the first to recognize the economic problems and to offer proposals to fix them.
Clinton embraced a proposal already on the table, offered by Rep. Barney Frank (D-Mass.) and Sen. Christopher J. Dodd (D-Conn.), to expand the role that the Federal Housing Administration can play in restructuring -- or outright buying -- at-risk mortgages. Obama is a co-sponsor of that legislation.
"This is too big of a crisis for us to let either ideology or fears of political demagoguing to keep us from putting every option on the table," Clinton economic adviser Gene Sperling said in a conference call.
Clinton has lashed herself to the issue of homeowner insecurity as part of her bid for a strong finishing kick to the primary season, in which she hopes to rack up big popular-vote victories in economically struggling states such as Pennsylvania, Indiana, West Virginia and Kentucky. With Clinton lagging in the overall delegate count in the race for the nomination, her strategists think that if they can win more total votes than Obama, they can make the case to superdelegates that she would be the stronger nominee against Sen. John McCain (R-Ariz.) in November.
The economy has become a dominant issue nationally and has registered as the top concern in each of the Democratic nominating contests. In 30 of the 31 states in which exit polling was conducted on the Democratic race, more voters called the economy their most important concern than said so of Iraq or health care. Only in Iowa did the economy share the top spot with Iraq.
In Ohio, nearly six in 10 Democratic primary voters called the economy the most important issue facing the country, and Clinton prevailed among these voters, winning them by 12 percentage points. Obama scored victories among such voters in six of the nine post-Super Tuesday states that featured exit polling. The two ran even among economy voters in Texas. Clinton won them in Rhode Island.
At the national level, a Newsweek poll this month asked Democrats which candidate would be better able to improve the economy. It was a virtual tie, with 43 percent responding Obama and 42 percent saying Clinton. Clinton held a narrow edge on this question in a new Wall Street Journal-NBC News poll.
Cohen reported from Washington.