Senator Stalls Housing Relief With Call for Energy Credits
Thursday, June 26, 2008
A Republican senator from Nevada, home to the highest foreclosure rate in the nation, yesterday blocked an ambitious plan to help troubled borrowers save their homes, saying he will not permit the measure to go forward unless the Senate adds tax breaks to encourage the production of renewable energy.
The demand by Sen. John Ensign (R-Nev.) stalled a massive housing package with broad bipartisan support even as a report showed that new-home sales continued to tumble, underscoring the severity of the nation's housing slump. It also threw the Senate into chaos days before Congress is scheduled to leave town for the July 4 holiday, prompting Senate leaders to threaten to keep lawmakers in Washington through the weekend.
Late yesterday, Senate Majority Leader Harry M. Reid (D-Nev.) said the Senate is unlikely to take a final vote on the housing bill until next month. But the Senate will eventually approve the measure, he said, adding: "We need to finish housing. . . . With 8,500 houses going into foreclosure every day, we have an obligation to the American people."
Ensign said he would not back down from his demand to tack on more than $6 billion in tax breaks for producers of renewable energy, such as solar and wind power. The measure is popular with both parties -- Sen. Maria Cantwell (D-Wash.) is a co-sponsor. But Senate Democrats oppose adding it to the housing bill because it is not accompanied by tax increases to make up for the lost revenue. Such an addition would ruin efforts to forge a compromise on the housing bill with the House, where 218 Democrats, a majority of the chamber, have signed a pledge to reject measures that increase the deficit.
Still, Ensign's insistence puts Democrats in the uncomfortable position of opposing renewable energy, a concept many of them ardently support.
That point was not lost on Ensign, chairman of the National Republican Senatorial Committee, who has been trying for weeks to attach the energy credits to a bill that has some hope of reaching the president's desk.
"Especially in an election year, very few things are actually going to make it into law and going to be signed by the president," he said. "The housing bill has a great chance of being signed into law. And that's why we're trying to get this renewable tax credit on this piece of legislation."
Ensign said the credits are critical to ending the nation's dependence on foreign oil and are important for his home state, where renewable-energy investments are becoming a major economic-development tool and source of jobs. Every quarter the tax credits remain off the books, he said, the nation and Nevada lose investment dollars and jobs that will never return.
Ensign acknowledged that his state also has been racked by the mortgage crisis and has led the nation in foreclosures for more than a year.
Yesterday, the Commerce Department reported that new-home sales tumbled 2.5 percent from April to May, the sixth decline in seven months. The median price of a new home sold last month was $231,000, down 5.1 percent from a month earlier.
But Ensign said the nation also has an energy crisis, and he questioned whether Democrats would kill the housing bill because it contains renewable-energy provisions -- "something they say they believe in."
"I think that's a tough choice for them to make," he said, "and that's why we're trying to push them on it."
The housing package represents Washington's most ambitious response to the nation's mortgage crisis and contains a variety of measures aimed at halting the slide in home prices and preventing additional foreclosures. The centerpiece of the bill is a plan to help more than 400,000 distressed borrowers trade mortgages with rapidly rising payments for more affordable government-backed loans if their banks will forgive a portion of their debt.
Even as the bill stalled in the Senate, talks to reconcile the two versions continued between House and Senate leaders, who said they were close to reaching agreement on details that would win approval in both chambers.
Lawmakers also have been negotiating with the White House, which has threatened to veto the legislation. But what had once been a long list of administration objections appeared this week to have been reduced to just a few problems, including White House opposition to a Senate proposal to include $4 billion in emergency funds for communities to purchase vacant and foreclosed properties.
"I think we could complete this bill in a couple hours," said Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.), the measure's chief sponsor in the Senate. Dodd said that although he supports Ensign's energy credits, the housing bill is not the place for them.
"He's put in jeopardy a bill that could make a difference," Dodd said.