Democrats Poised to "Cram" Bill to Reward Irresponsible Behavior Down Homeowners' Throats
"Taxpayer Tea Parties" Occur Across the Country to Protest the Type of Legislation Democrats Are Bringing to the House Floor Today
Washington,
Mar 5, 2009 -
“Taxpayer tea parties” have been occurring across America in recent weeks – a phenomenon that reflects the fact that a growing number of Americans are simply fed up with policies in Washington that reward irresponsible behavior and spend tax dollars on bigger, more costly government programs. Later today, the House will vote on legislation that is a textbook example of why responsible taxpayers – and more specifically, homeowners – have had enough.
Disingenuously called the “Helping Families Save their Homes Act,” the measure forces those who have acted responsibly to subsidize scam artists, speculators, and those who knowingly made bad decisions. And it repeals a century-old rule that prohibits what is commonly called “cramdown.” Cramdown allows bankruptcy judges to rewrite the mortgage terms on an individual’s primary residence, and lifting the prohibition is expected to add even more uncertainty to a housing market already in turmoil and will increase mortgage costs at a time when homeowners can afford it least.
It didn’t have to be this way. Last week, Democratic leaders tried to force a vote on the bill, but “Blue Dog” Democrats balked, refusing to support the bill because of the cramdown provisions. However, as is often the case, Democratic leaders made a few cosmetic changes to bill, and the Blue Dogs heeled, proving once again that they are all bark and no bite. Congressional Quarterly reports:
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“The House is considering the bill (HR 1106) following a few days of intense negotiations between Speaker Nancy Pelosi, D-Calif., and representatives of several of the more centrist and conservative members of the Democratic Caucus.”
“Members of the New Democrat and Blue Dog coalitions shut down consideration of the bill on Feb. 26 after airing concerns about the broad nature of the provision — often referred to as ‘cramdown’ — that would allow bankruptcy judges to modify the mortgages on the primary residences of homeowners who are in jeopardy of foreclosure.”
“Critics of the provision say it will unnecessarily raise rates on responsible borrowers and spur a rash of bankruptcy filings.”
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We’ve seen this all too often from the Blue Dogs. From “pay-as-you-go” budget rules to votes on the alternative minimum tax (AMT), the Blue Dogs have made a habit of momentarily opposing their leadership, only to back down after they secured purely cosmetic changes or promises that “things will be different” the next time the House faces a similar vote.
Only this time, the stakes seem higher than they have been previously. With the economy in recession and Americans’ anxiety rising, taxpayers are tired of subsidizing more Washington spending that we know we cannot afford – and tired of bailing out those who have acted irresponsibly. That’s just what the legislation on the House floor today would do. Are Blue Dogs prepared to face their constituents – including those participating in “taxpayer tea parties” – and explain their change of heart on this bill?
