Another Trial Lawyer Payoff: Dems' Housing Bill Includes $35 Million Slush Fund for Trial Lawyers, Care of U.S. Taxpayers
Trial Lawyers Gave Dems $85 Million in 2006; Democratic Majority Returns the Favor with Unprecedented $35 Million Slush Fund in 2008
Washington,
May 5, 2008 -
The House this week will consider legislation supposedly aimed at easing the ongoing housing slump. Unfortunately, however, the measure asks taxpayers to bankroll a massive bailout of speculators and scam artists at the expense of innocent victims who truly need assistance and hard-working taxpayers who continue to pay their mortgage on time.
Even worse, House Democrats last week tucked in the bill a $35 million mega-slush fund for trial lawyers – yes, trial lawyers – seeking to cash-in on the housing downturn. Here are the sordid details:
Last Thursday, the House Financial Services Committee adopted an amendment offered by Rep. Melvin Watt (D-NC) that, according to Congressional Quarterly, “would increase funding for foreclosure counseling to $210 million from $200 million, and would require that [$35] million of the money be used for grants to state and local legal organizations with experience in foreclosure law.” Translation: in a bill allegedly aimed to help alleviate the housing downturn, House Democrats are lining the pockets of their trial lawyer allies with tens of millions of dollars, courtesy American taxpayers and homeowners truly in need of honest, unfiltered foreclosure counseling.
In a sign of just how egregious this special interest payback really is, the slush fund actually failed to pass on April 24, the first time Rep. Watt offered this amendment in the Financial Services Committee. But Rep. Watt and his Democratic colleagues regrouped and successfully forced through the $35 million slush fund last Thursday, according to Congressional Quarterly:
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“The Watt amendment was rejected last week when several Democrats sided with Republicans, but panel members voted, 36-23, to reconsider it Wednesday.”
“Republicans argued that the proposal could end up supporting advocacy groups or funding class action lawsuits. Tom Price, R-Ga., said the funds could ‘pad the pockets of the trial lawyers.’”
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According to the Center for Responsive Politics, lawyers and law firms gave $85 million to Democratic candidates during the 2006 election cycle. And as a political payoff to this special-interest constituency since taking the majority, congressional Democrats have focused on legislating new avenues for litigation and lawsuits on their behalf. And in the eyes of the Democrats’ trial lawyer cronies, the housing slump is quite a treasure trove.
House Republicans believe the housing downturn requires urgent action – but on behalf of its victims, not speculators, scam artists, or trial lawyers seeking to make a quick buck off of the misfortunes of others. A comprehensive housing proposal should not reward those who have acted irresponsibly. Instead it should:
- Keep taxes low on middle-class families in order to increase homeownership;
- Bring reform and transparency to the housing market and improve our overall economy;
- Stand up for Americans who saved and invested responsibly; and
- Insist that anyone receiving government housing assistance should have to make a financial sacrifice and have a stake in the outcome.
The Democrats’ bill does none of this. Instead, it forces taxpayers to bail out those who have taken advantage of the housing slump and pads the bank accounts of trial lawyers who already are cashing-in on the policies of this Democratic Congress. Too many American families face rising costs of living, declining home values, and the rising risk of foreclosure. Congress has an obligation to work in a bipartisan manner to address these challenges in a balanced and responsible way.
