Behind the Senate deal on housing relief

The broad civil rights community is scrambling to push to restore this provision to the housing bill, he says.

"At a time when 20,000 families are losing their homes each week, we can no longer rely on voluntary measures to stop record high foreclosures that have been caused by abusive lending practices," says Josh Nassar, vice president for federal affairs for the Center for Responsible Lending in Washington.

Bankruptcy provision contentious

In the run-up to this week's bipartisan deal, business and banking groups lobbied hard against the bankruptcy provision, and President Bush signaled that he would veto a bill that included it. The White House and banking industry groups say that any provision allowing a judge to rewrite mortgages on primary homes would increase costs for all homeowners, as lenders increase rates to cover expected higher risk.

"With veto threats on the bankruptcy provisions, the majority leadership had to decide: Do they want to make a political statement or do they want to enact a law?" says Bruce Josten, executive vice president for government affairs at the US Chamber of Commerce, which lobbied against the provision.

Senate leaders on both sides of the aisle called the deal a good start to the debate. Democrats hope to extend more direct help to families facing foreclosure; Republicans want to see more tax breaks for the housing industry.

Both sides of the aisle expect a lively debate with the House over whether costs for the housing bill must be offset this year by cuts to other programs. House Democrats have a policy to respect so-called pay-go provisions, but have backed down in recent clashes with the Senate on this point.

Sen. Richard Durbin (D) of Illinois, the lead sponsor of the bankruptcy provision, said that he could have used Senate rules to derail the housing bill over this point. But "there was a genuine effort and undertaking to finding common ground between Democrats and Republicans," he said on Wednesday morning. Had he used his rights as a senator to stop this bill, the net result would be "an elongated Senate process and a lot of wasted time," he said. In return, he said he wanted a standalone vote on the provision, a request that was still pending at press time.

"There's widespread feeling on both sides of the bill that we need an accomplishment on a bipartisan basis," said Republican leader Mitch McConnell.

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