White House Urges No Major Housing Provision In Stimulus Bill
04 Februar 2009 - 12:48AM
Dow Jones News
The White House urged Democratic lawmakers Tuesday to avoid
including any major new housing provisions in the economic stimulus
plan until President Barack Obama and Treasury Secretary Timothy
Geithner unveiled a "comprehensive" housing rescue plan in the
coming days.
In a letter sent to Senate Majority Leader Harry Reid, D-Nev.,
by Obama's budget director, Peter Orszag, the White House makes it
clear that its preference would be for the Senate to hold off
including any major housing based initiatives in the stimulus
plan.
"Any major new housing measures should be considered only after
the release of the Administration's comprehensive proposal," Orszag
wrote in the letter.
The White House is effectively using the letter to voice its
objection to a Senate Republican plan to create a federally
subsidized discounted mortgage rate in a bid to kick-start the U.S.
housing market.
The proposal is expected to form the main thrust of the GOP
attempt to reform the stimulus bill as it is debated on the Senate
floor.
It would direct Fannie Mae (FNM) and Freddie Mac (FRE) to
purchase the cheaper loans that would have rates between 4% and
4.5%. The 30-year loans would be available through 2010, and could
cost taxpayers up to $300 billion.
Earlier Tuesday, Reid said that Democrats would consider the
Republican proposal, although a senior aide said there were
concerns over its price tag.
The letter from Orszag said that the Obama administration
believed the recovery package would have an immediate boost on the
housing and construction industries. It welcomed existing proposals
included in the plan aimed at boosting the housing market, but
cautioned against any further ones.
The primary measure included in the plan currently would waive
the obligation to pay back a $7,500 tax credit available to
first-time buyers on properties purchased between Jan. 1 and the
end of August.
There are at least two amendments seeking to make this credit
more generous.
-By Corey Boles, Dow Jones Newswires; 202-862-6601;
corey.boles@dowjones.com
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