WASHINGTON — A massive foreclosure rescue bill cleared a key Senate test Tuesday by an overwhelming margin, with Democrats and Republicans both eager to claim election-year credit for helping hard-pressed homeowners.
The mortgage aid plan would let the Federal Housing Administration back $300 billion in new, cheaper home loans for an estimated 400,000 distressed borrowers who otherwise would be considered too financially risky to qualify for government- insured, fixed-rate loans.
An 83-9 vote put the plan on track for Senate passage as early as today, but President Bush is threatening a veto.
Borrowers would be eligible for the housing rescue if their mortgage holders were willing to take a substantial loss and allow them to refinance, and if they could show an ability to make payments on the new loan. The bill also would tighten controls and create a new regulator for Fannie Mae and Freddie Mac, the mortgage giants that provide huge amounts of cash flow to the home loan market by buying loans from banks.
It would provide a $14.5 billion array of tax breaks, including a credit of up to $8,000 for first-time homebuyers who buy in the next year. And it would boost low-income tax credits and mortgage revenue bonds.
The Senate bill would provide $3.9 billion in grants to deal with foreclosed properties — a House plan would provide $15 billion — but the White House singled out the funds in its veto threat.
House Democrats’ gas price-gouging bill fails
House Democrats failed Tuesday to resurrect a bill to punish price gouging at the gas pump, while maneuvering to block Republican attempts to expand offshore drilling, an idea gaining in popularity amid $4-a-gallon gas prices.
House Democratic leaders failed to get the two-thirds vote needed to push through a measure that would have made gasoline and diesel fuel price-gouging a federal crime, with penalties of up to $2 million for individuals and possible jail time. The vote was 276-146.
Action on legislation that would assure continuation of the ban on oil and natural gas drilling in most of the country’s coastal waters was put off until later this summer after it became increasingly clear that Republican lawmakers may have the votes to lift the drilling moratorium.
House votes to delay cuts in Medicare payments
The House voted Tuesday to postpone a planned cut in payments to physicians who treat Medicare patients by approving a reduction in payouts to private insurers.
The House approved legislation, on a 355-59 vote despite a veto threat from Bush, that forestalls a 10.6 percent cut in Medicare payments to doctors and hospitals for 18 months — a decrease that Democrats warned would lead to many physicians opting out of treating Medicare patients.
The battle now shifts to the Senate.
The White House has threatened to veto the bill because it includes payment reductions to Medicare Advantage, the program under which some seniors use a private fee-for-service insurer instead of Medicare for their health coverage.
According to White House statements, a drop in payments to those insurers would result in reduced services and benefits, particularly for elderly patients in rural areas. Democrats said the private insurers are receiving too much money.
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