WASHINGTON — Even as a huge bipartisan majority in the Senate voted Saturday to send a sprawling housing bill to the White House, economists, consumer advocates and other analysts said the package of programs for cash-strapped homeowners and shaken mortgage lenders is unlikely to relieve the foreclosure crisis that is driving the nation toward recession.
“This is not the end of the housing crunch,” said Jared Bernstein, a senior economist at the Economic Policy Institute. “Housing prices have already fallen 15 percent and they need to fall 10 percent more. This bill isn’t going to change that equation.”
The Senate voted 72 to 13 to approve the bill, which seeks to halt the steepest slide in house prices in a generation, rescue hundreds of thousands of families from foreclosure and restore confidence in the nation’s largest mortgage-finance firms. White House officials said President Bush is likely to sign it by midweek, despite his opposition to nearly $4 billion in aid to local communities.
During Senate debate, Sen. Christopher Dodd, D-Conn., chairman of the Senate Banking Committee and one of the bill’s lead sponsors, cited a litany of grim statistics about the mortgage crisis, including that an estimated 8,500 families a day are falling into foreclosure and that 1 in 8 homes is projected to enter foreclosure over the next five years.
“The American dream has become a nightmare for countless families,” Dodd said, urging his colleagues to vote for a bill that he acknowledged is “not perfect … and will not perform miracles.”
Republican lawmakers, particularly in the House, have blasted some of the measure’s key provisions as bailouts for irresponsible borrowers and risk-addicted financial institutions that could wind up costing taxpayers hundreds of billions of dollars. Last week, the House approved the bill 272 to 152, with three-quarters of GOP lawmakers voting no.
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