Durbin Urges GOP To Back Stimulus; Pledges To Address Housing
February 05 2009 - 12:46PM
Dow Jones News
A top Senate Democrat Thursday urged Republicans to support the
more than $900 billion economic recovery plan and pledged to work
with them on legislation to address the housing crisis in
exchange.
Sen. Richard Durbin, D-Ill., the No. 2 ranking Democrat in the
Senate, said that he was not adverse to a GOP proposal to create a
federally subsidized discounted mortgage rate in a bid to drive up
demand for housing and to assist current homeowners struggling to
make their monthly repayments.
But citing concern over the potential cost of the plan, Durbin
said he would not support the proposal at the expense of creating
jobs. He said Republicans would strip out hundreds of billions of
dollars in spending from the stimulus plan to pay for their housing
plan.
Republicans have said they would cap the costs of the discounted
loan at $300 billion, although they said they believed it would
actually cost the Treasury much less.
"I hope they would stick with us on stimulus and then we would
work with them to address the housing crisis," Durbin said.
The GOP plan would create a mortgage rate between 4%-4.5% and
direct Fannie Mae (FNM) and Freddie Mac (FRE) to buy the new loans
off the books of lenders who offered them. The federal government
would subsidize the banks' closing costs to encourage lenders to
participate in the scheme.
It would be available for a year to both new homebuyers and
those looking to refinance. The loans would be for 30 years.
Durbin said Democrats had shown a willingness to compromise by
accepting an amendment put forward by GOP Sen. Johnny Isakson,
R-Ga., that would double in size and extend in duration an existing
homebuyers credit.
Majority Leader Harry Reid, D-Nev., said earlier this week that
Democrats would consider the Republican housing plan. But the White
House urged Democrats not to include any major housing proposals in
the stimulus plan before the Obama administration released its own
plan to tackle the ailing housing market.
President Barack Obama and Treasury Secretary Timothy Geithner
are expected to announce their plan next week.
-By Corey Boles, Dow Jones Newswires; 202-821-2412;
corey.boles@dowjones.com