Housing crisis worse, Congress takes vacation

Ed Henry
White House Correspondent

If you’re taking some well-deserved rest for the Fourth of July, you are probably getting at best a day or two off around the actual holiday itself. Only in Congress could a break for the “Fourth” become a vacation spanning more than a week.

The Democratic-run Congress shut down last Friday and is not returning to work until next Monday. Between now and then, the New York Times notes in a blistering editorial Tuesday, another 55,000 homes will sink into foreclosure.

Yet the Senate left town Friday without passing a long-awaited housing rescue bill that would allow homeowners on the edge to get new mortgages backed by the federal government. The catch is that the existing lending institution would have to agree to cut the existing mortgage balance down to 85 percent of the home’s value.

Between Republican fundraising events, President Bush is in Little Rock today at a credit counseling agency and is expected to prod Congress to finish the legislation. But even if it did, the President has threatened to veto the current bill… because he does not believe it does enough to reform the Federal Housing Administration.

In fairness to Democrats, the housing bill stalled after a Republican, Sen. John Ensign, insisted the Senate tack on a package of tax breaks for renewable energy. Besides the fact that really has nothing to do with the housing crisis, Ensign had no way of paying for the tax cuts so it would run afoul of budget rules in the House, thereby making it even more complicated to pass a final product.

Sound like a mess? It is.

So some local communities, fed up with Washington, have decided to take matters into their own hands and implement their own reform plans.

Fairfax, Virginia, for example, has an innovative plan known as the “Silver Lining” proposal. The chair of the county commission, Gerald Connolly, is having the local government buy up foreclosed properties so it can eventually sell them at low prices to police officers and firefighters currently priced out of the area.

And there’s a twist: Connolly himself is now running for a seat in Congress. Maybe if he wins he can bring some fresh ideas to Capitol Hill.

Original here