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Washington, DC—House Financial Services Committee Chairman Barney Frank today issued the following statement:
“Twice this week Bill Swindell has repeated an allegation in Congress Daily that is wholly without any basis. On Monday and on Thursday he made the suggestion that I have been seeking to trade funding for buying foreclosed properties from the omnibus housing bill in return for a higher loan limit. This is a twofer in terms of inaccuracy: it has absolutely no basis either in fact or in logic.
“I have been seeking higher loan limits, which are important to areas around the country due to the high cost of housing, because I think that is good for the economy, a view that is strongly supported by all of the industry groups supportive of the role of housing in the economy. It is also very strongly desired by people from California, including the Speaker, but also Governor Schwarzenegger, who sent a high-ranking official to Washington to testify on behalf of the higher loan limits, along with every single Member of the California Congressional Delegation, Democratic and Republican, who signed the attached letter. A housing market in which people cannot get mortgage loans above a certain level is bad not just for the people in those areas but for the whole economy.
“But at no point have I ever suggested that this was a tradeoff for killing funding for foreclosed property. I have had concerns about the Senate’s approach on the foreclosed property issue. But that is hardly because of any objection to the concept of providing funding for it. Indeed, Congresswoman Maxine Waters and I worked hard to put through the House a separate bill to provide far more money for cities to acquire foreclosed property. That bill is similar in intent to what is included in the Senate’s omnibus housing bill, and we are committed to making sure that Congress acts on this before we adjourn for the year. As the manager of the House version of the housing bill, my problems with the Senate approach are twofold: First, the Senate’s foreclosed property funding is the one item that the administration has consistently cited as the sure source of a veto. There are people who tell me to ignore that, but there is too much that is important in this bill, and it has already been too long delayed by procedural problems in the Senate, for us to risk the further delay involved in a veto. People within the administration with whom I have worked to try to reach agreement on this issue assure me that the veto threat is a real one, and I have no basis for accepting Senate assurances that it will simply go away.
“In addition, there is a strong faction within the House that has objected to legislation that does not meet the Pay As You Go (PAYGO) principle. A large number of Members of the House have shown their commitment to this principle on a whole range of important issues, including tax extenders and the alternative minimum tax. In my discussions with Senate leaders on the housing bill, I have often been told that we must accept outcomes that are far less than ideal because that is all that the Senate can be persuaded to do. That is exactly the case with using CDBG monies to fund the foreclosure purchase program – which the Senate bill does – without a provision to pay for it. While I find it odd that there are people who are committed to an insistence on paying for $4 billion for foreclosed property but not for hundreds of billions for the war in Iraq, I am not empowered to change reality simply because I dislike it.
“Given continued House Republican opposition to the housing package, the defection of a significant number of Democrats on the PAYGO principle would keep us from getting a majority for the bill. My response has been to work with the House leadership and others to get agreement that we will find a way to pay for at least $4 billion in CDBG debt and include it in one of the major funding vehicles that must pass Congress before we adjourn in September. Just as there were Members on the Democratic side who said they would not vote for any CDBG package that wasn’t paid for, I believe there are a significant number of Members, including those in the Congressional Black Caucus, other Members from Ohio, and other affected areas, who will not vote for the necessary funding packages this year without the inclusion of a fully funded foreclosed property provision. This makes me confident that we will be able to accomplish this before the end of the year, in a way that does not jeopardize the passage of the omnibus housing bill, or delay it even further than it has already been delayed.
“These two issues – increasing the loan limit and finding a way to achieve the foreclosed property funds provision are entirely separate, and I repeat that at no point has anyone that I know of suggested that they be traded. Regrettably, Mr. Swindell in all of the conversations he and I have had about this bill has never asked me whether I was pursuing such a trade. Had he done so, I would have told him that it made no sense.
“And that leads me to the second part of this fundamental error – its total lack of logical structure as a deal. For there to be a trade, Party A must want one thing, and Party B must want the other thing. The Senate bill contains the lower loan limit level and the CDBG funding. For reasons I have mentioned above, the House would like to change both provisions in the Senate bill. The so-called trade would be one in which the Senate acceded to the House on both issues. While I of course have no objection to that as a general principle of legislating, I do not understand how anybody could think that constitutes a trade or that I would think it was a clever strategy – namely to persuade the Senate to give in to the House on both issues while persuading them that they had somehow been participants in an even trade.
“I continue to believe that higher loan limits are good for the overall economy, given the need to boost housing activity and the inability of the private market to provide adequate funding at the higher levels in many areas of the country, and I continue to support strongly providing funds to cities to buy up foreclosed property. I will be pursuing both of those objectives, but the notion that they are somehow linked in a trade is wholly without any basis of any kind whatsoever.”
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