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Paul Kiesel
Paul Kiesel
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White House Renews Threat to Veto Housing Bill, Bush Pushes Congress to Pass His Version

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Yesterday, the White House renewed its threat to veto the housing bill that will be voted on tomorrow by the House if it contained a $4 billion block grant program for states to buy foreclosed homes (in order to get foreclosed homes off the market; a move that would likely provide relief to a struggling real estate market).

White House spokeswoman Dana Perino said that, “Our position hasn’t changed,” (New York Times, 7/22/08).

President Bush last week endorsed the “bailout plan” for Fannie Mae and Freddie Mac, that was added in a hasty effort to stimulate investor confidence, to the previous housing bill. The federal government stepped in a week ago saying they’d do what it takes to prevent the two mortgage giants from failing.

The Bush administration has come to rely heavily on the two companies to pull the housing market out of its current slump.

Treasury Secretary Paulson has suggested, with Bush following suit (but just recently), that the Fed should take a more active and larger role in supervising the companies (something that wasn’t done during the subprime days of Phil Gramm-like deregulation). Part of this supervision is contingent on Fannie and Freddie receiving the financial backing that the housing bill would allow.

Nancy Pelosi believes that Bush will have little leverage to veto the bill and has stated that the housing bill will keep the $4 billion provision intact when it’s voted on tomorrow.