I've talked to probably a dozen people involved with the bill allowing bankruptcy judges to write-down mortgages, which would reduce foreclosures by 20% and wouldn't cost the taxpayers one dime. Every single person I spoke to said the same thing -- it's disgusting that banks are writing the legislation, watering it down so it is meaningless with the help of Ellen Tauscher and the New Democrat coalition.
On Saturday I wrote about the efforts of former Wall Street investment banker Tauscher to gut the legislation on behalf of banks, who are holding out hope that they can unload their bad loans on taxpayers and never have to take responsibility for their mistakes.
I promptly got a call from Jonathan Kaplan, Tauscher's press secretary, who said that the New Dem's Executive Director Adam Pase, a former lobbyist for predatory lenders who worked to undermine regulation of subprime loans, was not working on this issue. Nor, he claimed, was Tauscher taking the lead. He said Tauscher was only trying to help homeowners before they got to bankruptcy court, and wasn't trying to weaken anything.
Lo and behold, this morning we find not one but two articles where Tauscher brags about her leadership of an effort to "limit the scope of the bankruptcy bill as much as possible," saying that "it shows we have bench strength, and it shows we can flex." Adam Pace was circulating memos on the bill, and an article in Roll Call this morning (subscription) states that he is "widely credited with bringing a sharp organizational focus that has reinvigorated the group."
The upshot? Nancy Pelosi "buckled" and suspended consideration of the housing bill at a time when it is desperately needed.
(You can tell Speaker Pelosi to stand up to Tauscher, the New Dems, the banks and the lobbyists here.)
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Business week also has an article detailing the way that banks are dictating how this legislation is being written. Lobbyist money is flowing into the coffers of Tauscher's New Dems, and nobody on the Hill even bothers to pretend that they are doing anything but representing corporate interests over those of the people who elected them.
New Democrats Bill Foster, Gabby Giffords, Shelly Berkley, Brian Baird, Melissa Bean, Patrick Murphy, John Larson, Dennis Moore and Jim Moran represent districts that will be the hardest hit by the foreclosure crisis. Caroline Maloney and Ed Perlmutter are not on the list, but they are New Dems who have been vocal in their support for Tauscher's efforts.)
How do they explain to their constituents that thousands of homes will go into foreclosure in each of their respective districts without this legislation, dragging the value of other properties in the area with them in an endless downward spiral? Do they really think voters won't notice that they are aligned with the financial services industry against them? You can write a letter to the editor of your local paper letting them know you'll be watching your representative's vote here.
Bank lobbyists worked through Tauscher and others to keep mortgage write-down from happening in 2007, when it could have been really helpful in softening the economic blow. How can Tauscher claim that there's anything "moderate" about working on behalf of the bankers who created this crisis? How do the New Dems justify tying the hands of bankruptcy judges when both Barack Obama and leading economists say it's vital to arresting the economic crisis?
When Democrats were given the keys to Congress and the White House, nobody did so with the idea that they should become the new recipients of K-Street lobbyist money, fattening their own coffers while the public suffers. The idea that they are being "fiscally responsible" is laughable.