Mortgage Recovery Package
Senate Banking Chairman Chris Dodd (D-CT) and House Financial Services Chairman Barney Frank (D-MA) have been working through the weekend to develop a bill to provide the Treasury Department with the authority to buy $700 billion worth of bad debt from the nation’s banks. The bill will be based on a proposal from Treasury Secretary Henry Paulson, and is an effort to turn around the troubled financial institutions. It is unclear what form the bill will have when it is released early this week.
Secretary Paulson has asked for complete authority over the $700 billion with no additional regulation or oversight on the banking industry. However, Chairman Dodd has suggested additional oversight may be necessary, and provisions limiting the amount of manager compensation for banks who participate in the program may be included as well. Another possible provision would require banks who participate in the program to allow bankruptcy judges to adjust the terms of mortgages. A similar measure in April failed to receive the 60 votes needed to end debate on the measure, 58-36.
Conservatives are mixed about the proposal. House Minority Leader John Boehner (R-OH) is not happy about the plan but believes it is necessary. He also opposes any restrictions on the funding and believes Congress should pass a clean bill as quickly as possible. Other conservatives are skeptical of the bailout and are not convinced it is necessary or appropriate for the federal government to reach into the free market. Congressional leaders would like to see the package finished and voted on by the end of the week.
On Tuesday, Treasury Secretary Henry Paulson and Chairman of the Federal Reserve Ben Bernanke will testify before the Senate Banking Committee on the recent turmoil in the credit markets; they will testify Wednesday before the House Financial Services Committee.
After finishing the tax bill, it is possible the Senate will begin consideration of energy policy legislation. They will likely vote on two competing Senate packages. One package is by Energy and Natural Resources Chairman Jeff Bingaman (D-NM), and one was put together by Republican leaders, as well as the House-passed bill. Consideration of energy legislation may get pushed back until later in the week or early next week, depending on the timing of the continuing resolution and the mortgage recovery package.
The House is also expected to consider a bill sponsored by Rep. Caroline Maloney (D-NY) that will reform the credit card industry. H.R. 5244, the Credit Cardholder’s Bill of Rights, would require credit card companies to notify customers 45 days in advance of any rate increase and prohibit double-cycle billing and universal default practices by the credit card industry.
The House and Senate Armed Services committees hope to be able to conclude conference negotiations on the FY 2009 Defense Authorization bill by early this week. The committee chairman and ranking members of those committees will meet to hammer out the final difference between the House- and Senate-passed bills.
The Senate Armed Services Committee will hold a hearing on Iraq and Afghanistan Tuesday with Defense Secretary Robert Gates and Gen. James Cartwright, the vice chairman of the Joint Chiefs of Staff, testifying.
The first votes of the week in the Senate will be on the tax extenders package. The package has been broken up into two pieces, a fully offset renewable energy section and a partially offset AMT patch and business tax credits section. As early as Tuesday morning, the Senate will vote on the fully offset renewable energy tax credits. Majority Leader Reid is then expected to offer an amendment to fully offset the cost of the business tax credits and the AMT patch. If that amendment fails, they are expected to vote on passage of the bill as is, with the renewable energy tax credits fully offset and the AMT patch and business tax credits only partially offset. The bill is likely to meet resistance in the House, where Democrats have insisted on adhering to rules.
Lilly Ledbetter will testify before the Senate Judiciary Committee on Tuesday. Ledbetter was the employee whose sex discrimination lawsuit was recently thrown out by the Supreme Court because she failed to file suit shortly after receiving her first discriminatory paycheck.