Cramming Down The Blame On Cramdown

As I said back in March, without the "cramdown" provision to allow bankruptcy judges to modify mortgage rates, Obama's foreclosure relief plan was doomed from the get-go. The cramdown provision was defeated by the Senate ConservaDems in April as one of Arlen Specter's first votes as a Democrat.

Three months later, as we learn the first half of 2009 set a record for foreclosures in the country and only threatens to get worse, the political damage is starting to set in at a time when the Democrats can least afford it, and the usual suspects are twisting the knife in.

The Obama administration’s $50 billion program to curb foreclosures isn’t working, and the White House knows it.

Administration officials blame the mortgage servicers charged with carrying out the mortgage modifications and refinancing under the federal program. Many of their Democratic allies on Capitol Hill back them up, but others are criticizing the White House for fumbling the execution. Whatever the reason, the program hasn’t stopped the rising tide of foreclosures: Experts predict that at least another 2 million homes will be lost this year, and the administration’s plan has so far reached only about 160,000 of the 3 million to 4 million homes it was supposed to protect over the next three years.

That’s bad news for the economy — and bad news for the Democrats.

The Democrats’ political and policy fortunes rest on their ability to persuade voters that they’re fixing the economy. But experts say that rising foreclosures will only exacerbate the nation’s economic woes, pushing down home prices, slashing state and local tax revenues and imperiling consumer confidence.

“Everybody understands that getting out of this broader crisis requires that we stabilize our housing market and stem the tide of foreclosures,” Senate Banking Chairman Chris Dodd (D-Conn.) said in a hearing Thursday. But in unusually harsh words for a Democrat, Dodd said that the Obama administration’s progress in stopping foreclosures has been “disgraceful” so far.

“It’s just hard to explain to the working families in America how it is we could move so fast with extraordinarily complicated deals with the huge financial institutions, and we are moving so incredibly slowly, mired in paperwork, in rules, in talking to banks back home,” said Sen. Jeff Merkley (D-Ore.).

You want to know why the plan is failing?

Max Baucus (D-MT)
Michael Bennet (D-CO)
Robert Byrd (D-WV)
Tom Carper (D-DE)
Byron Dorgan (D-ND)
Tim Johnson (D-SD)
Mary Landrieu (D-LA)
Blanche Lincoln (D-AR)
Ben Nelson (D-NE)
Mark Pryor (D-AR)
Arlen Specter (D-PA)
Jon Tester (D-MT)

...all these Senate Dems killed cramdown. Cramdown would have allowed judges to directly set rates and do it quickly. Instead, months of paperwork means those who could have been helped the fastest are having to wait and wait and wait as foreclosure proceedings clog up the courts. As a result, homeowners are going under instead of getting help.

Let's not forget more than 35 Republicans voted to kill this measure too. But the ConservaDems stabbed Obama -- and the country -- in the back in April. Now the bill is due, and millions more Americans will lose their homes.

The same ConservaDems will most likely kill Obamacare too.

Remember them.