By Vicki Needham - 05/09/14 02:04 PM EDT
Housing industry groups expressed frustration and surprise on Friday that Senate Democrats appear willing to slow momentum and risk scuttling a bill that would revamp the housing finance system.
Jerry Howard, president of the National Association of Home Builders, said he is baffled about the motivations of a group of six liberal Senate Democrats who said they won’t support the bipartisan legislation crafted by Senate Banking Committee leaders.
Howard argued that delaying the bill this year could, in the worst case scenario, push its consideration to 2017 or later, leaving the housing sector and job market in limbo.
"I don’t understand their calculus at all,” he said.
The latest bipartisan version authored by Senate Banking Committee Chairman Tim JohnsonTim JohnsonFormer GOP senator endorses Clinton after Orlando shooting Housing groups argue Freddie Mac's loss should spur finance reform On Wall Street, Dem shake-up puts party at crossroads MORE (D-S.D.) and the panel’s top Republican Mike CrapoMike CrapoGOP warming up to Cuba travel Ann Coulter: VP pick is Trump's first mistake Overnight Finance: Freedom Caucus moves to impeach IRS chief | Calls for US-UK trade talks | Clinton ally offers trade for Trump tax returns MORE (Idaho) is expected to gain approval next week with votes from 12 long-standing supporters of the 22-member panel.
But it will move forward without a group of Democratic hold-outs.
Late Thursday the Democrats — Charles SchumerCharles SchumerConvention shows Democrats support fracking, activists on the fringe Dem ad blasts Indiana senate candidate on Social Security The Trail 2016: Unity at last MORE (N.Y.), Robert MenendezRobert MenendezTim Kaine backs call to boost funding for Israeli missile defense GMO labeling bill advances in the Senate over Dem objections Overnight Finance: Trump threatens NAFTA withdrawal | Senate poised for crucial Puerto Rico vote | Ryan calls for UK trade deal | Senate Dems block Zika funding deal MORE (N.J.), Jack ReedJack ReedDems to GOP: Admit Trump is 'unfit' to be president Armed Services leaders encouraged after first conference meeting US urges China to be calm in wake of South China Sea ruling MORE (R.I.), Elizabeth WarrenElizabeth WarrenWasserman Schultz: 'Sometimes you just have to take one for the team' Chelsea Clinton's big moment Kaine as Clinton's VP pick sells out progressive wing of party MORE (Mass.), Sherrod BrownSherrod BrownThe Trail 2016: Her big night Kaine as Clinton's VP pick sells out progressive wing of party Unions want one thing from Hillary tonight: A stake in TPP’s heart MORE (Ohio) and Jeff MerkleyJeff MerkleyDem anxiety hangs over Clinton Kaine as Clinton's VP pick sells out progressive wing of party Unions want one thing from Hillary tonight: A stake in TPP’s heart MORE (Ore.) — said they couldn’t support the measure at this point.
The bill would eliminate government-controlled mortgage giants Fannie Mae and Freddie Mac over five years and replace them with a Federal Mortgage Insurance Corporation (FMIC).
While most lawmakers agree that Fannie and Fredde need to eventually be eliminated, the Democrats are pressing for changes to the bill to ensure that big banks don’t control the mortgage market and that underserved borrowers have access to the services they need, among other issues.
Schumer, a main target of supporters to sign onto the measure, told The Hill on Thursday that “we’re making progress” but would not say what more could be done to quell his concerns.
Howard said he wonders if Democrats realize the “double irony” of their decision not to sign onto the bill because it will hurt not only underserved borrowers they are seeking to help but all potential homeowners.
He argued that politically their stance gives Republicans exactly what they want, “no compromise.”
Howard said that Johnson and Crapo have put together a strong housing package that the White House supports, which should prompt more Democrats to back it.
“I thought some people were more practically and politically pragmatic,” he said of the group of Democrats.
David Stevens, head of the Mortgage Bankers Association (MBA), said it especially came as a surprise to him because the talks had been constructive and there seemed to be momentum toward solving major concerns and bringing more Democrats on board.
While he argued that no bill will ever be perfect, the fact that “this is a bipartisan effort should move it forward."
Stevens said it was unfortunate that this group of senators announced their opposition without informing White House officials or Senate leaders beforehand.
“This needs to be resolved because the risk of waiting threatens affordable housing in a far greater way,” he said.
Sen. Bob CorkerBob CorkerTrump starts considering Cabinet Trump's secret weapon is Ivanka Senate Dems introduce Iran sanctions extension MORE (R-Tenn.), a Banking panel member and chief author of the measure used as the Johnson-Crapo foundation, told The Hill that there have been daily “discussions on the ways of broadening the bill’s support.”
“The issues are complex and so when you throw a solution out there’s a lot of work that has to be done behind it so people are continuing on that path,” he said.
He said there doesn’t necessarily have to be more support for the bill beyond what is in place right now.
Still, Corker added that it is one of the most complex issues he’s ever worked on and said it is probably wise to solve as much as you can in committee.
“But the other thought is you can fix some things before it goes to the floor, which is what happened on immigration where the real push was after committee," he said.
"In this case, it’s pretty technical so we’re trying to do as much as we can before the final committee markup, which may not change the vote at all."
Then he added, “but it might.”
Corker, who crafted a bill with Democratic Sen. Mark WarnerMark WarnerTim Kaine backs call to boost funding for Israeli missile defense Democratic National Convention event calendar Liberal group: Kaine could be 'disastrous' VP pick MORE (Va.) last summer, reiterated that the votes have been there in the committee for “some time” to move the bill.
Stevens said there is still time over the next few days “to see how firm senators are but I’m not sure how successful that will be.”
But time also is one of the bill’s greatest hurdles with the midterms creeping into the political picture faster than lawmakers may be able to reach a broader compromise and pass the measure in the Senate.
The major concern for supporters is that without a supermajority on the committee, probably around 17 votes, the bill won’t have enough momentum needed to pass the Senate and put pressure on the House to act.
Still, the panel is going to move ahead with the markup next week and aim to continue negotiating to get a bill through the Senate before the midterm elections in November.
“We have made significant progress bridging the divide among those previously undecided, and the committee vote is just a first step,” said Banking panel spokesman Sean Oblack.
“Those involved in the negotiations have indicated they are interested in continuing to work together to try and find common ground, so the Banking Committee will keep working after favorably reporting out the bill next week."
This story was updated at 4:45 p.m.