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 JohnsonHousing groups argue Freddie Mac's loss should spur finance reform On Wall Street, Dem shake-up puts party at crossroads Regulators fret over FOIA reform bill MORE (D-S.D.) and the panel’s top Republican Mike CrapoMike CrapoHousing groups argue Freddie Mac's loss should spur finance reform Bipartisan effort seeks end to budget gimmicks Republicans mum on possibility of Trump filling Supreme Court seat 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 SchumerRyan goes all-in on Puerto Rico Cruz's dad: Trump 'would be worse than Hillary Clinton' With Ryan’s blessing, lawmakers press ahead with tax reform talks MORE (N.Y.), Robert MenendezRobert MenendezSenate confirms Obama's long-stalled ambassador to Mexico Democrats block energy spending bill over Iran amendment Senate close to voting on Mexico ambassador MORE (N.J.), Jack ReedJack ReedTroops question rules for ISIS medal Bill would target retaliation against military sexual assault victims Pentagon: Russian military support for Assad remains strong MORE (R.I.), Elizabeth WarrenElizabeth WarrenClinton slams Trump, but stops short of calling him racist or sexist Kasich paints himself as 'our only hope' in 'Star Wars'-themed ad White House weighs overtime rule changes MORE (Mass.), Sherrod BrownSherrod BrownDem senators: Slash executive pay at pension plans seeking benefit cuts Lawmaker offers bill to impose 'exit tax' on expatriating companies For Clinton, there's really only one choice for veep MORE (Ohio) and Jeff MerkleyJeff MerkleyOvernight Finance: Fed steady on rates; Dems rally behind retirement rule Overnight Finance: Puerto Rico pressure builds; Big tariff vote Wednesday Senate votes to increase wind energy funding 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 CorkerHousing groups argue Freddie Mac's loss should spur finance reform Iran and heavy water: Five things to know Trump seeks approval from foreign policy experts, but hits snags 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 WarnerTurf battle erupts over hot cyber issue Housing groups argue Freddie Mac's loss should spur finance reform Week ahead: Rival encryption efforts clash on Capitol Hill 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.