Three Thought Experiments on the Bankruptcy Fight

by: Chris Bowers

Mon Mar 02, 2009 at 13:43

1. Representative Ellen Tauscher is bragging to Politico that the delay on the Help Families Dave Their Homes Act (for details on the bill, click here) is a show of strength from House moderates:

   "It shows we have bench strength, and it shows we can flex," said California Rep. Ellen O. Tauscher, who chairs the New Democrat Coalition and played a central role in negotiations over the bankruptcy bill.

   First thought experiment: if you are bragging to the Politico that delaying a bill is a show of political strength, then how exactly are we to know that you have good faith policy disagreements with the bill? Seems to me that once you start bragging about delaying legislation as a show of political power, any claim to good faith goes our the window.
   

2. Remember that the financial services industry opposes this plan:

   The financial services industry and House Republicans are fighting back against a bill pushed by House Democrats that would empower bankruptcy judges to write down mortgage interest rates and principal.

   Or at least would like to limit it:

   The financial-services industry has vigorously opposed "cramdown" legislation that would let bankruptcy judges write down the principal and interest payments on mortgages for primary residences. The industry says the bill, as written, is too broad and would allow homeowners to head to court before attempting to work out a modified mortgage with their lender.

   Second thought experiment: what are the odds that the financial services industry and House Republicans actually have the public's best interests at heart in opposing this bill? What about their behavior over the last few years would lead one to such a conclusion? Given their track record, isn't it far more likely that they are trying to make themselves wealthier at the public's expense?
   

3. Like the financial services industry, Ellen Tauscher wants to limit the scope of the bill, too:

   That prompted lawmakers, like Tauscher, to limit the scope of the bankruptcy bill as much as possible, even though this measure is only loosely related to the president's broader proposal.

   Third thought experiment: if you are bragging to the Politco about showing off political power, and if you are aligned with the financial services industry in their attempt to narrow the scope of the bill, then what are the odds that you are working on behalf of the public interest in this fight?

Thought experiment over--now, let's take some action. Firedoglake has a couple of great ways to make a difference on The Help Families Save Their Homes Act:

Tell Congress they work for you, not the banks
Tell Speaker Pelosi to stand up to the Democratic bank lobby

These are great tools that give you an easy way to make a difference, today. There is still time to sway minds on this one, as President Obama is sending is new Housing Secretary to talk to wayward Democrats on this matter tonight. Before that conversation, let members of Congress know there is popular support behind the President's plan.