Thanks to Paul Blumenthal and the Sunlight Foundation for sponsoring and putting together this forum.
Brad Miller is a Congressman, and a genuine blogger. He became a blogger in 2005, when Congress, which had never heard anything about the Bankruptcy Bill designed to undermine the poor for the benefit of credit card companies except praise from lobbyists for passing it, got pilloried by internet communities. Liberal and conservative blogs, and groups like Moveon exploded in frustration at this blatant ripoff of the public. Miller noticed, and began reading blogs and participating in these communities. He blogged angry, violating the cardinal rule of blogging, he spoke at Yearlykos in 2006 as a blogging expert, and he is one of us both as a progressive and a blogger.
Unlike most of us, though, Miller is a Congressman on the Financial Services Committee. And he's trying to work on the subprime mortgage mess caused by many of the same financial elites who pressed the Bankruptcy Bill. He's going to be around with Rep. Linda Sanchez tomorrow, here and at Dailykos. Today he was at TPM discussing the bill with Elizabeth Warren and Hale Stewart (Bonddad).
When I asked around early this year about what Congress could do to help middle class families escape foreclosure, a couple of bankruptcy judges suggested that Congress could just let bankruptcy courts modify home mortgages the same way bankruptcy courts can modify mortgages on family farms.
So Linda and I introduced a bill that would do just that. If the mortgage exceeds the value of the home, the court can limit the debt secured by the home to the value of the home and treat the rest as unsecured. And the court can then set a term of up to thirty years and an interest rate of prime plus a couple of points for risk-still a subprime loan, but not a predatory loan.
According the CRL, the legislation would make it possible for 600,000 or so families to save their homes from foreclosure. The chief economist for Moody's thinks that's an exaggeration-probably only 500,000 families would save their homes under the legislation.
Okay, so let's get started.
Go over to TPM and have a look. And come back tomorrow at 11am to hear from Brad Miller and Linda Sanchez.
If you want to know why we haven't heard much about the subprime mortgage mess from Democrats, it's because there's an intraparty fight brewing in the House of Representatives over what to do. The Judiciary Committee has the votes for a good bill, but the floor is a 'crapshoot'. Now, let's go into the housing crisis for a second so we can understand the dynamics of the fight. The housing crisis is hitting people all over the country in swing areas like the central corridor of Florida, so you'd think this would be a good time for Democrats to offer a solution. And they are doing so, or at least some of them are doing so.
Tthe reason the subprime mortgage meltdown is so problematic is because homeowners can't renegotiate mortgages for primary residences in bankruptcy court. If you declare bankruptcy, you still can't get out from under your mortgage debt, which essentially enslaves people whose home value has dropped lower than their debt amount.
The good news is that Brad Miller, Linda T. Sánchez, Barney Frank, and Mel Watt have a bill in Congress that empowers bankruptcy courts to restructure mortgages for primary residences. You can find out more here and here. It's a very sane and reasonable approach that lets people declare bankruptcy and get our from under horrific levels of debt.
The interesting news is that 16 fellow Democrats are opposing this bill because it will impact the Bankruptcy Bill provisions they passed in 2005. Who are these lovely people? If you guessed 'Blue Dogs', you'd be right. This is from Congress Daily:
As House Judiciary Committee Democrats quickly prepared last month to move legislation that would make it easier for bankruptcy judges to refashion home mortgages that are on the verge of foreclosure, the banking industry had to mobilize quickly to slow the bill they contend would rattle the shaky home mortgage market.
The bankers quickly worked sympathetic lawmaker offices with their in-house lobbyists. And they knew exactly whom to go to in order to stop the bill in its tracks: the Blue Dog Coalition of moderate-to-conservative Democrats.
Sixteen members of the coalition of business-friendly lawmakers sent a letter Oct. 16 to Judiciary Chairman Conyers asking him to delay consideration of the bill because it might undermine implementation of the 2005 bankruptcy overhaul law.
"We had concerns that a judge could come in and retroactively change the loan terms," said Rep. Dennis Moore, D-Kan., who organized the letter.
"I consider myself very consumer friendly; I also want to look out for business."
The Blue Dog letter forced Conyers to yank the bill from a full committee markup Oct. 24. He scheduled another hearing in the Judiciary Administrative and Commercial Law Subcommittee to go over concerns....
The letter represented the first time the Blue Dogs have flexed their political muscle in public this year on a business issue, much to the relief of lobbyists who are worried that a Democratic-controlled Congress will bring greater regulation and scrutiny of their industries...
Many K Street sources hope that as more substantial bills come forward -- tax overhaul, mortgage lending, and energy -- that the 47-member Blue Dog caucus will have more sway to make the outcome of any legislation less burdensome on business...
"We do a lot of reach-out to them for a lot of reasons," said Bruce Josten, executive vice president for government affairs at the U.S. Chamber of Commerce. "You have to work where you can work. They are go-to people."
Eight Blue Dogs joined in an Oct. 24 letter with other Democrats to Pelosi and Majority Leader Hoyer regarding two bills that would have restricted the use of how businesses could use Social Security numbers, stating the potentially adverse impact on financial institutions.
Those bills have not advanced to the House floor.
"We have tried when we can to have a clear understanding of where the Blue Dogs and where the [more moderate] New Democrats are on issues we care about. They can keep a bill from coming to the floor. If they are together, they can affect the outcome of something. ... They can affect the floor schedule," said one Democratic financial services lobbyist.
Aside from industry whore Dennis Moore, here are the other Bush Dogs that signed the letter. The letter is on the flip, and argues against amending the 2005 Bankruptcy Bill:
Lincoln Davis, John Tanner, Tim Mahoney, Jim Matheson, Alan Boyd, Jim Marshall, David Scott, Melissa Bean, Mike Ross, Baron Hill, Mike Thompson, Bart Gordon, Stephanie Herseth, Charlie Melancon, Dan Boren, Lincoln Davis, John Tanner, Tim Mahoney
What I find fascinating about the letter is how only 16 members of the Blue Dog caucus signed it, but the rhetoric speaks for the entire set of Blue Dogs. Do Patrick Murphy or Kirsten Gillibrand agree with these people? If not, why are they letting them trash their caucus brand?
(I originally posted this at Daily Kos earlier in the week, and got a decent response. I'm interested to see if it generates any thoughts here. Thanks!)
John Edwards is pretty good when it comes to the credit card industry. To be sure, he has made an issue out of it, while I can't find much anything about the issue on either Hillary Clinton's or Barack Obama's websites. I'll give credit where it's due: He's willing to take on issues that matter to real Americans.
But then the flip-side of that is that I'm addressing this diary to him, and not to the others. They should listen too. But I think Edwards is the only one who might, and maybe is the one who can make the best political use as well.
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