Bush Threatens To Veto Democrats' Housing Bill

The White House just announced that President Bush would veto the housing bill the Senate is set to take up as early as this evening.

Rumors that the administration planned to issue a statement of administration policy on the bill started swirling late last week. A statement of administration policy is almost always a bad sign, used by the White House to criticize legislation as well as let lawmakers know it won’t make it past the president’s desk. Bush almost never backs down from a veto fight, so it's a safe bet that this bill, as is, will be dead on arrival.

On the Hill, the controversy on this housing bill as focused entirely on the section that would change the bankruptcy code to help homeowners avoid foreclosure. But the administration finds a lot more wrong with the legislation. The White House “strongly opposes” giving $4 million to state and local governments to redevelop abandoned and foreclosed homes; it just “opposes” increasing funding for the Neighborhood Reinvestment Corporation.

The bankruptcy language also earned a “strongly opposes” moniker from the White House.The hot-button provision would allow bankruptcy judges to modify the terms of primary residential mortgages, which are untouchable under current law. The measure has drawn a full-force lobbying attack from the finance mortgage industry, at the same time its being championed by a host of consumer and civil rights groups as the best way to help families facing imminent foreclosure.

Senate Majority Leader Harry Reid (D-Nev.) and Majority Whip Richard J. Durbin (D-Ill.) have been working on a narrower version of the bankruptcy language in hopes of winning over some undecided Democrats and Republicans.