Housing Finally Earns the Attention of Lawmakers & Economic Stimulus Effort

Better late than never. There is a growing consensus among lawmakers in both parties that the deepening collapse of the housing market is at the heart of the country’s acute economic downturn, according to a report by the New York Times. While this falls into the category of, "That's what we've been trying to tell you for the last six months," it's gratifying that the message has finally entered their consciousness.

The New York Times reports that four months after Congress tried to rescue the economy with a $700 billion bailout for the financial industry that disappeared down a dark hole without a trace, Republicans and Democrats are suddenly competing to bail out financially struggling homeowners and the cratered new home building industry.

Having spent hundreds of billions of dollars rescuing financial institutions, only to see the economy spiral even deeper into crisis, liberal and conservative economists and lawmakers are pushing to redirect the economic stimulus bill to what they say is the core problem: the housing market.

Senate Republicans are seeking new tax breaks and up to $300 billion in mortgage subsidies to attract homebuyers. Democrats want to spend at least $50 billion on federal programs aimed at reducing mortgage foreclosures.

The Obama administration is hammering out its own plan to spend $50 billion to $100 billion to prevent home foreclosures. And later this month, Democrats hope to pass a measure that would give bankruptcy judges the power to reduce monthly mortgage payments for homeowners who are in default.