On May 8th, the House passed sweeping housing legislation (HR 3221) aimed at reducing foreclosures and stimulating the housing market. The House approved the legislation in three separate votes:

1. By a vote of 266-154, the House approved an expansion of the Federal Housing Administration's authority to assist borrowers, a modernization of the FHA, and an overhaul of Fannie Mae and Freddie Mac. The legislation would authorize $300 billion in new FHA loan guarantees, as well as encourage lenders to accept write-downs on bad loans, and then refinance at current market value. Participating lenders would receive FHA loan guarantees on the new loans, and homeowners would have to share with the government any future appreciation of the home's value.

The White House has threatened a veto over the FHA loan guarantee expansion, calling it a "taxpayer bailout" that would "jeopardize FHA's financial solvency." House Minority Leader John Boehner (R-OH) also opposed the bill saying Democrats "are forcing responsible homeowners and taxpayers to pick up a $300 billion tab to bail out scam artists, speculators, and reckless borrowers." However, the Boehner statement is misleading because the cost to the government of a loan guarantee is not the amount of the loan; it is the amount of projected liability from bad loans. The nonpartisan CBO estimated the cost at $2.7 billion over FY 2008-13, based on a projection of 500,000 borrowers refinancing under the new program.

Statement of Administration Policy on HR 3221
CBO Cost Estimate for the expansion of FHA authority:

2. By a vote of 322-94, the House approved a refundable tax credit of up to $7500 for first-time homebuyers in order to stimulate the housing market. ("Refundable" means that taxpayers would receive a check from the IRS for the full amount of the credit even if it is larger than their tax liability.) Also included is an additional standard deduction for state and local property taxes. This piece of the housing package would also authorize an additional $10 billion in tax-exempt bonds that would be used to refinance subprime loans, finance construction of low-income rental housing, and increase the number of low-income housing tax credits.

3. By a vote of 256-120, the House voted to prevent any provision of Federal law from pre-empting state laws dealing with residential foreclosures.

The House also passed HR 5818, that would authorize the Department of Housing and Urban Development (HUD) to make $15 billion in loans to States for housing authorities and nonprofits to purchase, renovate, and sell foreclosed housing. The Bush Administration has threatened to veto the bill, saying it would "constitute a costly bailout for lenders and speculators and would delay the economic recovery it purports to advance." Statement of Administration Policy on HR 5818

Aug. 1, 2007: H.R. 3162 reported by Ways & Means on August 1, 2007.

Aug. 1, 2007: House passed H.R. 3162 by a vote of 225-204. (Administration veto threat.)
Oct. 25, 2007: House passed H.R. 3963, by a vote of 265-142.
Dec. 19, 2007: House passed S. 2499, a simple extension of SCHIP (w/o expanding coverage), by a vote of 411-3.

Congress also included in the SCHIP extension (S 2499) a provision to postpone for 6 months a scheduled 10% cut in Medicare payments to physicians.  Background: The scheduled cuts date back to the Balanced Budget Act of 1997 which sought to slow the growth of Medicare spending, in part, by scheduling cuts in payments to physicians.  Opponents of the scheduled cuts have been concerned that allowing them to go into effect would result in fewer physicians willing to treat Medicare patients.  Under the temporary provision, Medicare will increase physician payments by 0.5 percent for the first 6 months of 2008, but without additional action the scheduled cuts will spring back in July, 2008.