Shahien Nasiripour reports that three Fed governors — heads of three of the Federal Reserve’s regional banks — support ending too big to fail by breaking banks up. “If there was a good way to do so, if you had a clear road map about how you were going to go about it, and why you were going to break them up in this particular way,” James Bullard, the head of the St. Louis bank, said he would support it.

And Ryan Grim reports that Republican legislators mentioned they might support the “Volcker Rule,” an proposal by former Fed President Paul Volcker to restrict proprietary trading, where banks make speculative bets for themselves rather than on behalf of customers:

“Sixty percent of all the banking assets are concentrated in ten banks in the country,” said [Sen. John Cornyn (R-Texas)]. HuffPost asked if he’d support what’s known as the Volcker Rule, an administration plan to split off risky trading done by banks for their own gain from standard commercial banking activities.

“Yes,” he said, “I think that’s one approach.”

Without prompting, he added: “Glass-Steagall, we need to look at that.”

“We all — I say we all, but almost all of us — made the mistake of repealing Glass-Steagall in 1999,” Sen. Johnny Isakson (R-Ga.) told HuffPost. “Some of the problems of the big banks were brought about by the blurring of the restrictions on where they could go. And they went into brokerage and they went into derivatives they went into lots of other things. Maybe we need to look back to that, but it’s hard to put the genie back in the bottle.”

But the bill proposed by Sen. Chris Dodd (D-Conn.) solves the too big to fail problem differently — by creating a $50 billion fund, paid for by banks, to cover the cost of resolving a failing bank and wiping out its shareholders and management — meaning such statements of support are likely too little, too late, even if they might be a more effective solution.

The activists displayed impatience with the Republican strategy of prolonging debate on health-care reform by offering amendments to the bill from the Senate floor.  “We don’t want amendments,” one woman said. “We don’t want a bill.”

Isakson defended the strategy, calling it “brilliant,” and crediting Senate Minority Leader Mitch McConnell for crafting it. “That’s the only way we can do [this] — make the other side show its hand,” he said.

One woman in the group proved to be a bit of an outlier. “If this bill is killed, will there be some sort of reform made to health care so that we can afford it?” she asked. “I don’t have health care.”

Isakson launched into the standard GOP talking point of allowing people to purchase insurance policies across state lines.

Isakson’s comments about the GOP’s actual strategy against the bill are pretty revealing.

Grassley is known as both a straight-shooter and a guy not prone to muck around in the swamps of petty politics. Which makes his statement today about the Democrats’ plans for health reform that much more remarkable.

“In the House bill, there is counseling for end of life,” Grassley said. “You have every right to fear. You shouldn’t have counseling at the end of life, you should have done that 20 years before. Should not have a government run plan to decide when to pull the plug on grandma.”

Of course the House bill doesn’t have any such thing. Rather, it would provide government help for people who choose, on their own accord, to seek counseling about late-in-life services like hospice care.

The AARP has launched a campaign to debunk such myths, which have spread like wildfire across the town halls of the country in recent days. The group says the claim that the government will be in charge of these decisions is patently false: “Any decidsions regarding your health will continue to be made by you, your doctor and your family — not by the government.”

But don’t take it from AARP. Sen. Johnny Isakson (R-Ga.), sponsor of legislation providing for Medicare coverage of option late-life services — legislation similar to the Democrats’ proposal — told The Washington Post this week that the idea that his proposal would somehow encourage government-sponsored euthanasia is “nuts.”

I just had a phone call where someone said Sarah Palin’s web site had talked about the House bill having death panels on it where people would be euthanized. How someone could take an end of life directive or a living will as that is nuts.

A Republican senator saying that his party’s last vice presidential nominee is “nuts” when talking about the health care bill? I’m surprised this isn’t getting more play.

Sens. Barbara Boxer (D-Calif.) and Johnny Isakson (R-Ga.), who head the Senate Ethics Committee, introduced legislation Thursday to force lawmakers to disclose the “full and complete” details of their mortgage arrangements — including dates, rates, the range of the amount and the creditor’s name and location.

The bill arrived one day before the Ethics Committee cleared Sens. Chris Dodd (D-Conn.) and Kent Conrad (D-N.D.) of ethics violations surrounding special rates they received on loans taken out through Countrywide Financial Corp.

You can’t pin this one on Republicans alone. It’s true that Sen. Johnny Isakson (R-Ga.) came up with the idea to revitalize the proposal, which first surfaced earlier this year in negotiations over the stimulus package – -but Senate Banking Committee Chairman Christopher Dodd (D-Conn.) is a co-sponsor. Coincidentally, I’m sure, Dodd is in the midst of a tough re-election battle. I’d imagine offering a $15,000 credit for first-time homebuyers and eliminating any income ceilings so even wealthy people are eligible probably will lpay pretty well in Greenwich.

First, a little background. As TWI reported recently, Congress approved the $8,000 tax credit as a way to jumpstart the housing market, and HUD came up with a plan to allow homebuyers to access the credit immediately for downpayment money. This seemed slightly problematic to many, given the long history of fraud and abuse associated with downpayment assistance schemes for government-backed loans. Also, some wondered why the government was helping people who couldn’t afford downpayments to buy houses, given that having no skin in the game leads to defaults, which was supposed to be one of the lessons learned from the mortgage crisis.

To its credit, HUD came out with revised guidelines for the program, requiring borrowers to put down some of their own money for the downpayment, along with accessing the credit. And it issued stern warnings to third-party firms that might try to offer bridge loans for the credits at high interest rates.

That should have ended it. But then lawmakers came up with the new idea to increase the size of the credit and open it to everyone. Here’s how Clusterstock summarizes it:

The government continues its desperate effort to make the cost of dwelling more expensive. There’s already an $8,000 homebuyer tax credit, but it’s obviously not done enough, so Senators Johnny Isaacson and Christopher Dodd are proposing to up it to $15,000.

And, perhaps more importantly, they’re eliminating the income requirements. Under the previous tax credit, a couple had to have a combined income of less than $150,000. Now any upper-middle class homebuyer is eligible, and hopefully this will get the McMansion sales going again.

Yes, that’s just what America needs – more McMansions.

It’s true that interest rates are jumping and the housing market isn’t exactly soaring. And the Obama administration’s homeowner rescue plan isn’t quite taking off, either. Those are serious problems that need to be addressed. Is handing out a $15,000 tax credit the best way to accomplish that?

If this tax credit expansion passes, look for someone to suggest a way to let borrowers turn it into downpayment money. Then they can buy bigger houses than they probably can afford.

We might not have learned much from the current foreclosure crisis, but at least the builders of all those McMansions will be happy.

Isakson even introduced the first lighthearted moment of the hearing. He says he met with Hill in his office last week and got a response on “the only question I needed an answer to,” which is how Hill will follow up Ryan Crocker’s tenure as U.S. ambassador to Iraq. “I just don’t want to screw it up,” Hill replied.

Sen. Johnny Isakson (R-Ga.), pictured here with fellow Republican Senators Mike Enzi and Mitch McConnell, introduced an amendment to the stimulus that cuts funding for low-income housing programs (WDCpix).

The Senate stimulus bill eliminates nearly $5 billion for low-income housing programs included in the House-passed proposal while providing nearly $40 billion in tax breaks for wealthier homebuyers who likely don’t need the help. The discrepancies have left affordable-housing advocates concerned that the eventual compromise won’t go far enough to stem the spike in homelessness projected to hit the most vulnerable Americans as the economy worsens.

Under the $838 billion Senate proposal, which squeaked through the upper chamber Tuesday, homebuyers of any income would be eligible for a tax credit of $15,000. Yet only those wealthy enough to pay $15,000 worth of taxes over two years would receive the full benefit — and only if the purchased home costs more than $150,000. Otherwise the credit is 10 percent of the home price.

Illustration by: Matt Mahurin

The Senate measure — sponsored by Sen. Johnny Isakson (R-Ga.), who voted against the final stimulus bill — is far more generous than the House-passed $7,500 tax credit for first-time homebuyers earning less than $150,000. The Joint Committee on Taxation estimates the Isakson provision will cost $39.2 billion over ten years. The House measure, by contrast, is projected to cost $2.6 billion. In addition, the Senate bill provides $4.7 billion less for Housing and Urban Development programs than the House version.

Supporters of the Isakson amendment, including the real-estate and home-building industries, say the Senate provision will spur home sales and revive the sagging housing market. But many housing advocates and watchdog groups contend the credit, because it targets wealthier households, won’t provide the same stimulating effects that funding other low-income programs would.

“Nine out of 10 of the people benefiting probably would have bought new homes anyways,” said Barbara Sard, director of housing policy at the Center on Budget and Policy Priorities. “To the extent that that’s the case, it’s really wasteful — and it’s really expensive.” Sard said the Senate proposal does little more than provide “a windfall for people who don’t need it.”

Danna Fisher, legislative director at the National Low Income Housing Coalition, agreed. “Their idea of helping the homeowner is putting rich people into new homes,” Fisher said of the supporters of the Isakson provision. “That’s not going to help any poor or moderate income homeowner stay in their home.”

The Senate stimulus proposal passed the upper chamber Tuesday by a vote of 61 to 37, with just three Republicans — Sens. Olympia Snowe (Me.), Susan Collins (Me.) and Arlen Specter (Pa.) — joining every Democrat in supporting the bill.

The homebuyer tax credit isn’t the only topic of contention on the affordable housing front. The Senate proposal also eliminates all funding for hard-hit communities to stabilize neighborhoods by buying up foreclosed homes. The House proposal includes $4.2 billion for that program.

The Senate bill also cuts $2.5 billion in green-energy projects and other retrofits to federally funded low-income housing facilities.

Fisher, of the National Low Income Housing Coalition, said the funds under the Senate bill are “grossly disproportionate to low-income housing needs.”

A failure to address those needs could carry dire consequences as the recession deepens and the number of foreclosures continues to rise. In December, the U.S. Conference of Mayors released figures revealing that, among 25 major cities surveyed, homelessness increased by an average of 12 percent in 2008.

“For persons in families,” the report reads, “the three most commonly cited causes of homelessness were lack of affordable housing, cited by 72 percent of cities, poverty (52 percent), and unemployment (44 percent).”

Some advocacy groups are predicting that, without federal help, 1.5 million Americans could join the ranks of the homeless over the next two years.

On Tuesday, the Obama administration announced a new strategy to tackle the financial crisis, including a plan to direct $50 billion in Wall Street bailout funding to stem the rising tide of foreclosures. Announcing that plan, Treasury Sec. Tim Geithner also indicated that the White House is crafting a “comprehensive plan to address the housing crisis.” The details of that plan, Geithner said, will be announced “in the next few weeks.”

Housing advocates will be watching closely as House and Senate lawmakers meet this week to reconcile the differences between the chambers’ stimulus proposals. Negotiators are expected to begin their discussions today, with hopes that a compromise can be approved and sent to the White House by the end of the week.

Last week, a group of 42 housing, consumer and child-welfare groups urged those negotiators to close the gap between stimulus funding for low-income Americans and those wealthier households “who have many other options.”

“When we compare the attention paid to homeownership in the bill to the resources provided to programs serving the nation’s most vulnerable people,” the groups wrote, “we are dismayed and disappointed that those households for whom stable homes are most threatened in today’s economy have been largely overlooked.”

Still, with the powerful real-estate and building industries behind the Senate proposal, housing advocates might not want to hold their breath for drastic changes to the upper-chamber’s bill.

The Isakson tax credit “is of great interest to very powerful constituencies,” said Barry Zigas, director of housing and credit policy at the Consumer Federation of America, an advocacy group. Those suffering foreclosures, Zigas added, represent “a smaller constituency that’s not as politically effective.”