Treasury Skips Cramdown Hearing

Created: July 09, 2009 19:06 | Last updated: July 31, 2020 00:00

Hoping to bring “cramdown” legislation back onto Congress’ radar, a House Judiciary subpanel met this afternoon to re-examine whether bankruptcy judges should be empowered to alter mortgage loans in order to prevent foreclosures.

Witnesses included the obligatory consumer advocates, a conservative think-tanker and a university professor. But the Treasury Department, although asked to send a representative of its own, declined to do so.

A Democratic aide said the agency was simply too slammed this week with other hearings to meet the request (and the Treasury didn’t respond to requests for comment), but the pattern is getting suspicious.

President Obama campaigned in support of cramdown last year, and endorsed it again in February when he unveiled the administration’s foreclosure mitigation plan. But since then, the White House has done very little to ensure the bill’s success. In April, for example, Treasury Secretary Tim Geithner was hardly enthusiastic when asked if bankruptcy changes were a vital element of the administration’s plan to stem foreclosures.

More recently, the White House watched in silence as the cramdown bill was obliterated in the Senate, where 12 Democrats voted against it. Some Democrats said later that they interpreted the president’s silence to mean they were free to oppose the measure.

And now here’s the Treasury, in the middle of the continued foreclosure crisis, saying it’s too busy to talk with Congress about ways to keep folks in their homes?

Are we missing something?

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