AP: Bankruptcy Language Not Likely in Bailout Compromise
As congressional leaders work furiously to hash out a bipartisan counterproposal to the Bush administration’s $700 billion financial bailout plan, there’s increasing consensus that the plan should also contain limits on executive pay and greater oversight of the Treasury Dept.
But a Democratic push to include language empowering bankruptcy judges to rewrite the terms of troubled mortgages, thus allowing an estimated 600,000 homeowners to remain in their homes, is likely to be left out, The Associated Press reported this morning:
Democrats are pushing to allow bankruptcy judges to rewrite mortgages to ease the burden on consumers who are facing foreclosure - a nonstarter for Republicans.
Democrats acknowledge privately that the provision will almost certainly be dropped in the interest of a bipartisan deal. Obama told reporters it’s “probably something that we shouldn’t try to do in this piece of legislation.”
Right. Why would this bill include something so tangential as a foreclosure rescue? After all — as Mary points out (and the White House concedes) — it’s only the root of the problem.