9:15 PM
Julio Barreto
Amidst all of the drama within both parties – Tea Party versus establishment Republicans, liberals versus conservative/moderate Democrats, make no mistake the 800 pound gorilla settling in Washington is the draft report issued by the bipartisan National Commission on Fiscal Responsibility and Reform. President Barack Obama creates the commission to seek recommendations on ways to reduce Federal spending and control future deficits.
The Commission, co-chaired by Former Republican Senator Alan Simpson (WY) and Erskine Bowles, the former Chief of Staff to President Bill Clinton, submitted a preliminary report with five basic recommendations:
1. Enact tough discretionary spending caps and provide $200 billion in illustrative domestic and defense savings in 2015.
2. Pass tax reform that dramatically reduces rates, simplifies the code, broadens the base, and reduces the deficit.
3. Address the “Doc Fix” not through deficit spending but through savings from payment reforms, cost-sharing, and malpractice reform, and long-term measures to control health care cost growth.
4. Achieve mandatory savings from farm subsidies, military and civil service retirement.
5. Ensure Social Security solvency for the next 75 years while reducing poverty among seniors.
In issuing the report, the co-chairs did not spare any program or department in the Federal government nor did the commission concern itself with the political ramifications of the recommendations made. For example, it calls for cuts to military, some paring down of the mortgage income deduction, some tax increases and measures to control Social Security benefits.
To no one surprise, it was met with bipartisan denunciation; however, both co-chairs stressed the importance of being honest with the measures needed to control Federal spending and future deficits. The current economic situation, the election results and this report is going to finally force the powers that be in Washington to confront the hard reality of what it will take to turn the nation’s financial situation around.
It is going to be interesting to watch the debate unfold on controlling federal spending. While Republican calls for reduced spending have been focused on domestic programs the truth is ALL federal spending must be curtailed to some degree to contain the spiraling deficits. Both parties are to blame for the deficit and both parties and now must agree to the pain required to fix it.
Housing Budget Unclear
Congress has returned for its lame duck session with a final decision on this year’s Federal budget still unclear. The debate over the future of the Bush tax cuts is generating the bulk of media attention; however, local providers of housing and community development programs still don’t know what their budget will be for next year. While there will be fireworks aplenty, expect Congress to reach an agreements on a number of issues including some type of extension of the Bush tax cuts and a temporary spending measure to keep the Federal government operating through the early part of 2011.
These programs will face an uphill fight next year securing any increases and will likely struggle to maintain current levels. Fiscal conservatives will seek cuts to domestic programs and will probably target public housing dollars. Vouchers will be affected as well; however, private landlords will carry enough sway to keep any cuts to a minimum. During downturns in the economy, landlords like participating in the voucher programs because of the certainty that the government will pay a large portion of the rent. When the economy improves some landlords may be less committed because of the higher rents they can secure in the open market.
Congressional Panel Urges Review of Factors Affecting Foreclosure Crisis
A congressional panel overlooking the mortgage irregularities in the foreclosure process is urging its colleague to review the situation closely to avoid greater damage to the financial markets. Examining the Consequences of Mortgage Irregularities for Financial Stability and Foreclosure Mitigation states that financial institutions and securitization servicers should not proceed with foreclosures unless all of the proper documents are in order.
It has been found that banks are foreclosing properties without proper documentation casting doubts about the legitimacy of the actions. There is uncertainty over whether in some cases banks had the authority to foreclose. This has also raised questions over who has ownership of the loan and the property in question.
The panel calls on policymakers to monitor what is occurring and offered these recommendations:
• The Department of Treasury should closely monitor the impact of foreclosure irregularities.
• Treasury and the Federal Reserve should stress test banks to evaluate their ability to weather a crisis related to mortgage irregularities.
• Policymakers should evaluate system-wide consequences of documentation irregularities.
The panel is concerned that the implications of the confusion of foreclosures could reverberate to banks of all sizes. As disturbing as the potential implications of documentation irregularities may be for “too big to fail” banks, the consequences would not be limited to the largest banks in the market. Other concerns of the panel include not placing Fannie Mae and Freddie Mac at too much risk to underwrite these mortgages; homeowners losing confidence in the housing market; and, the public may lose faith in due process.
Interesting Reads
Housing and Community Development
GOP targets mortgage bailouts
By Sean Lengell
The Washington Times
Foreclosure takes toll on increasing number of children
By Dina El Boghdady
The Washington Post
Lame-Duck Game of Chicken
By David Broder
The Washington Post
Will Republicans Get Serious on Spending?
By Steve Chapman
The Chicago Tribune
Guns used to kill police officers: Where they come from and how they get in the hands of criminals
By Cheryl W. Thompson
The Washington Post
Politics
A Forecast That Obama Could Love
By Jeff Sommer
The New York Times
Obama Returns to an Unpredictable Congress
By Jackie Calmes and David M. Herszenhorn
The New York Times
Sober suggestions from Obama's debt commission
By David Broder
The Washington Post
Five myths about Sarah Palin
By Matthew Continetti
The Washington Post
The Palin Network
By Robert Draper
The New York Times Magazine
Political divide between coasts and Midwest deepening, midterm election analysis shows
By T.W. Farnam
The Washington Post
Romney, Weighing Run, Leans on State PACs
By Michael Luo
The New York Times
Murkowski victory a stinging rebuke to Palin and extreme partisans
By John P. Avlon
CNN Contributor
Junior Democrats in Senate seek to change the way chamber does business
By Shailagh Murray
The Washington Post
Truth or Consequences
By Evan Thomas
Newsweek
The Commission, co-chaired by Former Republican Senator Alan Simpson (WY) and Erskine Bowles, the former Chief of Staff to President Bill Clinton, submitted a preliminary report with five basic recommendations:
1. Enact tough discretionary spending caps and provide $200 billion in illustrative domestic and defense savings in 2015.
2. Pass tax reform that dramatically reduces rates, simplifies the code, broadens the base, and reduces the deficit.
3. Address the “Doc Fix” not through deficit spending but through savings from payment reforms, cost-sharing, and malpractice reform, and long-term measures to control health care cost growth.
4. Achieve mandatory savings from farm subsidies, military and civil service retirement.
5. Ensure Social Security solvency for the next 75 years while reducing poverty among seniors.
In issuing the report, the co-chairs did not spare any program or department in the Federal government nor did the commission concern itself with the political ramifications of the recommendations made. For example, it calls for cuts to military, some paring down of the mortgage income deduction, some tax increases and measures to control Social Security benefits.
To no one surprise, it was met with bipartisan denunciation; however, both co-chairs stressed the importance of being honest with the measures needed to control Federal spending and future deficits. The current economic situation, the election results and this report is going to finally force the powers that be in Washington to confront the hard reality of what it will take to turn the nation’s financial situation around.
It is going to be interesting to watch the debate unfold on controlling federal spending. While Republican calls for reduced spending have been focused on domestic programs the truth is ALL federal spending must be curtailed to some degree to contain the spiraling deficits. Both parties are to blame for the deficit and both parties and now must agree to the pain required to fix it.
Housing Budget Unclear
Congress has returned for its lame duck session with a final decision on this year’s Federal budget still unclear. The debate over the future of the Bush tax cuts is generating the bulk of media attention; however, local providers of housing and community development programs still don’t know what their budget will be for next year. While there will be fireworks aplenty, expect Congress to reach an agreements on a number of issues including some type of extension of the Bush tax cuts and a temporary spending measure to keep the Federal government operating through the early part of 2011.
These programs will face an uphill fight next year securing any increases and will likely struggle to maintain current levels. Fiscal conservatives will seek cuts to domestic programs and will probably target public housing dollars. Vouchers will be affected as well; however, private landlords will carry enough sway to keep any cuts to a minimum. During downturns in the economy, landlords like participating in the voucher programs because of the certainty that the government will pay a large portion of the rent. When the economy improves some landlords may be less committed because of the higher rents they can secure in the open market.
Congressional Panel Urges Review of Factors Affecting Foreclosure Crisis
A congressional panel overlooking the mortgage irregularities in the foreclosure process is urging its colleague to review the situation closely to avoid greater damage to the financial markets. Examining the Consequences of Mortgage Irregularities for Financial Stability and Foreclosure Mitigation states that financial institutions and securitization servicers should not proceed with foreclosures unless all of the proper documents are in order.
It has been found that banks are foreclosing properties without proper documentation casting doubts about the legitimacy of the actions. There is uncertainty over whether in some cases banks had the authority to foreclose. This has also raised questions over who has ownership of the loan and the property in question.
The panel calls on policymakers to monitor what is occurring and offered these recommendations:
• The Department of Treasury should closely monitor the impact of foreclosure irregularities.
• Treasury and the Federal Reserve should stress test banks to evaluate their ability to weather a crisis related to mortgage irregularities.
• Policymakers should evaluate system-wide consequences of documentation irregularities.
The panel is concerned that the implications of the confusion of foreclosures could reverberate to banks of all sizes. As disturbing as the potential implications of documentation irregularities may be for “too big to fail” banks, the consequences would not be limited to the largest banks in the market. Other concerns of the panel include not placing Fannie Mae and Freddie Mac at too much risk to underwrite these mortgages; homeowners losing confidence in the housing market; and, the public may lose faith in due process.
Interesting Reads
Housing and Community Development
GOP targets mortgage bailouts
By Sean Lengell
The Washington Times
Foreclosure takes toll on increasing number of children
By Dina El Boghdady
The Washington Post
Lame-Duck Game of Chicken
By David Broder
The Washington Post
Will Republicans Get Serious on Spending?
By Steve Chapman
The Chicago Tribune
Guns used to kill police officers: Where they come from and how they get in the hands of criminals
By Cheryl W. Thompson
The Washington Post
Politics
A Forecast That Obama Could Love
By Jeff Sommer
The New York Times
Obama Returns to an Unpredictable Congress
By Jackie Calmes and David M. Herszenhorn
The New York Times
Sober suggestions from Obama's debt commission
By David Broder
The Washington Post
Five myths about Sarah Palin
By Matthew Continetti
The Washington Post
The Palin Network
By Robert Draper
The New York Times Magazine
Political divide between coasts and Midwest deepening, midterm election analysis shows
By T.W. Farnam
The Washington Post
Romney, Weighing Run, Leans on State PACs
By Michael Luo
The New York Times
Murkowski victory a stinging rebuke to Palin and extreme partisans
By John P. Avlon
CNN Contributor
Junior Democrats in Senate seek to change the way chamber does business
By Shailagh Murray
The Washington Post
Truth or Consequences
By Evan Thomas
Newsweek
