The House got cold feet on mortgage modifications. The key paragraph in the WaPo story:
Under the provision, a bankruptcy judge would be able to cut the principal on a homeowner’s mortgage, lower the interest rate and extend the terms, provisions known as “cramdowns.” Judges are already allowed to modify mortgages for vacation or second homes but not for a borrower’s primary residence.
In other words, bankruptcy will continue to be rich man’s relief, at least for now. This time, Democrats tied to the financial services sector also opposed the change.
Meanwhile, the right is howling about President Obama’s budget proposal, which gives real world figures for our debt and deficit for the first time. And yes, it’s not looking good. But Republicans will have a hard time running away from the record of the president and Congress who got us here. (Spoiler alert: Both of them are Republican.)
From Dan Froomkin, we get the coming GOP narrative: that Obama is playing Robin Hood:
“You know, there are times where you can afford to redecorate your house and there are times where you need to focus on rebuilding its foundation,” Obama said this morning “Today, we have to focus on foundations.”
What he didn’t mention was that he was also ripping out some of the foundations that were laid by the previous administration.
Obama’s budget would dramatically increase taxes on the wealthy, while cutting payments and subsidies to insurance companies, pharmaceutical companies, agribusiness and defense contractors — and mandating a system to charge polluters for their carbon emissions.
It would, in short, reverse the redistribution of wealth that took place during the Bush era. This time, the rich will be subsidizing the poor, not the other way around.
The revenue increases — supplemented by staggering deficit spending — would pay for tax cuts for non-wealthy Americans and hugely ambitious plans in the areas of energy, health and education that, as Obama insisted on Tuesday night are necessary to assure the country’s long-term prosperity.
And the problem with that would be…? I recall that rich people did pretty well under the Clinton tax rates, which is what we’re returning to.
Meanwhile, Bill Kristol, trying to reinvent himself at the WaPo, advises Republicans to try and smother the Obama agenda soon:
Obama’s aim is not merely to “revive this economy, but to build a new foundation for lasting prosperity.” Obama outlined much of this new foundation in the most unabashedly liberal and big-government speech a president has delivered to Congress since Lyndon Baines Johnson. Obama intends to use his big three issues — energy, health care and education — to transform the role of the federal government as fundamentally as did the New Deal and the Great Society.
Conservatives and Republicans will disapprove of this effort. They will oppose it. Can they do so effectively? Perhaps — if they can find reasons to obstruct and delay. They should do their best not to permit Obama to rush his agenda through this year. They can’t allow Obama to make of 2009 what Franklin Roosevelt made of 1933 or Johnson of 1965. Slow down the policy train. Insist on a real and lengthy debate. Conservatives can’t win politically right now. But they can raise doubts, they can point out other issues that we can’t ignore (especially in national security and foreign policy), they can pick other fights — and they can try in any way possible to break Obama’s momentum. Only if this happens will conservatives be able to get a hearing for their (compelling, in my view) arguments against big-government, liberal-nanny-state social engineering — and for their preferred alternatives.