Congress rejects measure to help struggling families amid shower of special interest money
- Dale Eisman
When the House of Representatives passed a sweeping financial reform package last week, it rejected several high profile amendments, including the so-called “cramdown” provision. Introduced by Rep. John Conyers (D-Mich.), whose district has one of the highest foreclosure rates in the country, the provision would temporarily allow bankruptcy judges to adjust the value of a mortgage to reflect the current value of the home.
In March, the House passed an identical proposal as a stand-alone bill, the Helping Families Save Their Homes Act of 2009. But the same chamber rejected it this time, thanks to nearly four dozen members of Congress who switched their position on the issue since the spring.
In fact, 45 House members changed their vote from an ‘Aye’ to a ‘Nay’ on the mortgage provision when it was voted on Friday. This same group of House members has received nearly $3.4 million from the real estate, commercial banking, and credit union industries during the last election cycle and so far this year, according to an analysis of data from the nonpartisan Center for Responsive Politics. The vote-switching members received more than $900,000 from these industries in the first nine months of this year alone. All three industries have been fiercely opposed to the provision.
“There is no question this provision would help keep families in their homes,” said Common Cause President Bob Edgar. “But the banks don’t want to have to face more losses for all their risky lending, so they have showered Congress with campaign cash.”
Some of these members also represent districts in areas of the country hardest hit by the foreclosure crisis. Rep. Jim Costa (D-Calif.), for example, represents parts of southern California that have been at the epicenter of the foreclosure crisis. He received $68,900 from these industries over the last three years and his district ranks as the 19th hardest hit district in the country as measured by the foreclosure rate. Rep. Mario Diaz-Balart (R-Fla.), who received $146,934 and switched his position on the mortgage provision from March, represents a district covering portions of Monroe and Miami-Dade counties. Rep. Diaz-Balart’s district ranks as the 23rd hardest hit. And Rep. David Scott (D-Ga.), whose district in suburban Atlanta covers Fulton, Douglas and DeKalb counties and ranks 27th in foreclosure rates, switched his vote as well. He received $158,885 from these industries over the past three years.
“Good people caught in this economic downturn are losing their homes because of campaign contributions,” commented Nick Nyhart, president and CEO of Public Campaign. “It’s time to end this immoral pay-to-play system that lets the banks ‘own the place.’ Congress should adopt the Fair Elections Now Act,” said Nyhart, referencing Sen. Dick Durbin’s (D-Ill.) words earlier this year when a similar “cramdown” provision was defeated in the Senate.
The Fair Elections Now Act is a comprehensive campaign finance proposal that mixes small donations and public financing and frees federal Congressional candidates from the pressures of fundraising. Bills have been introduced in the Senate by Sen. Durbin, the Assistant Senate Majority Leader, and in the House by Rep. John Larson (D-Conn.), the Democratic Caucus Chairman.