The BEA will release 1st quarter GDP figures tomorrow, and the BLS will release employment data on Friday. To be sure, these will be carefully-watched figures as the nation holds its breath waiting to see if we're moving closer to the R-word.

But these are national data, and it becomes easy to overlook the fact that some areas within the nation are currently in throes of economic turmoil. This morning's release of metropolitan employment data reminds us that, regardless of what happens in aggregate, many Americans are already living a recession.

Unemployment rates were higher in March than a year earlier in 309 of the 369 metropolitan areas, lower in 40 areas, and unchanged in 20 areas, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Fourteen areas, 12 of which are located in California, recorded jobless rates of at least 10.0 percent, while 9 areas registered rates below 3.0 percent. The national unemployment rate in March was 5.2 percent, not seasonally adjusted, up from 4.5 percent a year earlier.

In March, 45 metropolitan areas reported unemployment rates of at least 7.0 percent, up from 26 areas a year earlier, while 69 areas recorded rates below 4.0 percent, down from 128 areas in March 2007....Overall, 193 areas recorded unemployment rates below the U.S. figure of 5.2 percent, 163 areas had higher rates, and 13 areas had the same rate.

Stimulus 1.0 -- First Checks Going Out Today: The first of 130 million tax "rebate" checks provided under the first stimulus package signed in February will be going out today, earlier than previously announced. The rebates - up to $600 for an individual, $1,200 for a couple and an additional $300 for each dependent child are the biggest part of $168 billion stimulus. Story.

War Supplemental -- Bill Could Top $200 Bn.: According to BNA ($), the House is mulling a war funding bill that would include the remainder of the president's FY 2008 request ($108 billion), his FY 2009 partial-year request ($70 billion), and some $15 billion in domestic spending that may include an extension of unemployment benefits and increased funding for a childhood nutrition program.

Taxes -- Senate Panels Agree on FAA, Highway Package: Leaders of the Senate Finance and Commerce Committees announced late Friday an agreement on a tax package to boost funding for the Federal Aviation Administration and ensure solvency for the Highway Trust Fund. Among the provisions are a "truth in passenger tax disclosures" provision to prevent airlines from presenting fuel surcharges as government taxes and tax credit bonds for rail infrastructure. The package has not yet been scored. American Infrastructure Investment and Improvement Act.

On Friday, actor Wesley Snipes was sentenced to three years in prison for failing to pay federal income taxes for close to ten years. Snipes could have been sentenced to up to 16 years if he had been convicted of all charges, but he was not convicted of tax fraud and conspiracy back in February. He owes close to $20 million according to the IRS. Snipes maintains he was dupped, but the judge thought otherwise:

But U.S. District Judge William Terrell Hodges said Snipes exhibited a "history of contempt over a period of time" for U.S. tax laws, and granted prosecutors the sentence they requested — one year for each of Snipes' convictions of willfully failing to file a tax return from 1999-2001.

The Snipes case is the highest profile tax evasion prosecution since the billionaire Leona Helmsley was convicted of tax fraud in 1989.

• Senate Energy and Natural Resources ranking member Pete Domenici (R-NM) said today that a gas tax holiday this summer will do little to curb the soaring record prices at the pump. "You might not get the whole benefit of it because in a month or so the price might be up anyway, because the price of crude oil going up... I'm willing to listen but I don't believe it will solve the problem and I don't think it will do much for the American people."

• Per House Transportation and Infrastructure Committee Chairman James L. Oberstar (D-MN) and Highways and Transit Subcommittee Chair Peter A. DeFazio (D-OR), the proposal will eliminate approximately 300,000 family-wage, highway construction-related jobs in a mere three months. For a state-by-state breakdown, click here.

... in each instance, when the [capital gains tax] rate dropped, revenues from the tax increased. The government took in more money. And in the 1980s, when the tax was increased to 28 percent, the revenues went down.... history shows that when you drop the capital-gains tax, the revenues go up.

Intuitively, Gibson's claim is far-fetched. True, if revenues increase following a capital gains tax rate cut, that's short-lived, and a function of investors delaying selling stock when they know a tax cut is imminent. After the cut takes effect, they then declare their gains and pay taxes at the lower rate. Empirically, as the Congressional Budget Office puts it in a revenue and tax policy brief:

[r]ising gains receipts in response to a rate cut are most likely to occur in the short run... The potentially large difference between the long- and short-term sensitivity of realizations to tax rates can mislead observers into assuming a greater permanent responsiveness than actually exists.

And from Gregory Mankiw, former chairman of President Bush's Council of Economic Advisers:

To what extent does a tax cut pay for itself? In almost all cases, tax cuts are partly self-financing. This is especially true for cuts in capital income taxes... For a cut in capital income taxes, the feedback is ... about 50 percent -- but still well under 100 percent and paybacks of 50 percent still mean a net revenue loss for the Treasury.

And finally, Will Rogers: "It's not the things he just don't know, it's the things he knows for sure that just ain't so."

Posted by Dana Chasin, 11:38:19 AM



Fiscal Foolery: Addressing Misconceptions, Pt. I
Suspending the 18.4 Cents/Gallon Tax This Summer

Sounds like a good idea, on the face of it. Cut the 18.4 cents-per-gallon Federal gas tax and customers will save roughly $2-3 each visit to the pump during the summer, right? What's not to like?

Well, don't ask whether it makes sense to encourage burning more fossil fuel or whether we should raid the highway trust fund when bridges are collapsing. Think about how to lower gas prices to boost the economy.

Here's the problem: Refineries run near capacity every summer as families rack up miles on their vacations. That's one reason why gas prices always jump in the summer. If [the] excise tax cut did translate into lower prices, we'd want to drive even more and burn more gasoline. Since the oil patch can't boost production much without building new refineries, the price has to go back up.

-- Commentary by Leonard E. Burman, Urban Institute, April 18, 2008

Another concern, raised by Dean Baker in the American Prospect:

We have a fixed amount of gas entering the market, the question is simply what price clears the market. In this context, if we reduce or eliminate the gas tax, the price doesn't change, the lower tax will simply allow Exxon and other oil companies to keep more profits (unless of course they were lying about running their refineries at capacity). Since most people do not have much familiarity with economics, the media should be informing the public about the impact of [this] proposal.

OMB Watch released a statement on April 22 on the FY 2009 budget resolution negotiations. The statement urges both House and Senate negotiators to uphold the fiscally responsible principles promised by Democrats when they took over the majority in 2006. A key aspect of the ongoing budget negotiations is whether to offset the $70 billion cost of a one-year fix to the creep of the Alternative Minimum Tax (AMT). The House version of the resolution offsets the costs while the Senate does not.

OMB Watch was intensely critical of the president and Congress, particularly the Senate, at the end of last year when they abandoned PAYGO and passed a fix to the AMT that added over $50 billion to the tab of future generations. Congress has the opportunity to reverse course on this issue this week and make the difficult, but correct, choice to pay for their priorities. Let's hope they are able to muster the courage to do the right thing.

At 11:00 a.m. today, the Senate Finance Committee announced a new tax title to the farm bill, complete with offsets. The timing is propitious, because the one-month extension of the farm bill expires today. But agreement with the House is still unlikely to come today.

The tax expenditures in the new tax title, which come to a total of $2.406 billion, are as follows:

• Ethanol Package $1.226 billion
• Schedule F Loss Limitation $0.456 billion
• Optional Self-Employment Tax $0.124 billion
• Other Farm-Related Tax Reform $0.600 billion

And the offsets for $10 billion total spending in the bill are:

• Stock Basis Reporting $6 billion
• Customs User Fees $4 billion

Senate Finance Committee leaders Sens. Max Baucus (D-MT) and Charles Grassley (R-IA) this afternoon proposed extending a raft of business tax breaks and providing a one-year AMT patch, but controversy is likely over the lack of offsets in the proposal. Story.

Rumors have circulated that Baucus and Grassley would not include PAYGO-compliant offsets in the legislation, but would rather offer a "letter of intent" to cover costs in the future -- an IOU to keep the package from adding to the debt. The proposal has not been scored, but could cost in the neighborhood of $100 billion.

The New York Times business section story today, Wall Street Winners Get Billion-Dollar Paydays, addresses the fortunes of "[h]edge fund managers, those masters of a secretive, sometimes volatile financial universe, [who] are making money on a scale that once seemed unimaginable, even in Wall Street's rarefied realms," mentions that the top 50 hedge fund managers last year earned a combined $29 billion, and goes on to quote William H. Gross, the chief investment officer of the bond fund Pimco:

There is nothing wrong with it — it's not illegal... But it's ugly.

Look, no one wants to make legitmate financial success illegal. But how galling would taxpayers find it to learn that these hedge fund managers paid a tax rate lower than or equal to all but the most destitute Americans?

Well, it's true, thanks to the carried interest loophole allowing fund managers to claim their salary from commissions as capital gains (taxed at 15 percent), rather than ordinary income (taxed at up to 35 percent). The loophole means top fund managers get tax breaks of hundreds of millions of dollars.

Last year, the hedge fund managers' lobbyists blocked a bill in the Senate (it had passed in the House) to end this loophole, arguing that the bill unfairly singled out fund managers. Singled out? Perhaps. Unfairly? Perhaps. This is like Mike Tyson crying to Nancy Kerrigan, "Pick on Someone Your Own Size!"

After fending off an effort to attach an immigration provision, the House passed HR 5719 by a vote of 238-179.

The bill would end the IRS's private debt collection (PDC) program if signed into law. It was this provision and a proposed change to the rules of health savings accounts (HSAs) that drew vocal opposition from Republicans.

While the fortunes of the bill in the Senate are uncertain -- Sen. Charles Grassley (R-IA) is a staunch supporter of the PDC initiative -- The House vote indicates an override of a veto is unlikely.

For more details about bill, read this Watcher article.

We all know we labor one third of our lives. Do we reflect on the fact that roughly one fifth of all our productive and economic lives involves taxation?

Do we appreciate that the tax code is our industrial policy (shaped by corporate tax incentives)? That the code is also a moral code (the marriage penalty)? That it expresses our values and governs much of our social and spiritual lives (the charitable deduction)? That it orders and re-orders our society (the mortgage interest deduction and the trillions more in spending that it enables)?

These and other themes are addressed in a statement offered today by Senate Finance Committee Chair Max Baucus (D-MT), "Regarding Fundamentals in Advance of Tax Reform", a tax day rumination that brings home the many ways that taxation has a direct bearing on our lives and society.

A choice quotation:

"A tax can be a means for raising revenue, or a device for regulating conduct, or both."

-- Justice Felix Frankfurter

... or both?

President Bush has threatened to veto HR 5719, the bill recently approved by the House Ways & Means Committee and expected to see House floor action today. The bill would end the IRS's private debt collection (PDC) program, require that disbursements from health savings accounts (HSAs) be substantiated (i.e. require submission of receipts), and implement a bevy of other tax policies.

The president feels that the federal government should continue to waste money on the PDC initiative, because he would rather put taxpayer data at risk and open citizens to abusive debt collection practices than divert federal funds to more efficient and transparent tax collection methods.

Bush also objects to the changes to the HSA code, because requiring HSA account holders to prove that withdrawals from their accounts are, in fact, for approved purposes, would result in a lower usage rate of such accounts.

The New York Times' lead editorial today, "Foreclosure Politics," opens with some important points about the expensive, irrelevant, and counterproductive tax breaks riddling the Senate's inaptly named "Foreclosure Prevention Act." But from there, the editorial swerves off course and confuses readers about the House bill aimed at preventing foreclosures and minimizing economic pain.

The editorial says that, under the plan by House Financial Services chair Barney Frank (D-MA) to provide $300 billion in refinanced mortgage guarantees,

loans could be modified en masse. But the plan also has flaws. One is political: taxpayers could be on the hook if F.H.A. borrowers defaulted. Congress cannot ask taxpayers to step up without doing all it can to solve the problem without shifting the risk to taxpayers. The way to do that is to allow bankruptcy courts to modify mortgages for troubled homeowners.

Taxpayers could be on the hook if the House adopts a plan that the House leadership, the administration, a broad range of regulators and policymakers, and all three presidential candidates have indicated that their support in principle. But taxpayers also might not be on the hook for a penny -- and, in fact, the federal government might ultimately make a pretty penny in the process under the plan.

This is not to say that bankruptcy reform doesn't have a role in making the Frank plan more effective. But talk about political difficulty! The ink is still not dry on the last major bankruptcy reform, which passed in Congress overwhelmingly in 2005. Members' votes on the bankruptcy issue are not likely to change so soon, certainly not enough to allow an override of a certain Bush veto.

Speculations about whether taxpayers would be on the "hook" under the Frank plan are just that until CBO scores the plan. Better to heed the initial indications CBO itself offered last Friday in a paper bound to be influential on the outcome of the debate, "Policy Options for the Housing and Financial Markets":

Direct federal provision or guaranteeing of credit to mortgage markets could help avoid foreclosures and ease the downward pressure on house prices, helping the market to adjust in an orderly manner, [would] involve modest federal subsidies and would probably affect several hundred thousand homeowners.

The Times editorial itself notes that "with foreclosures running at about 20,000 per week, at least 100,000 more families are likely to lose their homes before Congress passes a relief bill." If we count pennies and wait until we have a president who will sign bankruptcy reform, that number could easily exceed a million.

OMB Watch has signed on to a National Treasury Employees Union letter that calls on Representatives to support H.R. 5719, the "Taxpayer Assistance and Simplification Act of 20080." The bill would, among other things, end the private debt collection program, which is not only fiscally irresponsible, but puts sensitive taxpayer data at risk and opens citizens to abusive collection practices.

If you would like to sign on to the letter, email Matt Socknat at NTEU -
(email address appears as an image and is un-clickable to prevent spam)

Update: The letter sign-on deadline has passed. You can read the letter here.

Senate Finance Committee Chairman Max Baucus (D-MT) and Ranking Member Chuck Grassley (R-IA) won passage of important tax relief measures for homeowners, homebuyers, and homebuilders as part of the housing bill approved 84-12 by the Senate today. The Baucus-Grassley tax provisions, which total $10.9 billion over 10 years, aren't paid for, but it's so worth it. The bill allows companies, mostly those unrelated to the housing sector losing money — and facing employee layoffs — to write off current losses and bolster struggling operations.

Baucus: "There is no magic solution to this housing crisis. This is just plain responsible policy to deal with a lot of irresponsible actions that led to serious trouble for so many Americans and for our economy. To respond to this crisis, Senator Grassley and I crafted provisions that support American families and American workers who deserve to keep their homes and their jobs. This bill amounts to real money for American families through tax relief or continued paychecks from companies that use this tax relief to survive.

Grassley: "Tax relief helps encourage home ownership, and addressing the housing problem can help the economy overall. It's appropriate to use the tax code to help people buy homes and to help the many businesses that are tied to the housing industry recover from losses. Those businesses create jobs. The economy should benefit from this shot in the arm."

Proud parents Baucus and Grassley forgot to mention that more corporate tax breaks means more jobs, which means more money for mortgages payments... thereby preventing foreclosures!

President Bush yesterday threatened to veto this bill and the House might just ignore it entirely.

The Taxpayer Assistance and Simplification Act (H.R. 5719) approved by the House Ways & Means Committee yesterday contains a measure that would force U.S. firms employing workers through foreign shell companies to pay Social Security and Medicare taxes if the work is performed under a contract with the federal government.

The provision's language is lifted from the Fair Share Act of 2008 (H.R. 5602), which was introduced in the Senate and House on March 13. The measure would bring in, over ten years, $846 million in new revenue.

See this Watcher piece for more details on the Fair Share Act of 2008.

This afternoon, the House Ways & Means Committee adopted H.R. 5720, the Housing Assistance Tax Act of 2008, by a vote of 35-5. The bill, effectively the tax title of House Financial Service Committee Chair Barney Frank's FHA Housing Stabilization and Homeownership Retention Act, costs $11 billion over the next five and ten years, all but fully offset.

What it provides/How much it costs:

• First-time home buyer credit/$3.78 billion over 10 years
• Hike in mortgage revenue bonds/$1.37 billion
• New standard deduction for property tax/$1.117 billion
• Hike in the low-income housing tax credit/$1.05 billion
• Tax-exempt housing bond simplification/$519 million

Revenue provisions (offsets)/how much each one raises:

• Basis reporting by brokers on sales of stock/$8.05 billion
• Delaying implementation of worldwide allocation of interest/$2.93 billion

While some of the tax breaks in H.R. 5720 are not targeted to homeowners at risk or victims of foreclosure (e.g. the first-time buyer credit), this is a vast improvement over the Senate tax title for avoiding big, indiscriminate breaks for businesses across the board; for including many items that have already passed the House, making it politically viable; and for complying with PAYGO. Final JCT Score. Bill Description.

Health Care -- Bipartisan Support for Blocking Bush Medicaid Rule: CQ reports ($) that a House bill that would block the president's Medicaid rule changes is gaining support among Republicans. The proposed rule changes would shift about $17.8 billion (over five years) in Medicaid costs to states. The bill, H.R. 5613, will be marked up today in the Committee on Energy and Commerce Health Subcommittee.

War Spending -- Iraq Supplemental May Have Additional Stimulus Spending: After last week's deterioration of employment data released by the government, Sen. Majority Leader Harry Reid (D-NV) and Sen. Debbie Stabenow (D-MI), along with Democratic House leaders, are calling for adding extension of unemployment benefits to the upcoming Iraq war spending bill. House Republicans have vowed to oppose additional stimulus spending. CongressDaily ($)

Inequality -- CBPP/EPI: Income Inequality Continues to Rise: The Center on Budget and Policy Priorities and the Economic Policy Institute have released a lengthy report analyzing state-by-state data on income trends. The report concludes that "The gap between the richest and poorest families...grew significantly in most states over the past two decades...In fact, the nation's longstanding trend of growing inequality accelerated since the late 1990s as incomes fell for poor families in a number of states." CBPP/EPI Report Executive Summary

Taxes -- "Extenders" Package Could Move Before End of May: Sen. Finance Committee Chairman Max Baucus (D-MT) hopes to introduce, mark up and bring the extenders package of tax cuts to the Senate floor before the start of the Memorial Day Recess in May. The legislation would be fully offset, cover two years (2008 and 2009), and cost about $50 billion. Baucus would not pin down a date for introducing the measure, but stressed the need to get work done early: "We've got to do as much as we can during this work period." BNA ($)

White House spokesperson Dana Perino made the following statement conveying President Bush's opposition to the Senate Foreclosure Prevention Act of 2008, which won a cloture vote in the Senate this afternoon, 92-6. Perino:

The bill will likely do more harm than good by bailing out lenders and speculators, and passing on costs to other Americans who play by the rules and honor their mortgage debt obligations.

Translation:The bill will likely do more harm than good -- untold harm; in fact, I won't tell you what harm, but we are talkin' govament intervention here, right? -- by bailing out lenders and speculators -- like my friends over at Bear, Stearns -- and passing on costs to other Americans who play by the rules and honor their mortgage debt obligations -- who will have to pay for the bill's big-ticket item: corporate welfare in the form of deficit-financed tax breaks to companies mostly uninvolved in any way in the housing sector or credit crunch (hey, maybe this ain't so bad a bill after all).

Import: Little to none. At the end of the day, President Bush will come under enormous election-year pressure from the GOP to sign whatever housing crisis legislation passes Congress. If the President sticks to the Perino principles and issues a veto, he risks an override -- an embarrassment to most other presidents.

The Washington Post wrote their lead editorial yesterday on the future of entitlement programs. The editorial once again lumps Social Security, a relatively healthy program, with Medicare and Medicaid, which face more serious funding issues not because they are entitlement programs, but because of the rapidly growing cost of health care in both the public and private sectors.

We have written a good deal on why Social Security should be kept separate from Medicare and Medicaid when discussing long-term fiscal issues and that the Social Security situation is actually not that bad and certainly not even close to a "crisis." (See here, here and here. Also, see our coverage of Congressional Budget Office Director Peter Orszag making the same point to Congress ).

Yet the Washington Post still does not understand the differences between two different causes they cite in the editorial (retirement of baby boomers, rising health care costs) and effects those causes will have. The main problem that must be addressed has always been and continues to be health care costs, not the retirement of the baby boomers. In fact, just last week, the Center on Budget and Policy Priorities released an excellent report that showed the repeal of the Bush tax cuts for just the top one percent of Americans would generate enough revenue to close the entire funding shortage for Social Security.

While the main point of the editorial is well made (that politicians need to be forced to deal with these problems), the Post continues to follow other news outlets, policy makers, and even some budget experts in lumping the three programs together. This does not help move us toward a solution to the problems we face to keep the promises that have been made. We have to develop a clear understand of what we are up against before we attempt to fix it.

Dana has a piece up at TPM Café in which he outlines a set of criteria - political and substantive - that qualify a housing bill as effective and viable.

• It cannot involve "massive government intervention," or it risks the threat of veto by President Bush
• It must pay for itself or include offsetting tax hikes or spending cuts to comply with the pay-as-you-go
• (PAYGO) constraints Congress has imposed on itself
• It cannot involve a bailout of either financial institutions or investors who have lent to homeowners or to
• homeowners who have borrowed, except perhaps in "predatory" cases, since "bailout" is a dirty word, connoting taxpayer exploitation

A proposal floated by House Financial Services Committee Chair Barney Frank (D-MA) manages to meet all of the above criteria — except for the last. Still, the "FHA Housing Stabilization and Homeownership Retention Act of 2008" (FHAHSAHRA), avoids all political and legislative minefields and could forestall over half of the foreclosures otherwise projected to occur over the next 18 months.

Classic Senate... Easy to reach compromises when you agree to everyone's tax cut without paying for them. There is no need to make choices or decide whether the tax cut is worthwhile if we don't have to pay for it.

-- Anonymous House Democratic leadership aide, regarding Senate housing stimulus package

This is pretty peculiar. The Senate Finance Committee announced today a set of tax relief provisions "for homeowners, homebuyers, and homebuilders," to accompany the Senate housing stimulus package. A vote on the title and the bill could come as early as tomorrow.

The provisions are described, with estimated costs, here, and summarized below:

• A standard property tax deduction of $500 for single filers and $1,000 for joint filers who do not itemize property taxes. Present law allows only those who itemize deductions on their federal tax returns to deduct state and local property taxes (How many of the benficiaries would have bought anyway, even without that juicy $500/1,000 incentive?)
• Bonds for refinancing of subprime loans, mortgages for first-time homebuyers and multi-family rental housing. The measure also exempts interest earned on the bonds from the ATM. (Multi-family rental units in foreclosure trouble?)
• Extension of net operating loss carry-back to four years, from the two years currently allowed for businesses. It contains measures to prevent companies from abusing the intent of the provision (Relevance to "homeowners, homebuyers, and homebuilders"? No comment. NB: it's 60 percent of the total tax cuts here.)
• A tax credit for the purchase of homes in foreclosure, for as much as $7,000 to be claimed over two years (Relevance to the foreclosure crisis? No comment.)

The total cost of the tax provisions comes to $10.8 billion over 10 years. No revenue-raising offsets were included in the Committee's announcement materials.

Whatever. OK, some questions:

--> How much of the $10.8 billion in tax relief is specifically targeted at those in danger of or already in foreclosure? (A: 20 percent, at best; the other 80+ is deficit-financed untargeted tax cuts)

--> Do you just need to have the word "stimulus" in the bill to exempt it from PAYGO compliance? (A: Looks like)

If Banking, Housing, and Urban Affairs Committee Chair and Ranking Member, Sens. Chris Dodd (D-CT) and Richard Shelby (R-AL), respectively, can hammer out a compromise by tomorrow morning, the Senate may vote as early as tomorrow afternoon on a housing stimulus package that purports to address the alarming increase in the number of foreclosures in the U.S. "[F]oreclosures of this magnitude are on par with the severity of foreclosures during the Great Depression," said Dodd in a Senate floor statement today.

"Every day that goes by without action means more families are losing their homes," Dodd said of the housing crisis, before detailing the legislation designed to keep families from losing their homes:

• Foreclosure prevention counselling. Amount of funding: $200 million. What's the expression, a dollar short and a day late?
• Allowing state housing finance agencies to use proceeds from mortgage revenue bonds to help extend mortgage credit to people now trapped in predatory loans as well as to new homeowners. All new homeowners? Including wealthy ones who would have bought the home even without this new tax incentive?
• Community Development Block Grant funding. Four billion dollars. Dodd: "...a modest sum compared to the need, and compared to the hundreds of billions of dollars that has been made available to Wall Street in the form of discounted loans, special credit facilities, and guarantees."
• A bankruptcy provision to help more than 600,000 homeowners by allowing them to modify their mortgages in bankruptcy. Even liberal Democrats in Congress have actually concluded that the constitutional issues involved in govament (I'll explain later)-mandated contract term modification make this one a non-starter for them.
• Modernize the Federal Housing Administration (FHA). Hasn't this been in the works since long before the mortgage crisis emerged? Is it responsive to the crisis?

There are some other provisions Dodd didn't see fit to mention:

• Raising GSE loan limits by almost 40 percent to $730,000. The price of the average American home is under $200,000. And falling. So, who benefits from this provision?
• A "net operating loss carryback" that would refund some of the taxes paid by formerly profitable companies who have lost money in the past three years. Revenue Cost: $14.8 billion in 2008. Relevance to homeowners facing foreclosure?

Meanwhile, there is a serious proposal on the table over in the House. The FHA Housing Stabilization and Homeownership Retention Act of 2008" is quite a mouthful, of dubious audibility in the mouth of author Rep. Barney Frank (D-MA). But it doesn't monkey around with irrelevant tax breaks, raise any quasi-constitutional issues, bail out any bankers or borrowers, or cost much money. And it's going to be fully vetted in a House Financial Services Committee hearing next week.

The Senate finds it imperative to vote on the Dodd bill described above this week, or even by tomorrow? For ten points: which is the world's most deliberative body, again?