In it, but not of it. TPM DC
Not so much. The compromise under discussion would require banks to offer mortgage-holders a workable loan modification plan -- the same one proposed by President Obama -- before bankruptcy proceedings could begin. Any loans being modified in bankruptcy would also have to be verifiably unaffordable based on homeowners' income, as opposed to simply totaling more than a home is worth.
Whether that constitutes an unacceptable watering-down of the cramdown bill depends on one's perspective. But the question of how many people would actually be helped by the provision is easy to answer: about 350,000 new bankruptcy filings over 10 years are expected as a result of the cramdown change, according to the non-partisan Congressional Budget Office (their report is downloadable here, under HR 200). The state of Florida alone is expected to be hit by 150,000 foreclosures this year alone.
"This is not an ideological fight for them," one aide to a New Democrat told me, adding that members of the coalition "have worked closely with Democratic leaders to improve the bill, make it more expansive and push it in the direction of President Obama's housing plan by including a loan modification plan."
And Pelosi herself defended the cramdown compromise in an appearance earlier today. "It's a question more of message, about what we are doing for people and giving them some hope about how they can stay in their homes beyond saying to them you can declare bankruptcy," she said. "Because not all of them can, and it's not a good option."
My response to any progressives who'd love to lump the New Dems in with the Blue Dogs: Direct that ire at the Senate, where cramdowns were negotiated with the help of Citigroup.