WASHINGTON, D.C. — The Senate killed an amendment today that would have allowed bankruptcy judges to modify home mortgages for people facing foreclosure.
A version of the controversial provision known as a “cramdown” passed the House in March and was supported by President Obama as a last resort for keeping people in their homes.
Sen. Majority Whip Richard Durbin, D-Ill., who sponsored the legislation in the Senate, said it would have helped about 1.7 million borrowers.
But, in the end, vehement opposition from the banking industry, Republicans and even some Democrats prevented the measure from passing for the second time in two years.
Only 45 Senators voted for the provision, including Minnesota’s Democratic Sen. Amy Klobuchar.
Meanwhile, 51 senators rejected it, including all the Republicans voting and 12 Democrats.
Rep. John Dingell (D-Mich.), the dean of the U.S. House of Representatives, introduced a resolution, on April 21, calling for the establishment of a House select committee “to make a thorough and complete investigation of the causes of the current financial crisis and other matters.”
Lyndon LaRouche commented that “this action by Rep. Dingell is of national significance. This is what President Obama is resisting. This is what must be done if we are to save the nation. Now is the time.”
Like the Senate select committee proposed by Senators Dorgan (D-N.D.) and McCain (R-Az.), the house select committee would have subpoena authority, and it would have the authority to investigate any financial operations involving securities, mortgages, trading and related activities.
“Thank you, Madam Speaker. I rise today to introduce a resolution establishing a select committee in this body to examine the causes of the current financial crisis. This select committee, to be comprised of members appointed from the Committees on Financial Services, Agriculture, Energy and Commerce, and Oversight and Government Reform, is modeled on the Pecora Commission that held hearings in 1932 and 1933 to investigate the roots of the Great Depression.
“The Pecora Commission exposed a wide array of abusive practices by banks at the time of the Depression and resulted in the subsequent enactment of the Glass-Steagall Act of 1933 and Securities Act of 1934. It is my ardent hope that the resolution I introduce today will foster a coordinated approach among the multiple committees of jurisdiction on this matter and lead to legislation that re-imposes a strict regulatory framework upon the financial services industry.”
“As Ferdinand Pecora, the commission’s namesake, remarked about the outcome of its investigation, ‘Legal chicanery and pitch darkness were the banker’s stoutest allies.’ I urge the members of this body to take heed of Pecora’s words, now more irrefutably accurate than ever, and support this resolution, which will establish a time-tested mechanism by which to investigate and remedy the various unsavory practices that have led our Nation to an economic precipice of gargantuan proportions.”
The resolution, H.Res. 345, has four co-sponsors, so far, Ellison (Minn.), McGovern (Mass.), Kaptur (Ohio) and Periello (Va.).
(1) We need public financing of all federal level elections to level the playing field for those lobbyists who have the big bucks with which to buy “access” to present their cases and those (usually representing the common good) who do not have big money.
(2) If we do not achieve #1, I’m afraid we should set term limits. This will cause us to lose wonderful representatives and senators, but will allow us to get rid of those who, over time, become so cozy with the monied lobbyists that they even let them write legislation to make sure it benefits their corporate employers instead of ordinary people (see Medicare Part D and the bankruptcy modernization act, for instance).