March 16, 2011; Source: The Hill | In close to a party-line vote, the Republican-dominated House of Representatives voted on Wednesday night to terminate the Neighborhood Stabilization Program. It isn't just any old HUD program that the House interred. NSP was the program initially created in response to the subprime mortgage crisis and then refunded twice to help local and state governments work with nonprofits and other developers to acquire bank-owned foreclosed properties and redevelop them for rental or owner occupancy.
Only five Democrats voted with the Republican majority, and two Republicans (both from foreclosure-ravaged Ohio) favored saving NSP. The bill may be political kabuki theater, because the Senate is unlikely to follow the House's lead and the President is pledged to veto the legislation. Like kabuki, however, there are meanings attached to the action.
California Congressman Joe Baca (D-CA), for example, charged that the real reason for the Republican action was that a sizeable piece of NSP funding went to the nonprofit Chicanos por la Causa, which some Republicans see as in the political opposition. Congressman Pete Sessions (R-TX) and others suggested that the end of NSP was the Democrats' fault, because the Democrats in Congress and the White House during the previous two NSP appropriations failed to make necessary program design corrections, although the idea of killing a program that needs a fix makes no sense.
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Congressman Robert Hurt (R-VA) added an amendment requiring that recaptured NSP funds be devoted to deficit reduction, a clearly symbolic action of little substance (the total NSP appropriations were $6 billion in the first two rounds and $1 billion in last year's Wall Street reform legislation. Rep. Barney Frank (D-MA) implied that the NSP repeal bill was silly, because the $1 billion remaining would likely be disbursed before the Republicans could get the bill passed, if that were even possible.
What's really behind the Republicans' proposed rescission? Congressman Gary Miller (R-CA) called NSP "a bad giveaway". What giveaway were he and his Republican colleagues concerned about? Miller complained that NSP hadn't stopped foreclosures. Frank reminded him that NSP wasn't about stopping foreclosures, but about taking and rehabbing homes that had already been foreclosed on by banks and servicers. If the Republicans want to terminate "giveaway" programs, they might at least want to get the program descriptions correct.—Rick Cohen