Republicans Scared Straight By Housing Mess

Looks like that two-week trip back to their districts and states has scared the hell out of Republicans:

Casting aside partisan differences, Senate Democratic and Republican leaders said on Tuesday that they would work urgently on a package of legislation to help millions of homeowners at risk of foreclosure, with the hope of bringing a bill to the floor as early as Wednesday afternoon.

The new pledge of cooperation was the latest sign of fast-growing consensus among Congress, the Bush administration and financial regulators that broader government action was needed to prevent a torrent of new foreclosures and further collapse of the housing and residential mortgage markets.

And it reflected the mounting pressure on Congressional Republicans and the White House to extend a helping hand to average Americans after the Federal Reserve’s intervention in the near collapse and proposed sale of Bear Stearns, the New York investment bank, to JPMorgan Chase.

If the Bear Stearns bailout, which is being financed by the American taxpayer, was the only offer of government help in this financial crisis, there would be riots and general strikes. There is no question that something more had to be done. Johnny Isakson got the message.

"Unless every member of the Senate was in a cave over the two-week recess, it's pretty obvious that gas prices and housing crisis are the two most important issues to the American public," said Sen. Johnny Isakson (R-Ga.), a former real estate broker who was among those urging Republican leaders to stop blocking the legislation. "You can play that game when it doesn't matter. But people's lives, their fortunes, their largest single asset is at stake."

I like the part where you can play a game with the American people when it doesn't matter. How do you think this kind of thing happens?

The compromise package could help up to 1.5 million homeowners to refinance their ARM loans into 30-year fixed-rate loans. And there is additional counseling for homeowners in the bill, along with floating bonds to be used for refinancing and tax credits for those who purchase foreclosed homes.

Maybe we can in the process end the Republican assault on the New Deal and restore regulatory authority to the banking industry.

UPDATE: Ben Bernanke isn't doing much to soothe Republican stomachs. What you reap you will sow.