COMMENTS: Do Something About It

The Senate saw a couple of developments on the economy. Chairman Benjamin Bernanke of the Federal Reserve Board testified before a Senate committee--and said the R-word. "It is a rare day when you hear a Fed Chairman utter the word 'recession'" remarked CNBC's Trish Regan for NBC, although admittedly the actual phrase was: "A recession is possible." Bernanke also called "the housing crisis the most serious problem facing the American economy," noted ABC's Betsy Stark (embargoed link), "and he told lawmakers it was up to them to do something about it."

Accordingly, both ABC's Stark and Wyatt Andrews on CBS covered a $15bn Senate package of proposals to cushion the shock for the 5m-or-so defaulting homeowners who face eviction in the near future. CBS' Andrews called the package "damage control--because both parties in Congress are taking heat over their inaction…while losses at Bear Stearns, $29bn worth, were being absorbed by the Fed." The plan would extend $4bn to municipalities to help resell homes or turn them into rentals; and offer $11bn either to help refinance existing mortgages or to give a $7,000 subsidy to those who buy foreclosed homes to live in. Andrews called it a "drastic reduction from what Democrats first proposed" and Stark noted that a provision allowing bankruptcy judges to force subprime lenders to give money back had been rejected: "The banking industry has opposed the idea."


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