Dems get ready to highlight their economic fixes

Democrats are sharpening their differences with Republicans over economic policy ahead of a two-month session in Congress in which the stalling economy will dominate.

Senate Majority Leader Harry Reid (D-Nev.) will bring to the floor a package of measures —dubbed the Foreclosure Prevention Act — aimed at propping up the housing sector and helping troubled borrowers.

{mosads}Last month, Republicans erected procedural hurdles to the legislation, which contains a controversial provision allowing bankruptcy judges to trim mortgage debts for homeowners at risk of foreclosure.

Unless the provision is dropped, Republicans are likely to block the bill again. But Democrats are hoping to score political points from the exercise by publicizing the GOP’s opposition to legislation to rescue at-risk homeowners after the Federal Reserve recently intervened to bailout the Wall Street investment bank Bear Stearns.

Reid has signaled that he will allow Republicans the chance to amendment the bill, as long as their proposed changes pertain to the housing market. In a letter to Senate Minority Leader Mitch McConnell (R-Ky.) sent on Friday, he indicated that the Democrats are prepared to “engage in a robust debate and consider amendments related to this bill.”

Last month, Republicans had pushed to amend the bill with an extension of the Bush tax cuts. Meanwhile, President Bush issued a veto threat on the legislation, citing the bankruptcy provision as well as another controversial measure that would give $4 billion in grants to states so that they can purchase and rehabilitate foreclosed properties. 

Meanwhile, Rep. Barney Frank (D-Mass.), House Financial Services Committee chairman and Sen. Chris Dodd (D-Conn.), Senate Banking Committee chairman, are drafting a plan to help at-risk borrowers avoid foreclosure. Frank may introduce legislation at the end of next week, according to House aides.

The Democrats and the Bush administration exchanged dueling radio addresses on Saturday focusing on the economy.

For their radio address, the Democrats chose freshly elected Rep. Bill Foster (Ill.), who won the seat left vacant by former House Speaker Dennis Hastert’s (R) retirement.

Foster touched on issues ranging from the high gas prices and high tuition to energy independence and affordable children’s healthcare. He also criticized the White House for rejecting a Democratic plan to extend tax credits to support the production and use of renewable energy.

However, the White House says it does not oppose extending the tax credits, which expire at the end of the year; it opposes a Democratic plan to pay for the tax relief by raising taxes on the big oil companies.

“Passing this legislation is critical, but achieving energy independence will be virtually impossible if the war in Iraq continues with no end in sight,” Foster said in his address. “We have now spent more on the war in Iraq than has been invested on energy research in the history of our country.”

Meanwhile, Bush in his weekly radio address touted his administration’s steps to ease the mortgage problems and putting together a private sector group, called the Hope Now Alliance. Bush also stated that a new the Federal Housing Administration program called FHA Secure is expected to help up to 300,000 people by the end of the year.

Jessica Holzer contributed to this report