Housing rescue stalls in Senate

Democrats and many Republicans were pushing for quick approval of the bill, which would allow the government to back $300 billion in new, cheaper mortgages for debt-ridden homeowners facing foreclosure.

The Senate inched closer to passage of the measure Wednesday, endorsing its version over a similar bill already passed by the House. The 79-16 procedural vote reflected a desire among lawmakers in both parties to enact election-year aid for distressed borrowers in tough economic times.

But negotiations to complete the legislation hit a snag over a bid by Sen. John Ensign, R-Nev., to add a $6 billion package of tax breaks for renewable energy producers. The incentives have bipartisan backing, but House Democrats oppose including them without balancing them with tax hikes to prevent an increase in the deficit.

The stalemate contributed to a pre-vacation Senate traffic jam of high-profile legislation awaiting completion, including the broad housing package, a terrorist surveillance bill, and bills to fund the Iraq war and avert Medicare cuts.

Senate Majority Leader Harry Reid, D-Nev., said he was determined to complete the housing measure--which also includes long-awaited overhauls of the Federal Housing Administration and Fannie Mae and Freddie Mac, the government-sponsored mortgage giants--but that it will have to wait until next month, after lawmakers return for a weeklong July 4th break.

Sen. Christopher J. Dodd, D-Conn., the Banking Committee chairman, said that could be the death of the measure.

"Getting back on the floor again with a matter like this gets hard," Dodd said. "If you don't seize the moment when you have the opportunity to get something done like this, you can lose it."

Ensign said he'd slow the measure for days--into the weekend if necessary--to secure a vote on the tax breaks, forcing Democrats to either swallow them or kill their own housing rescue plan.

"I think it's a tough choice for them," Ensign said. "This is the right vehicle because it's going to be signed" by President Bush.