Hope Arises for Housing-Bill Deal

Wall Street Journal (05/08/08) P. A3; McKinnon, John D.; Paletta, Damian; Pulizzi, Henry J.
Despite an earlier threat to veto a House measure that would provide government insurance for nearly $300 billion in troubled mortgages, White House National Economic Council director Keith Hennessey has left the door open to an eventual deal with Capitol Hill Democrats. Hennessey used soft language in stating that the differences between the Bush administration and Democrats in Congress are "not insurmountable." The bill's primary objective is to encourage lenders to reduce the principal on troubled home loans in return for a guarantee of repayment from the Federal Housing Administration in the form of insurance on the mortgages. Bush and his advisors oppose the legislation in its current form, contending that it would force U.S. taxpayers to pay for what amounts to a "bailout" of homeowners and their lenders.