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Paulson and Bush `Roadblock' Against Action To Stop Foreclosures

Dec. 6, 2007 (EIRNS)—There were subtle and ironic differences between the two announcements today by Treasury Secretary Henry Paulson, and by President George W. Bush, of the same mortgage crisis "plan." Paulson gave out the correct telephone number for the HOPE national mortgage "hotline"; poor Bush got the number wrong. Paulson called on the Congress to appropriate money for the HOPE mortgage counselling centers; Bush vetoed the appropriations bill which already contains that money.

But despite these differences of style, what the White House and Treasury were doing this afternoon was putting up a roadblock in the way of any action by Congress to stop the huge national wave of home foreclosures. This is the path opened by Lyndon LaRouche's proposed Homeowner and Bank Protection Act (HBPA), which is by now well-known to most Members of Congress and hundreds of state legislators around the country, and is the only way 1) to stop all foreclosures and 2) to protect chartered banks from the mortgage bubble collapse (a Missouri official told the state's legislature this week that 24 banks in that state, for example, are now "in trouble" because of it). Paulson's "plan" intends to rule out action by Congress along either line of LaRouche's HBPA.

The White House/Treasury "plan" divides homeowners with mortgage problems into four categories, and proposes to "help" only some homeowners in two of the categories to avoid foreclosure; one whole category, Paulson says, "will have to go back to being renters." It allows "not one Federal dollar" to protect and keep chartered banks open, and dumps all the debt costs of helping homeowners, onto the states. That may be because Paulson wants to husband Federal credit for bailing out the big banks' bankrupt "SIV" investment funds.

Senator Hillary Clinton, at a Wall Street forum yesterday, reiterated her challenge to Paulson, breaking ranks by proposing a foreclosure moratorium of "at least 90 days," and a five-year freeze on mortgage interest rates for homeowners who are delinquent on their mortgages, as well as those who are current—no "categories." An immediate "no moratorium" response came from the Mortgage Bankers Association (MBA), who accompanied Paulson at his press conference today. This showed that Senator Clinton, appropriating just a bit of what LaRouche has proposed, had "crossed the line" into reality and seriousness, in dealing with the foreclosure crisis and financial crash. Others, including Presidential candidate John Edwards and various members of Congress today, were making various criticisms and caveats to Paulson's announcement, but treating this incompetent "King Canute plan" to slow down foreclosures as the only game in town.