Executive actions aim at lifting economy

Obama stance: Housing, school-loan strategies needed, because Congress won’t act

— With his jobs plan stymied in Congress by Republican opposition, President Barack Obama today will begin a series of executive-branch actions to confront housing, education and other economic problems over the coming months, heralded by a new mantra: “We can’t wait” for lawmakers to act.

According to an administration official, Obama will kick off his new offensive in Las Vegas, especially hard hit in the housing bust, by promoting new rules for federally guaranteed mortgages so that more homeowners, including those with little or no equity in their home, can refinance and avert foreclosure.

And Wednesday in Denver, the official said, Obama will announce policy changes to ease college graduates’ repayment of federal loans, seeking to alleviate the financial concerns of students considering college at a time when states are raising tuition.

The president’s announcements will bookend a three-day Western trip during which he also will hold fundraising events in the two cities — both Nevada and Colorado are election battlegrounds — as well as in Los Angeles and San Francisco.

The “We can’t wait” campaign is a new phase in Obama’s effort — punctuated until now by his cries of “Pass this bill!” on the stump — to pressure Republicans to support the job-creation package he proposed after Labor Day. It comes after unanimous votes by Senate Republicans in the past week to block the plan; House Republican leaders have refused to put the measure to a vote.

Polls show overwhelming support for pieces of the $447 billion package, which includes expanded tax cuts for workers and employers and spending for infrastructure projects and for state aid to keep teachers and emergency responders at work. But Republicans oppose provisions in Obama’s plan that would offset the costs with higher taxes on high earners.

Nonpartisan economists have forecast that without such a stimulus plan, the economy is likely to relapse into recession next year just as the president faces re-election.

“The only way we can truly attack our economic challenges is with bold, bipartisan action in Congress,” said Dan Pfeiffer, Obama’s communications director. “The president will continue to pressure congressional Republicans to put country before party and pass the American Jobs Act, but he believes we cannot wait, so he will act where they won’t.”

Privately, some Republicans worry that they could suffer from that line of attack. On Sunday the Senate Republican minority leader, Mitch Mc-Connell of Kentucky, offered an alternate narrative, saying Obama, for all his complaints about Republican opposition, had given little prominence to his signing of three free-trade agreements that won bipartisan approval earlier this month.

“They’re ashamed to mention any of the things that they do with Republicans because it steps on their story line,” Mc-Connell said on CNN’s State of the Union. “Their story line is that there must be some villain out there who’s keeping this administration from succeeding.”

Aides said Obama will announce at least one initiative each week through the rest of the year, including steps to help returning veterans and small businesses. Yet the officials acknowledge that the coming policy changes, executive orders and agency actions are generally less far-reaching than legislative proposals.

The administration earlier this month expedited approval of payments to small businesses with government contracts. It announced waivers for states with schools falling short of the proficiency standards of the 2002 No Child Left Behind education law — a move that prompted some senators to compromise on an alternative rewrite of the law.

And last week the administration eased regulations stemming from the 2010 health-insurance law to encourage hospitals and doctors to coordinate on Medicare patients’ care for better results at lower cost.

The housing proposal Obama will announce in Las Vegas is rooted in the independent Federal Housing Finance Agency, the office created to oversee the government-sponsored housing finance companies Fannie Mae and Freddie Mac after they were forced into conservatorship at the outset of the financial crisis in 2008.

Though the collapse of housing values is considered a major factor holding back economic growth, because of its effect on consumer spending, government programs to stem foreclosures have fallen short of initial promises. For that reason, officials have tried not to raise expectations that the latest plan can help more than a small fraction of the millions in danger of foreclosure.

While details remain sketchy, the initiative is expected to change eligibility standards for the 3-year-old Home Affordable Refinance Program to encourage new, lower-cost loans to more homeowners who owe more on their mortgages than their properties are worth.

Typically, refinancing is unavailable to those who do not have equity in their house; the Home Affordable Refinance Program sought to encourage refinancing for up to 125 percent of a home’s value for mortgages owned or guaranteed by Fannie Mae, the Federal National Mortgage Association, or Freddie Mac, the Federal Home Loan Mortgage Corp. This month the acting director of the Federal Housing Finance Agency, Edward DeMarco, told lawmakers his agency was considering raising that threshold.

Under current rules, underwater borrowers can’t qualify for new loans or refinancings even if they are current on payments. Many would-be buyers are sitting on their hands, amid high numbers of foreclosures and vacant homes.

In the meantime, banks are stepping up efforts to foreclose on borrowers in default. Between July and September, notices of default, the first formal step in the foreclosure process, jumped nearly 26 percent from the previous quarter, according to DataQuick, a San Diego real estate information service.

Additionally, a likely national settlement over complaints about banks filing faulty paperwork to take back homes should clear the way for an additional 400,000 foreclosures in coming months, according to Moody’s Analytics, an economics research firm.

Moody’s predicts that foreclosures will rise next year to a record 1.5 million, or a hefty 30 percent of all sales of previously owned homes.

Vice President Joe Biden, in a CNN appearance Sunday, said the administration would continue to work with federal agencies “to loosen restrictions on the ability to refinance” and also press the banks, “so they can get in the business of actually doing what we think they should have been doing much more of, and that is sitting down and renegotiating with people who are about to go under.”

Information for this article was contributed by from Washington by Jackie Calmes of The New York Times; and by Don Lee of the Tribune Washington Bureau.

Front Section, Pages 1 on 10/24/2011

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