Bills in Brief

Congress kicked off its year working on an economic stimulus plan, but it could get to other business-related bills left hanging from '07 later in the year.

Housing: With everyone blaming the subprime market for turning the economy sour, Congress started last year looking for ways to keep foreclosures to a minimum while taming the subprime market from future excess. It didn't get far, but this year the pressure is on to wrap up a series of bills introduced last year - from expanding federal loans to making it harder for brokers to sign off on risky loans. See our "Housing Jitters" page for more.

Food and Oil Futures: with gas and food prices on heady upswings, Congress is moving to tame commodities' future markets, which some believe are helping to nudge prices up.

what's up

With economists, Wall Street and Americans increasingly leery a recession is on the horizon, DC hustled to put a "stimulus" plan in place to give the economy a little pre-emptive boost.

Not all economists agree a stimulus package is necessary (or would be effective). For those gung-go on an immediate boost, however, "targetted, timely and temporary" was the going mantra on Capitol Hill - getting cash to consumers and producers as soon as possible and with the biggest bang for the buck. Still, there are different schools of thought on what are the best ways to target energy back into the economy.

What's up

The US's once rock-solid housing market starting seeing cracks in '06, but it wasn't until a spring '07 report on home-owner defaults (WP) and a couple of mortgage-related funds going belly up over the summer of '07 that Wall Street really started to feel the housing jitters. When Bear Stearns, a bigwig investment firm with lots of fingers in mortgage pies, practically disintegrated in March '08 there was no denying housing market woes were spilling over to the rest of the financial world.

Just how long the market will wobble along - and how much the housing crash will continue to slow down the rest of the (world) economy is unclear. What is clear is that a lot of low-income families will be losing their dream homes - and a few Wall Streeters will be deferring on that new yacht.

Bills in Brief

The new Democratic Congress continues to work on business issues that dogged last year's Congress - at the same time as giving a Democratic twist to new and old issues.

Bill in Brief

Before the housing market started trembling, Congress was looking at ways to tame Fannie Mae and Freddie Mac, the "government sponsored" companies that have fueled the housing market, but which - some have long feared - were on fiscally shaky ground. This year, things got even shakier - with Fannie and Freddie first becoming part of the rescue posse to help prop up defaulting mortgages - and then later with the weak housing market sending both lenders into financial free-fall.

In '08, partly as part of a giant housing bill passed in July, Congress and the administration ended up doing three things: setting tighter regulatory reins onto the two companies; at the same time loosening the leash on the mortgages they can cover; finally, allowing the fed broad scope to shore up the companies' finances through loans and direct investment.

Facts

Partly fueled by low mortgage rates and in part by an improving economy, homeownership in the US reached record levels this decade. As with any hot market, there are fears – even from the head of the fed himself - that the “housing bubble” will eventually burst or that, indeed, it's already started to pop. Cracks in the "subprime" mortgage
market may be giving way to larger problems in the market. We won't offer any predictions here, but we will give you a statistical glance at the state of housing today – among homeowners and renters.