Providing for Consideration of H.R. 3648, Mortgage Forgiveness Debt Relief Act of 2007

PROVIDING FOR CONSIDERATION OF H.R. 3648, MORTGAGE FORGIVENESS DEBT RELIEF ACT OF 2007 -- (House of Representatives - October 04, 2007)

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Mr. LINCOLN DIAZ-BALART of Florida. Thank you, Mr. Speaker. I would like to thank my friend, the gentleman from California, for the time and I yield myself such time as I may consume.

In August, over 165,000 properties in Florida alone entered foreclosure, 50 percent more than the previous month. The situation is most acute in the part of Florida that I am honored to represent. Miami-Dade County ranks in the top five counties in the Nation among major metropolitan areas where homes are entering some stage of foreclosure. Broward County ranks third in the Nation. This great cause for concern in the housing market has prompted anxiety over the tax consequences associated with discharges of indebtedness, debt forgiveness, in connection with restructuring acquisition indebtedness and home foreclosures.

As the gentleman from California pointed out, under current law, when a lender forgives some or all of the mortgage debt, Mr. Speaker, the borrower is required to treat the forgiven debt as taxable income, taxed at ordinary rates. In today's marketplace, declining property values have left some sellers in the position of having to sell their homes for less than the outstanding balance on the mortgage. Even if the loss of value occurs through no fault of their own, if the lender forgives the shortfall, that amount is taxable income for sellers. This phantom income tax places a heavy burden on a family that has incurred a significant economic loss. This legislation will help protect those homeowners from an unexpected and unfair tax bill.

The bill also extends the deduction for private mortgage insurance for 7 years. Current law limits the deduction for private mortgage insurance to payments made prior to the end of 2007. This provision will be helpful, especially to young families purchasing their first home.

There is some concern that the bill may go beyond what is needed during this time. The administration and some in the minority here in Congress have stated that the relief should be temporary to assist homeowners during the current mortgage market transition period, avoiding as much as possible distorting consumer and lender decisions on new mortgage loans. But, Mr. Speaker, there can be no doubt that the underlying legislation being brought forth today for consideration by this House is an example of what can happen, the good that can happen, the progress that can be made when the congressional majority decides to work with the administration, with the President and the minority in Congress on an important issue such as this. Much of the legislation that we will be considering today was proposed, the substance of that legislation was proposed by President Bush. And so this is an example of what progress can be made on important issues when the congressional majority decides to work with the minority and the administration.

Now, on process, Mr. Speaker, in a document called The New Direction for America, the new congressional majority laid out its campaign promises to

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the American people last year. Included in that document was a promise, and I quote, that bills should generally come to the floor under a procedure that allows open, full and fair debate consisting of a full amendment process that grants the minority the right to offer its alternatives, including a substitute.

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But with this rule today that, as you know, Mr. Speaker, the rule is what brings to the floor the underlying substantive legislation that will be considered subsequently by the House; with this rule today, the majority has broken its own promise in two ways. First, they denied the minority the ability to offer a substitute amendment. My colleague, the distinguished ranking member, Mr. Dreier, offered two amendments Tuesday in Rules to allow Ways and Means Ranking Member McCrery the ability to offer a substitute amendment on this legislation. But on a party-line vote, the majority rejected the minority's ability to offer a substitute.

The majority claims that they are running the House in a more open manner than we did in the 109th Congress, but this rule today once again demonstrates that they are not moving toward a more open process, but instead moving backwards. This rule closes out all amendments. So every Member of the House is precluded from in any way offering their ideas to improve this bill.

So far this year, the majority has offered 34 closed rules on bills, closing out all amendments, far surpassing the number from the 109th Congress at this point, as a matter of fact, more than double the amount of closed rules. At this point in the 109th Congress there had been 16 closed rules. And remember the promise: the promise was to move in the other direction, and instead, more than double the amount of closed rules; clearly, moving backwards.

What this rule today really represents, Mr. Speaker, is a missed opportunity. If the majority had offered an open rule, the majority could have doubled their number of open rules on nonappropriations bills to a whopping two; instead, they've permitted only one open rule on nonappropriations bills, thus continuously violating their claim to be a more open and bipartisan Congress.

Mr. Speaker, at this time I reserve the balance of my time.

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Mr. LINCOLN DIAZ-BALART of Florida. Mr. Speaker, in response to my good friend Mr. Cardoza's point about the tradition with tax bills, yes, there has been a tradition to bring tax bills to the floor under a restricted rule. That has not precluded in the past, as we did often, the ability of the minority to offer a substitute amendment.

So what I was talking about with regard to process is that there was a clear promise to move in a more open direction, to move toward more openness and more transparency and more rights for the minority. And what has happened is exactly the opposite, a doubling by the majority of closed rules that absolutely close out, in other words, prohibit, all Members from proposing amendments on this floor. So that great contrast between the promise and the performance is what I was alluding to, that unfortunate contrast.

Now, on substance, again, I think that today is an example of something very positive. The congressional majority has decided to work with the minority and the President on an issue that is of importance to this legislation. And so we see legislation, much of

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which was proposed by the President of the United States, coming to the floor today to solve a major problem facing the American people.

So while I reiterate the great disappointment that we in the minority feel with regard to the lack of performance by the majority with regard to its promise to open this House to more fairness on substance, I think it's commendable that for once there is an issue of importance to the American people that the congressional majority has decided to work with the President on and with the minority in Congress.

I will be asking for a ``no'' vote on the previous question, Mr. Speaker, so that we can amend this rule and allow the House to consider a change to the rules of the House to restore accountability and enforceability to the earmark rule.

Under the current rule, so long as the chairman of a committee of jurisdiction includes either a list of earmarks contained in the bill or report, or a statement that there are no earmarks, no point of order lies against the bill. This is the same as the rule in the last Congress. However, under the rule as it functioned under the Republican majority in the 109th Congress, even if the point of order was not available on the bill, it was always available on the rule as a question of consideration. But because the Democratic Rules Committee specifically exempts earmarks from the waiver of all points of order, they deprive Members of the ability to raise the question of earmarks on the rule or on the bill.

I would like to direct our distinguished colleagues, Mr. Speaker, to a letter that the House Parliamentarian, the distinguished JOHN SULLIVAN, recently sent to the distinguished chairman of the Rules Committee, Ms. Slaughter, which confirms what we have been saying since January, that the Democratic earmark rule contains loopholes. In his letter to Chairwoman Slaughter, the Parliamentarian stated that the Democratic earmark rule ``does not comprehensively apply to all legislative propositions at all stages of the legislative process.''

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