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home prices started a pretty steady decline about five years ago, and government certainly can't fix the entire problem on its own. but it is wrong for anybody to suggest that the only option for struggling responsible homeowners is to sit and wait for the housing market to hit b bottom. [ applause ] >> the president in a short drive from washington, d.c. to falls church, virginia, as he announced the plan of a series of packages and proposals designed to jolt the housing market, and his latest effort to reignite the economy of four years of foreclosures and falling home prices. this is washington today on c-span radio. i'm steve skully, and meanwhile at the bottom of the hour, we will have a conversation with senator john thune who is putting forth legislation to stop of the big bonuses for fannie mae and freddie mac executives, and he will be here

to talk more about that in 20 minutes. meanwhile negotiators on the capitol hill in extending through the end of the year the payroll tax cut worth $1,000 for the typical worker, but lawmakers are far apart on how the pay for tex tepgs as well as jobless benefits for millions of unemployed americans without swelling the national debt, and the house senate panel beginning the negotiations on the payroll tax figuring out how the pay for it, and the lawmakers working on the conferee saying they will start with the second tier issues like overhauling unemployment insurance. secretary of state hillary clinton says that russia and other countries must ask themselves if they should stand with serious people or the dictator, and the secretary state saying that they are hoping to win council approval of the arab resolution, and calling on syrian president assad to leave power. russia, as we talked about in the last couple of days opposes the language that could lead to military intervention or potential regime change. well, the new york times reporting on a developing story

this afternoon of secretary of state leon panetta sending an end date for u.s. troops in afghanistan for 2013. elizabeth brumiller is in brussels and says that is a major milestone to ending the troops in afghanistan saying that the secretary will end the combat by 2013 which is a year before all scheduled troops are to come home. they cast the decision as an orderly step of a withdrawal process long planned by the u.s. and the allies. and france saying they will pull out of afghanistan within the next year, but however "the new york times" says that this is the first time that the u.s. has put a date on the central role in afghanistan. the defense secretary's words were reflecting the president's e eagerness to bring to the close of two grinding ground wars that he inherited from the bush administration. you can find out more on

nytimes.com. let's begin with the president's comments in falls church, virginia. the essence is that it would be easier for homeowners to refinance their home mortgages with the current interest rates. currently, the interest rates are 3% or 3.5% whether it is adjustable or locked in rate. and borrowers who owe more than their homes are worth, they could refinance into the loans that are guaranteed by the federal housing administration, and here is more of the president's remarks in falls church, virginia. >> i will be honest that the programs that we have put forward have not worked at the scale we have hoped, and not as many people have taken advantage of it as we wanted. mortgage rates are as low as they have been in a half a century, a when that happens usually the homeowners flock to refinance the mortgages and lot of people take advantage of it and save money, but this time, too many families have not been able to take advantage of the low rates. because falling prices locked them out of the market.

they are under water and more difficult for them to refinance and then all of the fees involved in refinancing and a lot of people said, even though i'd like to be obviously cutting down the monthly payment, the banks just aren't being real encouraging. so, last year we took aggressive action that allowed more families to participate. and today, we are doiare doing more is the reason we are here today. [ applause ] as i indicated at the state of the union last week, i am sending congress a plan that will give every responsible homeowner in america the chance to save about $3,000 a year on their mortgage by refinancing at historically low rates. [ applause ]

no more read tape. no more run around from the banks. and a small fee on the largest financial institutions make sure it does not add to the deficit. i want to be clear. this plan like the other actions we have taken will not help the neighbors down the street who bought a house they could not afford and walked away and left a foreclosed home behind. it is not designed for those who have acted irresponsibly, but it can help those who have acted responsibly. it is not going to help those who bought muttple homes just to speculate, and flip the house and make a quick buck, but it can help those who have acted responsibly. what this plan will do is to help millions of responsible homeowners who make the payments

in time and find themselves trapped under falling home values or wrapped up in red tape. if you are ineligible for refinancing just because you are underwater on the mortgage, through no fault of your own, this plan changes that. you will be able to refinance at lower rate and be able to save hundr hundreds of dollars a month that you can put back into your pocket or you can choose those savings to rebuild equity in your homes which will help most under water homeowners to come back up for air more quickly. now, to move this part of my plan. we are going to need congress to act. we are going to need congress to act. i hear some -- [ laughter ] -- murmuring in the audience here. we need them to act. and act specifically, the president is going to ask congress for a tax on financial

companies, and those companies with more than $50 billion in assets, and congress we should point out has twice refused similar requests over the last two years, so what is the reaction from the speaker of the house? >> the president is announcing a proposal today to help under water homeowners to refinance, and -- >> one more time? one more time? how many times have we done this? we have done this at least four times where there's some new government program to help homeowners who have trouble with their mortgages. none of these programs have worked. i don't know why anyone would think that this next idea is go ing to work. and ail they have done is to delay the clearing of the market. the sooner the market clears, and we understand where the prices really are, it will be the most important thing we can do in order to improve home values around the country. >> do you think that you can work with the president in any way to actually help --

>> i am always open to working with the president of the united states. we both have a job to do and if it makes economic sense and fiscally responsible, sure i will take a look at it. >> joining us live on capitol hill is stacy caper who is following this story for the washington journal. >> thank you for having us. >> you say this is the latest of attempts by the white house to help homeowners and you heard the speaker of the house john boehner and where does this leaf it? >> well, on the night of the state of the union, where obama first announced this refinancing effort where he did tie it to the housing consumer advocates winced when they heard the word, because it dooms it at this point anyway. you heard the speakers comments today, and in 2010 you had a stronger control by democrats of the senate, and also the house

then, and there was a lot of anger over the t.a.r.p. bailout in 2008 and you had dodd/frank this huge financial law signed into law. and at that time they could not get it through, and they had to strip it out of the conference report of the wee hours last night as they were debating it. so trying to bring it back now is a difficult thing, and housing advocates have spoken with since it has been announced said that they would hope that there would be another way to achieve this, and not that they don't agree with the idea of trying to hold banks accountable for the financial crisis and their role therein, but the fact that it is dead on arrival politically makes it a hard sell. >> well, let me put this in terms of the political campaign, because we have just wrapped up the florida primary yesterday and the nevada primary is on saturday and these are two states where they have a huge percentage of the housing stock under water or foreclosed and the ununemployment rate in florida and nevada higher than

this rest of the country largely because of the housing industry and the job losses. >> a great point, and something that indeed the president's re-election campaign is hoping to take advantage of. you have not heard romney or gingrich or any of the republican contenders come out with any other housing alternatives. they have advocated for letting the market do its thing, and letting it work out on its own, and the administration has taken a lot of heat for not being more proactive and not being more involved to try to stem the collapse of housing prices and halt the title of foreclosures sooner, but they have had a lot of initiatives and programs, and they haven't been well managed or produced the results they had promised. but obama now today trying to talk about all of the ideas that they have had out there for a while and put forth a few new ideas is more than his, you know, opponents have, and they are really hoping to appeal to

the voters in the spaces that you have mentioned that are hit hard by the housing crisis. >> drill down into the legislation of the mortgage assistance legislation. already interest rates are at a record low, so if you want to refinance, you can do so as low as even as 3% if you want to do a short-term adjustable loan or 4% if you want a 30-year locked in rate. why so hard for homeowners to do it through conventional format? >> well, as the president mentioned today, some 10 million homeowners now who are under water, and meaning they owe more than the home is worth because of the way that the home prices have fallen in the past few years so for more of the refinancing options, traditionally, you have to have equity in the home, and right now what is happening is that the borrowers don't qualify, and they are getting, you know, blocked from being able to take advantage of the low interest rates which is frustrating for the administration and also for the fed, because the low interest rates have been part of the monetary policy strategy for

helping to revive the economy. >> well, let me just read part of what you wrote and again the story is available on "national journal" and underscore the election feel of the housing market, the u.s. policy experts and the relevant congressional offices were not brought into the fold with advanced briefings as is typical can with a policy announ announcement. what does that tell you? >> well, from housing and business groups, and reals or the and mortgage bankers and that there has not been a stronger focus on the housing administration, and as well as the advocacy community, and you have heard different bills and hold the hearings and come up with proposals to try to address some of the things such as broad refinancing, and it has been frustrating that they haven't seen more from the administration, and we are in an election year, and i think that the white house, you know, wants to try to term what has been

kind of a weakness as a strength by showing that the president is out there talking about these issues and putting forth a plan. i will say though that a lot of the folks who typically get invited to these things that are really on the inside loop as far as what the details are and as far as how this is going the work and the advanced copies of the legislative language were not a part of this, and many were surprised yesterday as they were getting wind of it, and really got the feel that this is put together by the campaign folks than the policy folks. >> and you heard the speaker of the house and john boehner in his remarks this morning and what did you read into what he had to say? >> well, you know, some of the question of how much republicans will take the bait so to speak on this issue, and part of the refinancing idea not only does it take about a bank tax to payer for it which the republicans have said would take capital out of the economy, and it also is reliant on increasing the government's role to a certain extent by having these

rate financings go through and the federal housing administration, which is a part of hud that insures mortgagers, and that is something that the republicans have been concerned about because the fhsa have had financial issues about about it long term solvency, and republicans have not really wanted to see expansion of any kind of government support ed housing which helps to lead our way into the crisis. and making mortgages to cheat artificially, and also it is an election year, and you heard boehner have strong words and you heard the strong words today in opposition of the obama's plan come from the senator bachus, and the central finance committees chairman and the chairman of that sub committee, and there is no willingness on the part of the republicans to

work with the administration on this part of this as they see it as all of the recipe to win in november. >> the headline at national journal.com, obama's house trumpets re-election themes available at national journ journal.com. thank you, stacy caper. >> thank you. and how does this plan differ from previous proposals, just one question that was presented in the white house briefing room. >> reporter: obviously, several problems with this idea put forward in the last three years and a couple in the last administration that tried to use fha to refinance people, and none of them have really worked that well, so what is sort of fup damt fundamental different about this program this would get it through congress to suggest it would work even when you have had every minimal success. >> i talked earlier about the fact that there are a while,

many of these efforts have not reached as many people as we had originally hoped. if you go to talk to any of those more than 1 million families who've had their fha mortgages modified for example through the loss mitigation efforts and able to stay in their homes, the remaining numbers of the almost 5 million families that had them modified through the other efforts and if you talk to the 60% of african-american or latino homeowners who were able to buy a home last year, because of an fha mortgage, it is fair to say that without fha and without the p programs that we have had and the impact that we have had, this housing crisis would have been much, much worse. we did, and we were successful in pulling this housing market back from the precipice for 30 straight months of house price declines to house prices actually rising in the first year that the president was off.

so we have made a real impact, and fha has had been an important part of that and reach ed millions of homeowners so fair to say that while not all of the efforts have been successful or reached the families that we had hoped, there has been a real impact, and you could go to talk to the families about that impact. and specifically on this effort what we have seen is that refinancing is something that middle class homeowners who have been paying their bills and doing the right thing fundamentally believe is a choice they want to make. whether it's the million homeowners in harp that have already participated or the hundreds of thousands of fha homeowners who have refinanced through the streamlining refinancing program that we haven't even talked about today, so we believe that there is great demand and frankly, a fundamental fairness issue for families who have played by the rules and dope the right thing and paid their bills to be able

to refinance. and that incentive, and being able to save $3,000 a year on average is something that the families will choose. >> and there is great demand for the other programs and i'm not disputing that the people who did benefit from them were in fact greatly again fitted, but as the president said, they did not have the impact that was anticipated, so what i am trying to understand is should we expect similar results this time and maybe modest, but the people who helps it will be very, very little or, do you believe it will be bigger? >> the barriers that we have run into have been resistance from banks, market bare ersand i talked about a number of them before on second liens, and private mortgage insurance and those are the types of barriers that have stopped programs from reaching as many homeowners as, as they could have reached before. and again, families will choose.

and it is up to families to say they want to refinance, but they can be confident that today, because of the work that this administration has done, working with and pushing the private sector, second liens will be automatically resubordinated. private mortgage insurance and there is an agreement to tra transfer that mortgage insurance and that was a major barrier before, and another barrier is the fees and the costs of refinancing, getting an appraisal for example and a vast majority of these for now could use an automated system for appraisal which could eliminate the cost of a full appraisal and many, many of the barriers that stood in the way before have been knocked down through the hard work of my staff and many others across the administration to remove the barriers there before. >> and the proposal? >> for this and the changes that we announced without congress

acting to the harp program that will allow more fannie mae and freddie mac borrowers to refinance. >> shaun donovan in the white house briefing room, and the full program is available on cspan.o cspan.org, and you can check out the video library. you are listening to c-span radio. senator john thune is sponsor of a bill to stop the bonuses for fannie mae and freddie mac executives. he is joining us on capitol hill tonight. thank you, senator thune. >> great to be with you, steve. thanks. >> specifically, what is in the bill? >> what we found out is that last fall of course the american people discovered that the federal housing financing agency had approved nearly $13 million of executives for fannie mae and freddie mac and that was something that when they looked at the performance over that same time period, and the fact that they are $150 billion into taxpayer assistance and there was a lot of outrage across the

country, and you know, fannie mae and freddie mac in the same time period announced the big losses and there needed to be additional taxpayer infusions of money, and we wrote a letter challenging the issuesurance of those bonuses, but what this is, it is a legislative effort that not only would deal with the bonuses that are unpaid from last year and going forward and essentially freeze those and applying the savings to the national debt, but also going forward to put the executives at fannie mae and freddie mac into the same sort of salary structure that applies to the financial regulators like the occ, and the fdic and the fcc and caps the salaries at $275,000 a year. so in response to something that i think that the american people found to be very outrageous, and sort of moves the compensation packages of these two agencies into more of what's in line with

some of the other financial regulatory institutions in this country. >> but as you well know, some would argue that salary is necessary to keep and maintain some of of the executives whether it is their pay or their bonuses. >> right. i think that's -- i understand that, and i think that by and large a lot of the people who serve in government agencies do so because they are very interested and believe in public service. it seems at least that $270,000 salary would be sufficient incentive for people who are real interested in public service and wants to turn an institution around and be part of solving a big problem. there are a lot of people who have done well in the private economy who would be very interested in, so i don't think it will limit the talent pool that is available to these two agencies, but i think that more importantly it does do a lot to help restore the, i think, confidence and trust of the american people that there aren't executives who at a time

when our economy is struggling and at a time, too, when these two agencies continue to help raj money a -- hemorrhage money, and require taxpayer assistance that they are paying out big bonuses. it did pas the house of representatives and the senate financial services committee by a strong margin of 52-4 so i hope we will get it through the senate. >> when you heard of the beus ins last year, what was your reaction and how many individuals involved and how much money, senator thune? >> well, like a lot of americansk i was pretty outraged. there were ten executives and $13 million paid out and well in excess of $1 million per executive. and, you know, i think that at the time it was right about that time that the both freddie mac and fannie mae requested additional assistance from the federal government, and announced losses and it seemed

to most people that if you were paying good people for performance that is one thing if they are getting bonuses, but when you are actually, the and organizations continue to lose money and require additional taxpayer assistance, that is not a time to pay out the excessive bonuses. this is in response to that, and i think that what we have heard from the people when that story broke, and that news got out was a lot of outrage, and it was justified. >> let me ask you about the support that you have or maybe trying to get. do you have bipartisan support for this legislation and will republicans and democrats sign on to this, and will it pass for the 60-plus votes necessary in the u.s. senate? >> we have bipartisan support, and it is a bill that both mark begich the senator from alaska and i have produce and we are paking up cosponsors on the order of 20 cosponsors at the moment both democrat and republican and we hope the add to it. it is something that is even right now being debated. an amendment offered by senator

mccape on tin on the floor to t current legislation that we are debating right now the prevent the bonuses from being paid, you know, going forward, but what ours would do is to also set compensation levels at a more reasonable level going forward so it is going to go farther than that, but it is still very much, i think, a part of the national discussion, and, you know, especially when any news comes out about those two agencies, and there has been plenty of that in the news here in the last, and continues to be in the last several weeks. >> we are talking with senator john thune , senator of south dakota. part of this is taking on the dodd/frank, and do you feel that in the next congress it faces a repeal? >> well, it is possible that there are attempts to do that and certainly if not repeal all of it, but portions of it and try to deal with the too big to fail and systematically risky institutions at least, but there is a widely held view among the

republicans in congress that dodd/frank went too far. much more far-reaching and is going to create a lot of problems and challenges particularly for smaller institutions in this country. i know it is certainly something i hear about in my state from the community banks and the credit unions and a lot of concern, and because in many cases the regulations for the implementing of dodd/frank are wr written and what that might look like. clearly, there were some things in that legislation that causeded great concern. i mean, not just the larger financial institutions in the country, but many of the smaller ones and some that are not even necessarily in that business but could fall under the regulation that the consumer finance protection bureau might for example put out. so there is still, and it is something that i think that you will see an effort on if there is a change in the leadership and the congress after the next election and the change in the

white house. >> senator thune, before i let you go, one more political question that you have been on the campaign trail supporting mitt romney, and newt gingrich vowing to stay in the race through the convention and in your perspective, how long do you think that the republican party will see a competitive primary leading up to the convention in tampa? >> well, lit will depend whethe the other candidates can continue to raise the resources to go on. as each state goes by, you have to go to onext one which takes organization and resources, and a campaign that was built for the long haul is probably better prepared and positioned to survive until we get to the convention, but i mean, speaker gingrich announced after of the election yesterday in florida he would continue on and continue on all of the way to the convention, and we will see. i think that's the prerogative of any candidate, but there are certain i think realities that candidates run into is that the

races are on, and one is can you continue to raise the resources necessary to wage a campaign to the many states that are still to come, and that we will see. as you said, i endorsed governor romney and i would like to see him become the nominee, and probably sooner rather than later, but i certainly respect the process that we have for picking a nominee, and we will see it through and see what happens in the next few weeks. >> a for you personally, and your family, as you watch the primary process unfold, and you had thought of potentially running for the presidency, and as you see the up close and personal, what do you think? >> well, you know, it is quite a process to observe. there is more, you know, that you look at what the candidates with what they go through and the number of debates they have been through. it is a, you know, that is why you to be a totally committed 100% 24/7 into this thing. that is why it does definitely narrow out some of the