Tag Archives: Ted Lieu

Ted Lieu, the VLF and the supermajority

SB 746 Tanning Beds TED LIEU PC_April 28 2011_1054Senator backs down from car tax discussion

by Brian Leubitz

If you ever wonder about the gaping hole in our budget that we’ve been trying to close for the last decade or so, there is one part of that larger pie that is bigger than the rest. That is the Vehicle License Fee. Back when Arnold Schwarzenegger was running in the recall election, it was dubbed simply the “car tax.”

And give him credit for this, when elected he did, in fact, slash the “car tax.”  We were able to backfill with a few years of budgetary “smoke and mirrors” but the hole was stubborn. And when 2007-8’s big recession hit, we were proverbial budgetary roadkill. The cuts just couldn’t come fast enough to match the speed of declining revenue, given that we had already made cuts to cover the loss of the VLF revenue.

And so here we stand, with a brand new legislative supermajority sure to eventually show up. So, given the damage the VLF cut brought us, surely it would be at least open for discussion, right? Sen. Lieu thinks so, or at least he thought so a few days ago when he told the LA Daily News just that

The constitutional amendment would restore the 2 percent vehicle license fee slashed by Gov. Arnold Schwarzenegger after he won office partly on that pledge.

The 1.35 percent transportation system user fee increase would generate an estimated $3.5 billion to $4 billion annually for roads and public transit in yet-to-be-decided proportions, Lieu said. … “It would be a test to see what the two-thirds (majority) Legislature means,” Lieu told the editorial board of the Los Angeles News Group. “The best way for us to lose the supermajority is to overreach.

“I’m not saying it would be an easy sell,” he added of the proposal. “I’m aware of the fact I may be attacked for it.” (LA Daily News)

Now, the interesting part here is that the suggested increase would still go to the voters, because, apparently we are all in on the government by plebiscite thing. All this would do is to save somebody a few million dollars of getting the measure on the ballot. To be honest, the amount of money spent getting it on the ballot would pale in comparison to the amount required to pass it. So, yes, Democrats have a supermajority, but no, they won’t be going so far as just passing additional revenues on their own.

Silly you, thinking we had a representative democracy, but even the vote was too much for some.

However, over the last few weeks California’s political landscape has changed.  I have listened carefully to those who have contacted my office or me.  Additionally, more stakeholders weighed in on this important issue.  As a result, I will not be introducing the proposal.  Instead, I will work with transportation stakeholders and the public next year on alternative ways to mitigate the transportation infrastructure problem.  This problem is not going to go away and will only worsen when the final installment of depleted Proposition 1B funds are allocated next year.  I am open to any suggestions and if you have any, please feel free to contact me or my office. – Sen. Ted Lieu

So the good senator got some pressure, and as Dan Walters points out they are loathe to be seen as “over-reaching.” The CW apparently comes down hard, and despite some solid advice from our very own Robert Cruickshank to move forward on progressive legislation, it looks like there is more work to be done here. Now, that being said, it looks like we may get some not inconsequential reform on the ballot in 2014, but the status quo is still quite strong.

URGENT! Tell State Senator Ted Lieu To Support The Ban On Shark Finning

Approximately 73 million sharks per year are killed to provide fins for shark fin soup, a luxury popular in the Cantonese community. The soup can sell for upwards of $100 a bowl.

The vast majority of fins are obtained using the barbaric practice of landing the shark, cutting off the fins and releasing the mutilated live shark back into the ocean to die.

This year, California Assemblymen Paul Fong and Jared Huffman introduced AB 376, a bill that would ban the sale and possession of shark fins in California. The bill passed, 65-8, with bipartisan support in the Assembly, but has hit rough waters in the State Senate.

My state Senator Ted Lieu does not support the bill. Lieu, who is Asian-American, claims a ban on shark fins unfairly targets that community’s cultural heritage. (Recent research contradicts that claim of discrimination. A poll of Chinese Americans commissioned by the Monterey Bay Aquarium and conducted by a nationally recognized polling research firm showed that 70 percent of Chinese Americans interviewed support the proposed legislation banning shark fin.)

Instead, he’s proposing changes to the bill  that would make it both impossible to pass and impossible to enforce.

Please click on this link to tell Senator Lieu to support AB 376 as proposed.

Senator Lieu is proposing amendments to the bill, including a ban on shark fishing in California waters and banning the sale of all shark meat and products.

Both of these ideas may sound positive on first blush, but they are unworkable. Law enforcement does not have the ability to determine if fins were obtained in California waters, and banning shark fishing in California would face stiff opposition by the recreational and commercial fishing lobby in Sacramento. They would scuttle the bill.

Californians are the No. 1 consumers of shark fin soup outside of Asia, and our state is a significant entry point for fins trafficked to Asia. A state bill that specifically targets the sales of shark fins will have the greatest impact on helping critical shark populations recover.

Sign the petition – tell Ted Lieu to support CA Assembly Bill 376 as proposed, and end the wasteful and cruel slaughter of sharks.

What Do All These Endorsements For Janice Hahn Really Mean?

Today the folks at Hahn Campaign™ touted yet another high-profile endorsement, that of newly elected State Senator and former political rival Ted Lieu. Lieu went on to win 57% of the vote after for the seat vacated by State Senator Jenny Oropeza’s death, clearing the field for a Lieu victory.

Lieu’s is a significant endorsement since his district and CA36 share much of the same territory.

The Hahn Campaign ™has been working the phones overtime ever since she announced her candidacy two weeks ago. But what do all these endorsements mean? And why is Hahn working so hard to get them?

I’ll answer the second question first. Candidates work so hard for endorsements for several reasons. Endorsements mean money and resources. Endorsing officials and community leaders will often do so on the condition they’ll fundraise, or lend their names to fundraisers to draw participation. Organizations like unions can lend significant institutional support by putting boots on the ground to canvas and phone bank.

An impressive and extensive list of endorsements convey inferred legitimacy to a candidate. They act as “validators” for the busy voter, who might not be paying very close attention to a politician’s policies, but who sees the name of a trusted official or organization endorsing a candidate and thinks their policies and values must closely mirror their own.

Lastly, endorsements can also act as a “shock and awe” strategy, discouraging lesser-known or under-resourced candidates from entering the race, clearing the field of pesky challengers.

The Hahn Campaign ™has been working the “shock and awe” doctrine overtime. Within 24 hours of announcing her candidacy, Hahn had secured the endorsement of dozens of politicians, including the Mayor of Los Angeles and nearly the entire LA City Council. In two weeks, she’s amassed over 80 endorsements, all the way from Senator Diane Feinstein to the President of the Long Beach Democratic Club.

But what do all these endorsements really mean?


Or, as one politician who’s name sits high on the Hahn Campaign’s ™ endorsement list told me, “Look kid, if Hahn loses, I still have to work with her. If she wins, I have a friend in congress.”

While not all the endorsements on Hahn’s website represent this kind of transactional politics, a lot of them do. Nearly every name on Hahn’s list endorsed before the other Democratic candidate, Debra Bowen,  had officially announced. The Hahn Campaign ™ was calling in favors, and they was calling them in as fast as they could.

(Full disclosure, I was contacted by Janice Hahn and asked to endorse her within hours of Harman’s resignation. I told her I wouldn’t, because I wanted to see who else would enter the race. It’s probably not hard for any of you to guess who’ll I’ll be supporting based on the Act Blue widget at the top of this blog, but more on that later.)

So my advice when analyzing endorsements in this race, especially so early on, is to ask yourself, “What does the endorser get out of this?”

Is the politican/oganization endorsing because they think that candidate would be the best one for the district, or because they owe that candidate a favor, fear repercussions if they don’t endorse or hope to do a little horse-trading in the future?

Do your homework, ask questions, then decide.

Election Day in SD-17 and SD-28

UPDATE: Well, it looks like we went 1 for 2.  Sharon Runner defeated Darren Parker, but Ted Lieu was also able to pull off the 50% threshold.  We should be seeing both Runner and Lieu in the Senate shortly.

If you happen to live in either SD-17 or SD-28 it’s an election day today!  In the 17th district, CDP African-American caucus chair faces off one-on-one with Sharon Runner.  The winner will receive more than 50%+1, so they will be ready to take their seat right after the election is certified.  

Darren is an extremely dedicated and hard working leader.  He helped out on the Kamala Harris campaign, and was an extremely passionate contributor.  He is a fantastic alternative to the Runner dynasty.

In the 28th, Ted Lieu is facing off with a slew of Republicans, a Democrat and a few others.  The big challenge in this race is for Lieu to get to that magical 50%+1 so that he can take the seat right away. If he does, he will be able to get to vote on Jerry Brown’s budget, which he supports.

Lieu has been a fighter, particularly on mortgage issues.  While I haven’t always agreed with him, particularly with his positions on prison reform, he would be an asset to the Senate.  He is a very sharp and intelligent legislator.

So, if you are in the districts…VOTE! You can get the results here when the polls close.

AG Candidate Ted Lieu Calls Out Supreme Court on Nixing Prop. 8 Video

So the U.S. Supreme Court has decided that the revolution will NOT be telvised. Attorney General candidate Ted Lieu (a miliatary prosecutor himself) has a few choice words for them:

“The goal of the American civil justice system is to seek justice. The Supreme Court’s decision to censor the public broadcast of the historic trial to reverse California’s Proposition 8 amounts to a fear of too much justice. Our courts are not star chambers, where testimony and rulings are made in secret and hidden from the public.  

“The Court majority’s rationale that broadcasting this trial will result in “irreparable harm” has no basis in fact.  The Court states that witnesses may suffer harm because they are concerned about possible “harassment” if the public actually found out what they will say under oath. Under that rationale, the Court should seal the transcript of this entire proceeding, not allow any non-witness to attend the proceeding, and block newspapers from reporting on this trial.  

I served on active duty in the armed forces because I believe America is the best country in the world. Members of our armed forces have given their blood to defend our democracy and our constitutional liberties, including freedom of the press, which is perhaps the greatest check on governmental overreach. The Court’s overreach in censoring the broadcast of this trial is something you would expect from the Supreme Court of Iran, not the Supreme Court of the United States.”  

Does CEQA matter?

There was a bit of discussion about the City of Industry / Ed Roski plan to build a new sports stadium in LA County. The stories neglect to tell you a very major point, that Ted Lieu is listed as a principle co-author of ABX381, a bill that many detests.

Now, Lieu is running for Attorney General and does not dare brag about this bill on his web site.  In fact, the news lets Senate ProTem Steinberg take the rap for setting aside California’s Environmental Quality legislation to aid a private developer and a city of less than 1000 people.

I don’t think that this state needs an Attorney General who is so willing to set aside environmental law when it becomes convenient, just for that sake of a big developer who promises jobs… something that sports complexes routinely fail to deliver.

It might have been expected from a Republican.  That Lieu is a Democrat should be embarrassing to the party. I have already seen an effort to have SoCal Greens oppose Lieu over his willingness to set aside existing law.

Remember Way Back to 2007 When the Assembly Supported A Sentencing Commission?

Back in 2007, former Assembly member Sally Lieber (D-Mountain View) wrote a Sentencing Commission bill, AB 160.  You can read an analysis of that bill here. Like the current proposal, it had teeth. It didn’t give the Legislature ratification authority. It had wide support of progressives, but not much support from either the Governor or from the Senate. In fact, on the Senate, it got only 10 votes, mostly from progressives like Carole Migden and Shiela Kuehl, but, somewhat suprisingly, also from moderates like Sen. Ron Calderon. Good on you Sen. Calderon.

On the Assembly side, it got 43 votes, including many members who are now protesting the inclusion of a Sentencing Commission today. For example, Asms. Huffman, Ma, Nava, Torrico all voted for the bill. For his part, the other AG candidate, Asm. Ted Lieu apparently was against solid prison reform back in 2007 too.

Now, turn the calendar a few years forward, to about last week. Basically many in the current Assembly Democratic caucus are walking away from a bill they ALREADY supported.

I’m not sure how at least two of these folks square their past votes with their public positions today.  Take Asm. Pedro Nava (D-Santa Barbara), who voted for AB 160 in 2007:

“You essentially would be contracting out your duties as a legislator,”Assemblyman Pedro Nava, D-Santa Barbara, said of the Senate-passed plan. (SacBee 8/25/09)

Or from Asm. Torrico (D-Newark), who also voted for AB 160:

“The notion that the Legislature would not be required to vote on a sentencing commission proposal, I just think it’s real problematic,” Torrico said. (LA Times)

I don’t want to give Asm. Lieu a pass here, as he is also stonewalling good policy here. Yet, how is that removing sentencing from the Legislature was good in 2007 but not today when the crisis is far more acute?  

Could it be that this time it actually has a chance of succeeding?  Back in 2007, Asm. Lieber’s bill didn’t have a snowball’s chance in hell of getting through the Senate, let alone to be signed by Governor Toughie McActionStar. It is only today, with the very real possibility of this actually going into law that these legislators are balking at voting for real prison reform.

Sorry, but that smacks of the cynicism that has plagued Sacramento for so long. It is this cynicism that is why our prisons are under a slew of federal court orders and we can’t manage our house. Blame it on fear of the prison guard’s union (CCPOA) or the “law and order” vote or what you will, but the fact is that we need real reform that will allow our prisons to get back to the business for which they were intended: keeping California safe.

If it plays in Kansas, it can play here.  It just requires leaders who are willing to stand up for their own values and for the voters who put them there. This should be past the point of politics now. I know, it’s probably not possible for the Republicans, but I expect more from our Democratic Legislators. Do the right thing for our state and your political fortunes will follow.

Wall Street Banks Need To Stop Using Funny Math

(Say Hi to Asm. Lieu. NPR’s Planet Money podcast did a good report on this subject as well. – promoted by Brian Leubitz)

Two weeks ago, Bank of America surprised Wall Street by posting an alleged ‘strong’ profit of $4.2 billion the first quarter of this year. Now we know how they arrived at those numbers:  funny math. Today we learned that Bank of America actually needs another $34 billion injection of capital in order to survive. 

Bank of America is not the only firm using funny numbers.  Goldman Sachs posted an alleged profit of $1.8 billion for the first quarter of 2009.  The company had previously followed a calendar quarter that ran from December to February.  However, Goldman Sachs conveniently and suddenly decided to change its accounting to a calendar year schedule, and changed their fiscal year to start in January, effectively eliminating December’s results.  The company had suffered large losses in December.  So the ‘profit’ Goldman Sachs posted doesn’t account for the entire missing month of December.


Funny numbers, lack of transparency, and the obscuring of risk were some of the prime causes of Wall Street’s economic collapse, a collapse that started our recession.  America’s recession will be prolonged if investors continue to stay on the sidelines because they are unable to ascertain the true value of banks and other companies.  

It is time for Wall Street firms to come clean and start telling Americans the truth.

Will Our Attorney General Candidates Get The Prison Crisis?

Today, Chief Privacy Officer at Facebook Chris Kelly announced an exploratory committee for the race for California Attorney General.  He joins a field that includes Assemblymembers Ted Lieu, Pedro Nava and Alberto Torrico; San Francisco DA Kamala Harris, and Los Angeles City Attorney Rocky Delgadillo.  In his statement, which you can find at his website, Kelly talked about efficienct and effective government, Internet safety, proper training and equipment for law enforcement, and stopping trafficking.  The words “prisons,” “jails,” “corrections” or “parole” was not mentioned.

Our prison system is a mess.  We have the highest recidivism rate in the country, mostly because 2/3 of our prisoners returning to jail go there because of technical violations of their parole.  This turns jails into giant holding pens instead of areas for rehabilitation and treatment, as well as colleges for nonviolent offenders on how to get involved in violent crime.  The overstuffed prisons cost more money to staff and service as they become more dangerous, leading to the state spending more on incarceration than higher education.  Despite all this spending, conditions in the prisons are medieval, with the ACLU proposing the closure of the LA County Men’s Central Jail.  Prison officials are discussing release of 8,000 nonviolent and terminally ill offenders, but that’s a drop in the bucket.  We also have denied prisoners their Constitutional right to health care, and have a federal receiver now remedying that situation, taking it out of the hands of the legislature.  The “tough on crime” mantra that has ruled the thinking of both parties on this issue has utterly and completely failed.

And yet, our Attorney General candidates and our gubernatorial candidates view this absolute crisis as just another check on their list, instead of the serious problem it is.  Gavin Newsom didn’t bring it up in his speech, though I did ask him about it in the blogger meeting afterwards.  He talked about how we need a re-entry strategy better than the failed parole system, and cited some re-entry reforms in San Francisco that have helped matters.  And he stated that having the courts step in to fix the problem presents an opportunity for real reform.  With respect to the drug war, which lies at the heart of this, he expressed his support for drug courts and mental health courts and the kind of options that wouldn’t consign nonviolent offenders to the rigors of overcrowded prison life when they need medical treatment.  And he vowed to have more detailed programs available soon.  But when it counted, on stage, he said nothing.  Jerry Brown did tackle the issue, but his non-stop fight against the prison health care receiver and sensible steps like Prop. 5 destroy any credibility he may have had on the issue.

I have appreciated Greg Lucas’ interviews with some of the candidates in the Attorney General’s race, and I have paid particular attention to their views on the prison crisis.  (over)

Here are Alberto Torrico’s ideas to deal with recidivism:

CC: What’s the best way to reduce recidivism?

AT: First, we need to evaluate. See what programs work and don’t work. We’ve got to figure out what we’re going to do about these parolees. Put all these people out and then there’s too many parolees and too few parole officers. We can’t continue to pretend our prisons are drug rehab centers because they’re not. We need to get resources to people who can be helped and make sure when they’re tried at the local level they get put into programs that work.

I’ve been a criminal defense lawyer. I’ve been a labor lawyer. I represented a public agency. The judge tells people under Prop 36 (drug rehab law) that you’re not going to jail, you’re going to get counseling once a week for 12 weeks. You’re not going to beat an addition one hour a week over 12 weeks.

He seems earnest about lowering the recidivism rate as a financial and moral imperative, and these ideas are somewhat noble, but they read like bullet points, without the innovation necessary to really deal with this crisis.  It’s not just about hoping the locals solve the problem, but a strategy that focuses on rehabilitation, re-entry and alternatives to prison right at the top.

Here’s Ted Lieu on the same subject:

CC: Not sure how much it costs but it has to be expensive when we parole 120,000 people a year and within two years over 70 percent are back in prison.

TL: It is a sort of downward spiraling problem. Because we have a prison-overcrowding situation we now aren’t doing any of the skills training in prison programs that teach people how to function in society when they leave prison. And then people come back to prison because they have nowhere to go and that increases the over-crowding.

I’m a big supporter of drug courts. If someone is addicted, they should get treated. When revenues are falling off a cliff its extremely difficult to fund the programs we need to help people when they get out of prison. Long-term view is that yes it costs some money now but in the long-term it would help the state save money.

If an inmate works toward a degree then they should get early release credits as an incentive to do such things. Part of the problem – and this is a much larger fix – is I think I we also need to improve our education system. If we did, we’d have less people in prison as well.

I just see a lot of people talking around the problem.  I support drug courts as well, but I think there’s a mindset change that’s needed.  The Attorney General at this point is in a position to transform the entire way we think about prisons and rehabilitation.  Rocky Delgadillo gets closer to that.

CC: Speaking of costs, recidivism is very expensive. Something like 120,000 people are paroled each year and 70 percent are back behind bars within two years.

RD: We’ve got to get on the front end. One thing we know about gang members and people who have been in prison is they tend to have a shelf life it tends to end. But if they’re young and active and they go out they do it again. Why? Because in prison they get to hang out with the best in their business. And we pay for it. Great health care plan. So when they get out, they go back to it again. So the answer is to send less in.

We have a program called “First Chance.” I grew up in Northeast Los Angeles. People would say they’ll give you a second chance. You can’t have a second chance until you have a first chance. This is a program for young, but adults who get into our system. Not where they’ve done a serious crime but we know they’re involved with gangs or negative activity. We allow them to go to job training and school and if they complete it, we drop the charges. It’s a much better investment up front then to try and deal with them after they’ve been in prisons. In there, it’s an abyss.

Finally, here’s Kamala Harris, who actually pre-empts the discussion by raising recidivism without being asked:

CC: What role can the Attorney General play in the state’s seemingly endless budget mess?

KH: First, critically examine how the criminal justice system is working and whether we are being most efficient with limited dollars. Here’s an obvious example: Recidivism. California has the highest recidivism rate in the country. On an annual basis we release more than 120,000 prisoners and within two years of their release 71 percent recidivate. That’s costing us a lot of money.

In San Francisco, we created a re-entry initiative in my office. Its called “Back on Track.” It’s for low-level, first-time, non-violent offenders. I brought on my friends from labor – the building trades guys – friends from the business community, non-profits, and we give the parolees job skills development, education and help them meet things like parenting needs. A lot of these young offenders are parents. We reduced recidivism for this specific population from 54 percent to less than 10 percent. The national DA’s association has designated “Back on Track” as a national model.

My vote in this crowded Attorney General’s field will be almost entirely predicated on each candidate’s approach to the prison crisis.  Will they reverse the “tough on crime” myth and start talking about sentencing reform?  Will they discuss serious options to reform parole?  Will they bring up innovative strategies around re-entry and recidivism that would put the focus on rehabilitation and spend on the front end to save on the back end (Hint: check with Kansas)?  Will they touch the third rail of the failed drug war by moving toward decriminalization and keeping tabs on those who commit crimes with victims instead of nonviolent drug abuse?

I eagerly await the answers.

Pressured By CA Lawmakers, Obama Expands Mortgage Refinance Program

When the Obama Administration’s plan to mitigate foreclosures came out, it was clear that it would be insufficient to deal with the particular challenges faced in California.  Initially, the plan would only modify loans where the amount owed was 105% of the home’s true value.  Given that home prices have collapsed here, this would have helped almost nobody in California.  State lawmakers, in particular the Democratic point person on mortgages and foreclosures Asm. Ted Lieu, went to Washington to lobby for changes.  And today, faced with a sluggish mortgage rescue program attracting few lenders or homeowners, the Administration expanded the plan.

The Obama administration said Tuesday it is expanding its foreclosure prevention program to cover second mortgages and to direct more troubled borrowers to the Hope for Homeowners program.

Under the administration’s new program, the interest rate on second mortgages will be reduced to 1% on loans where payments cover interest and principal and to 2% for interest-only loans. The government will subsidize the rate reduction, with the money going to the mortgage investor […]

Also Tuesday, the administration said it is now requiring servicers to offer troubled borrowers access to Hope for Homeowners as a modification option if they qualify.

Expanding Hope for Homeowners would address one of the major holes in the original Obama foreclosure prevention plan. It helps homeowners whose homes are now worth far less than their mortgages.

Servicers had balked at participating in the Hope program because it required they reduce the mortgage principal balance to 90% of a home’s current value.

Hope for Homeowners, which began in October, is being revamped in Congress. Servicers would have to reduce the principal to 93% of the home’s value. The change would also reduce the program’s high fees, which turned off many troubled borrowers.

Loan servicers get a fair bit of cash incentives for participating in the program, which I don’t totally support, but if we have to bribe lenders in order to keep people in their homes, that makes more sense than spending the same amount of money on the fallout from a foreclosure.  And lenders do take a haircut in the Hope for Homeowners program, the first loss to my knowledge that lenders have been forced to take.

Asm. Lieu responded with this release (flip it):

“I am very pleased the Obama Administration today acted on the concerns raised by states such as California and took two steps to expand refinance and foreclosure assistance to distressed homeowners.

First, the Administration announced it would incorporate the Federal Housing Administration’s (FHA) Hope for Homeowners program into the existing Making Home Affordable Program.  This is significant because currently, the Making Home Affordable Program has a 105% underwater refinancing cap, which shuts out many Californian homeowners.  The Hope for Homeowners program does not have that limitation; instead, the Hope for Homeowners program states that lenders will take a loss on the difference between the existing loan amount and the new refinanced loan, which is set at 96.5% of the appraised loan value.      

For example, under the existing Making Home Affordable program, a homeowner whose home is valued at $100,000 but owes $120,000 on the existing loan balance would not qualify for refinancing under the program because the loan is 120% underwater.  However, under the Hope for Homeowners program, the homeowner could qualify and the new refinanced loan would be $96,500.  The lender would take the loss of $23,500.  The Obama Administration would increase the number of lenders participating in the Hope for Homeowners program by offering financial incentives to the lenders.

Second, the Administration announced steps to address the second lien problem.  Many distressed mortgages have two liens and often the second lien holder does not want to modify the loan.  The Obama Administration will provide financial incentives to allow the second lien to be reduced or extinguished.

These two critical actions will expand assistance to distressed homeowners in states such as California, where many loans are more than 105% underwater or have second liens.”

This is decent news.  Unfortunately, the tool that homeowners really need to stave off foreclosure, the ability for bankruptcy judges to cram down the principal of a loan on a primary residence, appears poised for what amounts to defeat in the Senate, a testament to the continued power of the nation’s biggest banks.

In order to garner the support of conservative Democrats and a few Republicans, the proposal has been watered down. The bankruptcy legislation will still allow homeowners to renegotiate mortgages in bankruptcy – the so-called cram down provision – but only under strict conditions. The banking industry has lobbied fiercely against cram down, but Durbin said on the Senate floor Monday night that the compromise was supported by Citigroup, which has been at the negotiating table.

“In the past, some of my colleagues understood the need for action but have been uncomfortable with the original language. Let me be clear: this amendment is different,” said Durbin. “The amendment I’m going to offer will make a modest change in the bankruptcy code with a lot of conditions. It won’t apply across the board. This amendment limits assistance in bankruptcy to situations where lenders are so intransigent that they are unwilling to cooperate with the foreclosure prevention efforts already underway – Obama’s homeowner assistance and stability plan and the Congressionally-created HOPE For Homeowners, which this bill will greatly improve.” […]

Meanwhile, the banking lobbyists are furiously lobbying against it and Durbin acknowledges it will be difficult to “muster the votes, although I know it will be hard.”

It is “hard to imagine that today the mortgage bankers would have clout in this chamber but they do,” said Durbin. “They have a lot of friends still here. They’re still big players on the American political scene and they have said to their friends, stay away from this legislation.”

We will be in a better position with foreclosures by the end of the week than we were at the beginning, but not where we need to be.