WASHINGTON After talking to struggling homeowners in their states during a two-week recess, senators decided to address the real estate foreclosure crisis.
Just one month ago, the Senate could not reach a deal to take up housing legislation.
But upon returning last week from their recess, Senate leaders announced a bipartisan agreement to begin debating how to help people hold onto their homes.
The Senate voted 58-36 to reject an amendment that would allow bankruptcy judges to revise mortgages on primary residences.
Current law allows bankruptcy judges to change mortgages only on secondary housing like a vacation cottage.
Sen. Dick Durbin, D-Ill., the sponsor of the amendment, said it would help homeowners saddled with shady mortgages disguising skyrocketing interest rates.
Banking industry lobbyists argued Durbin's amendment would be counterproductive because it would force banks and other lenders to raise fixed interest rates and discourage potential homebuyers.
Sens. Blanche Lincoln and Mark Pryor, both D-Ark., voted against the Durbin amendment.
Inflation amendment denied
The Senate voted 44-41 to defeat an amendment by Sen. Jon Kyl, R-Ariz., that would have provided a tax break for homeowners.
When a home is sold, the owner must pay a capital gains tax if profits from the sale exceed $250,000.
Under Kyl's amendment, the capital gains tax would be limited by accounting for inflation which increased the home's value.
Kyl said inflation was a big factor in the rise of the median value of a family home in the United States from $146,000 in 1997 to $247,200 last year.
But opponents of the Kyl amendment noted home values are falling, and Kyl's amendment is unnecessary because sellers are receiving lower prices.
Lincoln and Pryor voted against the Kyl amendment.
Housing counseling limited
The Senate defeated an amendment to add $200 million for the federal budget to offer counseling to homeowners who fall behind on their mortgages.
Although the Senate voted 44-40 for the amendment, it failed because 60 votes were needed to cut off debate.
Advocates of the amendment said the demand for counseling could easily justify a $500 million request.
Opponents complained the request would violate budget rules.
Lincoln and Pryor voted for the additional counseling money.
Katrina and business tax break approved
Residents of Louisiana and Mississippi would not have to pay taxes on federal grants they received to build their homes after Hurricane Katrina struck in 2005, according to a 74-5 vote in the Senate.
Lincoln and Pryor voted for the amendment.
Global AIDS program funded
The House voted 308-116 to reauthorize funding for medical treatment of victims of AIDS and other diseases all over the world.
The bill would allow $50 billion from fiscal years 2009 to 2013 to combat AIDS, tuberculosis and malaria in foreign countries.
Supporters said the program, which was launched by President Bush in 2003, has become the most successful foreign assistance plan for the United States since the Marshall Plan.
Critics complained it makes no sense to spend $50 billion in Africa when Americans are struggling to pay for their own health care and housing needs.
Reps. Marion Berry, D-Gillett; John Boozman, R-Rogers; Mike Ross, D-Prescott, and Vic Snyder, D-Little Rock, voted to reauthorize the global AIDS program.
