Fake Bipartisanship

by Allan Sloan,

The President’s “across-the-aisle” plan to give housing relief to the middle class needs to give credit where credit is due.

… the Obama administration has responded to the national yearning for grownup behavior in Washington by creating bogus bipartisanship.

President Obama did that in his recent speech in Galesburg, Ill., where the White House launched its sales campaign for its economic policies. It was only two sentences of an hour-long speech, but it was a telling example of how Washington works. Or doesn’t.

Obama said, “I’ve asked Congress to pass a really good, bipartisan idea — one that was championed, by the way, by Mitt Romney’s economic ­adviser — and this is the idea to give every homeowner the chance to refinance their mortgage while rates are still low so they can save thousands of dollars a year. It would be like a tax cut for families who can refinance.” (White House text, my italics.)

In fact, it’s a wonderful idea, initially floated in 2008 by Glenn Hubbard, dean of the Columbia Business School, who became a top Romney adviser. But guess what? Two years ago, when the proposal would have helped millions more people than it would now, the administration wanted no part of it.

So you can see why my curiosity was aroused when I heard Obama say he had proposed a “bipartisan” refinancing plan to Congress. The White House wouldn’t respond to my request for information about when this had happened. However, my Fortune colleague Tory Newmyer found a sentence on page 25 of the President’s 2014 budget proposal saying that the administration “is calling on Congress to take additional steps so virtually every family that has a standard mortgage and has been making its payments on time will have the opportunity to refinance their mortgage at today’s historically low rates.” The document, submitted to Congress in April, says nothing about this being a bipartisan proposal.

Goldman Sachs estimates that 8 million homeowners could benefit from Hubbard-Mayer-Boyce today. But that’s down from 20 million near the end of 2011 because both home prices and mortgage rates have risen since then and many owners have already refinanced.

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