Progress Illinois

In his new cover story for The New Republic, Jonathan Chait explains how feckless, parochial Democrats, working under screwy and antiquated rules, routinely derail legislation that the majority of Americans favor.  Chait uses the fault lines created by Obama's budget as his case study, noting how conservative Democrats have demanded "that Obama do more to reduce the deficit while simultaneously opposing his deficit-reducing measures."  Worse yet, Chait notes that these senators been rewarded by the Beltway media for their actions and elevated as "symbol[s] of fiscal rectitude."

The negotiations over Sen. Dick Durbin's mortgage modification bill are equally frustrating to watch.

Already killed three times in the Senate, the measure represents sensible reform. Allowing bankruptcy judges to reduce the principal owed on a homeowner's primary residency to the current fair market value wasn't an idea developed in some European commune. In fact, the courts can already do so on secondary properties and family farms. The profits of mortgage lenders might dip a bit, but the government wouldn't foot the bill. And considering that 14,000 Illinois homeowners received at least one foreclosure-related notice last month, the measure could help a lot of people avoid an economic disaster. 

Yet it has faced consistent opposition from conservative Democrats.

In the House, a coalition of so-called Blue Dogs and New Democrats -- including Illinois' own Rep. Melissa Bean -- worked to limit the bill's scope before it was eventually passed with cosmetic changes. Now, Sen. Evan Bayh (D-IN) and his happy band of small state Democrats have signaled that Durbin's bill doesn't satisfy their belief in "fiscal responsibility." And Majority Leader Harry Reid has declared that he will drop the provision if it threatens Senate passage of the overall banking bill.

To be clear, the obstructionists aren't protecting their constituents, but rather their most influential campaign donors. Serving as the voice of Beltway reason may go over well among political consultants and corporate PACs, but everyday Americans don't care about the interests of the mortgage industry -- they want to keep their homes. Thanks to the expanded use of the filibuster (requiring a supermajority on every controversial vote), these small state Democrats now yield disprortionate power.

Before Reid takes Durbin's bill off the table again, leaders in Washington should take the train up to Philly, where judges have been given the right to modify mortgages. Strangely, the economy hasn't collapsed as a result:

[W]hat's happening in Philadelphia might change the minds of both bankers and policymakers. Judges there now require delinquent homeowners and their lenders to talk in mediation before the sheriff can auction off a home. Of the 2,300 homeowners who've participated, 4 out of 5 still have their homes. Philadelphia's experience shows what happens when the lender and homeowner know a judge could take a seat at the negotiating table. That's what bankruptcy judges could do if they were given the power to modify loans.

Image used under a Creative Commons license by Flickr user Tony Bracjun.