continued from p. 73

LEGISLATIVE OUTLOOK

Move grows in Congress to bottle up housing bill in House rules committee

Congress may enact no housing law at all this year.

Conservative Republicans in the House are so alarmed over what they consider unsound changes written into the 1956 housing bill by the Senate (June, News) and the House banking committee that they are talking about bottling the measure up in the House rules committee.

Brainfather of the movement is Rep. Jesse Wolcott (R, Mich.), GOP leader of the House banking committee. Wolcott, who is retiring after this session after 25 years in Congress, reasons this way:

"The six members of the rules committee who bottled up the housing bill last year can be expected to do the same thing again because of their distaste for even a small dose of public housing."� (Before the bill can be brought to the House floor for debate, it must have clearance from the rules committee, which acts as a legislative traffic cop. The committee has 12 members. Last year, it split 6-6 on public housing, but since one Congressman who favors public housing is ill, the committee would probably vote 6-5 against public housing this time.)

"Last year,"� notes Wolcott, "the rules committee was induced to let the housing bill go to the House floor only on the promise that a skeletonized measure would be introduced doing little more than continue the expiring sections of housing programs."� The strategy backfired. So this year Wolcott says he will introduce no bare-bones substitute. Reason: no matter how conservative a housing bill gets through the House, the Senate could load back public housing and most other objectionable provisions in conference, as it did before.

Wolcott and a lot of other Congressmen find this year's Senate version of a housing law even more repugnant than 1955's.

Besides the big public housing program (see below), Wolcott dislikes loans for college dormitories at "practically give-away interest rate-� and a "foot-in-the-door"� approach to a new area of federal aid, housing for the aged. Wolcott thinks FHA could get by without more insuring authority until Congress reconvenes in January, when it would be easy to rush a measure through.

FHA Title I repair loans will expire Sept. 30 unless Congress extends the program. But Wolcott says he hopes a short resolution extending them can be put through in such a way it cannot be amended. This prospect makes retail lumbermen unhappy. It would postpone the otherwise excellent chances for upping FHA's repair loan limit from $2,500 to $3,500 and extending the maximum amortization from three years to five.

What's wrong with the housing bill: more federal competition with private enterprise

If Congress adopts a housing law at all this year, chances are growing better and better that it will put the federal government into a lot more competition with private housing and mortgage lending.

The Democrat-controlled Senate has passed and the Democrat-controlled House banking committee has recommended legislation moving sharply in that direction.

At the same time, the 1956 housing law is being so loaded with special help for special interests that it is becoming a "some-thing-for-everybody"� measure politically popular, but economically unsound.

Newspapers are giving the nation little idea of what is taking place. The focus is almost exclusively on fights over public housing. Questions of bigger dollars and cents impact on the nation are largely unreported. In part,

say Washington pundits, this is the housing industry's own fault for making such a fuss so many years over public housing.

Some of the worst provisions of the Senate and House legislation so far:

Public Housing

Senate: voted, 41-38, for 135,000 units a year (with power for the President to fluctuate between 200,000 and 50,000 units according to the state of the economy) until the balance of the 810,000 units authorized by the 1949 Housing Act are built. The upper house also approved an additional 15,000 units a year for aged persons. It defeated, 44-32, an effort by Sen. Prescott Bush (R, Conn.) to restore the urban renewal's workable program as a prerequisite to new public housing units.

House committee: voted, 10-9, for 50,000 units a year for three years, plus 10,000 units a year extra for the aged.

Warns HHFAdministrator Albert M. Cole: the Senate's program is "unsound"� and "would put the government into the business of building housing that can and should be built by private enterprise."

Housing tor the Aged

Senate: would create a new FHA Sec. 229 with 100%, 40 year loans up to $8,000 ($10,000 in high cost areas) for owner-occupants, subject to minimum $200 down payment including closing costs. Builders could get 85% loans. Would permit cosigners on mortgages for buyers 60 or older. Rental Sec. 229 units would grant 100% loans to nonprofit groups, 90% to others. Would authorize revolving $50 million for FNMA advance commitments.

House committee: would also permit cosigners for persons over 60. Would authorize direct government loan-�3½%, 50 year-� to nonprofit co-ops building for the elderly from a $250 million revolving fund.

Objects HHFA's Cole: the Senate would give elderly persons better FHA terms than young couples with children.

Fanny May

Senate: would order FNMA to pay par for special assistance mortgages (distressed areas, cooperatives, renewal, military, minority and aged housing). This would force the price higher for extra risky mortgages than it is for regular FHA and VA paper, again make Fanny May a dumping ground for unwanted investments as it was during much of the Truman administration.

House committee: like the Senate, would make FNMA pay par for special assistance mortgages. Would give the agency power to make advance standby commitments to builders "at a price high enough to provide production support yet sufficiently below prices offered for immediate purchase to discourage excessive sales."�

College Housing

Senate: defeated, 41-40, a move by Sen. Frederick Payne (R, Me.) to raise interest rate from 2⅝% to 3⅛%. The GOP appeared to have this one won but Senate Democratic leaders, resorting to an old parliamentary trick, stalled the roll-call by having one senator after another go to the rostrum to ask how he was recorded. Meantime, Democrats rounded up just enough votes to defeat the move.

House committee: by not mentioning interest rates, would leave them at present below-cost-to-the-government level.

Natl. Service Lite Insurance

House committee: voted to let VA use Natl. Service Life Insurance funds to make par loans for VA mortgages in high discount areas. Earmarked $550 million of NSLI money for this.

Senate: took no action along these lines.

On the plus side, Congressional tinkering with urban renewal should make it work better. The House committee, for example, approved a 10% builders profit in FHA Secs. 220 and 221. It voted for 100% Sec. 220 rehabilitation loans to owner-occupants