Obama criticizes Bush's slow handling of housing foreclosures

McClatchy NewspapersDecember 7, 2008 

WASHINGTON — Criticizing the White House directly for the first time since November's election, President-Elect Barack Obama Sunday accused President Bush of not doing enough to stem the nation's home foreclosure crisis.

Obama vowed that it if the Bush administration doesn't take sufficient steps to help reduce foreclosures in its remaining days in office, he would take action shortly after being sworn in as the nation's 44th president on Jan. 20, 2009.

"I'm disappointed that we have not seen quicker movement on this issue by the administration," Obama told Tom Brokaw on NBC's "Meet the Press." "We have said publicly and privately that we want to see a package that helps homeowners, not just because its good for that particular homeowner, it's good for the community."

Obama repeated his displeasure at a news conference in Chicago to introduce retired Army Gen. Eric Shinseki as his nominee to lead the Veterans Affairs Department.

"We have not seen the kind of aggressive steps in the housing market to stem foreclosures that I would like to see," he said, adding that his transition team has had discussions on the subject with the White House. "If it is not done during the transition, it will be done by me."

Bush administration officials responded that they're working hard to stem the foreclosure crisis through the Federal Housing Authority and the private sector. Administration officials say they've also bolstered Fannie Mae and Freddie Mac.

"There are no easy solutions to problems in the housing market, but we've taken aggressive action over the past year to deal with the housing downturn and to stop preventable foreclosures," said Cynthia Bergman, a White House spokeswoman. "And we continue to review options and new programs to help keep families in their homes and to help the housing market recover."

Obama's remarks Sunday were part of a whirlwind weekend in which he outlined his economic rescue package, offered support for Detroit's Big Three automakers and tapped Shinseki, who was forced to retire out of the Pentagon because of his harsh criticism of the original Iraq War invasion.

Obama said his economic team is weighing the option of a three-month moratorium on foreclosures, which he had proposed during the election campaign.

"I think we also should be working to figure out how we can get banks and homeowners to renegotiate the terms of their mortgages so that they are sustainable," he said. "The vast majority of people who are at threat of foreclosure are still making monthly payments, they want to stay in their homes, they want to stay in their communities, but the strains are enormous."

Obama also said Detroit's auto industry deserves federal financial help only if they put their own house in order.

"Labor, management, shareholders, creditors, everybody is going to recognize that they don't have a sustainable business model right now, and if they expect taxpayers to help in that adjustment process, then they can't keep on putting off the kind of changes that they, frankly, should have made 20 or 30 years ago," he told Tom Brokaw.

At the Chicago news conference, he added: "if this management team that's currently in place doesn't understand the urgency of the situation and not willing to make the tough choices and adapt to these new circumstances, then they should go."

Obama said his recovery plan is vital to quelling foreclosures, saving Detroit and stabilizing Wall Street.

"The way we design this stimulus package, this economic recovery plan, is one that changes the way we do business," said Obama, who hasn't put a price tag on his plan. "We are not going to simply write a bunch of checks and let them be spent without some very clear criteria as to how this money is going to benefit the overall economy and put people back to work."

The ostensible reason for Obama's news conference was to continue to round out his Cabinet with the announcement of Shinseki, a retired four-star general, to Veterans Affairs.

"No one will ever doubt that this former Army Chief of Staff has the courage to stand up for our troops and our veterans, no one will ever question whether he will fight hard enough to have the support that they need," Obama said.

Shinseki, a former Hawaii resident like Obama, was forced into retirement shortly after the fall of Baghdad in 2003 for his criticism of former Defense Secretary Donald Rumsfeld's insistence on invading Iraq with a small number of troops. Rumsfeld had been advocating that the Army reinvent itself into a smaller, faster service that relied more on technology than infantry.

Shinseki told the Senate Armed Services Committee in early 2003 that it would take "something on the order of several hundred thousand soldiers" to maintain postwar peace in Iraq. Rumsfeld balked at Shinseki's estimate and predicted that it will "prove to be high." Former Deputy Defense Secretary Paul Wolfowitz at the time said Shinseki was "way off the mark."

Obama, speaking on "Meet the Press," said Shinseki "was right."

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McClatchy Newspapers 2008

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