BLOG VIEW: This year marks the centennial of the birth of Ronald Reagan, who was among the influential and controversial presidents in U.S. history. In the course of his presidency, Reagan offered a comic yet cogent sound bite on why big government is not always the answer to the public's problems: ‘The nine most terrifying words in the English language are: 'I'm from the government, and I'm here to help.'’
I am reminded of Reagan's famous quote in reviewing the government's Home Affordable Modification Program (HAMP), which has been the subject of withering criticism by the House Republican leaders and a very mild defense by the Obama administration.
HAMP, not unlike many federal ideas created in the whirlwind of a political and economic crisis, was a well-intended notion that didn't quite play out as designed. At a Jan. 26 recent hearing before the House Oversight Committee, Special Inspector General on the Troubled Asset Relief Program (SIGTARP) Neil Barofsky stated that HAMP ‘continues to fall dramatically short of any meaningful standard of success.’ Barofsky backed up his criticism with data: 2.9 million homes went into foreclosure proceedings last year, but only 522,000 HAMP-initiated modifications are currently taking place.
The chairman of the House Oversight Committee, Rep. Darrell Issa, R-Calif., invited Treasury Secretary Timothy Geithner to explain HAMP's shortcomings at the hearing. Geithner, however, blew off the invitation and sent Timothy Massad, an acting assistant secretary, to defend HAMP.
Massad, however, wasn't the most vigorous defender, noting simply that although HAMP ‘has helped hundreds of thousands of struggling families stay in their homes,’ it was ‘not meant to prevent all foreclosures.’ That is putting it mildly. Making the case for HAMP more troubling is new data from the Treasury Department that determined that 15.3% of HAMP loan modifications that became permanent in the fourth quarter of 2009 were 90+ days delinquent one year later.
Not surprisingly, several GOP House leaders are ready to completely remove HAMP from the federal system. Issa, along with Reps. Jim Jordan, R-Ohio, and Patrick T. McHenry, R-N.C., have introduced a bill to shut down HAMP. Jordan was especially brutal about the program, dismissing it as a ‘colossal failure’ that serves as ‘one more example of why government interference in the private sector doesn't work.’
In complete fairness, it is highly unlikely that HAMP was conceived and executed with the premeditated desire to wreak havoc. The enormity of the crisis has proven to be extraordinary; it is impossible to imagine that a private-sector-only response would have been able to address the matter with nary a hiccup. (Can you say ‘robo-signing’?)
If HAMP or a successor program is to succeed, it will need significant changes in behavior by both sides of the political debate. The GOP leadership is going to have to offer genuine solutions, not just vituperative putdowns of the administration's policies. With HAMP, as with so many other hot-button issues, the GOP fire sources are providing a lot of heat but very little light.Â
The White House, for its part, is going to have to acknowledge the program isn't working. Geithner's refusal to appear before Issa's committee to offer an explanation for what went wrong was insulting to the Legislative Branch and to a public that expects its leaders to lead.
Circling back to my previous acknowledgment of the Reagan years, I am reminded of another quote that the 40th president once offered: ‘There are no constraints on the human mind, no walls around the human spirit, no barriers to our progress except those we ourselves erect.’ If progress is to be made on the HAMP front, the barriers that separate the key players need to be torn down in favor working toward a common goal. I believe that if Reagan were in the White House today, he would have preferred that approach instead of the ongoing partisan miasma.
– Phil Hall, editor, Secondary Marketing Executive
(Please address all comments regarding this opinion column to hallp@sme-online.com.)
