WASHINGTON — House lawmakers sparred Friday over a last-minute effort led by Democrats to allow foreclosure-prevention funds to be directed to legal aid groups.
Republicans said they would oppose a bill sponsored by Rep. Marcy Kaptur, D-Ohio, that would allow those groups to receive money as they take part in a federal program to assist homeowners on the verge of foreclosure.
The Treasury Department has allocated $7.6 billion to 18 states and Washington through the Hardest Hit fund, which uses money from the $700 billion Troubled Asset Relief Program.
Currently, legal aid groups are not able to receive such assistance. Treasury Secretary Timothy Geithner said in a letter to lawmakers Friday that he supports legislation that would allow them to do so.
Republicans said the measure amounts to a continuation of the deeply unpopular government bailouts. Speaking on the House floor, Rep. Lee Terry, R-Neb., said Democrats are "attempting to bring the bailout back to life for the sole purpose of showering taxpayer money on community groups that provide legal assistance."
But Democrats disputed that argument. Rep. Barney Frank, D-Mass., the outgoing chairman of the House Financial Services Committee, said recent revelations of sloppy foreclosure practices at large banks underscore the need for homeowners to receive professional legal assistance when facing foreclosure.
Frank said he was "appalled by the insensitivity and the cruelty" of Republicans opposing the measure, and said it "does not extend the TARP in any way."
One Republican, Rep. Steven LaTourette, R-Ohio, spoke in favor of the measure, saying he was disappointed that a partisan fight had broken out on the issue.
"The money is already out there," he said. "We should stop the nonsense, approve the bill and move on."
