What Foreclosure Bill Means for the Election

Sens. Chris Dodd (D., Conn.) and Richard Shelby (R., Ala.) from the Senate Banking Committee reached an agreement for the basis of a bill on the housing crisis, which will be debated Thursday on the Senate floor.

Amendments are expected to be added to the bill. The debate on amendments and any eventual compromise will offer insight into the future debate between Democratic and Republican presidential candidates in the fall. James Carville called it in 1992 when he said, "It's the economy, stupid."

Taxpayers could face a $20 billion bill to help on foreclosures. The bill allocates about $14 billion to help communities address foreclosure -- $10 billion to communities to help renegotiate subprime loans for first-time buyers and a $4 billion fund to help resuscitate foreclosed properties. Additionally, some tax breaks have been granted to homeowners, purchasers of foreclosed properties and homebuilders -- such as Lennar (LEN Quote), Toll Brothers (TOL Quote) or DR Horton (DHI Quote) -- for losses on prior profitable year's taxes. ...