Mon. 06 , Nov. 2006 Photo by Matthew Craig . Senator John McCain speaks to a crowd of supporters gathered in Knoxville Monday morning to show their support for republican senate candidate Bob Corker. In addition to McCain, Corker was joined by senator Lamar Alexander, Bill Frist and Corker’s wife Elizabeth for Monday’s swing across the state.
Beyond the stimulus debate, Corker also warned that despite federal efforts to rescue the credit market, more bank seizures and huge losses are coming — possibly totaling up to $1 trillion.
“It’s going to wreak havoc,” Corker predicted and would require further federal spending.
WASHINGTON — As the Senate takes up economic stimulus legislation this week, Tennessee’s Republican Sens. Lamar Alexander and Bob Corker are calling for paring back the massive proposal and focusing on the housing market.
The two are proposing the federal government offer 4 to 4.5 percent, 30-year mortgages for current or new homeowners.
Alexander estimates the lower interest rate would reduce the average homeowner’s monthly payment by more than $400. Large loans would not qualify, and the program would be capped at $300 billion, he said.
Alexander and Corker also are calling for a $15,000 tax credit for the purchase of homes during 2009.
The credit is usually reserved for first-time homebuyers, but this would apply to anyone and would cost $20 billion in lost tax revenue, according to Republican estimates.
Both senators were critical of the $819 billion plan approved by the House last week and the similar version offered by Senate Democrats.
Alexander called it “tremendously oversized” and Corker called it “a potpourri of spending that is not thoughtful.”
The House bill calls for $50 billion for highway and school construction, while the Senate proposal would allot $43.4 billion.
Differences in the House and Senate stimulus bills:
— Increasing Pell Grants for tuition. House: $15.6 billion; Senate: $13.9 billion.
— Military construction and renovation. House: $8.4 billion; Senate: $5.6 billion.
— Highway programs. House: $30 billion; Senate: $27.1 billion.
— Law enforcement grants. House: $4 billion; Senate: $2.5 billion.
Source: U.S. Conference of Mayors
Senator Corker is interviewed about the economic stimulus package by Peter Cook on Bloomberg’s “Money & Politics”.