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LaRouche Homeowners and Bank Protection Act Passes Pennsylvania Lower House Committee

April 1, 2008 (EIRNS)—This release was issued today by the Lyndon LaRouche Political Action Committee (LPAC).

HR418 was voted up today at a meeting of the Intergovernmental Affairs Committee of the Pennsylvania State House of Representatives by a straight party-line vote of 16 Democrats to 12 Republicans. The resolution, modeled on the Homeowners and Bank Protection Act authored by Lyndon LaRouche, should now come up for a vote on the floor of the Pennsylvania lower house next week, when the legislature is in session for two days before recessing for the April 22 Presidential primary.

During the committee meeting, the Republican minority committee chair, Representative Steil, was the first to speak, saying that he would vote against the resolution, lamely claiming that there is a blizzard of bills and initiatives pending in the U.S. Congress on the matter, and that therefore the state legislature should defer to the Congress on it.

He was answered by a Democratic representative from Allegheny County in Western Pennsylvania, who said: "No, you are wrong. We have to do this." He pointed out how devastated the population is across the state, and especially in western Pennsylvania. He said that action must be taken, that such action is vital, and that a strong message must be sent to Congress that action must be taken.

During the intense debate, a Republican representative asked how the legislation will work, and who will determine how much the inflated mortgages will be written down, effectively suggesting that this would be a bailout.

State Representative Harold James answered the first question by pointing out that the HBPA stipulates that the state Governors will assume the administrative responsibilities for implementing the program. He then asked Phil Valenti to answer the second question about the writedown, and whether it constitutes a bailout.

Phil Valenti, who represents the LaRouche Political Action Committee, explained that there is already a bailout going on, which is the illegal bailout of Bear Stearns, but that what the HBPA calls for is not a bailout. The mortgages will be frozen for a period of however many months or years are required to adjust the values to fair prices. Ultimately, speculative debt obligations will be written off, reflecting the deflation of the housing bubble. This will take time, but what we need immediately, as stipulated in the HBPA, is to put the mechanism in place to protect homeowners and banks.

Although no Republicans on the committee voted for the resolution, numerous Republicans in the state legislature support the measure and had attempted to organize Republican committee members to vote for it.

It is expected that the resolution will now be referred to the floor of the Pennsylvania lower house for a vote as early as next week. The legislature will be in session two days next week and then will recess for the April 22 Presidential Primary election. Supporters of the resolution are pushing for a House floor vote prior to the recess.