Housing crisis bill headed to House floor

WASHINGTON, July 23 (UPI) -- A bill aimed at easing the worst effects of the U.S. mortgage finance crisis was headed Wednesday to the floor of the U.S. House of Representatives.

Under the provisions of the landmark measure, the U.S. debt ceiling would be raised by $800 billion in a compromise between congressional negotiators and U.S. Treasury Secretary Henry Paulson that is meant to give the government more leeway to deal with the crisis, Politico, a Washington publication, reported.

The bill would give Paulson broad standby authority to extend aid to financially troubled mortgage giants Fannie Mae and Freddie Mac, which are facing capital crunches in the wake of falling home values, despite demands by some lawmakers to include a cap on how much the two quasi-public could receive from taxpayer funds, Politico said.

The Congressional Budget Office estimated Tuesday that Paulson's Fannie Mae and Freddie Mac proposals might cost as much as $25 billion over the next two years.

House Republicans warned that many of them would vote against the measure because of $300 billion in new loan guarantees for the Federal Housing Administration included by Democrats to help at-risk homeowners refinance out of exotic, adjustable-rate mortgages, Politico reported.