DRIVING THE DAY - It turns out the key to bipartisanship is FEAR.
Lori Montgomery on the WashPost's Business front: "Under pressure from voters to address the nation's housing crisis, Senate Republicans agreed yesterday to work with Democrats on a compromise plan to stimulate sagging home sales and help distressed homeowners avoid foreclosure. … Republican leaders were prepared to block it again. But senators returned from a two-week break marked by the government rescue of a major Wall Street investment bank and growing anxiety over the economy among their constituents, and some Republicans argued that it was time to start working together."
WHAT'S NEXT: Under the Senate deal, Senator Chris DODD and Richard SHELBY have until noon today to come up with a compromise housing bill.
WHAT'S IN: CongressDaily's Bill Swindell and Ben Schneider say to expect a $10 billion increase to the cap on mortgage revenue bonds so more mortgages can be refinanced, and a provision to let companies use recent losses as a way to claim refunds of taxes paid in better times — "a provision pushed hard by homebuilders that have suffered greatly under the housing downturn." Also in: Probably Sen. Johnny ISAKSON's three-year, $15,000 tax credit for some home buyers plus $200 million to pay for counselors to help current homeowners avoid foreclosure.
WHAT'S OUT: Don't hold your breath for $4 billion in community development block grants — the White House is opposed — or a change in bankruptcy laws that would give judges the power to rewrite some adjustable rate mortgages, according to CD.
HOW IT HAPPENED — Politico's Martin Kady II and Victoria McGrane in "Members Feel Heat, See Light on Housing": "It's amazing how two weeks at home can rattle the political minds of Capitol Hill. With the housing market in meltdown and financial markets in turmoil, Republicans who were previously geared up to block a Democratic housing bill found bipartisan religion Tuesday. Democrats who were ready to hammer the GOP for blocking progress on the most important issue of the day decided legislating was cool and political rhetoric was not."
THE VOTE, from CQ's Benton Ives: "Just a month ago, the Senate fell a dozen votes short of the 60 needed on a procedural vote that would have allowed consideration of a package of housing legislation designed to help struggling homeowners. But after traveling in their home states during the two-week recess and hearing from constituents, senators voted, 94-1, in favor of continuing debate on the legislation."
"AN EARFUL": The New York Times' David M. Herszenhorn and Vikas Bjaj, who lead the paper, bury the GOP flip-flop under a "new spirit of cooperation," but it's lurking after the jump: "Republicans had blocked the measure in late February. Since then, the financial markets have experienced additional turmoil, including the near collapse of Bear Stearns and intervention by the Federal Reserve. . . . And lawmakers then went home for a two-week recess where many said they had gotten an earful from constituents on the housing problems as well as rising gasoline prices. And by the time they returned to Washington on Monday, it was clear that senators in both parties felt enormous pressure to make progress on a housing bill."