LEFT vs. WHITE HOUSE Over Mortgage DEAL

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"....President Barack Obama’s liberal base says he’s on the verge of selling out to the banks again..."




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This time, the problem is a subprime mortgage settlement that his administration is pressuring state attorneys general to sign off on — a deal that could stop many state investigations and prosecutions about mortgage lending practices.




That settlement, a collaboration between the Justice Department and the 50 state attorneys general much like the one that produced the landmark 1998 agreement with tobacco companies, would mean a lump-sum payment from the banks in exchange for a release from liability. But with negotiators in Washington this week trying to finalize a deal, it’s become the latest flashpoint of left-wing disenchantment with Obama.



“The least charitable view ties it directly to campaign donations,” said Adam Green, co-founder of the Progressive Change Campaign Committee, which this week began mobilizing its 700,000 supporters against the broader deal. “The most charitable view, it’s a bunch of Wall Street hacks in the position of economic advisers who truly believe that giving billions to banks will trickle down to the middle class. The most charitable view is that they’re just wrong.” For Obama, a settlement would be a chance ahead of next year’s election to claim progress on a key kitchen-table issue that’s particularly pronounced in several swing states — and tout it as an example of rare bipartisan success to boot.



For liberals, the fight over this issue — how much responsibility lenders have for the mortgage crisis — is an opportunity to put the banks on trial, forcing greater consumer protections and bigger payouts along the way. Between the bailouts and financial regulations, they say Obama’s already caved to the banks too much. “There are a lot of progressives, and frankly everyday voters, who wish this White House would cut their ties with Wall Street, stop the sucking up to Wall Street,” Green said. And the fear that the White House is pushing for an agreement that doesn’t go far enough is fitting into the larger frustration with Obama for how he’s handled negotiations over everything from health care to the debt ceiling.



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http://www.politico.com/news/stories/0911/64344.html



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