Some expected, but still dispiriting, news out of the Senate last night, where Dick Durbin's "cramdown" legislation went down to defeat. The policy was simple enough: It would allow bankruptcy judges, at their discretion, to reduce the principal and interest-payments on primary mortgages. That would make it likelier that people could keep their homes. Unsurprisingly, the banking industry wasn't hugely enamored of the bill, and protested that they'd have to raise mortgage prices to deal with the resulting uncertainty in their revenues.
That's probably an accurate objection, so far as it goes. But the change in aggregate mortgage prices would be so small as to be virtually unnoticeable for homeowners. The reduction in principal, conversely, could save the homes of the directly impacted, and by keeping them in their homes, boost home prices in the area. Many observers -- including the administration -- supported the provision. The financial industry, predictably, reacted less favorably. It's bad precedent for them. And they won. A dozen Democrats voted against the final legislation, including Max Baucus (Mont.), Michael Bennet (Colo.), Robert Byrd (W.Va.), Byron Dorgan (N.D.), Tim Johnson (S.D.), Mary Landrieu (La.), Blanche Lincoln (Ark.), Ben Nelson (Neb.), Mark Pryor (Ark.), Jon Tester (Mont.), Tom Carper (Del.) and, yes, Arlen Specter (Pa.).
I leave the states in there because it demonstrates something useful. The graph below tracks Obama's margin of victory in each:
Delaware is a bit of an outlier here. They're pretty reliant on the financial industry. But aside from that, what you'll notice is that Arlen Specter hails from a state that's considerably bluer than the average on this list. And whatever the guy's establishment support, it's not as if he has a long and enduring relationship with the Pennsylvania's Democratic base. So it'll be interesting to see whether he can vote against things like the budget and cramdown and still avoid a successful primary challenge a more natural Democratic representative. Amassing a voting record that appeals to Republicans while trying to run as a Democrat isn't the most obvious path to electoral success in a blue, and increasingly populist, state.
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