Audit D.C. Notes: Sweetheart Deals, Tax Talk, Commission Coverage

The Wall Street Journal does well by staying on top of the controversial Countrywide lending program that provided sweet deals to well-connected borrowers.

The latest: senators or Senate employees received 30 loans, a far bigger number than previously known, the Journal says.

The information is contained in a letter sent to the Senate Select Committee on Ethics by Rep. Darrell Issa (R., Calif.), who has been spearheading the House Oversight and Government Reform Committee’s investigation into Countrywide’s so-called VIP mortgage program.

No specific loan recipients were named in the letter. But Mr. Issa’s letter said borrowers on a dozen loans listed their place of employment as the office of “Senator Robert Bennett.” Available public records don’t indicate that Sen. Bennett, a Utah Republican and member of the Senate Banking Committee, received a Countrywide home loan.

Wow. Bennett’s time on the Hill is coming to an end—he lost a bitter GOP primary. But that doesn’t make the story any less important.

—The Journal didn’t bring the same excitement to its story on the coming debate over extending some, or all, of the Bush-era tax cuts.

There’s a nifty chart about how expiration of the Bush tax cuts would affect rates, and the likely outcome of each. But other than that, there’s not much here, besides the most basic of scene-setting.

But Pete Davis tuned in to the Senate Finance Committee’s hearing on extending the tax cuts, and gives a nice report at Capital Gains and Games.

Davis, who spent a long time working on the Hill, also does some nice reporting about what to expect:

My conversations with top Hill staff of both parties convince me that Congress is very likely to wait until a lame duck session in December to pass a one-year extension of the Bush tax cuts for those under $250,000 ($200,000 for singles). This will maximize tax rate uncertainty for small businesses and will hit the equity markets with a 39.6% dividends top tax rate, up from the current 15%. Both President Obama and Senate Finance Chair Max Baucus (D-MT) want a 20% top rate on dividends, but I don’t see Congress reaching an overall compromise on the Bush tax cuts that would pay for the 20% rate. Then, if the Republicans take the House on November 2, we’ll experience budget gridlock as the public debt rises toward 87% by 2020. This is a prescription for another economic downturn in a year or so that will hurt those low- and middle-income Americans least able to bear it.

Not exactly good news. But good work.

The Hill’s Walter Alarkon does a good job reporting on what the co-chairs of the president’s fiscal commission have to say, and giving the story some important context.

Speaking at the U.S. Chamber of Commerce, Erskine Bowles, the commission’s Democratic co-chairman, said he’d like the U.S. to do something like the British government did, “taking 75 percent out of spending and 25 percent out of revenue.”

The Hill fills in some important details of David Cameron’s moves, and gives a good analysis of how a similar move would be viewed here. Short version: Conservatives would like it; liberals, not so much.

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Holly Yeager is CJR's Peterson Fellow, covering fiscal and economic policy. She is based in Washington and reachable at