Senate passes housing crisis fix that's admittedly flawed

WASHINGTON — The Senate on Thursday passed a bipartisan package of tax breaks and other steps designed to help businesses and homeowners weather the housing crisis.

The measure passed 84-12, but even its supporters acknowledged it's tilted too much in favor of businesses such as homebuilders and does little to help borrowers at risk of losing their homes. Washington Sens. Patty Murray and Maria Cantwell, both Democrats, voted for the measure.

The plan combines large tax breaks for homebuilders and a $7,000 tax credit for people who buy foreclosed properties, and $4 billion in grants for communities to buy and fix up abandoned homes.

The measure, the Foreclosure Prevention Act, will be significantly redrawn by House critics, who say it favors businesses instead of borrowers. "Quite candidly, what we've done does not quite live up to the title," said Sen. Chris Dodd, D-Conn., chairman of the Senate Banking Committee and the measure's top sponsor. "We have more work to do."

House slaps Bush on Colombia trade

The Democratic-led House, in an election-year showdown with the White House, on Thursday effectively denied President Bush a timely vote on a free-trade agreement with Colombia, a key South American ally.

The House voted 224-195 to eliminate a rule forcing it to vote on the trade agreement within 60 legislative days of the president's submitting it to Congress.

Bush sent the agreement to Capitol Hill on Tuesday, starting a 90-day clock for the House and then the Senate to either approve or reject the pact. The Washington delegation split along party lines, with Democrats voting to eliminate the rule and Republicans voting against.

The House action likely kills consideration of the Colombia agreement this year.

Mountain renamed for Iraq casualty

A federal panel on Thursday officially renamed a Phoenix mountain for Army Spc. Lori Piestewa, 23, the first American Indian woman to die in combat while serving in the U.S. military.

Less than a month after Piestewa, a Hispanic-Hopi mother of two from Tuba City, was killed in Iraq in 2003, a state panel renamed Squaw Peak, a popular hiking spot, as Piestewa Peak. The U.S. Board on Geographic Names made the change official Thursday.

Credit crunch hurts student loan business

Lenders are dropping out of the federally backed student-loan business in droves because of the credit crunch.

Forty-six student lenders have stopped making federally guaranteed student loans, either temporarily or permanently.

Distress in the $330 billion market for auction-rate securities in recent months rippled into the student-loan market, and several states have suspended their college-loan programs.

The 46 lenders accounted for 12 percent of the federally backed student-loan market, according to FinAid.org, a Web site focused on student lending.

Companies, including Washington Mutual, Sovereign Bancorp, College Loan, CIT Group, NorthStar Education Finance, HSBC Bank USA and Zions Bancorp, stopped issuing federally guaranteed student loans in recent weeks. State agencies in Iowa, Michigan, Montana and Pennsylvania suspended college-loan programs.

The major federal student-loan program is providing an estimated $50 billion in loans to 6.4 million students in the current academic year.

Seattle Times news services