“Redraw New Jersey's political map fairly - Asbury Park Press” plus 1 more

Redraw New Jersey's political map fairly - Asbury Park Press

Posted: 26 Dec 2010 01:05 AM PST

It's not the quantity of our congressmen in the House of Representatives that should matter most to New Jerseyans. It's the quality.

Unfortunately, the corrupted once-a-decade process of redrawing congressional districts continues to diminish that quality.

Recently released U.S. Census Bureau statistics have resulted in the loss of one of New Jersey's 13 congressional seats. That's a problem for whichever two House incumbents eventually are lumped together in one district — meaning only one can survive their next election. Otherwise, however, New Jerseyans need not care much. Instead, they should focus on the redistricting war sure to follow next year. Because if tradition is any guide, the new voting districts will be drawn up to favor the re-election of incumbents. And that is bad for democracy.

The U.S. Constitution requires redistricting after every census in order to create districts roughly equal in population, guaranteeing equal representation in Congress nationwide. Problem is, the powers that be typically draw up districts to account not only for population, but for voter registration and historic voting patterns favoring incumbent parties in each district. That goes a long way toward virtually assuring re-election.

The result is the creation of legislative districts that are not as competitive as they should be. This squelches political debate and curtails the free exchange and consideration of ideas that matter to the electorate. It also damages the concept of fair and equal representation.

Look at Congress. As it stands now, Capitol Hill has an incumbency problem that has made a mockery of the political process, despite perceptions of sweeping change enveloping Washington in November. Nearly 90 percent of incumbents were re-elected during the supposed "anti-incumbent" tidal wave. Rigging the game through redistricting lies at the heart of the problem.

Yes, one less seat in the House means one less vote for New Jersey, one less electoral vote in the presidential elections and one less post on committees that help shape legislation that could benefit New Jersey in some fashion. All of that technically weakens the state's "voice" a bit on national issues.

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But the practical impact is negligible. Ultimately, New Jersey won't suffer from having 12 of its members sitting in the House of Representatives rather than 13.

New Jersey will continue to suffer, however, if the political powers once again insist on gerrymandering — carving the state into districts comprised of often nonsensical patchworks of communities that duck in, out and around community borders in patterns that can only be explained by partisan demographics. A line detoured here, and a Democratic incumbent collects more traditionally Democratic voters. Another line detoured there helps a Republican incumbent gain more GOP votes in a neighboring district. And on and on it goes.

Next year, members of a 13-member bipartisan commission will take on the redistricting task in New Jersey, and it should not be too much to ask to have the new districts mapped out fairly. But it is also naive to expect the commission will do its job without politics again staining the entire process.

That doesn't mean New Jerseyans should accept it all with a defeatist shrug. Enough with the odd-shaped districts that pool like-minded voters who wind up electing the same candidate, or party, time after time to preserve the status quo. The House of Representatives, with its biennial elections, is designed to be the governing body most responsive to the changing demands of the American people. This ability for maximum representation is hampered when incumbents are virtually assured re-election in non-competitive districts.

So if we can't trust our bipartisan commission to map out fair districts, then perhaps the citizens of New Jersey should look into more democratic means of achieving a more effective redistricting. Truly independent commissions — nonpartisan rather than bipartisan — could work out plans to be put to up-or-down votes by Trenton lawmakers. Or maybe ordinary citizens will have to be empowered to try their hand at drawing up more reasonable districts.

Regardless, it's time to make the heart of the democratic process more democratic, considering our incumbent re-election rates continue to look more like those in the Kremlin rather than Congress — or at least how Congress should be.

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Officials Search for Fannie-Freddie Road Map - Wall Street Journal

Posted: 23 Dec 2010 03:27 PM PST

By NICK TIMIRAOS And DEBORAH SOLOMON

Obama administration officials are struggling to reach consensus on a future path for mortgage giants Fannie Mae and Freddie Mac, unable to agree on whether the government should provide a guarantee for new mortgages when the market stabilizes, according to people familiar with the discussions.

The matter is becoming urgent because of a looming January deadline for the Treasury Department to produce recommendations to Congress for revamping the nation's system of housing finance.

Top administration officials, including Treasury Secretary Timothy Geithner, have publicly discussed the merits of a limited but explicit government guarantee of securities backed by certain types of mortgages. Investors, academics and the housing industry say such a guarantee is needed to maintain a healthy market, particularly for long-term, fixed-rate loans that remain a keystone of U.S. housing.

But the administration is divided over whether a backstop for new loans would be needed when markets return to normal, a process that could take several years. Some worry any guarantees expose the government to too much risk, as the $134 billion in losses incurred by Fannie and Freddie indicate.

Edward DeMarco, the acting director of the federal agency that regulates Fannie and Freddie, echoed those concerns at a fall hearing. "The negatives [of an explicit guarantee] have not been fully explored," he said, adding that taxpayers could be on the hook again if the government underpriced any guarantee. Also, in exchange for backstopping loans, the government "would likely want a say" in who should get loans and at what price, Mr. DeMarco said.

Those in favor of a guarantee say it is needed to keep markets functioning during periods of stress. Others argue that because investors might assume the government will step in during a crisis, it's better to make guarantees explicit and then charge appropriately for them.

The administration remains particularly sensitive about putting forward plans that might destabilize the mortgage market, which remains on government life support. It has committed unlimited aid to ensure the solvency of Fannie and Freddie, which guarantee half of the $10.6 trillion in U.S. home loans outstanding, and together with federal agencies enable more than nine in 10 new loans.

Fannie and Freddie bundle mortgages into securities that are sold to investors, and they make investors whole when loans default. Investors long assumed that the government would rescue Fannie and Freddie if they ran into trouble.

Democrats and Republicans have fought for years about the role of Fannie and Freddie in the housing market, and Republicans are likely to challenge any White House proposal that doesn't aim to wind down the companies quickly. The fragility of the housing market could complicate efforts to pursue major changes. Analysts expect any overhaul of the country's housing-finance system to take several years.

At a minimum, the administration's proposal will likely focus on taking steps to attract private capital to return to the market, according to people familiar with the discussions. The government could do that by gradually allowing Fannie and Freddie to raise the guarantee fees they charge banks when they purchase loans.

That would make private loans relatively more attractive, though it could also drive more business to the Federal Housing Administration. It would also be politically unpopular because it would raise borrowing costs.

On Thursday, Fannie Mae said it would raise certain risk-based fees to lenders in April, following a similar announcement last month by Freddie Mac.

In an October letter to Mr. DeMarco, a bipartisan group of 37 members of Congress expressed concern that higher loan fees being charged by Fannie and Freddie were "prohibitively raising the cost of conventional mortgages."

Officials could also push to reduce the maximum loan limits for mortgages Fannie and Freddie can purchase. Those limits were expanded as an emergency measure in 2008. A report published Wednesday by the Congressional Budget Office noted that "restoring lower loan limits could encourage" the revival of the dormant private market for securitization.

Some members of Congress from high-cost housing markets in California, New York and Massachusetts have objected to reducing loan limits. They say it would put pressure on home prices. Limits are set at $417,000 nationally but rise as high as $729,750 in high-cost areas.

The housing industry and mortgage investors say an administration road map, even one they don't necessarily like, will create certainty that paves the way for private investors to return to the mortgage market.

Fannie and Freddie executives say it will also make it easier to retain staff. "If we don't have as much specificity, we have a greater challenge," said Charles E. Haldeman Jr., Freddie's chief executive, at a fall industry conference.

Write to Nick Timiraos at nick.timiraos@wsj.com and Deborah Solomon at deborah.solomon@wsj.com

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Sunday, December 26, 2010