Last week, I closed my column by noting that the domination of the Republican Party by its most deeply conservative faction is advantageous for the Democrats in the short run but damaging to the country if it persists.

The evidence on how strongly the right wing is entrenched is mixed. It demonstrated its firm control of the presidential nominating process during the first debate. With the partial exception of the long-shot John Kasich – whose ability to achieve even this status was due to the statistically insignificant polling advantage he had over Rick Perry and the wholly politically irrelevant George Pataki – there were no real differences between those considered to be front-runners and their rivals in affirming agreement with the party’s most fervent ideological purists.

If there had been a musical theme for the evening, it would have been an adaptation of a recent pop song by Meghan Trainor: “It’s all ’bout that base, ’bout that base; no moderates!”

But a somewhat different picture is beginning to emerge in the actions of the Republican-controlled Congress. Specifically, the mainstream conservatives in the Senate have differed with the heavily tea party-influenced House on a number of issues. The one that has attracted the most attention is the Export-Import Bank, which plays an essential role in supporting American exporters who would otherwise face significant competitive disadvantages from subsidies provided by other governments to their businesses, and does so without costing any taxpayer dollars.

My subject today is another example of the Senate Republicans’ support for continuing a policy that meets an important economic need; that was created with bipartisan support; that accomplishes its goal by relying on the private sector; and, most relevantly for the readers of this column, is being led by Maine Sen. Susan Collins.

The policy in question is to distribute a small percentage of the profits now being generated by Fannie Mae and Freddie Mac to state housing agencies in order to provide funds to private developers to build rental housing for low-income people. This approach was first adopted by the House Financial Services Committee in 2005, when the Republicans were in the majority in a bill to reform these two agencies. While it did not pass both houses of Congress, it was included in the bipartisan bill adopted in 2008 in a collaboration between the Democratic-controlled Congress and the Bush administration, with then-Treasury Secretary Hank Paulson in the lead role.

When Paulson used the authority the bill gave him at his request to put the agencies into receivership, the provision was inoperative because there were no profits to distribute. Two important developments then occurred.

• First, Congress passed the Financial Reform Act in 2010, effectively prohibiting the issuing of subprime mortgages to low-income borrowers who lacked the resources to meet the payments, which had, of course, been a major cause of the financial crisis.

• Second, with these mortgages banned and with the reforms that Paulson initiated in place, Fannie Mae and Freddie Mac stopped costing the taxpayers money and began to make a profit.

This does not mean that the debate about how to provide federal support that will enable lenders to continue to issue fixed-rate 30-year mortgages to people who can repay them is over. It does mean that as we carry on this discussion, there are now funds available that do not come from tax revenues that allow us to provide affordable rental housing to low-income people to replace the policy of encouraging them to take out mortgages that are beyond their means.

And given the shortage of rental housing and the consequent steep increase in rents that has caused an economic squeeze for middle-income people as well, increasing the supply of rentals has general economic benefits, both for renters and in the contribution housing construction makes to the GDP.

For these reasons, there is strong support from lenders, builders, Realtors and advocates for the poor that this program should be a part of any new legislative approach to federal support for housing finance.

And since it is unclear when a consensus will form sufficient to enact the post-Fannie/Freddie arrangement, there is a very strong case for continuing to use the non-taxpayer-generated funds now available to support private-sector efforts to build the affordable rental housing that is the flip side of meeting the residential needs of low-income people without inducing or encouraging or even enabling them to take out mortgages that will likely lead to foreclosures.

This is where Collins has come in. Fortunately, both for rational housing policy and for those eager to see Republican leaders willing to protect a responsible, efficient bipartisan approach to an important issue – which relies on private-sector initiative and does not draw on tax revenue – Collins chairs the Senate Appropriations Subcommittee with jurisdiction of this matter, and she has produced a bill that does so.

She has not only a substantive argument for her position, but a strong procedural one as well. This use of surplus Fannie Mae/Freddie Mac funds was first included in a bill passed by a Republican House, then enacted in a bill passed by a Democratic Congress working closely with a Republican treasury secretary and signed into law by President George W. Bush.

Deciding whether to preserve it, amend it or even abolish it is a wholly legitimate subject for debate in a comprehensive bill restructuring housing finance. For the tea party to include such a fundamental legislative change in an appropriations bill is an example of their willingness to short-cut procedural regularity – a practice they deplored when they were in the minority.

While the rightward movement of the Republican Party has led me to be more partisan than I was at the beginning of my legislative career, Collins’ work on this issue does remind me of my admiration for the late Edward Brooke, an earlier Republican Senate advocate for fair, responsible policy to meet the legitimate housing needs of the poor.

Barney Frank is a retired congressman and the author of landmark legislation. He divides his time between Maine and Massachusetts.

Twitter: BarneyFrank

— Special to the Telegram

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