Obama's new, smaller bailout?

Welcome to O-pinion, the Observer's place for argument - and to the Morning Buzz, our roundup of opinion close to home and far away. I'm Peter St. Onge, associate editor on the O's editorial board, and I'll be hosting this morning before handing off to editorial page editor Taylor Batten later.

This morning, an old debate is brewing about a new plan - the Obama administration's announcement that it will expand an earlier housing program and provide refinancing to as many as two million homeowners whose homes are financially underwater.

The Washington Post says it's not really a terribly new plan.

The Wall Street Journal says the plan highlights a sharp partisan split.

The Atlantic's Molly Ball says it's a risk for Obama, because voters don't like helping the irresponsible.

The Weekly Standard wonders why the administration still hasn't released numbers that would show how the big stimulus worked.

The debate is a simple one: Should the government help Americans in trouble with their houses by letting them refinance at lower rates?

Republicans and conservatives say that it's an unnecessary intrusion into the market - another bailout, albeit on a much smaller scale. One of those Republicans, presidential candidate Mitt Romney, went where few of his colleagues have gone on the issue by suggesting earlier this month that for the housing crisis to end, foreclosures need to run their course and new investors can then rent out the homes. Translation: the markets need to do their own work.

"Let it run its course and hit the bottom," Romney told a Nevada newspaper. He was, of course, excoriated by Democrats as being out of touch with struggling homeowners.

The Obama administration and Democrats say that helping homeowners helps everyone by keeping foreclosures from devastating neighborhoods and property values, along with giving people more money to spend and put back in the economy. (Although the money households gain likely comes out of the pockets of investors who hold securities backed by Fannie and Freddie.)

This program seems to be low risk: the homeowners being bailed out are those who have been paying their loans, and the loans already are guaranteed. Plus, as those homeowners might say: banks who contributed to this mortgage mess have already been bailed out - why not the little guy, too?

One certainty: The lowest risk of all is that this will hurt Obama politically. People who don't like the idea of bailouts big or small aren't likely voting for him anyway in 2012. But the move fits Obama's narrative of being the man in Washington trying to help Americans, and the places most hurt by foreclosures happen to include swing states like Nevada and Florida.

Opinion closer to home

The Observer, in its Tuesday editorial, says the supercommittee has been not-so-super thus far.

In today's letters to the editor, what the Republicans want from the courts, and a new coined word for the Obama administration.

With NCAA sanctions imminent, The Raleigh News & Observer says "The Carolina Way" was sacrificed by University of North Carolina officials in their desire to field a powerhouse football program.

Nationally

A corporate tax holiday. The gift that doesn't really give at all, says the New York Times.

Here's Rick Perry's flat tax plan, in a Wall Street Journal op-ed.

And finally, one to chew on...

Slate asks: Could climate change steal the beauty from autumn?