CNN's Blitzer, on-screen text misled on cost of housing bill

Summary: CNN's Wolf Blitzer made the misleading assertion that "the House of Representatives just passed a $300 billion plan to help struggling homeowners." In fact, while the bill to which Blitzer referred would authorize the FHA to insure up to $300 billion in homeownership retention loans for qualified homeowners, the Congressional Budget Office estimated a total cost of $2.7 billion for the program.

During the May 8 edition of CNN's The Situation Room, host Wolf Blitzer made the misleading assertion that "the House of Representatives just passed a $300 billion plan to help struggling homeowners." In fact, as Media Matters for America documented, while the FHA Housing Stabilization and Homeownership Retention Act -- which passed the House as an amendment to the American Housing Rescue and Foreclosure Prevention Act -- would authorize the Federal Housing Administration to insure up to $300 billion in homeownership retention loans for qualified homeowners, the Congressional Budget Office estimated that loans that would be insured under the program would total about $85 billion, at an estimated cost to the government of $1.7 billion from 2008-2013. Including administrative and other discretionary costs, the CBO estimated a total cost of $2.7 billion for the program, not "$300 billion."

While Blitzer spoke, on-screen text stated, "House approves $300 billion bill to help struggling homeowners."

After noting that "[m]any Republicans oppose the bill," Blitzer reported, "President Bush is threatening a veto, saying these Democratic efforts would help lenders and speculators, not homeowners." Blitzer did not note that the assertion he attributed to Bush -- that the bill would not help homeowners, but rather speculators and lenders -- is false. In fact, the bill specifically limits access to retention loans to owner-occupied homes. During debate on the issue, Rep. Melvin Watt (D-NC) stated, "The bill explicitly says that this is limited to homeowners, not people who have been speculators. I don't know what else we could say on that. The language is absolutely explicit that only homeowners qualify for this program." Similarly, according to a May 9 Washington Post article, Rep. Steve LaTourette (R-OH) said, "They say it rewards speculators. No, it doesn't. It's limited to homeowners. They say it's a $300 billion bailout. No, it's not. It costs $1.7 billion."

From the May 8 edition of CNN's The Situation Room:

BLITZER: In today's "Political Ticker," moments ago the House of Representatives passed a $300 billion plan to help struggling homeowners. It would allow them to refinance their loans into more affordable fixed-rate loans backed by the federal government. Some experts say it could help 500,000 homeowners. Many Republicans oppose the bill. President Bush is threatening a veto, saying these Democratic efforts would help lenders and speculators, not homeowners.

—J.H.