House votes to kill neighborhood stabilizing plan

WASHINGTON Wed Mar 16, 2011 9:13pm EDT

A realtor and bank-owned sign is displayed near a house for sale in Phoenix, Arizona, January 4, 2011. REUTERS/Joshua Lott

A realtor and bank-owned sign is displayed near a house for sale in Phoenix, Arizona, January 4, 2011.

Credit: Reuters/Joshua Lott

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WASHINGTON (Reuters) - The House of Representatives on Wednesday approved a bill to kill an Obama administration program that provides $1 billion to stabilize neighborhoods blighted by vacant and foreclosed homes.

The measure is the third of four Republican bills aimed at ending government assistance for homeowners who have seen home values plummet since the housing bubble burst, though none is expected to clear the Senate.

The House voted 242-182 to kill the Neighborhood Stabilization Program, started in 2008 to provide funds for state and local authorities to encourage redevelopment and rehabilitation of abandoned and foreclosed properties.

About $6 billion has already been set aside. As part of last year's rewrite of Wall Street rules, Congress pledged an additional $1 billion for the program.

The proposal would pull the plug on the last $1 billion before it goes out the door, but does not address the initial $6 billion.

Republicans argued the program was ineffective and not worthy of taxpayer support and the vote to kill the program broke largely along party lines.

A bill to shut down the administration's signature foreclosure prevention effort, the Home Affordable Modification Program (HAMP), is expected to come up for a vote on the House floor the week after next.

Analysts see the votes as an effort by Republicans, who last November seized control of the House with an anti-bailout, anti-government spending message, to score political points.

But the bills are almost certain to die when they reach the Democrat-controlled Senate, and the White House has said advisers would recommend President Barack Obama veto the bills if any made it to his desk.

(Reporting by Corbett B. Daly; Editing by Gary Hill)

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