Senate housing bill stalled through holiday

By Kevin Drawbaugh

WASHINGTON (Reuters) - Legislation aimed at saving hundreds of thousands of troubled American homeowners from foreclosure stalled in the U.S. Senate on Thursday, with lawmakers not expected to resume work on it until early July.

Republican Nevada Sen. John Ensign blocked the bipartisan bill's progress toward likely passage by insisting, against the wishes of its backers, that he be allowed to try to attach an amendment dealing with renewable energy tax credits.

President George W. Bush urged senators to overcome weeks of bickering and act. "Congress needs to come together and pass responsible housing legislation," he told reporters.

The White House has threatened to veto the Senate bill and a similar one passed by the House of Representatives in May. But it has left the door open to working with lawmakers.

Senate Majority Leader Harry Reid, a Nevada Democrat, late on Wednesday said the Senate would complete the housing bill in the first week after the recess, possibly as early as July 7.

"It looks like we're being held up on housing because of Sen. Ensign's insistence on an unrelated amendment," Democratic Illinois Sen. Richard Durbin said on Thursday.

Congress is struggling to respond to the severe housing slump damaging the economy. Under firm Democratic control, the House has produced legislation. But the narrowly divided Senate has done little since February's economic stimulus package.

In the meantime, more than 8,000 foreclosure proceedings were filed per day in May, a record-setting rate, while home prices have been falling sharply nationwide.