U.S. lawmakers willing rescuers in mortgage crisis

By Richard Cowan

WASHINGTON (Reuters) - The home mortgage crisis that has Wall Street and consumers worried about an economic meltdown is prompting many in the U.S. Congress to come to the rescue of hard-hit states that just happen to be crucial to their own election-year success.

Florida, Ohio, Michigan and California have some of the highest concentrations of home foreclosures. They also are vote-rich states that congressional and presidential candidates need to win in November's elections.

"We're waiting to see what kind of an impact this latest news is having on members (of Congress) from Ohio to Pennsylvania to Florida and elsewhere around the country," said Jim Manley, spokesman for Senate Majority Leader Harry Reid of Nevada. His state's largest city, Las Vegas, claims the highest rate of home foreclosures in the country.

"There's obviously a need that must be dealt with," Manley said.

The "latest news" Manley referred to is the souring U.S. economy, highlighted by the Federal Reserve's role in rescuing a teetering Bear Stearns, the fifth-largest Wall Street investment bank until it was bought by JPMorgan Chase and Co.

Congress returns from a recess on Monday, when measures to stanch home foreclosures and further stimulate the economy will be "front and center," said Illinois Rep. Rahm Emanuel, a member of the House of Representatives' Democratic leadership.

The legislation would follow moves already taken by the Fed, which has promised to pump $400 billion into the financial system to help credit markets and, for the first time since the Great Depression, opened emergency credit to investment banks.

With the weak economy a top concern among voters, Democrats are seizing on the issue in hopes of demonstrating they are better suited to protect the poor and middle class from the downturn. Their performance could help voters decide whether the Democratic majority in Congress should be expanded in November elections, and whether they should put a Democrat in the White House.