LAS VEGAS – President Barack Obama is unveiling $1.5 billion in housing help, a boost timed to his appearance in the city with the worst foreclosure crisis in the nation.
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President Barack Obama salutes during his arrival at McCarran International Airport in Las Vegas, Thursday, Feb. 18, 2010. (AP Photo/Pablo Martinez Monsivais)
Obama’s move, detailed by aides in advance of his town hall here Friday, is the latest by a White House determined to show it is helping families rebound from a deep recession. The downturn is taking an election-year toll on Obama’s party as voter frustration builds.
Obama was to announce that housing finance agencies in the five hardest-hit states in the housing crisis will receive $1.5 billion to help spur local solutions to the problem. Those five are Arizona, California, Florida, Michigan and Nevada.
The policy wrinkle comes during a two-day Western trip with different agendas for the president. He will be back in town-hall mode, a venue that aides say allows him to connect with people and distance himself from the messy process of Washington governing.
The president is also out to help vulnerable senators protect their seats and, in turn, gain as much legislative leverage as he can.
At the town hall and a business speech he will be lending his support to Senate Majority Leader Harry Reid of Nevada, a top 2010 election target of Republicans.
Obama’s political involvement comes as the Democrats’ command of the Senate grows shakier, jeopardizing the president’s agenda. The tide of change that Obama rode to office is threatening to slam against his own party.
The first day of the trip was all politics. Obama campaigned Thursday for Sen. Michael Bennet of Colorado in Denver, then held a $1 million fundraiser for Democrats in Las Vegas. Reid is one of Obama’s allies, despite a flap over the president’s tendency to refer to Las Vegas as a symbol of imprudent spending, which has the city’s mayor fuming at the president.
For Obama, slowing the foreclosure rate is a key step in the recovery of the overall economy. Millions of people have lost their homes because they couldn’t afford the mortgages anymore, and millions lost jobs because of the associated slowdown in new home building.
Reid’s state leads the nation in home foreclosures; Las Vegas was the metro area with the highest foreclosure rate in January, with one in every 82 homes receiving such a filing.
The money for the new rescue effort will come from the $700 billion financial industry bailout program, according to a senior administration official who spoke anonymously Thursday night because the formal announcement had not been made.
Economic issues, such as unemployment or reduced income, are expected to be the main catalysts for foreclosures this year. Initially, subprime mortgages were mostly the culprit, but homeowners with good credit who took out conventional, fixed-rate loans are the fastest growing group of foreclosures.
Obama will cap his Las Vegas trip with a speech to the city’s Chamber of Commerce before returning to Washington later Friday.
Associated Press writers Darlene Superville and Adrian Sainz contributed to this report.