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Congress looking for broader fixes for U.S. economy

On the Hill, bills range from rule changes allowing judges to rewrite mortgage terms to a financial-sector overhaul.

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Spurred by the mortgage crisis and stress in US financial markets, Congress is ramping up to have its own say in how to revive the economy, even as the Bush administration warns against congressional overreach.

Fixes in the works on Capitol Hill range from new bankruptcy rules to help homeowners facing foreclosure – including allowing courts to rewrite the terms of a mortgage – to an overhaul of how Washington regulates the financial sector.

Congress also wants to know more about how the Federal Reserve engineered this month's resscue of investment bank Bear Stearns – and what that might mean for other firms or groups at risk in a struggling economy. Lawmakers are asking: Did this deal set a precedent that expands the Federal Reserve's role and was it politically motivated?

Also, if the Fed can run to the aid of an investment bank, shouldn't Washington help out more homeowners and others facing big losses?

Despite the difficulty of consensus in an election year, there is broad agreement on some elements of the pending legislative agenda including the need to complete bills to strengthen the capacity of the Federal Housing Administration and government-sponsored enterprises, such as Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, to respond to the mortgage crisis.

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