Last week and again this week, the New York Times editorialized disingenuously about the legislative options under consideration as Congress comes to grips with the nation's housing and foreclosure crisis. Last week's "Foreclosure Politics" opened with some important points about the expensive, irrelevant, and counterproductive tax breaks riddling the Senate's inaptly named "Foreclosure Prevention Act." But from there, the editorial swerves off course and confuses readers about the House bill aimed at preventing foreclosures and minimizing economic pain.

The editorial says that, under the plan by House Financial Services chair Barney Frank (D-MA) to provide $300 billion in refinanced mortgage guarantees...

loans could be modified en masse. But the plan also has flaws. One is political: taxpayers could be on the hook if F.H.A. borrowers defaulted. Congress cannot ask taxpayers to step up without doing all it can to solve the problem without shifting the risk to taxpayers. The way to do that is to allow bankruptcy courts to modify mortgages for troubled homeowners.

Taxpayers could be on the hook if the House adopts a plan that the House leadership, the administration, a broad range of regulators and policymakers, and all three presidential candidates have indicated that their support in principle. But taxpayers also might not be on the hook for a penny -- and, in fact, the federal government might ultimately make a pretty penny in the process under the plan.

This is not to say that bankruptcy reform doesn't have a role in making the Frank plan more effective. But talk about political difficulty! The ink is still not dry on the last major bankruptcy reform, which passed in Congress overwhelmingly in 2005. Members' votes on the bankruptcy issue are not likely to change so soon, certainly not enough to allow an override of a certain Bush veto.

Speculations about whether taxpayers would be on the "hook" under the Frank plan are just that until the Congressional Budget Office (CBO) scores the plan. Better to heed the initial indications CBO itself has offered in "Policy Options for the Housing and Financial Markets":

Direct federal provision or guaranteeing of credit to mortgage markets could help avoid foreclosures and ease the downward pressure on house prices, helping the market to adjust in an orderly manner, [would] involve modest federal subsidies and would probably affect several hundred thousand homeowners.

The Times editorial itself notes that "with foreclosures running at about 20,000 per week, at least 100,000 more families are likely to lose their homes before Congress passes a relief bill." If we count pennies and wait until we have a president who will sign bankruptcy reform, that number could easily exceed a million.

Yesterday, for the second time in as many weeks, the Times editorializes in favor of expanded bankruptcy protection and against "voluntary" efforts to forestall further foreclosures and foster re-financings, but it flies in the face of the facts:

Most important, Congress must not continue with efforts that have not worked to date, namely, appeals to the mortgage industry to act voluntarily to help distressed borrowers. Instead, lawmakers should allow bankrupt homeowners to have their mortgages modified under court protection.

This formulation does a disservice to readers and is likely to be ignored by policymakers seeking sensible solutions to the housing crisis for two reasons:

• False Dichotomy:

foreclosure prevention via re-financings does not preclude prevention via bankruptcy, or vice-versa. To suggest otherwise irrationally removes a vital policy tool from among the viable solutions available to policymakers.

• Laissez-Faire vs. Incentivized 'Voluntary' Programs:

President Bush's "HOPE" program is aptly named -- borrowers and lenders can only hope their counterparts are willing to re-negotiate; Barney Frank's plan rewards borrowers and lenders who voluntarily re-negotiate.

Last week's editorial put forth the very same false dichotomy, so the Times reader is now left to puzzle this out: why is the paper suggesting that, without a bankruptcy provision, any housing bill is actually a mortgage industry bailout, unworthy of passage? The merits aside, the legislative reality is that the bankruptcy provision faces long odds, perhaps to the point of non-viability. In addition to the points made above, the was defeated 36-58 by the Senate on April 3 -- 11 Democrats voting against. Bush has promised to veto the provision.

Does the Times really mean to imply that there are no viable legislative solutions to the housing crisis?