More importantly omitted is an amendment proposed by Senator Dodd that requires the Treasury Secretary to develop a mortgage modification plan and mandates that he use $50 billion in TARP funds to carry it out. The provision would have provided some accountability for Geithner’s pledge last week to use $50 billion to prevent “avoidable” foreclosures. An additional Senate provision that would have permitted Treasury to pay mortgage servicers a fee for modifying mortgages while providing them legal cover from investor suits was removed.

The House legislation had left foreclosure mitigation efforts, but included $4.2 billion for the rehabilitation of foreclosed properties into affordable housing. The conference report restores these funds at $2 billion after the Senate bill omitted them.

In essence, the conference report continues the only substantive congressional action taken to address the foreclosure crisis – the Neighborhood Stabilization Program (whose benefits are yet to be seen) – while providing the administration another free pass to avoid using TARP funds for foreclosure mitigation, if the financial system requires it. A stimulus package is perhaps not the best place to make housing policy, but Dodd’s effort to press Geithner to commit to foreclosure prevention would not have harmed the overall package.

Health Insurance
The House bill made significant adjustments to health insurance for the unemployed that the Senate moderates forgot to include – the conferees also forgot to include them. Still, the conference agreement subsidizes COBRA, the federal program that allows unemployed workers to continue enrollment in their former employer’s health plan, at the House-preferred 65% of an individual’s premium, instead of the Senate’s 50%. This represents a 9-month savings of about $504 for the recently unemployed.

But the conference report, like the Senate version, omits House provisions that allow states to offer health insurance to unemployed and low-income individuals through Medicaid, an effort to plug the serious insurance gap that high rates of unemployment create. A similar measure excluded from the House bill would have allowed older workers fired from their jobs to use COBRA coverage until they reach eligibility for Medicare (though the subsidized COBRA benefit would only last a single year).

Granted, the changes made in the House bill might not be desirable in the long term: it is not unreasonable to argue that the changes would be hard to reverse once enacted. But the House version made an impressive effort to ensure that additional households do not become uninsured as the employment environment worsens.

Executive Compensation
The conference report, to President Obama’s chagrin, follows the Senate version and commits executive pay limitations to legislation. However, it omits the strongest provision that would have capped executive pay at $400K, along with another measure to retrieve – with a prescribed penalty for noncompliance – bonuses in excess of $100K.

President Obama has suggested that he might try to avoid enforcing the conference report’s compensation limits, preferring his own that apply to fewer executives. But Rep. Barney Frank retorted that Obama’s is not, after all, the Bush administration: “They will enforce it,” he said.

Say-on-pay provisions, even if nonbinding, are also included for firms that receive TARP funds, another baby step in the burgeoning shareholder activist movement.

The House included no such provisions.

Tax Breaks
The conference report waters down two ineffective, and potentially dangerous, tax breaks included by the Senate. One had provided a $15,000 tax credit to all homebuyers and the other would have allowed taxpayers to deduct loan interest and sales tax on auto purchases. Both failed to target their benefits to individuals at the margin who are likely to purchase a house or a car only if they were provided the credit or deduction. Worse, in the long run, the housing credit could unnecessarily inflate housing prices (and encourage speculation). The conference report narrowed the housing tax break to $8,000 only for first-time homebuyers (which will limit speculation) and permits a tax deduction for sales tax on auto purchases (not for interest on auto loans).

Refundable Tax Credits
The conference report selected the House’s 40% refundability for the American Opportunity education tax credit – that will provide a maximum $2,500 for higher education – instead of the Senate’s 30% refundability. The floor for receiving a refundable child tax credit is lowered to $3,000 in the compromise legislation, significantly lower than the $8,100 level provided in the Senate bill. The House version had eliminated the floor. The refundable portions of these credits essentially allow low-income households to receive refund checks from the government, so a lower floor means more lower income households (the ones most likely to spend money they receive and most in need of the funds) will receive a check.

Two Final Omissions
The conference report, like the Senate stimulus, did not include funds for low-income heating assistance and did not raise the maximum amount of the Stafford loan, a low-interest loan for college students.