Democrats praised US President George W. Bush's proposals to help low-income homeowners on Friday but indicated they would continue to press measures opposed by the administration to expand the federal role in housing, making it likely that the issue will set off partisan battles this year and next.
Bush, in formally announcing administration proposals that had been outlined the day before for a handful of news organizations, said the measures were intended to help families keep their homes through a mixture of actions, legislation and persuasion. But he said the administration would not bail out "speculators" in the housing industry.
"The government has got a role to play, but it is limited," Bush said.
"A federal bailout of lenders would only encourage a recurrence of the problem. It's not the government's job to bail out speculators, or those who made the decision to buy a home they knew they could never afford," he said.
Administration officials said that Bush's statement reflected the president's determination to oppose Democratic proposals for the federal government to help set up trust funds or use Fannie Mae and Freddie Mac, the government-sponsored housing companies, to rescue families in danger of losing their homes.
The administration initiatives formally announced on Friday included steps to make it easier for low-income homeowners to get federal mortgage insurance and plans for federal "jawboning" of private mortgage lenders to persuade them not to foreclose on homeowners without giving the borrowers a chance to renegotiate payments.
Several of the administration's proposals were endorsements of existing Democratic measures, including a proposal to provide reduce taxes for homeowners whose debt is forgiven. Ordinarily, the amount of a loan that is forgiven is taxed as income.
A chorus of prominent Democrats who have called for more federal action welcomed Bush's initiative, some of them saying that it represented the first sign that the administration was willing to engage in a bipartisan approach on a major budget or economic issue.
Representative Barney Frank of Massachusetts, chairman of the House Financial Services Committee, said that Bush and Federal Reserve Chairman Ben Bernanke had adopted a more pragmatic approach on housing.
On Friday in a speech in Wyoming, Bernanke said that the Fed would take a more aggressive approach on the regulation of mortgages to discourage predatory practices.
"I think it's a major step by them," Frank said.
"They are basically acknowledging that they have been insufficiently aware of the need for more of a regulatory and institutional response to this situation," he said.
Senator Charles Schumer of New York went further, saying that Bush sounded a little bit like a Democrat.
"The best point of all here is that the president has gotten out of his ideological straitjacket," the senator said.
But Senator Christopher Dodd of Connecticut, chairman of the Senate Banking Committee, said that Bush still needed to "get serious about this problem" and do more.
Democrats say the plight of the estimated 2 million homeowners who face higher costs because payments on their adjustable-rate mortgages are expected to rise has become a potent political issue.
They intend to keep it an issue as next year's election heats up.
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