Civil disagreements with Lynne Varner and Bruce Ramsey, members of the Seattle Times editorial board is a weekly feature of the Ed Cetera blog. Bruce and Lynne often disagree on major issues in our community, state and nation -- Bruce tends more conservative and Lynne more liberal. As foils in editorial board meetings, their shrewd thinking and passionate arguing elevates the discussion and they agree sharpens their own arguments.

Bruce Ramsey: Lynne, we've got to be careful about changing the law to let people out of the terms of their mortgages. If the lender wants to be generous, because it's choking on unsold houses and would rather take a lesser payment than swallow another one, fine. But if the government breaks into contracts between two private parties, not so fine.

The unfairness of government breaking into private contracts was recognized in the U.S. Constitution, which says: "No State shall ... pass any ... Law impairing the Obligation of Contracts."; That's the Contracts Clause.

The Supreme Court did allow this rule to be bent during the 1930s Depression, in the case of Home Building & Loan Association v. Blaisdell, 290 U.S. 398 (1934). And the federal government is not bound by the Contracts Clause, and bankruptcy law is federal. So they can do it.

But it does create a risk to the financial system. Government has been trying to shore up lenders. Breaking into mortgage contracts undermines lenders. It hurts bank shareholders. It hurts bond investors, including institutions like AIG or the Washington State Investment Board. It hurts savers. After the disaster of last September and October, it’s not something you’d want to do.

There is also a long-term risk. The more forceful government intervenes in mortgage contracts, the more it will affect mortgage rates in the future. Why would lenders be willing to make mortgage loans at 5.25 percent, but post credit card rates (on my card) of 26 percent? Because credit-card debt is not secured, and millions of Americans declare bankruptcy and erase their debts. If we make mortgage debt more like credit-card debt, mortgage rates will go up. Not a good thing.

Now, to Obama's $75-billion plan. Despite all the talk about changing the terms of mortgages, I notice that most of Obama's plan is voluntary to the contract holders. That is wise. It's government saying, "We'll provide some money if the lender agrees to take less." That may reward some people who were imprudent, but it's not ripping off the lenders. However, there is one part of Obama's bill, I understand, that allows bankruptcy judges more discretion to impair contracts, and that part treads on dangerous ground.

Lynne Varner: Bruce, we do have to be careful about changing the terms of private contracts entered into by willing parties. But the economic conditions faced now are not so different from those that led the Supreme Court to cite economic emergency as justification for their decision in the Blaisdell case.

An estimated 6,600 American families are losing their homes to foreclosure every day. That's despite the fact that many of the large lenders have been in a holding pattern on foreclosure proceedings since the holidays while awaiting an Obama administration response to the crisis.

The time to act was now. And the scope of action had to be large.

The president's plan could help 9 million mortgage holders continue to pay -- not get out of -- their mortgage loans. I especially like that President Obama announced a plan that is steeped in specifics and unapologetically populist. You'd like this Bruce: The president said the plan will not help greedy speculators or people who bought homes they knew from the start they couldn't afford. Three types of homeowners are outlined here.

The plan depends on the cooperation of lenders, no heavyhandedness from the feds here. But lenders ought to prefer modification of home loans that allow people to stay in their homes and out of foreclosure and/or bankruptcy courts.

I'm not worried about bankruptcy judges having more discretion to reconfigure mortgage loans. They do this everyday with other assets. Courts should have the power to do what disputing parties are sometimes unwilling to do.

Obama's plan is ambitious. But nothing ventured, nothing gained. I'm a suburban girl, Bruce. Right now, the burbs are littered with foreclosed and unsold houses and last month housing starts plunged 17 percent to a new low. If Obama's plan slows this downward spiral, I'm willing to let the market take care of the rest over time.