Members of Congress are jockeying to respond to the deepening mortgage problem after the fire sale of the country’s fifth largest investment bank over the weekend had to be aided by the Federal Reserve.

Democrats are seizing on the federal bailout of Bear Stearns & Co. to justify a broad government effort to help troubled borrowers stay in their homes. Meanwhile, Republicans are readying counterproposals, partly to stem defections by moderates in their conference who fear being blamed by voters for inaction.

With the flood of proposals, some are bound to collide.

The chairman of the Banking Committee, Sen. Chris Dodd (D-Conn.), told reporters on a conference call Monday that there was now “greater receptivity” to a plan he is drafting with House Financial Services panel Chairman Barney Frank (D-Mass.) to use guarantees from the Federal Housing Administration (FHA) to spur the refinancing of billions of dollars’ worth of distressed mortgages.

“It could provide the kind of reversal of confidence we need,” Dodd said.

But Sen. Charles Schumer (N.Y.), a member of the Democratic leadership, gave preference to a package of housing measures that he helped to push but that were blocked by Republicans last month.

“There’s lots to be done, but the five points in our housing proposal should be first and their FHA proposal should be second,” he told reporters on Monday.

House Democrats have floated a second stimulus package that would include items dropped from the first bill, such as an extension of unemployment benefits, more money for food stamps and additional state aid.

 Senate Majority Leader Harry Reid (D-Nev.) last week said he would renew his push for a package of housing-related measures soon after lawmakers return from recess.

The effort faces a steep climb: When Reid attempted to skirt regular order to move toward a vote on the legislation last month, he garnered the support of only one Republican, Sen. Gordon Smith of Oregon.

Meanwhile, the Bush administration threatened to veto the legislation, citing its opposition to a measure that would allow bankruptcy judges to trim the mortgage debts of troubled borrowers as well as $4 billion in grants to state and local governments for the redevelopment of abandoned and foreclosed homes.

But Democrats are betting that signs that the housing market’s troubles are deepening and the stepped-up intervention by the Bush administration could alter the GOP’s calculus on the bill.

“The administration has shown in the Fed action that it has an appetite to use taxpayers’ dollars to help the economy,” said a spokesman for Reid, Stephen Krupin, who added that a vote for the bill would be a test of whether the administration wants to help “Main Street or just Wall Street.”

The political opportunities offered by the housing troubles are not lost on Schumer, who oversees the congressional campaign effort for Senate Democrats. He invoked the Great Depression to draw a stark distinction between the two parties in shoring up the economy, saying, “The laissez-faire, Hoover-like attitude of George Bush and, I think, [presidential contender Sen.] John McCain [R-Ariz.] is not going to find favor with the American people.”

By contrast, Dodd and Frank appear to be opting for a measured approach, casting their legislation as something that can gain Republican support. Dodd remarked to reporters that he had abandoned an earlier plan to have the government buy distressed mortgages in favor of allowing the FHA to guarantee the delinquent loans. Frank announced a hearing on the plan on April 9.

House Republicans are preparing their own proposal, according to GOP aides, who said the details had not been nailed down yet. “We want to be for something, not just against the proposals that are out there,” a Republican aide said.

Lawmakers are pressing for federal intervention to stabilize markets other than housing that have been squeezed by the credit crunch. The turmoil in the credit markets has sent a crucial funding source for student lenders into a deep freeze, imperiling loans for students this fall.

Rep. Paul Kanjorski (D-Pa.), the chairman of the Financial Services panel’s subcommittee on capital markets, and 31 of his House colleagues on Tuesday sent a letter to Federal Reserve Chairman Ben Bernanke urging him to inject liquidity into the student loan market.

“The increasing volatility in the financial markets could disrupt access for the estimated 6.7 million students and families expected to apply for Federal Family Education Loan Program loans in the coming months,” Kanjorski warned.