BILL PROVIDES UNLIMITED AUTHORITY TO THE TREASURY AND RAISES PUBLIC DEBT LIMIT BY $800 BILLION

Washington, Jul 23, 2008 - “Although supporters of this bill claim that it entails no expense to taxpayers, the Congressional Budget Office today declared that it has direct costs of $25 billion just for the provision dealing with Government Sponsored Enterprises (GSEs),” said Rep. Cliff Stearns (R-Ocala). “This huge expense pales in comparison with the fact that it makes the American people the final guarantors of $5.2 trillion in mortgages held by Fannie Mae and Freddie Mac, with $1.4 trillion of that amount in currently non-performing loans.”

The House today approved H.R. 3221, the America Housing Rescue and Foreclosure Prevention Act. This measure is supposed to strengthen the financial position of Fannie Mae and Freddie Mac by increasing their credit line and by allowing the Treasury department to use taxpayer dollars to purchase equity in both entities. Explained Stearns, “H.R. 3221 would also have the federal government assume the most toxic of mortgages. In addition, it allows Congress to tax Fannie and Freddie, meaning that they are rich enough to tax, but poor enough to subsidize.”

Stearns has been a long-time critic of the financial activities of Fannie Mae and Freddie Mac, having held a hearing on their financial conditions in 2003 as Chairman of the Commerce, Trade & Consumer Protection Subcommittee. The editorial in today’s (July 23, 2008) Wall Street Journal, “The Fannie Mae Gang”, outlines problems at Fannie Mae and Freddie Mac and Stearns’ effort to examine their accounting practices. *

The measure also includes a low-income housing credit, a first-time homebuyer tax credit, and a permanent affordable housing trust fund that will provide additional grants to housing activist organizations pursuing political agendas. “Ninety-five percent of Americans are paying their mortgages on time,” added Stearns. “Instead of focusing on helping those who are struggling to keep their homes, this measure is a bailout for companies that made bad loans and for some consumers who could not afford the homes they bought.”

* http://online.wsj.com/article/SB121677050160675397.html?mod=googlenews_wsj