$600 Million Baby

The Wall Street Journal ^ | July 08, 2008 | Unattributed

[gpapa]

As the Senate prepares to vote on its mortgage bailout this week, one part of Banking Chairman Chris Dodd's bill deserves more scrutiny. It's a section called "affordable housing allocations," and while it sounds innocuous, in practice it amounts to a new tax to create a permanent subsidy for state governments and political activists.

Like the bailout that has already passed the House, the Senate bill features a special new tax on Fannie Mae and Freddie Mac. We have long urged reform of the two mortgage giants, which operate with an implicit government guarantee and therefore a license to endanger the taxpayer if they take on too much risk. The shares of both plunged yesterday to new lows based on their credit risks. But as a price for allowing more oversight of the two companies, Mr. Dodd and House Financial Services Chairman Barney Frank want to cut their allies in on even more of the action.

[Wolfie]

They could scrap the lender bailout altogether, but somehow I think that would displease the WSJ just as much.

[rrrod]

I need to call my two worthless Senators and see where they stand. Dole will give a straight answer but Rcihard Burr aka lil dickie burrito will not give a line of BS.

[WVKayaker]

With rare exceptions, Republicans seem happy to go along with all this in the name of "doing something" about housing before the election. We doubt it will stem their electoral losses this year, and in return they'll be funding their political opponents for decades to come. Genius.