An enormously costly mortgage bailout bill passed the House 272-to-152, with strong support from liberal lawmakers. It will soon pass the Senate by an even bigger margin and become law. President Bush, following the advice of Treasury Secretary Hank Paulson, has wimped out and dropped his threat to veto it.
The bill will bail out the mortgage giant Fannie Mae, which has used intimidation and deceit, and spent millions of dollars on high-priced lobbyists, to thwart efforts to rein it in, even after its management engaged in a massive accounting scandal that rivaled Enron.
The bill will add at least $42 billion in new expenses to the federal budget, including $16.8 billion in new taxes for taxpayers, and new deficit spending, according to the Wall Street Journal. It will include billions of dollars in new pork for “community development” and “mortgage counseling,” enriching groups like the scandal-plagued ACORN, which engages in vote fraud, and La Raza.
As John Berlau notes, such funds may end up being used to seize homes for the benefit of politically-connected developers, a controversial practice permitted by the Supreme Court’s 5-to-4 Kelo decision, over a dissent by four conservative justices. (Some slums came into being after the government seized homes from working-class people as part of misguided redevelopment efforts that failed, as government planning often does). The final version of the bill negotiated with House banking chairman Barney Frank of Massachusetts strips out protections for private property rights that were in an earlier Senate version of the bill, substituting much weaker language.