Legislators Just Can’t Let Go of the Bailout
From everything I hear, everyone is against a federal bailout of distressed homeowners: taxpayers, Republicans, the White House. Heck, the distressed owners themselves aren’t even asking for one, from what I can see.
So why are our lawmakers still trying to come up with a bailout plan? Reuters broke this story late yesterday about Senate Democrats coming up with a proposal that might satisfy Republicans:
Leaders of the U.S. Senate Banking Committee said on Thursday they have agreed to the underpinnings of a housing rescue plan that will create a federal backstop for failing loans. “We feel very optimistic we can have a very significant bill, a bipartisan bill, to present to the rest of our colleagues on the floor of the United States Senate,” committee Chairman Christopher Dodd told reporters Thursday evening after a full day of negotiations.
WTH is going on here? Is the banking lobby pouring huge donations into lawmakers’ coffers to make this happen? Because that’s the only reason I can think of that the banking committee is persisting in this endeavor in the face of voters’ vehement opposition.
The plan would create a $300 billion mortgage insurance fund administered by the Federal Housing Administration and a new regulator for Fannie Mae and Freddie Mac, the two largest U.S. sources of mortgage finance. Under a deal hammered out on Thursday, Fannie Mae and Freddie Mac will partly finance the mortgage insurance program through contributions to a new affordable housing fund, industry sources close to the talks said.
Can’t our lawmakers spend time on issues that really matter, like universal health insurance, for instance, instead of trying to “bail out” people who stupidly obligated themselves to fat mortgages they couldn’t afford and the unscrupulous, greedy lenders who enabled them? How about holding congressional hearings and making some people pay — for abusing our trust, for wreaking havoc on our economy?
Instead, we’re rewarding the irresponsible, reckless, selfish behavior that led to this mess.
The only upside to all this is how few people will actually take advantage of a federal bailout if it’s offered. That’s because most people whose mortgages have become unmanageable were never in it for the long haul; they were in it to make a quick buck. Now that they know that’s not going to happen anytime soon, they’ve lost interest.
In the meantime, I’m going to contact my congressperson to express opposition to a bailout of any kind. If you’d like to do the same, click here to find out how.
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