Little Fannie Mae and Freddie Mac are the most expensive spoiled brats in Uncle Sam’s enormous brood. They got their hands on the old man’s checkbook and credit cards, and used them to fund a wonderfully exciting game, in which they pretended ideology can override economic reality. Like most exercises in make-believe, this one came to a jarring halt… leaving the housing market playroom in shambles, and the entire economic house creaking unsteadily. Even the neighbor’s houses in the global economy had some broken windows and dented mailboxes. It’s no exaggeration to say we will spend the rest of our lifetimes cleaning up the mess.
The Democrat Party is the insanely protective mother of these little terrors. It thwarted every attempt at oversight and reform during the Bush and Clinton presidencies. Democrat politicians brazenly lied about their financial status, and savaged anyone who suggested a closer look at their books.
The Democrats are still going to absurd lengths to protect Fannie Mae and Freddie Mac. On Tuesday, the Capital Markets and Government Sponsored Enterprises Subcommittee of the House Committee on Financial Services was set to vote on eight important reform bills, designed to bring greater restraint and transparency to these agencies, and protect the taxpayer money poured into their enormous bailouts. The Democrats responded with silly procedural games and delaying tactics, which put subcommittee chairman Scott Garrett (R-NJ) in mind of the embarrassing “fleebaggers” of Wisconsin.
“Americans have seen Democrats flee certain states and now we’re seeing Democrats in Congress use the same ploy,” said a frustrated Garrett. “Republicans are working to end the bailout of Fannie Mae and Freddie Mac, which has already cost taxpayers $150 billion. The American people want us to end the bailouts, and we hope the Democrats on the Committee will start taking this issue – and their responsibilities as legislators – seriously.”
Good luck with that, Representative Garrett! You’re talking about the party that thinks it can address our national budget crisis by launching an extensive campaign to demonize the guy who actually has some concrete ideas, Paul Ryan. If there is to be any discipline for the Democrats’ little angels Fannie and Freddie, the Republicans will have to be Super Nanny.
The reforms considered by the subcommittee would go a long way toward achieving that goal. Most Americans observing the debate would respond by saying, “Wait, we weren’t doing all of this already?” The eight bills would ensure Fannie Mae and Freddie Mac were subject to the same standards as other secondary mortgage participants; reduced the size of their portfolios from around $700 billion apiece to $250 billion each over the next five years; tied their guarantee fees to market conditions, to prevent them from disrupting the recovering housing market; increased oversight and reporting requirements; and sharply limited the ability of these government-sponsored enterprises to expand their activities or incur new debt.
Come on, admit it: you thought “wait, we weren’t doing all of this already?” when you hit each semicolon in the previous sentence.
The two reforms most likely to draw the attention of angry taxpayers are the Equity in Government Compensation Act, and the GSE Mission Improvement Act. The former cuts down on the multi-million dollar compensation packages for top executives at these bankrupt operations. The top six executives at Fannie and Freddie have collected a whopping $35.4 million in compensation since the taxpayer bailouts in September 2008. The GSE Mission Improvement Act repeals the ideologically imposed “affordable housing goals” that led Fannie and Freddie to destroy the housing market, by throwing huge loans to people who couldn’t possibly repay them.
Democrats ran from this burst of common sense like vampires fleeing the cross. And I do mean ran. They spent much of Tuesday night demanding frivolous quorum calls, then fleeing the committee chamber to make it impossible to establish a quorum. This turned the subcommittee into a slow-motion version of the closing credits from a “Benny Hill” episode. Committee Republicans even posted video of the hijinks on YouTube, which you can watch below. Warning: this video should not be viewed by people with heart conditions, high blood pressure, or tax liability.
These pointless delaying tactics managed to push the vote on the subcommittee’s common-sense legislation back to today. Let’s hope it passes without any further temper tantrums from the Democrats. The last time taxpayers babysat for Fannie and Freddie, they used our best china for skeet shooting, drove our car into the swimming pool, and stuffed our cat into the microwave. Someone has to push their overbearing mother out of the way, and put these little brats into “time out” for a while.
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