CCAGW Decries GSE Bailout Plan as Lacking Long-Term Strategy

WASHINGTON–(EMWNews)–The Council for Citizens Against Government Waste (CCAGW) today

criticized the U.S. Treasury’s rescue scheme

for the nation’s two troubled housing

government-sponsored enterprises (GSE), Fannie Mae and Freddie Mac,

claiming it lacks tough oversight reforms and long-term strategies for

dealing with the companies and their risk to taxpayers.

CCAGW President Tom Schatz made the following statement:

“Treasury Secretary Henry Paulson, Jr. and

Federal Reserve Chairman Ben Bernanke are leading the charge for an

unprecedented rescue of Fannie Mae and Freddie Mac. Yet they are not

taking on Washington politicians, including long-time members of the

House Financial Services Committee and the Senate Banking Committee, who

were always more interested in their next Fannie Mae or Freddie Mac

fundraiser than their fiduciary responsibility to taxpayers. These

politicians have been whistling past a graveyard for nearly a decade,

knowing that the GSEs were engaging in increasingly risky behavior, but

refusing to enact any meaningful accountability and transparency over

these companies.

“Up until this morning, the GSEs and their

well-compensated political allies were fond of crowing about the safety

and soundness of these two companies. They routinely used their lobbying

muscle to stave off even the most modest and rational oversight reforms,

including the mild reforms contained in the current housing bailout

bill, in which Congress exposed taxpayers to more risk by expanding the

GSEs’ ability to operate in the volatile jumbo

market.

“There is an ‘affordable

housing fund’ in the bill that theoretically

will be financed from the GSEs’ profits. With

one hand, the government wants to use taxpayer money to shore up the

companies; with the other it permits them to siphon off future profits

for vague housing projects.

“One thing is now certain: the ‘implicit’

government guarantee has now become painfully explicit. For the first

time, the government would directly fund, own, and lend to Fannie Mae

and Freddie Mac. There should be tougher oversight reforms and a

long-term strategy to reduce the size of these companies and the

taxpayers’ risk.”

The Council for Citizens Against Government Waste is the lobbying arm of

Citizens Against Government Waste, a nonpartisan, nonprofit organization

dedicated to eliminating waste, fraud, abuse, and mismanagement in

government.

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