Freedom Line Blog

In an op-ed published yesterday on The Hill’s Congress Blog, CFIF Sr. Vice President Timothy Lee writes how legislation advancing in the House and Senate to reform Fannie Mae and Freddie Mac fail to sufficiently protect taxpayers and private investors.

Specifically, Lee focuses on the PATH Act, sponsored by Representative Jeb Hensarling (R-Texas) in the House, and the Housing Reform and Taxpayer Protection Act of 2013, sponsored by Bob Corker (R-Tenn.) and Mark Warner (D-Va.) in the Senate.  Not only could both pieces of legislation “end up putting taxpayers at even greater future risk,” Lee writes, but in addition:

[B]oth proposed bills fall terribly short in terms of protecting the rights of private investors in Fannie and Freddie, many of whom were actively encouraged by federal regulators to take their risk.  Not only would it be inherently unfair for the federal government to undercut their bargained-for investment rights, it would also send a terrible signal to future investors.  When even Ralph Nader laments that the federal government unfairly threatens to turn those private investors into “zombies,” the impropriety of the government’s proposed course becomes even more obvious.

Accordingly, if Congress seeks to eliminate both GSEs, then using something approximating the existing bankruptcy process would be a far better option for all involved.  Under that process, the government, taxpayers and creditors would be treated more fairly, and taxpayers would not be stuck with trillions in liability.   While not ideal, at least that would constitute an orderly and transparent process, one that more closely adhered to the rule of law on which our society is ostensibly based.

Lee concludes by warning, “unless and until the bills are significantly revised, American taxpayers and private market investors stand to lose.”

Read the entire piece here.

Other than her congressional district, Rep. Michele Bachmann’s (R-MN) true base of support comes from the millions of Tea Party members currently providing the grassroots dynamism of the Republican Party.  Bachmann raised so much money last cycle that some pundits think she’s running for U.S. Senate or even president.

The announcement that Bachmann is delivering an unofficial Republican response to President Barack Obama’s State of the Union Address will heighten that speculation.  It will also anger the House Republican leadership that continues to pass over Bachmann.  First, it voted her down in a bid to be the new chair of the House GOP Conference Chair.  Bachmann pressed ahead with her own Tea Party caucus, raising even more money.  Now, Rep. Paul Ryan (R-WI) is slated to give the official Republican response, but Bachmann will deliver her own via the Tea Party Express website.

There may not be a way for Bachmann to capitalize on her media stardom, unless she continues to go her own way.  This will widen the gap between her and House GOP leadership, but if she wins a Senate seat or the presidency in 2012, the onus will be on leadership to make nice with her.

Rep. Michele Bachmann’s (R-MN) recent failure to win the chairmanship of the House Republican Conference Committee is an important reminder for the wave of new GOP congress members coming into office in January.  If you spend more time courting a movement outside Congress, don’t be surprised when those inside it promote from within.

Such is the case of Michele Bachmann.  Widely considered the highest profile Tea Party leader inside the federal government, Bachmann’s loss to Rep. Jeb Hensarling (R-TX) for the chairmanship is linked to her cultivated outsider status.  She may be brilliant with red meat speeches and raising money, but she is presumed to be light on policy details.  Moreover, the time she spent promoting the Tea Party were moments taken away from building the kinds of relationships with fellow members that lead to endorsements and favorable chairmanship votes.  That, more than anything else, explains the reason Bachmann lost to Hensarling.

But it isn’t just Bachmann that needs to consider how to parlay her grassroots support into actual results as a member of Congress.  The GOP leadership too needs to weigh carefully how to grow her brand while enhancing its own appeal to Tea Party voters.  Perhaps the latter consideration is what led House Republicans to create a new leadership position for the incoming class.  Ironically, the Republican congress member most deserving of representing the views of this Tea Party-flavored class is Bachmann herself.  Too bad the position is only open to freshmen.