Posts Tagged ‘Housing policy’
January 5th, 2012 at 5:21 pm
Obama Planning to Launch Trillion-Dollar Housing Bailout Without Congressional Approval?
Posted by Print

Skim through this week’s commentary pieces here at CFIF, and you’ll notice that all of us at the Center are incensed by President Obama’s recess appointments to the NLRB and the Consumer Finance Protection Bureau yesterday, all of which seemed to clearly overstep the president’s constitutional authority.

According to the invaluable James Pethokoukis, however, we ain’t seen nothing yet. Writing at the American Enterprise Institute’s Enterprise Blog, Pethokoukis notes that there’s an ominous implication from yesterday’s appointments — that the president could use a similar tactic to appoint a new head of the Federal Housing Finance Agency. He writes:

And why is that important? The Federal Housing Finance Agency is the regulator and conservator of Fannie Mae and Freddie Mac. And the FHFA currently has an acting director, Edward DeMarco. If Obama replaces him with a “housing advocate” via the same recess appointment process, here’s what might happen next, according to [the Washington Research Group’s Jaret] Seiberg:

“That could lead to a mass refinancing program for agency-backed mortgages that would go well beyond the existing HARP program. That could hurt agency MBS pricing and result in higher financing costs going forward. Yet it also could be a big boost for the economy and housing going into the election.”

Indeed, my sources tell me the Obama administration has been eager to implement just such a plan, but needs to have its own man heading the FHFA to make it happen.

There are more grisly details in Pethokoukis’s original post. The upshot? President Obama — without approval from Congress — could commit taxpayers to a quarter-trillion dollars of spending in order to bail out imprudent homeowners in an election year. Essentially, we’d all be financing the president’s reelection campaign. And, in a tight race, the resulting bribe stimulus might just do the trick.