They're going to vote on this tommorrow. The cost for bailing out Fannie, Freddie, and fools who got into mortgages they couldn't afford is going to be on OUR BACKS. Paulson, Dodd and others (tools of the investment banks) are trying to shove this through ASAP.
If this passes it will probably tank the bond market and the dollar, drive up interest rates as our debt becomes unpalatable to the rest of the world, and load even more debt on an already bankrupt country.
Please, people - call/write/email and fax your designated Congress critters and ask them to vote no (or at least vote to delay and talk about the unintended side effects of this) on this bill!!!!!
Tweak
Links: www.financialpetition.org
NO TAX DOLLARS FOR BANKS & WALLSTREET! DO SOMETHING NOW! http://www.FedUpUSA.org
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US House To Proceed With GSE Help, Housing Legislation
(Updated to include outcome of House Rules Committee meeting, comments from Reps. Frank and Bachus)
By Michael R. Crittenden
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--The U.S. House of Representatives will vote Wednesday on a massive package of housing legislation that includes foreclosure relief and a proposed federal backstop for Fannie Mae (FNM) and Freddie Mac (FRE).
The House Rules Committee on Tuesday evening approved a rule allowing debate on the bill in the House. Lawmakers will debate the bill on Wednesday for two hours, with no amendments to be considered. Despite the objections of Republicans on the committee, House Rules Chairman Louise Slaughter, D-N.Y., said Tuesday that "to allow amendments on the bill would kill the bill."
The legislation has been the source of constant negotiations in recent weeks between House and Senate lawmakers, the Treasury Department, and other federal financial regulators. When asked whether the two lead Senate negotiators - Sen. Christopher Dodd, D-Conn., and Sen. Richard Shelby, R-Ala. - had agreed on the legislation the House will vote on, Frank said they had.
"Yes, an official sign-off," Frank said.
Dodd and Shelby, however, refused to endorse the version Frank was bringing before the House in a joint statement issued late Tuesday evening.
"We have been working diligently for months on legislation to address the housing crisis. Last week we sent legislation to the House. Since then, we have been engaged in extensive and largely fruitful discussions with our counterparts in the House of Representatives, as well as Administration officials," the statement said. "We remain optimistic about the prospects for this legislation."
The legislation the House will vote on includes a regulatory overhaul for Fannie Mae and Freddie Mac, changes to the Federal Housing Administration, and a $300 billion program to offer federal insurance on refinanced mortgages.
It will also include a dramatic proposal by Treasury Secretary Henry Paulson to provide a temporary federal backstop for Fannie and Freddie in the wake of concerns within the capital markets about the firms' solvency.
Frank, Dodd, Shelby, Paulson and their staff have been meeting and in contact almost constantly in recent days to iron out the details of the legislation. Frank told reporters a handful of details about the legislation the House will vote on, including the idea that any help for Fannie and Freddie would be counted against the federal debt limit.
Additionally, Frank said it will allow the firms' regulator to approve authority over Fannie and Freddie's executive pay packages, and would set the size of loans Fannie and Freddie can purchase - also known as the conforming loan limit - at $625,000. Frank said lawmakers are talking about including a 115% "escalator" clause for certain metropolitan areas that would allow the firms to buy loans above the median home price in those cities.
Regarding the temporary federal backstop for Fannie and Freddie, Frank said lawmakers won't mandate, but will give the Treasury Secretary the discretion, to delay their dividends among other emergency authorities. He also said lawmakers won't require that any Treasury stake in the firms be in the form of senior preferred shares.
"We will give the Secretary authority but not mandate because we're playing games here with the capital markets and we don't want (Fannie and Freddie) to say 'Well I couldn't raise capital so you have to buy the stock.' We'd rather have (the private market) buy the stock," Frank said.
He said lawmakers may also raise the federal debt limit, which currently sits at $9.8 trillion, to $10.6 trillion as part of the legislation, Frank said.
"I believe it will be raised in this bill," Frank said.
Earlier Tuesday, the non-partisan Congressional Budget Office said the proposed backstop for Fannie and Freddie could cost federal taxpayers $25 billion, though it set the chances the program will ever be used at less than 50%.
It is unclear whether the White House would veto the bill, despite public threats to do so. The top Republican on the House Financial Services Committee, Rep. Spencer Bachus, R-Ala., said Tuesday that the Bush administration has "given every indication they will sign the legislation."
Frank also expressed doubt that the White House would veto the bill.
"For people who say they are going to veto the bill, they spend an awful lot of time negotiating details," Frank said.
Bachus himself did not say on Tuesday whether he would support the bill, but criticized the backstop provision for Fannie and Freddie.
"We are giving the executive branch pretty much carte blanche," Bachus said.
-By Michael R. Crittenden, Dow Jones Newswires; 202-862-9273; michael.crittenden@dowjones.com
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