It looks like you are getting screwed, even without Obama in office and even if you borrowed responsibly while everyone around you went all in.
It would appear the White House, reportedly run by a Republican Administration, has better things to do than protect taxpayers from covering losses taken by people that either (1) Should have known better (2) were realizing the downside risk in their investment which in no way should have been a surprise or (3) were out to screw people out of their homes, their money, or both.
Combine a housing meltdown with election-year politics and the results were not going to be pretty. Add a crisis in confidence in Washington’s favorite quasipublic companies and what we’re getting is a rout for taxpayers, especially those who kept their heads during the housing mania.
The House yesterday passed a housing bailout by 272-152. The White House has thrown its reservations overboard and is begging to sign this boondoggle, despite the less-than-veto-proof majority. A few brave souls in the Senate are threatening a filibuster, which is where the last hope lies for stripping the most egregious and expensive provisions from this monster.
Even conservative estimates by the Congressional Budget Office say the cost for this bailout will run to $41.7 billion, with $16.8 billion offset by higher taxes. No one has any idea of the real cost.
On the floor of the House yesterday, Democrats argued that this bill was the least Congress could do “for the people,” given the way the government had “helped” Bear Stearns. The cost borne by Bear Stearns was having its shareholders all but wiped out and half its employees pink-slipped. Countrywide was likewise sold at a fire sale price. Not so these two government-chartered giants.
Citing the Bear Stearns “bailout” as a precedent, a Democrat has only to open his or her mouth to reveal a view to profound economic illiteracy. Forcing one financial institution to buy out another and at a price just North of zero thereby locking in losses for investors and employees alike (many of which just before being asked to gather their personal effects) is hardly a bailout.
This should have been a perfect opportunity for Republicans, struggling to regain some standing with the American people, to rise united and demand real accountability and reform.
Just as House Speaker Nancy Pelosi predicted last week, President Bush withdrew his previous veto threats against the overall legislative package on Wednesday, having gotten virtually nothing in return.
So what will congressional Republicans do? Ironically, a veto-sustaining majority of House Republicans — led by House Minority Leader John Boehner, Financial Services ranking minority member Spencer Bachus, and Republican Study Committee Chairman Hensarling — voted against the bill on the very same day that the Bush administration caved. “I’m deeply disappointed the White House will sign this bill in its current form,” said Mr. Boehner in a statement. “We must take responsible steps to ensure our financial and housing markets are sound, but the Democrats’ bill represents a multibillion dollar bailout for scam artists and speculative lenders at the expense of American taxpayers.”
Multiple polls show that majorities oppose a federal mortgage bailout by a two-to-one margin.
The President could apparently veto this measure with success but won’t. Washington DC will soon become the largest financial sinkhole in the history of civilization and voting Republican is unfortunately no guarantee of relief.