Meta

Blogroll

Bush Proposed Fannie Mae / Freddie Mac Supervision In 2003

A September 11, 2003 New York Times article shows that President Bush proposed “the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.”  His proposal: An agency within the Treasury Department to supervise mortgage giants Fannie Mae and Freddie Mac.

Fearing that mortgages would no longer be available to people who were unable to pay them back, Democrats eventually killed the proposal. The current meltdown in the mortgage industry is a direct result of giving mortgages to people who could not pay them back, a practice protected by Congressional Democrats.

Both entities were recently taken over by the government, a move that puts trillions of taxpayer dollars at risk.

Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.

The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.

The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac — which together have issued more than $1.5 trillion in outstanding debt — is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.

But Democrats in Congress, also known as “the caucus perpetually on the wrong side of history,” were having none of this “responsibility” stuff.

”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

Representative Melvin L. Watt, Democrat of North Carolina, agreed.

”I don’t see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,” Mr. Watt said.

The proposal worked its way around Congress for a couple of years.  Efforts at reform of the kind proposed by President Bush were shot down by Democrats each time.

In 2005, Republican Mike Oxley, then chairman of the House Financial Services Committee, brought up a reform bill (H.R. 1461), and Fannie and Freddie’s lobbyists set out to weaken it.

[...]

During this period, Sen. Richard Shelby led a small group of legislators favoring reform, including fellow Republican Sens. John Sununu, Chuck Hagel and Elizabeth Dole. Meanwhile, [Democrat in bed with the mortgage industry Chris] Dodd — who along with Democratic Sens. John Kerry, Barack Obama and Hillary Clinton were the top four recipients of Fannie and Freddie campaign contributions from 1988 to 2008 — actively opposed such measures and further weakened existing regulation.

According to OpenSecrets.org, between 1988 and 2008 Dodd received $133,900, Kerry $111,000, Clinton $75,550, and Obama — in only 143 days in the Senate — received a whopping $105,849 from Fannie Mae and Freddie Mac.

Pennsylvania Democrat representative Paul Kanjorksi, who also opposed new Fannie Mae and Freddie Mac regulations, was given more than any other member of the House of Representatives.  He was paid $65,500 by representatives of these entities.

And, in case you were wondering, John McCain co-sponsored a bill requiring greater Fannie Mae / Freddie Mac regulation in 2005. It was also blocked procedurally by Democrats.

The 2003 New York Times article was unearthed by a Free Republic poster.

UPDATE: 2004 video posted to YouTube shows Republicans arguing for, and Democrats arguing against, regulations that would have saved us from the current crisis.

Even former President Clinton knows where to place the blame for the mortgage crisis.

UPDATE: Democrat Congressman Artur Davis admits Democrats dropped the ball on the mortgage crisis.

How Obama’s radical friends in ACORN community organized us right into a credit crisis.




Like That? You'll Probably Like These.

Tagged

, ,

34 Responses to “Bush Proposed Fannie Mae / Freddie Mac Supervision In 2003”

Comments posted are the opinions of the individual poster and do not reflect the views of Bucks Right. Comments are only moderated to prevent spam. No legitimate opinions are altered for content, although we reserve the right to delete any comment for any reason. VALID e-mail address required.

  1. Nice!! McCain and the RNC needs to make TV ads saying this.

    This needs to be plastered all over the net, but most likely the main stream will not report this.

  2. [...] Bush wanted to reform these two disaters in 2003. He was fought tooth and nail by [...]

  3. [...] the fact is that John McCain recognized what was going on as early as 2003 (as did the Bush Administration), and wanted to fix it.  He warned what failing to act would do, and he was dead-on.  [...]

  4. [...] Bush Proposed Fannie Mae / Freddie Mac Supervision In 2003 | Bucks Right. [...]

  5. DWest says:

    You gotta ask yourself why they are not plastering this… it’s because they know there is a lot of spin here and it will blow up in thier face.

    First of all, this money did not come from the company, lobbyist. It is from employees of the company contributing to the campaign. Big difference! Obama said he would not take money from lobbyist and he has stayed true to his word. When you put the lobbyist from these companies in the mix, McCain has actually recevied more than Obama from these companies. Nice!!

    Second of all, the money contributed from employess of these companies is a drop in the bucket for Obama’s campaign. They are not even in the top 20. So, to suggest he would block legislation for that is preposterous.

    Finally, the proposal made by the President was in response to accounting irregularities at the company. The proposal does not even sniff the surface of the real problem. Anyway, why would you want to give oversight to that administration. Haven’t they messed up enough things in the past 8 years. Their agenda would have been to squeeze out the average American so their more affluent friends could prosper from their expanded powers. We would have been in the same mess…just deeper and quicker. How long does it take for you people to get the rocks out of your head?

    Oh yeah, what can I say about “Johny come lately” McCain. He propbably didn’t know what the hell he was talking about…as he openly admits. I’m a regulator…no…a deregulator…ahhhhh….regulator?…a deregulator!…this is so confusing %(

    Before I bid you fairwell, I have to comment on the credit crisis itself. You cannot blame this crisis on average Americans that just wanted to live in a home they can call their own. It wasn’t lending to risky individuals that got us in trouble. The problem was trying to get over on these people with unscrupulous loan terms. They knew that most people do not fully understand, if at all, the terms of their mortgage. They took advantage of that to fulfill their greedy ambitions. They put them in mortgages that were going to cost them way more than the value of their home in the end. They did this for one reason…to get rich! That is where we need oversight. We have got to have protection for ordinary citizens that just want to live a comfortable, peaceful life. Obama seems to be for that and that is why I am for him.

    Independent (White) Voter

    • Dwight says:

      First, you need to understand that the Democrats are knee deep in this. They were raiding Fannie Mae/Freddie Mac for $500 million per year. This was going into Democratic causes.

      I am a Republican and I am for McCain. The Reason? IF we put a tax and spend liberal in office, we WILL have another Great Depression in this country.

      Obama claims he will not raise taxes. This is simply not true. He will raise the Capital Gains tax on Businesses (which will crush their growth), he will raise payroll taxes, he will increase dividend taxes. This is all in the fine print of Obama’s plan.

      Obama is charismatic, but you have to look at what he represents…a disaster for this country. Bank on it.

      • DWest says:

        Yes, I do agree with you that some Dems have some explaining to do. But don’t for a minute think that they were the only ones with their hand in the Fannie Mae/Freddy Mack cookie jar. Also, Obama’s donations were not from lobbyist but campaign contributions from employees of the company. This is a very important distinction and for the most part is completely accurate. The contributions that don’t fall under this category were minuscule in comparison.

        “tax and spend liberal”…nice phrase but it buys you no points here, just more rhetoric from the right. Obama’s plan is to raise the federal tax for incomes greater than $250,000. The glory days for the rich are over; and they’ll have to go back to paying the taxes they did before their drinking buddy took office. Actually, their glory days will never be over. They will be fine. Don’t waste any of your tears on them. And don’t buy the whole trickledown economics myth. And look, the idea that raising the capital gains tax would somehow grind the economy to a halt is ludicrous. The large majority of Americans would not be affected by a capital gains increase. The Repubs insist that this will somehow lower the gains of 401Ks because of the effect it will have on the stock market. This is simply not true and history does not support this notion. If I had a yacht business then I would be worried. There may be a few less yachts sold over the next few years. He will also raise the cap for social security tax. This again will not affect the majority of Americans whom already pay social security tax on their entire income. As he does in all his efforts, Obama is carefully — key word being careful – crafting this so that it targets the right group and does not affect the average worker. We need to sheer up Social Security and this is a good way to do it. Even if we replace social security in the future, we need to make sure it is sustainable until we figure out a good, well thought out alternative. McCain says we shouldn’t penalize the rich. In essence what he is saying is that we should continue to stomp on the middle class while the rich get government favor. I can’t see how anyone that is not rich, despite their political affiliation, can think this is better for you. The middle class already pays a great deal more of the percentage of their money to the government than the rich. It’s time to balance the scales again. And yes, it is time for the rich to be patriotic and put country first! If you can’t bring yourself to vote for Obama, stay home and don’t give your vote to a ticket that you have to know is a disaster waiting to happen. A McCain/Palin white house will make the last 8 years look like the good old days for the most Americans.

        • Steven says:

          All of Obama’s tax plans will negatively effect businesses – many of which net over $250,000 taxable as reported on individual tax returns and are run by folks who are decidedly not rich. Raising the SS cap also negatively effects businesses. And, by the way, that $250,000 is household income, not individual. I don’t know about where you live, but a married couple with some kids making $250,000 a year all told isn’t driving around in a Mercedes or shopping for a yacht here in Bucks County PA.

          Anyone with investments would be negatively effected directly by the capital gain rate increase. Anyone with a job would be indirectly effected by the reduced capital investments such an increase would cause. Cutting the capital gains tax has ALWAYS resulted in more income for the treasury. Raising it has ALWAYS resulted in less. There is no fiscal reason to do this, only a punitive reason of jealousy. And, again, I don’t know where you live but a capital gains tax on houses over $500,000 could hit a lot of middle class folks around here.

          The fact of the matter is that 40% of people in this country pay NO income tax to the federal government. Let’s carefully craft *that* to make that a little more fair. The so-called working poor already have a free ride tax wise.

          The top 5% of wage earners (over $153,542 AGI) already foot 60.14% of the bill of this country, while the bottom 50% (less than $31,987 AGI) foot only 2.99% of the bill. That is almost full income redistribution. That’s way beyond Robin Hood all the way to Jesse James. 5% of the people are lifting 2/3 of the load. That’s enough.

          Your class warfare doesn’t fly here. Sell it on TPM or Kos.

    • A tax payer says:

      WOW, you talk about spin! What would it be like if Obama made Raine’s sec of the treasury? Free money for everyone! Free Free Free! If all these dead beats that got all these mortgages would do what the promised and pay them back we would be in this mess! The problem is real simple, they gave people mortgages that should have been living in shelters!

      • Steven says:

        The cause of the problem may be “real simple.” However, simpleness is not the solution.

      • DWest says:

        You have got to be kidding me if you think that this is what got us in this crisis. You’ve been watching too much Hannity. He is a JOKE! Always follow the money!! These people lost their homes. They didn’t float away with multi-million dollar parachutes. Predatory lending and lack of oversight on the markets and fannie/freddy is at the crux of the problem. The Repubs don’t have a realistic answer. You can’t fix this problem by cutting taxes, eliminating regulations and changing accounting practices. These ideas might be great if we lived in a bubble but this won’t work in the real world. The Dems might not have all the answers but it is the Repubs that are at the center of this mess. I think Obama will be wise enough to take ideas from both sides and move the country in the right direction. We don’t need a stubborn cranky old man — and a hockey mom (that’s working out well:) — in this critical time.

    • Timmy says:

      You got it wrong Dude, you are an Independent STUPID voter who doesn’t demonstrate enough reasoning power to evaluate the facts correctly but what do we expect from
      the current crop of US educated children who haven’t been taught that one and one is two and aren’t expected to use sound reasoning to make proper decisions!

      • DWest says:

        You don’t sound like you have much of an education…I guess you can blame it on the school systems. Maybe you should share some of your own reasoning so we can have a big laugh!

  6. Andrew O says:

    RE: POLLS TODAY SHOWING OBAMA LEAD, LARGELY DUE TO ECONOMY

    If Obama wins on the economy, it will be an amazing feat of political illusion. Everyone knows that the Fannie Mae, Freddie Mac debacle has Democratic Party DNA and fingerprints all over it. Providing home mortgages to individuals, who really couldn’t afford them was essentially a Clinton-inspired social assistance program that went horribly wrong. Former Clinton (and Carter) administration officials were at the helm. These companies fostered close ties with Democratic party caucuses, made generous donations to Senators Dodd, Kerry, Obama and Clinton, and managed to avoid closer scrutiny largely through the protection of the Democrats in Congress… and, of course, company EXECUTIVES working in the Obama campaign.

    The Bush administration is responsible in that it did not act in an aggressive manner early on to prevent this from happening (oversight should have been pursued relentlessly… in spite of Democratic Party opposition). Wall Street excesses in greed and panic certainly played their role. Main Street made completely irresponsible choices – I mean, who buys what you can’t afford? But the fact is that the debacle is largely a consequence of Democratic Party ideologically driven social engineering practices run amuck. The mess they created has become our mess, the mess of the American people! As for the latest bank bailouts , turns out you’ve just been taxed… to the tune of $2000 for every man, woman and child… thanks to the hole dug by Senator Obama’s friends and associates in the Democratic Party, a hole which we now have to fill.

    And if you still don’t believe that it’s ideological – look at what they’re trying to attach to the bailout – finding a way to give “homeowners” a way to keep their houses. NEWS FLASH: until you’ve paid off your mortgage, your “homeownership” is shared with the bank you’ve borrowed from… But that’s just rich people, who can afford to give be charitable and “patriotic”… so what’s the problem, right?!?

    Unless you want the Democrats to dig an even deeper hole and turn the US into a “patriotic” socialist state … vote McCain!

  7. vince says:

    Bush’s 2003 regulatory overhaul was a reaction to possible accounting irregularities in Freddie Mac and Fannie Mae. Think about the Enron/Arthur Andersen disaster from the preceding years.

    So as much as many hope this is damning evidence of Bush’s prophetic solution to an impending meltdown, it does little to demonstrate, if it had passed, we would not be where we are today. The greed of the banking industry is at fault, with the remarkable complexity of unregulated mortgage backed securities

    The problem originated with the banking/lending industry, and could have only been attacked with effective regulation of the private sector.

    No one can deny the problem also predates the Bush Administration, but because the meltdown occurred on George W’s clock (whether it is really fair or not) it will be part of his and the Republicans’ legacy.

    • Steven says:

      It is unclear how “the greed of the banking industry” is at fault. Greed does not usually result in bankruptcy. Greed usually results in profits. There are plenty of complex securities in plenty of industries, none of which — besides the ones based on mortgages to people were unqualified to pay them back — have resulted in financial meltdowns.

      This entire problem can be traced back to predatory borrowing. And, from there, to the liberals in Congress who made loaning to people who could not pay the loan back and lived in areas where property does not appreciate in value mandatory.

      http://spectator.org/util/print.asp?art_id=13948

      • Reality says:

        The “liberals in congress” were Republicans– you know the ones who controlled both the House AND Senate (and the White House for that matter, altough not a part of Congress). Strange argument.

        Also, the bankruptcy vs. profit argument may be one of the most misplaced I have ever seen. These companies were printing money, in part due to greed, when the RE market was doing well. It was the collapse of the RE market, not the lack of greed and predatory lending (actually just the opposite) that led to this.

        It must be fun to argue when ignoring facts.

  8. vince says:

    Actually it is very clear how greed is at fault. Many in the lending industry took advantage of a federal program intended to provide affordable housing to the poor for their own financial gain. This resulted in a wave of defaults that now cut across all income levels and neighborhoods.

    This is my favorite spin story of this election season because it appears to be such a great smoking gun in support of the Bush Administration and John McCain.

    But of course nobody puts the 2003 proposed legislation in context (Enron, Arthur Andersen, accounting irregularities, the allegations that executives in FM & FM were inflating profits to increase bonuses, which was not at the time linked to subprime market problems), the fact McCain stated in Dec 2007 he didn’t see this crisis coming, the many proposals for legislation regulating the mortgage industry from both parties, including Obama’s 2007 STOP FRAUD act, and the money Rick Davis received from Fannie Mae.

    A well seasoned politician will tell you it’s just as important to analyze your successes as your failures. The Bush administration had the power to retain the best of the best to consult and assess in the midst what appeared at the time to be a robust ecomony, but really was a massive housing bubble.

    I’m a rare combination fiscal conservative / social liberal, and I’ve never held the FM & FM programs in high regard. But this story is only part of the problem. This administration’s reckless spending, record federal deficit, creation of big government, financial bailout of big business, on top of their ban on stem cell research and attempt to redefine marriage in the US Constitution leads me to consider the past 8 years the absolute worst in American history. The Bush administration shames both the Republican and Democrats because it has implemented the worst traits of both parties.

    But the roots of this crisis were overlooked by both parties, so it’s a bipartisan share of the blame

    • Steven says:

      Sorry, vince, but saying it over and over again is not proving it. It’s merely repeating it.

      Just watch the 8 1/2 minute video of Republicans begging for greater regulations on these GSAs and Democrats fighting tooth and nail against it and repeatedly saying nothing is wrong.

      They’re like you. They kept telling the big lie over and over again.

      Democrats owned and operated FNMA and FHLMC, and they paid the Dems in Congress well to look the other way.

      STOP FRAUD was mainly aimed at pay day loans.

      • Reality says:

        Steven – I will correct you every time you talk about “Congress” and their failure during this time. The REPUBLICANS controlled the HOUSE & SENATE (and White House) during this time. This is a fact. Whether I say it once, or 500 times. I know you hate facts, but they don’t change.

        • Steven says:

          I was merely quoting Bill Clinton. I’m sure you can reach him at his Harlem office or Chappaqua residence to refute his statement. Go ahead and argue with the source.

  9. Papapooch says:

    DWest… you are ill-informed. The so-called “rich” pay a disproportionate amount of all taxes. Here are the numbers directly from the IRS for 2003:

    The top 1% of income earners pay about 32% of all income taxes. The top 5% pays 51.4%. The top 10% of high income earners, pay 63.5%. The top 20% of income earners pays 78% of all federal income taxes. The top 20%.

    Now go take your daily Thorazine and stay out of my wallet.

    • DWest says:

      Thanks for the info but I have already seen it. I said that the middle class pays a larger percentage of their take home; not a larger percentage of the overall income tax. It’s not about where you fit into the pie. The economy works better when we all have money to spend. If people of middle and lower incomes have more money to spend we all make out better. The repubs got started right away — when Bush got into office and they controlled the congress — putting their failed policies to work. Look where we are now. I believe in tax cuts but right now we need to cleanup this mess. Under an Obama plan, the top 1% will take on much of the burden. After these past 8 years they have plenty to spare. But believe me…you don’t fall into that group. Your wallet is safe. But if we continue down this path, you won’t need a wallet.

  10. Reality says:

    The Republicans controlled the House, the Senate, and the White House in 2003/2004. If THEY wanted to reform anything, all they had to do was say so. They didn’t. How can you blame the voting down of a bill on the MINORITY party. The REPUBLICANS voted this down!! Morons. Thanks for playing.

    • Steven says:

      So the Democrats deserve the blame for the rescue plan failing yesterday? After all, they are the majority party now, right? “If THEY wanted to reform anything, all they had to do was say so. They didn’t.”

      The “truth,” if any of you libs are actually interested, is that any attempt at reforming this broken system was brought to a halt when Democrats and ACORN shouted the reformers down with false changes of racism. Every time.

      • Reality says:

        Funny you use the word “blame.” You have been ranting like a 9 yr old about the 2003 issue, so you obviously don’t have a concept of blame or responsibility. Similar to McCain who takes no responsibility for the war in Iraq.

        But yes, the Democrats cannot blame the defeat of the bill on the Republicans.

        One irony in all of this is how rich McCain’s advisors/fundraisers are getting off of this whole mess. First they make tens of millions lobbying against regulation on behlaf of freddy/fannie (over two dozen advisors/fundraisers). Now they are making millions more lobbying for the bailout. Interesting.

        • Steven says:

          Just listen to your previous Messiah, Bill Clinton. He knows who is to blame.

          http://www.youtube.com/watch?v=r2RZ0sUcVcE

          By the way, if you cannot post a comment without name calling, posts will no longer be approved for publication.

        • Reality says:

          Hilarious that you would use a McSpin campaign ad for your argument.

          Again, who controlled EVERY single branch of government (including the executive branch which could have stepped in on the agency side at any time it wished) during this time? Give me an honest answer to that question. You talk about a failed bailout; it is a bailout of your party’s failure. Also, who was lobbying against any reforms tooth and nail during this time? Rick Davis aka McCain’s campaign manager was was chief among them along with over two dozen other McCain aids. But who cares about facts, right?

          Again, thanks for playing.

          • Steven says:

            Wow. McSpin. I’ll bet you came up with that yourself. What’s next: BushCo or McSame?

            You don’t need the ad as evidence. Go ahead and just listen to Clinton’s statement.

            If being exposed to alternate viewpoints really disturbs you that much (why are you here in that case?) you can view just the part where liberal Clinton, when asked by liberal Cuomo, blames the current crisis entirely on the Democrats here:

            http://www.youtube.com/watch?v=hfGWxqsKFmY

      • DWest says:

        The repubs have their finger prints all over this mess and now they want the dems to shoulder all the responsibility of cleaning it up. What leadership? And to actually blame their lack of leadership on a speech is pathetic. Btw, let’s not bring up racism. Racism in America has been well documented. Sometimes you have to tilt the scales a little bit to balance things. Although, there are some people that unfairly use it to their advantage but they will soon fall by the wayside and we’ll continue to move forward in this country. Special considerations will be fewer and we can all play on an even playing field. Also, Clinton is obviously still bitter…he is insignificant. Since when did the repubs put so much stock into what the dems think? It is so funny to watch McCain put all these dems in his ads. Can’t he run on his own merits?

  11. [...] are you saying that fannie mae and the dems arent at fault here are you saying fannie mae didnt pay obama 120k-2nd most amount of all politicians-and it only took him 3 years to get that amount are you saying that fannie mae and freddie mac did not cause the sub prime mortagage crisis the two companies owned or garunteed half the 12 trillion dollar mortgage market and clinton urged these two to take on more subprime Bush Proposed Fannie Mae / Freddie Mac Supervision In 2003 | Bucks Right [...]

  12. [...] Posted by Spencer Collins Also..Bush never met a spending bill he didn’t like for 7 years.. Bush Proposed Fannie Mae / Freddie Mac Supervision In 2003 [...]

css.php