U.S. Congressman Randy Neugebauer voted in favor of the American taxpayers this week, as he opposed legislation that would grant open-ended authority for the federal government to lend funds to Fannie Mae and Freddie Mac, as well as create a new program to help lenders bail out their riskiest home loans. The House passed this bill, H.R. 3221, by a vote of 272-152.
"Every member of Congress cares about our nation's economy and the difficult financial situations many of our constituents face. What the majority has done in response is load up this housing package under the guise of attempting to stabilize the markets," said Neugebauer during the debate. "This bill will only make matters worse, particularly for the taxpayers. At a time when many Americans are working hard to pay their mortgage and make responsible financial decisions, they shouldn't have to make their neighbor's mortgage payment as well."
H.R. 3221 contained long overdue reforms Neugebauer supported such as a new, stronger regulator for Fannie Mae and Freddie Mac and modernization of the Federal Housing Administration (FHA) to make it a better alternative for borrowers than subprime loans.
However, the bill also included items that pose risks to the taxpayers and the economy. Those items include a tax on Fannie and Freddie to create a new Housing Trust Fund, a bailout to transfer lenders' riskiest borrowers into mortgages backed by FHA, unlimited authority for the U.S. Treasury Department to lend to Fannie and Freddie and a $800 billion increase in federal government's debt limit.
"At a time when the housing market is relying on Fannie and Freddie to ensure continued mortgage liquidity, Congress should not divert money from them into this new Housing Fund," said Neugebauer. "It makes even less sense that we would set up this fund at the same time as giving the Treasury Department a blank check to support these entities if needed."
Neugebauer said he believes the best signal the federal government can send to the markets and the taxpayers is that it is done intervening.
"We must remember that markets are not always kind, but they are efficient," he said. "The sooner the federal government steps back, the sooner capital will come off the sidelines and back into the marketplace."
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