CCAGW Denounces Housing Bailout Bill

Bush Administration Building Its Legacy on the Backs of Taxpayers
WASHINGTON--(Business Wire)--
The Council for Citizens Against Government Waste (CCAGW) today
strongly denounced the Bush Administrations' cave-in on H.R. 3221, The
American Housing and Foreclosure Prevention Act.

"The Bush Administration's reversal on its veto threat on H.R.
3221 virtually ensures that taxpayers will be saddled with the huge
costs associated with this bill for decades to come. There are so many
bad aspects to this bill, it is almost impossible to know where to
begin," said CCAGW President Tom Schatz. "It was a bad bill to begin
with and with the recent addition of the GSE bailout language, it went
from bad to catastrophic."

The bill, which was already expected to cost $300 billion, was
changed again last week to include a rescue plan for the nation's two
government-sponsored enterprises (GSE), Fannie Mae and Freddie Mac,
after they suffered an alarming stock slide on July 11. Fannie Mae and
Freddie Mac either own or guarantee about $5.2 trillion of the
nation's home mortgages, nearly 70 percent of the mortgages made in
this country.

In addition, House Democrats resurrected a controversial $3.9
billion grant program that had been removed from the bill earlier due
to opposition from the Bush administration. The grant program assists
states and localities in purchasing foreclosed properties.

"The President had wisely chosen to veto the bill over the grant
program, which will be just another $3.9 billion slush fund for
pork-barreling politicians. But his flip-flop today will actually cost
taxpayers hundreds of billions of dollars and have adverse
implications for the mortgage and financial markets far into the
future," continued Schatz.

"The GSE rescue plan, which is expected to cost $25 billion,
places the taxpayers squarely and explicitly behind the GSEs. The
overall bill, which will constitute the most aggressive federal
intrusion into the nation's mortgage markets in history, does enact a
long-overdue regulatory regime for the GSEs, but fails to address
critical long-term structural reform of the GSEs, nor does it lay
claim to any future GSE profits on behalf of taxpayers.

"One provision in the overall bill requires that homeowners who
take advantage of the assistance being offered in the bill pay back 50
percent of the equity gains in their homes to the government. The
GSEs, which have lived high off the hog for decades as a result of
their special benefits, should not be given a blank check when even
average homeowners will be required to pay something back to the
Treasury. Make no mistake about it, the taxpayers are getting ripped
off," concluded Schatz.

The Council for Citizens Against Government Waste is the lobbying
arm of Citizens Against Government Waste, a nonpartisan, nonprofit
organization dedicated to eliminating waste, fraud, abuse, and
mismanagement in government.

Council for Citizens Against Government Waste
Leslie K. Paige, 202-467-5334
Alexa Moutevelis, 202-467-5318

Copyright Business Wire 2008