Conservatives to Oppose Bailout

CNSNews.com
Pence Calls on Conservatives to Oppose Bailout That ‘Nationalizes’ Bad Mortgages
Sunday, September 28, 2008
By Terence P. Jeffrey, Editor-in-Chief




Speaker of the House, Rep. Nancy Pelosi, D-Calif, left, talks with Senate Majority Leader, Sen. Harry Reid, D- Nev., during a newss conference on the financial crisis Sunday, Sept. 28, 2008 on Capitol Hill in Washington. (AP Photo/Evan Vucci)(CNSNews.com) - Rep. Mike Pence (R-Ind.) is calling on conservatives to oppose the $700 billion financial industry bailout negotiated over the weekend because he believes it will permanently change the relationship between the government and the financial sector while giving the government the power to “nationalize almost every bad mortgage” in the country.

The $700-billion deal negotiated by the Bush Administration and congressional leaders of both parties over the weekend includes a mandate that the secretary of the Treasury work to bailout people who bought a house they could not afford by changing the terms of their mortgages or by providing them with other financial guarantees.

A summary of the bill published by the Senate banking committee on Sunday said the proposal “requires the Treasury to modify troubled loans--many the result of predatory lending practices--wherever possible to help American families keep their homes. It also directs other federal agencies to modify loans that they own or control.”

Section 109 of the proposed law is entitled “Mortgage Mitigation Efforts.” Section 110 is entitled “Assistance to Homeowners.” They address what the Treasury Department and other federal agencies must do about the mortgages that will be among the assets the government buys from financial institutions with the $700 billion in bailout money authorized by the bill.

The actual text of the proposed law says: “To the extent that the Federal property manager holds, owns, or controls mortgages, mortgage backed securities, and other assets secured by residential real estate, including multi-family housing, the Federal property manager shall implement a plan that seeks to maximize assistance for homeowners and use its authority to encourage the servicers of the underlying mortgages, and considering net present value to the taxpayer, to take advantage of the HOPE for Homeowners Program under section 257 of the National Housing Act or other available programs to minimize foreclosures.”





House Republican Leader, Rep. John Boehner, R-Ohio, and House Republican Whip, Rep. Roy Blunt, R-Mo., speak to reporters after a lengthy House Republican conference meeting regarding legislation on the financial crisis Sunday, Sept. 28, 2008 on Capitol Hill in Washington. (AP Photo/Lauren Victoria Burke)“In the case of a residential mortgage loan,” the proposed law continues, “modifications made … may include: (A) reduction in interest rates; (B) reduction of loan principal; and (C) other similar modifications.”

The House Financial Services Committee released an explanation of these sections of the bill that mirrored the Senate Banking Committee’s explanation.

The bill authorizes the secretary of the Treasury to create an entity called the Troubled Asset Relief Program (TARP) to buy up mortgages and mortgage-backed securities from financial institutions, the Financial Services Committee explained.

Under the “mortgage mitigation” section of the bill, the committee’s explanation says, the secretary must turn around and find ways to ease the terms of the mortgages of people who purchased homes they cannot afford.

“For mortgages and mortgage-backed securities acquired through TARP, the Secretary must implement a plan to mitigate foreclosures and to encourage servicers of mortgages to modify loans through Hope for Homeowners and other programs,” says the committee’s explanation. “Allows the Secretary to use loan guarantees and credit enhancement to avoid foreclosures. Requires the Secretary to coordinate with other federal entities that hold troubled assets in order to identify opportunities to modify loans, considering net present value to the taxpayer.”

The “Assistance to Homeowners” section of the bill would require other federal agencies that deal with the mortgages and mortgage-backed securities bought up by the government with bailout money to do the same.

The bill, says the Financial Services Committee, “[r]equires federal entities that hold mortgages and mortgage-backed securities, including the Federal Housing Finance Agency, the FDIC, and the Federal Reserve to develop plans to minimize foreclosures. Requires federal entities to work with servicers to encourage loan modifications, considering net present value to the taxpayer.”

On Sunday, Pence (R-Ind.) sent a letter to his House colleagues urging them to oppose the bill.

“We now have a deal that promises to bring near-term stability to our financial turmoil, but at what price?” asked Pence.

“Economic freedom means the freedom to succeed and the freedom to fail. The decision to give the federal government the ability to nationalize almost every bad mortgage in America interrupts this basic truth of our free market economy,” said Pence.

“Republicans improved this bill but it remains the largest corporate bailout in American history, forever changes the relationship between government and the financial sector, and passes the cost along to the American people. I cannot support it,” said Pence.

“Before you vote, ask yourself why you came here and vote with courage and integrity to those principles,” said Pence. “If you came here because you believe in limited government and the freedom of the American marketplace, vote in accordance with those convictions.”

“Now we need to finish the race and make sure that posterity and the American people know there were conservatives who opposed the leviathan state in this dark hour,” said Pence.

According to a report in the New York Times, Sen. Richard Shelby, the ranking Republican on the Senate Banking Committee flatly refused to even participate in the negotiations for the bill.

“I didn’t want to be in the negotiations because I object to the basic principles of this,” said Shelby, according to the Times. The paper said that when Shelby was pressed about his position, he said: “My position is no.”

President Bush applauded the members of Congress who worked to make the deal happen and called it a very good deal.

“I appreciate the leadership shown by Members on both sides of the aisle, who came together to write a very good bill,” said Bush in a statement released by the White House. “This bill provides the necessary tools and funding to help protect our economy against a system-wide breakdown. The bill will help allow access to credit so American families can meet their daily needs and American businesses can make purchases, ship goods, and meet their payrolls.”

Bush expressed confidence that the bill would become law.

“Members of Congress will vote on this legislation soon,” the president said. “This is a difficult vote, but with the improvements made to the bill, I am confident Congress will do what is best for our economy by approving this legislation promptly.”

Both major-party presidential candidates expressed general support for the deal.

"[R]egardless of how we got here, a failure to deal with the current crisis would have devastating consequences for our economy, costing millions of Americans their jobs and retirement security,” Sen. Barack Obama, the Democratic presidential nominees, said in a statement posted on his campaign website.

"That is why over the past ten days, in conversations with the President, Secretary of Treasury and leaders of Congress, I laid out the four core principles I believed had to guide any solution: oversight by an independent board; protections for taxpayers to ensure that they are treated like investors and that they receive any profits--and recoup any losses--from this plan; measures to help homeowners stay in their homes; and rules to make sure CEOs are not being rewarded at taxpayers' expense,” stated Obama. “While I look forward to reviewing the language of the legislation, it appears that the tentative deal embraces these principles.”


Sen. John McCain (R-Ariz.) the Republican presidential nominee, appeared on ABC’s “This Week with George Stephanopoulos” before the final details of the deal were revealed. However, he stated his basic support for the deal when asked by Stephanopoulos.

“I, again, I would like to see the details, but hopefully, yes,” said McCain. “And the outlines that I have read of it, that this is something that all of us will swallow hard and go forward with. The option of doing nothing is simply not an acceptable option.”

Stephanopoulos asked McCain if his “principles” had been met by the deal.

“Yes. Yes,” said McCain. “Protect the taxpayer. Make sure that there isn’t excessive compensation for CEOs. A oversight body, not leaving all the decisions in the hands of one individual. There are other provisions that I think are met here. And, frankly, I think the people up on the Hill deserve great credit that conducted these negotiations, I think [Treasury] Secretary [Henry] Paulson does. And I think we saw both a bipartisan and bicameral approach to this that is welcome.”

The bill is expected to come up for a vote in the House and Monday and could move through the Senate as early as Wednesday.








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edeldoug at 10:58 AM - September 29, 2008
Isn't it funny? The HATED GWBush is now lauded as the one with THE Answer? And the Dems are RUSHING to vote WITH BUSH? And the Conservatives are the ones standing in opposition to PROTECT Main Street FROM Wall Street? Say NO DEAL! No deal that doesn't REMOVE the requirements to MAKE these bad loans. No deal that doesn't ELIMINATE Mark to Market. No deal that offers Taxpayer Dollars to Paulson to buy bad paper. No deal that gives ANYTHING to ACORN! The markets don't want a FAST deal... they want a GOOD FIX.

Elblogo at 09:31 AM - September 29, 2008
We are doing nothing but the same thing over and our Congress critters are trying to protect their friends and their own spoils. Congress must be stopped from destroying America.