If an administration wanted to pull a fast one on American citizens and keep a move that puts them on the hook for hundreds of billion dollars as quiet as possible while still disclosing it, when would be the best time to take that action? How about an evening when people all across the country turn off their televisions and laptops to spend time with family and friends, celebrating an important religious holiday? Could any President be as calculating and cold-blooded as to do something like that?
The Obama administration’s decision to cover an unlimited amount of losses at the mortgage-finance giants Fannie Mae and Freddie Mac over the next three years stirred controversy over the holiday.
Welcome to the new transparency:
The Treasury announced Thursday it was removing the caps that limited the amount of available capital to the companies to $200 billion each.
Unlimited access to bailout funds through 2012 was “necessary for preserving the continued strength and stability of the mortgage market,” the Treasury said. Fannie and Freddie purchase or guarantee most U.S. home mortgages and have run up huge losses stemming from the worst wave of defaults since the 1930s.
“The timing of this executive order giving Fannie and Freddie a blank check is no coincidence,” said Rep. Spencer Bachus of Alabama, the ranking Republican on the House Financial Services Committee. He said the Christmas Eve announcement was designed “to prevent the general public from taking note.”
Treasury officials couldn’t be reached for comment Friday.
Why couldn’t they be reached? Because it was Christmas. The announcement was designed to put them out of reach, just as it was designed to keep the news out of reach from the general public. No one can seriously argue that Treasury and the White House woke up early on Christmas Eve and suddenly discovered a reason to lift the caps on the Fannie/Freddie bailout, after all. This had to be in the works for weeks. However, as the Wall Street Journal also reports, the White House had a deadline for acting unilaterally: READ MORE...
U.S. Move to Cover Fannie, Freddie Losses Stirs Controversy
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