Bail-out Bill Seen by Some as Spending Run Amok

With a mortgage relief bill due to pass through Congress, many critics say that the provisions for civil purchases amount to pork-barrel legislation

By Suzanne Rachman

The latest news coming out of Washington is that Freddie Mac and Fannie Mae must not fail. Congressional leaders have, for the most part, come to an agreement on legislation permitting the federal government to prop up the two mortgage powerhouses if their own funds run low. The measure, which has received widespread approval from lawmakers would allow government watchdogs to oversee the mortgage lenders if the worse should happen

The finalized deal comes on the heels of intense debate and, according to lawmakers, is likely to remain hotly contestred throughout the approval process. The Congressional Budget Office says that the legislation could end up costing taxpayers nearly 25 billion dollars. At the core of the debate is the 4 billion dollar item in the bill that will assist local government in their bids to buy and refurbish foreclosed homes.

While word of a veto has been thrown about since the bill was written, the latest reports have said that the White House has dropped the threat of veto, and is allowing the bill to proceed as is. Of course, this has drawn the ire of Republican lawmakers and conservative groups who believe that adding the 4 billion dollar provision is tantamount to holding the bill hostage. “It's clear, says White House spokesman Tony Fratto, that the democrats chose to play politics with the legislation, and unfortunate that they're doing it with legislation that will prevent systemic risk to our financial system.”

The bill is expected to pass in the Senate, with Republican lawmakers afraid to oppose the changes to the bill, on the grounds that they will be thought “unsympathetic” to the homeowners' plight. Of course, there are those on both sides of the aisle who are optimistic about the legislation, and believe that it will help homeowners facing the threat of foreclosure.