Tuesday, August 5, 2008

political pay-outs and pay-offs

From the editorialists at the WSJ, more on the nasty business of the taxpaper bailout of Fannie & Freddie Mac...

President Bush is poised to sign the housing and Fannie Mae bailout bill, after the Senate passed it with 72 votes on the weekend. But an underreported part of this story is that Majority Leader Harry Reid refused to allow a vote on Republican Jim DeMint's amendment to bar political donations and lobbying by Fannie and its sibling, Freddie Mac.

This is a rare parliamentary move for a body in which even Senators in the minority party have long been able to force votes. The strong-arm play illustrates how politically powerful these government-sponsored enterprises remain even after going hat in hand to taxpayers....

We believe in the right of individuals and businesses to lobby Congress. But with Fan and Fred now explicitly guaranteed by taxpayers, letting them ladle cash all over Washington amounts to using government-guaranteed profits to lobby for continued government protection. Congress sets the rules in favor of Fan and Fred, which then repay the Members with cash from their rigged profit stream. This is the government lobbying itself for more government. And, oh, what a stream of political cash it is....

-Fannie and Freddie's political action committees: $800,000 in this election cycle
-F&F's "charitable" foundations: the top two in the country-- at $21 and $25 million respectively

On this latter point, "most of this foundation money goes to charity groups uninvolved in politics and policy, but tens of millions of dollars find their way to policy advocacy groups on the left and even some on the right"-- including Jesse Jackson's Citizenship Education Fund, an offshoot of his Rainbow/PUSH Coalition: more than $500,000 since 1996 (after Mr. Jackson accused Fannie and Freddie of discriminatory lending practices)

Then, this kick in the shorts to wrap things up:

Groups on the left complain about "corporate welfare" all the time, but curiously nary a one has opposed the Fannie and Freddie bailout -- which amounts to one of the biggest corporate welfare gifts in U.S. history.


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