Living in the Rio Grande Valley it’s really hard to find anyone who agrees with me politically, but I was pleasantly surprised to learn that a few local representatives had the courage to stop the ridiculously massive government bailout that was proposed. The Monitor:
Rep. Rubén Hinojosa, D-Mercedes, was the lone congressman to support the measure that both Rep. Solomon Ortiz, D-Corpus Christi , and Rep. Henry Cuellar, D-Laredo, shot down citing overwhelming opposition from voters in the Rio Grande Valley.
“I’ve received many calls and emails from constituents across my district with the overwhelming majority opposing this bailout,” Cuellar said in a statement released after House lawmakers defeated the bill with a 228-205 vote. “There are too many unanswered question to undertake such a sweeping measure at this time.”
Rubén Hinojosa should’ve taken notes from his colleagues. Thanks Congressmen Cuellar and Ortiz for voting against the measure.
Opensecrets.org reveals the following information about the RGV Congressmen:
Rubén Hinojosa received a grand total of $14,500 from money Fannie Mae and Freddie Mac.
Henry Cuellar received a grand total of $2,450 from money Fannie Mae and Freddie Mac.
Solomon Ortiz received a grand total of $1,000 from money Fannie Mae and Freddie Mac.
This piece ran in 2005 in reference to the Freddie Fannie debacle:
What’s next for Fannie and Freddie? At conventional companies, throwing the responsible executives out might well be the end of the story. But Fannie Mae and Freddie Mac have between them $1.5 trillion of U.S. mortgages on their balance sheet, according to the companies’ latest figures. What’s more, their special status as government-sponsored enterprises (GSEs) means, arguably, that the taxpayer is essentially a co-signer on much of that paper, even if there is no direct guarantee from the government on GSE securities.
As a result, Congress and the administration are very eager to make sure things run more smoothly at Fannie and Freddie from now on–yet perhaps almost as anxious to avoid the political risks involved in re-engineering the two largest players in the secondary residential mortgage market.
Last year legislation was introduced and passed in the Senate Banking Committee, but never enacted. Both Fannie and Freddie field powerful lobbies, and they were able to help muster support to sideline the bills due to conflict over various provisions.
Hmm…2005…would that be the GOP controlled Congress and Presidency?
Even the White House was said to have pulled back its support from legislation due to concern that the measures weren’t tough enough. But with the start of a new Congress, the field is wide open for the legislative process to begin anew.
Since the Democrats (*cough* Nancy Pelosi *cough*) seem to want to play the blame game, let’s find out who fought for reform THEN:
Already, a bill similar to the one that failed last year has been reintroduced in the Senate. Filed on Jan. 26 by Sens. Chuck Hagel (R-Nebraska), John Sununu (R-New Hampshire) and Elizabeth Dole (R-North Carolina), the bill would:
* Create an independent, world-class regulator to oversee safety and soundness of Fannie Mae and Freddie Mac;
* Give the regulator the authority to shut down a failing GSE and protect against a taxpayer-funded bailout;
* Give the regulator greater decision-making in raising capital standards;
* Direct the regulator to draw a “bright line” separating the primary and secondary mortgage markets;
* Give the new regulator flexible approval power over new programs and activities;
* Require annual audits of affordable-housing programs to ensure compliance with the mission; and
* End presidential appointments to the boards of the GSEs.
And back to how this relates to the Rio Grande Valley:
Rep. Ruben Hinojosa (D-Texas) was more noncommital about whether reform was needed. He said, “It will be interesting to see if legislation will be introduced in the House to reform the government-sponsored enterprises and, if so, what it will contain, how the committee will proceed with consideration and what ultimately will be the outcome of any and all actions taken by Congress.”
But Hinojosa did find something to like in the Hagel bill: “I have also noticed that the legislation would greatly expand the regulator’s ability to limit benefits and bonuses within severance packages paid to GSE executives who leave entities. That component of Sen. Hagel’s bill is very important to me and to many of my colleagues in Congress,” he said.
More as this develops…
