CCAGW Opposes the Foreclosure Prevention Act of 2008
Tuesday, April 8, 2008
By: Tom Schatz

The United States Senate
Washington, DC  20510

Dear Senator,

          This week you are considering S. 2636, the Foreclosure Prevention Act of 2008.  The Council for Citizens Against Government Waste (CCAGW) opposes this legislation in general because this is another attempt by Congress to use tax dollars to interfere in the current turbulent housing market.  This market situation should be allowed to play out in order not to create a moral hazard.  Ultimately this bill will do more harm than good to taxpayers and for home buyers and sellers, now and far into the future.

          The bill includes $4 billion for Community Development Block Grants (CDBG) to purchase and rehabilitate foreclosed properties.  The Wall Street Journal stated in an April 7 editorial that the CDBG, “…may be the worst-run program in Washington.  So why are Senators making it a centerpiece of this week's housing splurge?”  Good question.  However, taxpayers are fortunate that Sen. Jim DeMint (R-S.C.) will offer Admt. 4474 to S. 2636 that will strike the CDBG funding measure from the bill.  On behalf of the more than 1.2 million members and supporters of CCAGW, I ask that you support this amendment.  .   

          The Office of Management and Budget’s Program Assessment Rating Tool rated the CDBG “not-performing/ineffective” because the program lacks a clear purpose, lacks short-term and long-term outcome measures, and funds are not targeted to places with the greatest needs.  The funding provision in S. 2636 will waste more tax dollars in an already wasteful government program.  It is also a highly flawed measure because it interferes with a buyer’s market, is unfair to owners who are not in foreclosure but trying to sell their houses, and it will affect borrowing and mortgage rates for future buyers.

          I ask that you support the DeMint measure to strike funding for the CDBG.  All votes on S. 2636 will be among those considered for CCAGW’s 2008 Congressional Ratings.

Sincerely,