CCAGW Asks House to Oppose EESA Bailout
Monday, September 29, 2008
By: Tom Schatz

U.S. House of Representatives
Washington, DC  20515

Dear Representative,

          You will soon vote on H.R. 3997, the Emergency Economic Stabilization Act and it will be a difficult vote.  The more than 1.2 million members and supporters of the Council for Citizens Against Government Waste (CCAGW) are angry about this financial crisis because most of it can be blamed on Washington.  Taxpayers are now being asked to provide up to $700 billion to the Secretary of the Treasury to buy failed mortgages and other troubled credit assets as a result of government meddling in the housing market.  While the bill is much improved since the original draft that was circulating late last week, the bill is still too troublesome for CCAGW to support.  On behalf of our members, I ask that you vote against H.R. 3997.

          Starting in 1993, the rules governing the Community Reinvestment Act (CRA) and Fannie Mae and Freddie Mac were re-written to force banks to establish new quotas for writing mortgages in low-income neighborhoods and to enter the subprime loan markets.  The changes drove up the price of homes and the easy money was carried right into Wall Street where shaky loans were packaged and sold.  While efforts were made several times to get a handle on Fannie Mae and Freddie Mac before the implosion of the housing market, these efforts were stopped in Congress by the companies’ political allies.

          CCAGW appreciates the efforts of several members of Congress that have improved the bill.  Removing the 20 percent slush fund for groups like ACORN is an important policy change.  The bill gives the Security and Exchange Commission the ability to suspend mark-to-market accounting.  The bill will not give the $700 billion in one step but instead will require the President to certify that additional funds are needed.  By establishing an advisory board, power is not left with one individual.  But these changes are not enough to overcome the opposition to H.R. 3997 that has been expressed by CCAGW members and taxpayers across the county.

          Government created these programs, and CCAGW is not confident that government can correct them.  I urge you to vote against H.R. 3997.  All votes on H.R. 3997 will be among those considered for CCAGW’s 2008 Congressional Ratings.

Sincerely,