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Inglis opposes bloated, big government Housing Bill

July 24, 2008

Inglis opposes bloated, big government Housing Bill

Also votes against $8 billion “bailout” to Highway Trust Fund

U.S. Rep. Bob Inglis (R-SC) voted against the Foreclosure Prevention Act of 2008 housing bill (H.R. 3221) in the U.S. House Wednesday, calling it “a bloated bill that bails out private housing interests for risky and flawed lending practices.”

Inglis also joined 37 fellow conservatives in voting against an $8 billion transfer from the general fund to the highway trust fund that was designed to make up for a shortfall created by flawed process and excessive spending. The bill cleared the House by a vote of 387-37.

“Taxpayers don’t have to jump in to save every risky venture, every bad management practice and every shortfall,” Inglis said.

The housing bill includes a $300 billion mortgage refinancing program, unlimited borrowing authority from the U.S. Treasury by the troubled Federal Home Loan Mortgage Corporation – Freddie Mac and the Federal National Mortgage Association – Fannie Mae. These stockholder-owned, private corporations are authorized by the government to make housing loans and guarantees. They have run up huge losses as a result of bad loan practices.

The housing bill also would create a new $4 billion program for buying and selling foreclosed homes and create a new tax to fund two affordable housing funds.

Inglis said that the housing bill would give lenders and investors the opportunity to dump their riskiest and worst loans onto the FHA.

“Fannie Mae and Freddie Mac need stabilization and must not fail, but writing a blank check for bad management is not the way to help the housing market.” Inglis said. “Some high-flying Wall Street types and Fannie Mae and Freddie Mac traded in worthless mortgages from borrowers who lacked—from the inception of the loans—the ability to repay. The holders of those notes and mortgages need to take a haircut. It should be a very painful time for them; there’s no reason to make it a painful time for taxpayers.”

Inglis said the add-on programs in the bill were “typical of Washington to seize on a perceived crisis and grow programs and grow spending.”

Fannie Mae and Freddie Mac need to come out of their self-induced crisis much smaller and tighter in their operation, he said.

Inglis also voted against amending the Internal Revenue Code of 1986 to restore the Highway Trust Fund (H.R. 6532) because of the $8 billion addition of deficit spending.

The Department of Transportation has projected a $3.2 billion shortfall with the HTF due to fewer cars on the road as a result of increased gas prices. The bill would transfer $8 billion from the General Treasury to cover this shortfall, which includes earmarks from the original highway bill.

The 2005 highway bill included $286 billion in guaranteed spending, including 6,300 earmarks for projects amounting to $24 billion.

“This amounts to another bailout to the tune of $8 billion. Budgets are set for a reason and when you start borrowing from the General Treasury, it sets up a bad precedent,” Inglis said. “Instead of a short term fix, the HTF needs a long-term solution.”

Inglis is supporting Rep. Jeff Flake’s (R-AZ) bill that would eliminate the HTF shortfall by rescinding expected earmarks from the 2005 highway bill.

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