Scott A. Hodge, Director of Tax and Budget Policy for Citizens for a Sound Economy, made the following statement today in support of the new coalition effort to shine the light of public scrutiny on the nation’s two largest GSEs, Fannie Mae and Freddie Mac:
“On behalf of the 250,000 members of Citizens for a Sound Economy nationwide, I’m pleased to join the HomeEc coalition effort to shine the light of public scrutiny on the nation’s two largest government sponsored enterprises (GSEs), Fannie Mae and Freddie Mac. CSE members are also supportive of Congressman Richard H. Baker’s legislation to improve the regulatory oversight of these mammoth financial institutions.
“The irony of this effort is that it is taking a coalition of taxpayer organizations to bring overdue oversight to Fannie Mae and Freddie Mac, who were given their market power and near-monopolistic status by the federal government. Meanwhile, the Justice Department’s Antitrust lawyers are busily waging war on the Microsoft Corporation who earned its success in a highly competitive marketplace.
“Over the next few months, CSE will work to educate our grassroots activists to the fact that these government-sponsored enterprises have exposed taxpayers to trillions of dollars worth of risk. We applaud Congressman Baker’s effort to remove Freddie and Fannie’s line of credit with the Treasury and, with it, the implied $6.5 billion subsidy these businesses get from taxpayers.
“We are also greatly concerned about the staggering $1 trillion worth of debt these organizations now bear, especially when the federal government is actually paying down the publicly held debt. If this trend continues, in just a few years these two GSEs could be issuing more debt than the entire federal government. This is a fact that should trouble every American taxpayer.
“Again, Citizens for a Sound Economy is pleased to join this private, taxpayer effort to bring overdue oversight to these quasi-government corporations, and we encourage every member of Congress to co-sponsor the ‘Housing Finance Regulatory Improvement Act of 2000.’”