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Stinger
09-26-2008, 11:36 AM
The Democratic ACORN bailout

House Republicans refused to support the Henry Paulson/Chris Dodd compromise bailout plan yesterday afternoon, even after the New York Times reported that Treasury Secretary Henry Paulson got down on one knee to beg Nancy Pelosi to compromise. One of the sticking points, as Senator Lindsey Graham explained later, wasn’t a lack of begging but a poison pill that would push 20% of all profits from the bailout into the Housing Trust Fund — a boondoggle that Democrats in Congress has used to fund political-action groups like ACORN and the National Council of La Raza:

In the Roosevelt Room after the session, the Treasury secretary, Henry M. Paulson Jr., literally bent down on one knee as he pleaded with Nancy Pelosi, the House Speaker, not to “blow it up” by withdrawing her party’s support for the package over what Ms. Pelosi derided as a Republican betrayal.

“I didn’t know you were Catholic,” Ms. Pelosi said, a wry reference to Mr. Paulson’s kneeling, according to someone who observed the exchange. She went on: “It’s not me blowing this up, it’s the Republicans.”

Mr. Paulson sighed. “I know. I know.”

Graham told Greta van Susteren that Democrats had their own priorities, and it wasn’t bailing out the financial sector:

And this deal that’s on the table now is not a very good deal. Twenty percent of the money that should go to retire debt that will be created to solve this problem winds up in a housing organization called ACORN that is an absolute ill-run enterprise, and I can’t believe we would take money away from debt retirement to put it in a housing program that doesn’t work.

Here’s the relevant part of the Dodd proposal:

TRANSFER OF A PERCENTAGE OF PROFITS.

1. DEPOSITS.Not less than 20 percent of any profit realized on the sale of each troubled asset purchased under this Act shall be deposited as provided in paragraph (2).
2. USE OF DEPOSITS.Of the amount referred to in paragraph (1)
1. 65 percent shall be deposited into the Housing Trust Fund established under section 1338 of the Federal Housing Enterprises Regulatory Reform Act of 1992 (12 U.S.C. 4568); and
2. 35 percent shall be deposited into the Capital Magnet Fund established under section 1339 of that Act (12 U.S.C. 4569).

REMAINDER DEPOSITED IN THE TREASURY.All amounts remaining after payments under paragraph (1) shall be paid into the General Fund of the Treasury for reduction of the public debt.

Profits? We’ll be lucky not to take a bath on the purchase of these toxic assets. If we get 70 cents on the dollar, that would be a success.

That being said, this section proves that the Democrats in Congress have learned nothing from this financial collapse. They still want to game the market to pick winners and losers by funding programs for unqualified and marginally-qualified borrowers to buy houses they may not be able to afford — and that’s the innocent explanation for this clause.

The real purpose of section D is to send more funds to La Raza and ACORN through housing welfare, via the slush fund of the HTF. They want to float their political efforts on behalf of Democrats with public money, which was always the purpose behind the HTF. They did the same thing in April in the first bailout bill, setting aside $100 million in “counseling” that went in large part to ACORN and La Raza, and at least in the former case, providing taxpayer funding for a group facing criminal charges in more than a dozen states for fraud.

It’s bad enough that taxpayers have to pay the price for Congress’ decade-long distortions of the lending and investment markets. If we realize a profit from the bailout, that money should go to pay down the debt or get returned to taxpayers as dividends from their investment — not to organizations committing voter fraud, and not to restarting the entire cycle of government meddling in lending markets. I’d support a rational bailout package, but anything that funds the HTF needs to get stopped.

Update II: The Wall Street Journal reported on the HTF/ACORN/Democratic connections in July:

The housing bill signed Wednesday by President George W. Bush will provide a stream of billions of dollars for distressed homeowners and communities and the nonprofit groups that serve them.

One of the biggest likely beneficiaries, despite Republican objections: Acorn, a housing advocacy group that also helps lead ambitious voter-registration efforts benefiting Democrats. …

Partly because of the role of Acorn and other housing advocacy groups, the White House and its allies in Congress resisted Democrats’ plans to include money for a new affordable-housing trust fund and $4 billion in grants to restore housing in devastated neighborhoods. In the end, the money stayed in the bill; the White House saw little choice.

What most riles Republicans about the bill is the symbiotic relationship between the Democratic Party and the housing advocacy groups, of which Acorn is among the biggest. Groups such as the National Council of La Raza and the National Urban League also lobby to secure government-funded services for their members and seek to move them to the voting booth. Acorn has been singled out for criticism because of its reach, its endorsements of Democrats, and past flaws in its bookkeeping and voter-registration efforts that its detractors in Congress have seized upon.

Once again, the Democrats want to set up a self-funding mechanism, this time by exploiting a severe financial crisis. Despicable.

http://hotair.com/archives/2008/09/26/the-democratic-acorn-bailout/

Mr. Laz
09-26-2008, 11:47 AM
disappointing ...... if true

RJ
09-26-2008, 11:53 AM
If this story is true, I would be sorely pissed if a dime of the package went to either of those groups. Has anyone seen this reported anywhere else?

HonestChieffan
09-26-2008, 11:55 AM
Any move to keep the money away from congress is good.

gblowfish
09-26-2008, 11:58 AM
This is all the fault of Clinton and the Democrats. We need to put them in boxcars, send them to re-alignment camps and get them right with God's plan.

But first, a shower for de-lousing...

tiptap
09-26-2008, 11:58 AM
It does say profit so it is not the principle that is being affected.

tiptap
09-26-2008, 12:00 PM
It is in the bill

HonestChieffan
09-26-2008, 12:02 PM
More Demo shanannigans and building the socialist agenda

The Rick
09-26-2008, 12:03 PM
:cuss:

I feel like this whole mess is a bad political dream that I can't escape...

tiptap
09-26-2008, 12:03 PM
But the direction toward ACORN is speculative and isn't part of the legislation at all.

Go to this site and look at legislation for a PDA file of the legislation. 14 pages double spaced.
http://www.politico.com/blogs/thecrypt/0908/Dodd_bill_much_more_aggressive_than_Treasury_plan.html

HonestChieffan
09-26-2008, 12:04 PM
Acorn cannot be any dirtier yet dems love it

eazyb81
09-26-2008, 12:10 PM
It's scary and sad that political BS is keeping a plan from getting pushed through. Bernanke and Paulson obviously did a terrible job of helping them realize how desperate this situation is. The credit markets are seized up, LIBOR/OIS is at an all-time high, and if something doesn't get put together by Sunday evening I expect the bottom to fall out of the market early next week in the form of a 1000+ point drop.

RJ
09-26-2008, 12:21 PM
It does say profit so it is not the principle that is being affected.



If there are any profits realized from this mess there are far better and less controversial ways for them to be used. There's no reason to stick a provision like that in the bill, it just causes delays and gives the R's a reason to point fingers. Basically, it's just :BS:

Either give the money or don't, this sort of thing is pointless - as is the in-fighting between Bush and his soldiers. Our Congress once again is proving to be worthless.

tiptap
09-26-2008, 12:29 PM
It's scary and sad that political BS is keeping a plan from getting pushed through. Bernanke and Paulson obviously did a terrible job of helping them realize how desperate this situation is. The credit markets are seized up, LIBOR/OIS is at an all-time high, and if something doesn't get put together by Sunday evening I expect the bottom to fall out of the market early next week in the form of a 1000+ point drop.

And are all the banks/Money Funds in the overnight loans being honest. If this is where the action is taking place isn't just the focus distorting. So you say a 1000 point drop, I assume in Stocks will this money show up in commodities like gold or silver or oil or pork bellies? Does this money go under the mattress as gold or such?

I am in agreement that Money Market Funds are under pressure won't they be were people dump money out of the stock market and put in Money Market Accounts. Won't that capitalize then. Or will it go the other way and Money Market moves in to hold dividened issuing stock.?

tiptap
09-26-2008, 12:33 PM
If there are any profits realized from this mess there are far better and less controversial ways for them to be used. There's no reason to stick a provision like that in the bill, it just causes delays and gives the R's a reason to point fingers. Basically, it's just :BS:

Either give the money or don't, this sort of thing is pointless - as is the in-fighting between Bush and his soldiers. Our Congress once again is proving to be worthless.

So McCain could have said can we drop this one provisio and we can move forward and the House 'Republicans would have been happy? I saw a completely different rebellion over a much wider range of issues that are more fundamental. I don't see Republicans taking this and as such I now predict nothing will happen until after the election. The week of era of good feeling is over.

HonestChieffan
09-26-2008, 12:40 PM
rebellion? really

RJ
09-26-2008, 12:44 PM
So McCain could have said can we drop this one provisio and we can move forward and the House 'Republicans would have been happy? I saw a completely different rebellion over a much wider range of issues that are more fundamental. I don't see Republicans taking this and as such I now predict nothing will happen until after the election. The week of era of good feeling is over.



No, I don't think it would have made them happy, but that's not my gripe. My gripe is that they included this in the bill in the first place, same with the R's who want to find a way to include tax cuts. These people can never do anything in a straightforward manner.

tiptap
09-26-2008, 12:45 PM
Do notice that only being 14 pages long. The proposed solution can be read and is therefore transparent. This is a big step forward even if you decide to vote no over the thousand page documents the Republicans use to give us. So vote no.

I