Senator John ThuneWashington has recently brought rise to a culture of open-ended federal government bailouts and runaway federal spending. While media attention has focused heavily on the taxpayer funded bailouts of AIG and General Motors, for the past two years American taxpayers have been on the hook for a massive bailout of Fannie Mae and Freddie Mac, the strained home mortgage finance companies. Soon, these companies will become the largest direct recipients of taxpayer dollars in our country's history.
Despite the billions of dollars American taxpayers have already been forced to pay to shore up the failing mortgage giants, a new report suggests that the housing bailout may double over the next three years and taxpayers will be forced to pick up the tab yet again. In new projections released this past week, the Federal Housing Finance Agency stated that Fannie Mae and Freddie Mac, which have already received $148 billion of taxpayer money, may need another $215 billion, nearly double the initial expected cost projections.
The original injection of taxpayer funds to both companies was not enough in the eyes of President Obama and Congressional Democrats. Last December, the Administration lifted the $200 billion cap on taxpayer funds to Fannie Mae and Freddie Mac and ultimately put taxpayers on the hook for another open-ended bailout. I was a vocal opponent against the Administration's actions at the time. These taxpayer dollars in all likelihood will never be repaid.
Additionally, I opposed the so-called financial regulatory reform bill that passed earlier this year because it failed to address Fannie Mae and Freddie Mac, two of the most significant causes of the financial meltdown.
South Dakotans are responsible people who work hard to make ends meet and pay their mortgages on time, which is reflected in our state's low home foreclosure rate. The federal government should not continue to force responsible Americans to shoulder the financial burden of failing companies. The government's recent report on Fannie Mae and Freddie Mac only confirms the need for Washington to end the era of taxpayer funded bailouts.