Fannie Mae headquarters in Washington, D.C.
(CNSNews.com) – Rep. Jeb Hensarling (R-Texas) says the Obama administration is using an accounting “gimmick” in its budget by not including the debt owed by mortgage firms Fannie Mae and Freddie Mac.
“The accounting gimmicks that are used today would make an Enron and WorldCom accountant blush,” Hensarling told reporters. “The American people know that under the policies of this administration-under the policies of this Congress-we are drowning in a sea of red ink.”
Hensarling, a member of the House Financial Services Committee, joined a group of House Republicans Tuesday in announcing the introduction of a bill that would require President Obama’s Office of Management and Budget to include the liabilities of Fannie and Freddie in the national debt calculation.
The two companies are defined as government-sponsored enterprises (GSEs) whose portfolios include trillions of dollars in American mortgages, many of which are now “under water.” The federal government took control of the mortgage giants in 2008, as they neared financial collapse.
Billions of taxpayer dollars ($61 billion for Fannie Mae and $51 billion for Freddie Mac) has been spent so far to keep the GSEs solvent. Just this week, Freddie Mac reported a $7.8 billion loss in the final three months of 2009, but said it will not require another taxpayer infusion at this time.
Hensarling on Tuesday suggested that the administration is under-reporting the nation’s debt by failing to account for the potential liability incurred if Fannie and Freddie go deeper into the red.
The potential liabilities incurred by Fannie and Freddie, Hensarling said, would amount to “the mother of all bailouts.”
Headquarters of the federally chartered mortgage giant, Freddie Mac, in McLean, Va.
“When the final chapter is written on the history of our financial debacle, it will show that the cause was the government policies that cajoled, incented (sic) and mandated financial institutions to lend money to people to buy homes that, ultimately, they could not afford,” Hensarling said. “At the epicenter of those federal policies was Fannie Mae and Freddie Mac, and before all the dust settles in the final accounting, they will prove to be the mother of all bailouts.”
Rep. Spencer Bachus (R-Ala.), the ranking member of the House Financial Services Committee, estimated that the unfunded liabilities of Fannie and Freddie could exceed $5 trillion.
Under Republican’s proposed bill, the White House Office of Management and Budget would have to treat the GSEs’ estimated liabilities as part of the federal debt, and those liabilities along with the rest of the debt would have to remain under the debt ceiling.
Congress recently voted to raise the debt ceiling above $14 trillion dollars for the first time to accommodate other spending.
“The president has often spoken about accountability and transparency,” Hensarling said. “This is an opportunity to engage in the deed as opposed to words to actually achieve that, and I would hope…that this legislation wouldn’t be necessary-that the president would direct the Office of Management and Budget to have honest accounting for the American people about the amount of debt that is attached to Fannie Mae and Freddie Mac.”
The bill – the Fannie Mae and Freddie Mac Accountability and Transparency for Taxpayers Act of 2010 — specifically directs the inspector general of the Federal Housing Finance Agency to submit quarterly reports to Congress during the conservatorship of the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac).
Each report would have to include the dollar amount of the GSEs’ total liabilities, with “a detailed breakdown of the potential level of risk to the Federal Government” and an explanation of how the risk to the federal government has changed from the previous reporting period.
The report also would have to include an explanation of all compensation and bonuses paid to Fannie and Freddie executive officers, among other items.
Treasury Secretary Tim Geithner told the House Budget Committee on Wednesday there’s no need for such reporting requirements: “We do not think it is necessary to consolidate the full obligations of Fannie and Freddie onto the nation’s budget,” Geithner said.
In addition to comparing the administration’s budget to the manipulated Enron balance sheet, Hensarling said the United States was heading down the same path as Greece, which now needs financial assistance from other European Union members.
“In fact, if you look at the rules of the E.U., when you look at our debt-to-GDP ratio-our deficit-to-GDP ratio, using our honest accounting, we couldn’t even get into the E.U. Now why are E.U. countries getting into trouble? Because of accounting gimmicks that they used to trick their people.”
H.R. 4581, the Fannie Mae and Freddie Mac Accountability and Transparency for Taxpayers Act, has been referred to the House Committee on Financial Services. In a Democrat-controlled House, it is not expected to advance.
Thursday, February 25, 2010
By Christopher Neefus
Source: CNS NEWS
The elite puppet US government and the Fed are destroying America:
– Bizarre? Now this is bizarre! Audit the Fed banksters NOW!
– US Senator Judd Gregg Warns of ‘Financial Meltdown’ Risk
– Rep. Ron Paul Grills Ben Bernanke on Saddam Hussein, Watergate and the Fed
– US Unveils Plans For New $1 Billion High-Security Embassy In London — The Most Expensive It Has Ever Built
– FDIC Report: ‘We Were Broke And Getting Broker’
– US: Millions of Unemployed Face Years Without Jobs
– US: Wealth Disparities Approaching 1920s Levels
– Judge Napolitano and Angela Keaton on Freedom Watch: Obama’s Bush Foreign Policy
– Rep. Ron Paul At CPAC 2010: ‘We Are On The Brink Of A Financial Cataclysmic Event.’
– Obama Signs Law Raising Public Debt Limit from $12.4 Trillion to $14.3 Trillion
– Societe Generale Chief Strategist Albert Edwards: Theft! Were the US & UK central banks complicit in robbing the middle classes?
– How to invest for a global-debt-bomb explosion; Prepare for an apocalyptic anarchy (Market Watch)
– Marc Faber on CNBC: All Governments Will Default On Their Debt, Including The US
– Cynthia McKinney at Munich Germany NATO Peace Rally: ‘My Country Has Been Hijacked By A Criminal Cabal’
– Report: 1 in 5 US Homeowners Underwater; Foreclosures at Record High
– President Obama’s Pledge Never to Raise Taxes on Anyone Making Less Than $250,000 a Year
– Rep. Alan Grayson: ‘20 Percent Of Our Accumulated Wealth Over The Course Of 2 Centuries Gone in 18 months!’
– Paul Craig Roberts: It Is Now Official: The U.S. Is A Police State
– Prof. Russell Roberts Testifies Before House Committee: ‘I Want My Country Back!’
– Director of National Intelligence Says US May Kill Americans Abroad
– President Obama Ups Pakistan Drone Strikes in Assassination Campaign
– The New Vision of the Obama Administration: War Without End
– Pentagon’s New Record Black Budget Tops $56 Billion
– Rep. Ron Paul on Obama seeking to assassinate ‘US citizens’ he labels as terrorist
– White House to Paint Grim Fiscal Picture: Another Record Budget Deficit
– US: GDP Mirage – The Last Hurrah
– Controller: Pennsylvania Capital Should Weigh Bankruptcy
– Marc Faber: Obama Makes Bush Look Like a Genius
– Obamanomics: Why Did the ‘Stimulus’ Fail to Help the US Economy?
– Paul Craig Roberts: How Wall Street Destroyed Health Care – Greed, Be Thou My God
– Ron Paul: US Foreign Policy is Bankrupting America
– Rep. Ron Paul: State of the Republic Address – ‘Dangerous Times Indeed.’
– America’s Impending Master Class Dictatorship! (MUST-READ!)
– The CFR Controls American News/Media
– Senate Proposes Increasing US Debt Limit to $14.3 Trillion: “If Congress does not enact this legislation, and soon, then the Treasury would default on its debt for the first time in history,” said Senate Finance Committee Chairman Max Baucus
– US: Unfunded Benefits Dig States’ $3 Trillion Hole
– Illinois enters a state of insolvency: ‘We’re close to de facto bankruptcy, if not de jure bankruptcy.’
– The No.1 Trend Forecaster Gerald Celente: Financial Mafia Controlling US and Wall Street
– Peter Schiff: The Lunacy of US Government Programs
– Former Dean of Harvard College Harry R. Lewis: Larry Summers, Robert Rubin: Will The Harvard Shadow Elite Bankrupt The University And The Country?
– Experts: Dollar Crisis Looms if US Doesn’t Curb Debt
– Marc Faber on Coming Sovereign Debt Crisis: Next Countries to Default are the US, Japan and the ‘PIIGS’
– Fitch: US Must Cut Spending To Save AAA Rating; US December Deficit Nearly Doubles
– The Coming Sovereign Debt Crisis
– US slides deeper into depression as Wall Street revels
– PIMCO’S Bill Gross: ‘Let’s Get Fisical’ (… or why the US will not make it.)
– Barack Obama’s Health Care Lies And Reversals
– US sheds 85,000 jobs in December; Record 40% Of Unemployed Without Job For 27+ Weeks
– Peter Schiff on Fast Money: ‘America is broke’; ‘The Fed created a currency crisis’; ‘Dollar to collapse 50-70% or more’
– US: Public Pensions Face $2 Trillion Deficit
– U.S. Avoids Technical Default By Three Days
– As an American, I refuse to buy mandatory health insurance … that supports Big Pharma
– The US Government Is Preparing For Collapse: Your Legal Right To Redeem Your Money Market Account Has Been Denied
– Prof. Dr. David Michael Green: Now I’m Really Getting Pissed Off … With Obama
– US Treasuries Post Worst Performance Among Sovereign Markets In 2009
– US losses will top $400 billion on Fannie Mae and Freddie Mac
– US: More Ammo For The Treasury Bazooka
– US government wants farmers to use coal waste on fields
– The No.1 Trend Forecaster Gerald Celente: The Terror And The Crash of 2010
– We’re Screwed! Hyperinflation like in the Weimar Republic; Great Depression worse than in the 1930s
– US Congress: Banksters Get $4 Trillion Gift From Barney Frank
Traitor in chief:
– Treason: Obama gives INTERPOL immunity from the Constitution (Amending Executive Order 12425)
– Peter Schiff on Obamacare, Freddie Mac & Fannie Mae: The Nightmare Before Christmas
– Obama administration backs Fannie Mae and Freddie Mac no matter how big their losses may be
– Rep. Dennis Kucinich: US War Presidents ignore Congress and Constitution
– Obamacare: Big payoffs to senators on health bill stoke public anger
– US: Trillions Of Troubles Ahead
– Chinese central banker Zhu Min: ‘The world does not have so much money to buy more US Treasuries.’
– Obamacare: Change Nobody Believes In
– Obama’s surge comes at a cost: At least $57,077.60 per minute
– US National Debt Tops Debt Limit
Hypocrite in Chief (Funny):
– President Obama: Another Busy Day in The Oval Office!
– Fascism in America: By Political Definition The US Is Now Fascist, Not A Constitutional Republic
– John Williams of Shadowstats: Prepare For The Hyperinflationary Great Depression
Liar in Chief (NOT funny!!!):
– Barack Obama Lies 7 Times In Under 2 Minutes!!!!!
– Robert Fisk, The Independent’s award-winning Middle East correspondent: Obama is a Disaster, Worse than Bush
– Rep. Dennis Kucinich: ‘These Wars Are Corrupting The Heart Of Our Nation!’
– Famous Investor Jim Rogers: Incompetence In Washington, Abolish The Fed And The Treasury
– Rep. Dennis Kucinich: The Truth About Afghanistan
– Obama’s Big Sellout (Rolling Stone Magazine)
– Obama administration to lift debt ceiling by $1.8 trillion
– Climategate: President Obama’s rule by EPA decree is a coup d’etat against Congress, made in Britain
– Obama administration tells Pakistan: Tackle Taliban or we will
– MSNBC Rachel Maddow: War President Obama
– Ron Paul: ‘Obama is Actually Preparing Us For Perpetual War’
– Afghanistan Surge to Cost At Least $40 Billion, That Is $1.333.333 For One US Soldier Per Year
– Rep. Brad Sherman: Geithner rejects $1 trillion limit on bailout power (Section 1204 is unlimited in dollar amount!)
Liar in Chief (Over 300 soldiers died in 2009 because of this lie!!!):
– Obama: ‘I will promise you this, that if we have not gotten our troops out by the time I am President, it is the first thing I will do. I will get our troops home. We will bring an end to this war. You can take that to the bank.’