According to federal regulators, the federal bailout for Fannie and Freddie Mac could double in size in the next three years. Both federally controlled mortgage fiance` giants would probably need at least another $73 billion dollars, and perhaps need as much as $215 billion from taxpayers.
Fannie and Freddie were seized by federal regulators in September 2008 as the crisis in the housing market threatened to topple them. The Bush administration pledged $200 billion to keep them solvent. Early on, the Obama administration doubled that number to $400 billion, and then late last year made an unlimited pledge of support.
The interesting part of this whole story, and barely covered by the media, is last week President Obama named Tom Donilon as National Security Advisor, replacing General James Jones. Tom Donilon was the top lobbyist for Fannie Mae during the housing bubble, and helped prevent any restrictions or curbs into its practices in the housing market. Donilon was a lobbyist for O'Melveny and Myers, where Fannie Mae was a client. Seeing his influence and contributions to our national debt, it's frighting to think what he will bring to our national security.
This again goes counter to what the president stated during the campaign, that no lobbyist would be working in his administration; that promise has gone by the way side. The taxpayers are the real victims. Ironically, Fannie Mae and Freddie Mac were conveniently left out of the recently passed financial overhaul legislation this summer. If they don't think that the national debt is a security threat now- hold on to your hat.
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