The Democratic ACORN bailout; Update: Video added
posted at 7:55 am on September 26, 2008 by Ed Morrissey
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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.
- 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).- USE OF DEPOSITS.Of the amount referred to in paragraph (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- 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: Here’s the video with Graham:
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.
