California is battling a tough recession, a budget that is at least $20 billion in the red and an unemployment rate inching towards 13 percent. While the taxpayer has had enough of bailout after bailout, Senator Barbara Boxer (D-CA) decided to bail out Fannie and Freddie Mac by voting to give them billions more to squander.
The California U.S. Senator kept Californians on the hook for the endless bailouts of Fannie Mae and Freddie Mac; instead of focusing on fixing the mortgage giant she cast a partisan vote against reforming the two government-run home loan companies.
Senate Democrats moved to kill an amendment this week that would have protected taxpayers from future bailouts and slow down the government control of Fannie Mae and Freddie Mac.
Insiders are concerned the perpetual spending on a nearly defunct program could hinder the reelection of blue dog Democrats due the fatigue Americans have regarding the number of bailouts Washington D.C. handing out. Both of these institutions have historically showered Democrats with campaign cash.
According to The Washington Post, “The total price tag for Fannie and Freddie will be $145 billion, easily becoming the costliest element of the government’s rescue of the financial system. Last week, Freddie reported a net loss of $6.7 billion in the first quarter and said it needed an additional $10.6 billion in assistance from taxpayers. Fannie’s latest earnings report showed that the company continues to lose money on the trillions of dollars in loans it owns or insures. The company reported an increasing number of foreclosures.”
“Under the terms of the government’s 2008 emergency takeover of Fannie and Freddie, the Treasury must pump money into either firm whenever its worth, as measured by assets minus liabilities, goes into the red. Late last year, the Obama administration pledged unlimited backing,” The Washington Post reported.
The beleaguered California senator is currently facing the toughest reelection of her tenure; she has even recruited President Obama to stop by two fundraisers to help her campaign. However, any of the three GOP contenders are within the margin of error of beating Boxer.
Of the tree candidates, there is strong support for the Conservative Chuck DeVore, former Congressman Tom Campbell and Sarah Palin endorsed Carly Fiorina, any of whom looks to turn a dark blue state into purple.
“While millions of Californians are without jobs, Barbara Boxer is forcing her constituents to bail out the same institutions that helped create the nation’s economic crisis. There’s no doubt that voters will hold Boxer accountable for her misplaced priorities on Election Day,” said National Republican Senatorial Committee (NRSC) spokeswoman Amber Marchand.
The California primary is June 8 and Boxer will have a fight on her hands with any of the three GOP contenders.
In the equivalent of a Friday afternoon drop for a story seeking minimal coverage, the federal government announced they would be sinking an additional $3.8 billion in aid to lending giant GMAC. This infusion of cash gives the federal government majority ownership in another failing loan industry company.
The Obama Administration is proving its intention and loyalty to the banking industry and the fat cats that run them by throwing more money into an industry that America once dominated.
The handout GMAC is taking from the taxpayers is $3.8 billion it is minor considering they took $12.5 billion from the government earlier this year. The Teasury Department said it would increase its company stock from 35 percent to 56 percent making Uncle Sam in charge of the failing loan company.
According to the government, four of the nine board members will be personally picked by the Obama Administration and GMAC will be required to pay $14 billion in loans in order to regain control of the company.
This will be the sixth company the federal government has taken over in two years. The others are American International Group (AIG), Citigroup, Government, oops General Motors, Fannie Mae and Freddie Mac.
“We said if you do not go raise capital from the private markets, if you are unable to, we will put capital into you because it is important to the stability of the system,” Treasury Secretary Timothy Geithner explained to the Congressional Oversight Panel earlier this month. “It was never going to be possible for GMAC. They are in a unique and difficult situation.”
The question taxpayers are left asking is where is the money coming from?
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