Saturday, September 27, 2008

NUTS! to Taxpayer Bailout to Benefit ACORN

Were you aware of any of the following based on a week of breathless reporting on this situation? I happened to hear Lindsay Graham's remarks about ACORN reported on Neil Cavuto's program late yesterday afternoon. From

The Democratic ACORN bailout;
posted at 7:55 am on September 26, 2008 by Ed Morrissey

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

“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:

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.

"Absolute ill-run organization"? "Housing program that doesn't work"?? Lindsay Graham is far, far too kind to ACORN, where Barack Obama cut his community-organizing teeth as an ACORN lawyer, see ("Inside Obama's Acorn"), and ("The Danger of Vote Fraud in the 2008 Election").

ACORN is a criminal enterprise that uses tax subsidies to finance its voter-fraud campaigns, and to get like-minded politicians like Barack Obama elected to office. Why should they be getting any benefit from any financial bailout?

The Wall Street Journal described in July how ACORN benefited from the homeowner bailout bill the President signed just a few weeks ago:

One of the biggest likely beneficiaries, despite Republican objections: Acorn, a housing advocacy group that also helps lead ambitious voter-registration efforts benefiting Democrats.

Acorn -- made up of several legally distinct groups under that name -- has become an important player in the Democrats' effort to win the White House. Its voter mobilization arm is co-managing a $15.9 million campaign with the group Project Vote to register 1.2 million low-income Hispanics and African-Americans, who are among those most likely to vote Democratic. Technically nonpartisan, the effort is one of the largest such voter-registration drives on record.

The organization's main advocacy group lobbied hard for passage of the housing bill, which provides nearly $5 billion for affordable housing, financial counseling and mortgage restructuring for people and neighborhoods affected by the housing meltdown.

A third Acorn arm, its housing corporation, does a large share of that work on the ground.

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