The White House on Tuesday threatened a veto of Democrats' broad housing rescue plan, calling it a burdensome bailout that would open taxpayers to too much risk.Link (aside added).
The threat came as the House prepares to vote Wednesday on the package, which is aimed at preventing foreclosures and stabilizing the housing market. The veto threat signaled that despite growing GOP support for the measure, especially among Republicans from areas hardest hit by the housing crisis, the plan could become mired in a partisan spat over which party is doing more to help homeowners in need.
But in a statement released Tuesday evening, the White House said it was opposed to virtually the entire package.
Relaxing FHA's standards to let debt-ridden homeowners to refinance into affordable, fixed-rate mortgages would "force FHA and taxpayers to take on excessive risk, and jeopardize FHA's financial solvency," said the statement from Bush's budget office.
It also said a central requirement of the bill — that lenders accept substantial losses on the original loans so that homeowners can refinance into a mortgage they can afford — would ensure the government would be on the hook for the worst-performing loans, increasing the plan's cost for taxpayers. [Which the Fed has already done anyway.]
The measure is "going to reward scam artists and reward those who were speculating in the marketplace," said Rep. John Boehner of Ohio, the House Republican leader. "To ask American taxpayers to bail out those who were scamming the system I think is very, very unfair."
And straight talk from the next President -- he's just not that into us (except for our votes):
John McCain said today he opposes government action to bail out homeowners having trouble with their mortgages, the New York Times reports. McCain—who will receive Nancy Reagan's endorsement today—differentiated himself from both Democratic candidates, who have called for federal intervention, saying: “It is not the duty of government to bail out and reward those who act irresponsibly."Link.
However, McCain said, intervention was prudent if it prevented “systemic risk that would endanger the entire financial system."
So both are in agreement: The crisis is all due to the borrowers.