The Treasury Department gains unlimited power, until the end of 2009, to lend money to Fannie Mae and Freddie Mac or buy their stock should they need it. The Federal Reserve takes on a new "consultative" role overseeing the companies.
The measure includes $15 billion in tax cuts, including a significant expansion of the low-income housing tax credit and a credit of up to $7,500 for first-time home buyers for houses purchased between April 9, 2008, and July 1, 2009.
Democratic leaders, recognizing that the measure could be one of the last items to become law during what's left of their abbreviated election-year schedule, tacked on an $800 billion increase, to $10.6 trillion, in the statutory limit on the national debt.
Conservative Republicans were vehemently opposed to the bill, particularly the help for Fannie Mae and Freddie Mac. Critics charge the companies enjoy lavish profits in good times and wield their outsized political clout to resist regulation while depending on the government to bail them out should they falter.
Sen. Jim DeMint, R-S.C., delayed the final vote because Democrats refused to allow him a vote on a proposal to ban the companies from lobbying or making political donations to lawmakers.
"We can't have the people who are supposed to watch over these organizations getting money from these organizations," DeMint said. "At least if we're going to ask the American taxpayer to be on the hook for billions, possibly trillions of dollars, let's stop this."
That is sad.
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The ability of these organizations to lobby Congress is huge and largely ignored by the American public. I worked for an organization that had strict prohibitions on its contractors lobbying Congress, and I'm convinced that it made a huge difference in our ability to control and direct our work. All too often I watched my peers in other branches doling out money that they believed was a complete waste because Congress had appropriated it to them at the behest of their contractors. Were we a model of free market efficiency? Hell no, but you could find a civil servant at headquarters who would vouch for every dollar that was spent at the contractor, and say it was money well spent. This is not true in much of the government.
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