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In the last few days, we have written here and here about the grave dangers to the economy and to the taxpayer of an unreformed Fannie and Freddie - - - as well as the peril of added slush funds for left-wing groups - - - all found in the Barney Frank Housing Bill.

The House Republican Leadership made it plain to the president on Tuesday night that there were enough votes to sustain a veto of this ill-advised measure. (Here is the House vote yesterday.)

Having enough votes to sustain a veto meant that the president had the leverage to bargain for a cleaner, more taxpayer-friendly housing bill that would not bring about another housing crisis a few years down the road. Instead he backed down from his earlier veto threat here issuing a vanilla statement here.

Politico here catches the reaction of House Republicans in “Housing flip puts Bush in GOP doghouse.”

“At a party caucus meeting, the leadership was applauded after urging a no vote. And in a blast from the past — and one eerily reminiscent of his attacks on Bush’s father in the ’90s — former Speaker Newt Gingrich (R-Ga.) jumped into the fray, telling Republicans at the same meeting that it was in their interest to vote no and thereby distance themselves from the White House.

‘I told them it was very good for House Republicans to take a stand on their own, separate from the administration,” Gingrich told Politico. “If I were Treasury Secretary [Henry] Paulson and I were given unlimited authority, I’d like it, too. But it’s an absurd bill. If a Republican administration wasn’t supporting it, it wouldn’t get five Republican votes.’

Rank-and-file conservatives were equally blunt. ‘When it was announced, there was kind of a moan,’ Rep. Tom Price (R-Ga.) said, recalling the caucus’ response when Bush’s decision was announced. ‘My personal reaction is that it is unconscionable.’

‘There he goes again,’ said Rep. Pete Hoekstra (R-Mich.). ‘When he really has a chance to stand up and take a tough stand, he’s not there.’”
(Underscoring Forum’s.)

The Competitive Enterprise Institute’s John Berlau reveals here that “‘Kelo’ Property Rights Protections [are] gutted from housing bill.” Explains author Berlau:

“All in all, this new language means that if the new bill is what ultimately passes, there will be virtually nothing stopping states and localities from using the federal housing grants to help themselves to confiscate housing. How did these property rights protections get removed? That’s somewhat of a mystery. Barney Frank may not be a friend of property rights, but then neither is Treasury Secretary Paulson, who, according to press accounts, convinced President Bush to decide not to veto the bill. Just after Bush nominated Paulson to head Treasury, CEI adjunct scholar Steve Milloy warned that Paulson “has demonstrated little respect for private property rights.” Milloy noted that as head of Goldman Sachs, Paulson spent shareholders’ money to support environmental groups’ efforts to stop forestry on a piece of land in in Tierra Del Fuego, Chile. After this pressure, the Chilean landowner was forced to sell the land to — who else — Goldman Sachs. For this reason and others, Milloy urged the Senate to reject Paulson’s nomination, as did CEI.”
(Underscoring Forum’s.)

The Wall Street Journal has been on the Fannie and Freddi case from the get-go. Today we learn from the editors here in their “Housing Bill Hammers Taxpayers” the score: crony capitalists, 100; taxpayers, zero:

“Mr. Paulson might have kept an eye on the taxpayer’s interest here by insisting that any money put into the companies come with some upside, as the Chrysler bailout in 1979 did. Instead we are left to trust that Mr. Paulson or his successor will have the political nerve to resist the companies and their friends on Capitol Hill. Any money given to Fannie and Freddie should have been conditioned on receivership, including clearing out the management and boards that made this mess.

Mr. Paulson argues that the new regulator will have the Federal Reserve’s clout behind it, adding firepower to its ability to rein in the not-so-dynamic duo. But the Fed is also subject to Congressional sway, and no Fed Chairman is going to risk losing his running room on monetary policy to corral Fan and Fred.

For proof of how powerful they remain, even in their straitened circumstances, look no further than Majority Leader Harry Reid’s refusal even to allow a vote on an amendment proposed by South Carolina Republican Jim DeMint to bar the two from lobbying in the future. Senator DeMint has threatened to filibuster if his amendment isn’t aired. By itself, the antilobbying provision won’t save the taxpayer from Fan and Fred, but it’s a start.

Democrats are rushing this bill through because of the favors for Fan and Fred and new spending for left-wing activists like Acorn. But the reluctance of many Republicans to look out for taxpayers is harder to comprehend. They’ll get little credit this year for letting the majority Democrats say they did something for “housing,” and GOP voters will blame them for rescuing the irresponsible.” (Underscoring Forum’s.)

Senator John McCain hit this legislative monster hard today here in his ““Take taxpayers off hook for rot at Fannie, Freddie”:

“Americans should be outraged at the latest sweetheart deal in Washington. Congress will put U.S. taxpayers on the hook for potentially hundreds of billions of dollars to bail out Fannie Mae and Freddie Mac. It’s a tribute to what these two institutions — which most Americans have never heard of — have bought with more than $170-million worth of lobbyists in the past decade.”

Now the senator can truly say “No Bush Third Term.”

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