Senator Calls Fannie/Freddie Bailout GOP 'Socialism'
Should beleaguered government-sponsored enterprises Fannie Mae and Freddie Mac live to see another bailout â€“ regardless of the cost?
Treasury Secretary Henry Paulson said so. Paulson has requested unprecedented power to use taxpayer funds to rescue Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:), the U.S. mortgage GSEs struggling with a recent collapse of confidence.
But Sen. Jim Bunning (R-Ky.) disagrees. Bunning appeared on CNBCâ€™s July 15 â€śKudlow & Companyâ€ť to elaborate on his view of Paulsonâ€™s proposal after blasting it earlier in the day at the Senate Banking Committeeâ€™s monetary policy hearing.
â€ś[T]he administration is absolutely wrong in bailing out Bear Stearns and/or Freddie and Fannie,â€ť Bunning said. â€śAnd the Secretary of the Treasury and the complicity of the Fed Chairman [Ben Bernanke] to these two things â€“ youâ€™re absolutely right, we have socialism in the Republican Party and this administration.â€ť
Although some politicians and pundits would prefer to see a bailout of Fannie and Freddie â€“ including CNBCâ€™s Jim Cramer â€“ some members of the Senate Banking Committee have expressed reservations In hearings on July 15 about granting bailout power to Paulson and future secretaries, none was more outspoken than Bunning.
â€ś[W]hen I picked up my newspaper yesterday, I thought I woke up in
Bunning stated that he was concerned there were no guarantees this type of bailout would have to happen again.
â€śAnd for this unprecedented intervention in our free markets â€“ what assurances do we get that it will not happen again? Absolutely none,â€ť Bunning added.
Bunning vowed to block any such measure during the hearing, which according Sen. Charles Schumer (D-N.Y.) implied he was threatening to filibuster. Overriding the filibuster would require the Senate to have 60 votes to enact any Freddie Mac/Fannie Mae reform legislation, versus a simple majority otherwise.