Someone 'splain this to me

Latino Lawmakers Press Fed To Drop Fannie, Freddie Study

WASHINGTON -(Dow Jones)- Members of the Congressional Hispanic Caucus, at Fannie Mae's urging, are pressuring Federal Reserve Chairman Alan Greenspan not to release a controversial study that is expected to denounce the company's benefits to consumers.

"It's an important issue to their constituency," said Fannie Mae spokeswoman Janice Daue, who confirmed a meeting between the company's lobbyists and members of the caucus late last month as well as Fannie's input on their letter to Greenspan. "We talk to Congress all the time. It is our job; we're congressionally chartered to talk to Congress."
...
The Fed paper, which is expected to be released as early as Monday, is said to conclude that the housing GSEs don't lower mortgage costs much for consumers, and that their federal subsidies, valued at more than $15 billion a year, are largely unnecessary.

Similar reports by the Congressional Budget Office and others say the $15 billion in estimated annual federal perks given to Fannie, Freddie and the Federal Home Loan Bank System only lower mortgage rates for consumers by one quarter of a percentage point, at the most - not enough to price anyone out of a home if the subsidies were removed. Federal Reserve Chairman Alan Greenspan has made similar comments publicly, telling lawmakers in February that the companies' effect on mortgage rates is negligible.
...
Fannie Mae and Freddie Mac have been heavy contributors to the Congressional Hispanic Caucus and the nonprofit affiliate founded by its members, the Congressional Hispanic Caucus Institute Inc.

Fannie this fall donated $1 million to the Institute, to help launch a two- year CHCI research program targeting 63 congressional districts where Latinos comprise 25% of the population, the institute confirmed. The nonprofit Institute, unlike the CHC, isn't subject to restrictions on so-called soft money donations from corporations.

The Bush administration is pushing legislation that would strengthen the federal regulators of all three housing GSEs, possibly consolidating them under one agency within Treasury.

Fannie, Freddie and the 12 FHLBanks are exempt from most securities disclosure laws and don't pay state or local income taxes. Fannie and Freddie additionally have a $2.25 billion line of credit with the U.S. Treasury. Their debt also enjoys an implied federal backing and government "agency" status in the markets, giving all three a lower cost of capital.

Let's see if I have this straight. We've got a bunch of quasi-governmental "businesses" that don't pay taxes, compete with real businesses, and haul down $15 billion a year in taxpayer subsidies not to mention a $2.25 billion credit line. And they spend a bunch of money on lobbying and contributions to politicians who want to quash a study which indicates that their efficacy is negligible.

It's good to know the taxpayers are so flush with cash. Follow the link if you want to read more self-serving puffery from these bozos.