A housing bill of horrors.(Inside Track)

In response to the housing crisis, the American Housing Rescue and Foreclosure Prevention Act of 2008 (H.R. 3221) passed in the House (272-152) on July 23 and in the Senate (72-13) on July 26. This legislation added another new agency to the goliath federal bureaucracy, the Federal Housing Finance Agency (FHFA), to oversee and regulate three Government Sponsored Enterprises (GSEs): Fannie Mae, Freddie Mac, and the Federal Home Loan Bank System. The new FHFA is required to consult the Federal Reserve before issuing any regulations, orders, or guidelines concerning GSEs through 2009. Thus the Federal Reserve's power has been enhanced to cope with the disastrous Greenspan legacy.

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An emergency monetary "bazooka" has been provided the Treasury for defending the viability of Fannie Mae and Freddie Mac. The Treasury secretary was given open-ended authority to increase the existing line of credit to Fannie and Freddie for 18 months. Ammunition for the monetary bazooka came through increasing the debt ceiling by $800 billion (8.2 percent) to $10.6 trillion. The Treasury was also given authority to buy stock in these two investor-owned companies through 2009, demonstrating open abandonment of free markets through governmental manipulation of the price of select stocks. Rep. Ron Paul expressed concern about the lack of effective standards for congressional oversight of the Treasury's expenditures. Congress has relinquished significant control over the federal purse strings.

Three hundred billion dollars for FHA loan guarantees was also authorized through ...