Washington, D.C. – Citizens Against Government Waste (CAGW) Vice President Leslie Paige  testified today before the House Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises.  Testifying on behalf of the Homeowners Education Coalition (HomeEC), Paige discussed the costs and risks to taxpayers inherent in the activities of government-sponsored enterprises (GSEs), specifically Fannie Mae and Freddie Mac. 

HomeEC is an ad hoc coalition of taxpayer and consumer groups including the National Taxpayers Union, the Competitive Enterprise Institute, the Free Congress Foundation, 60 Plus, CapitolWatch, and the American Association of Small Property Owners.  HomeEC is committed to drawing much-needed attention to the escalating debt load of the housing GSEs, the absence of either true market discipline or congressional and regulatory oversight, and the mounting risk these activities pose to taxpayers.  Following are excerpts from Paige’s prepared testimony:

“With the release of the CBO update, it is no longer tenable to argue that there are no federal subsidies [provided to the GSEs] and there is no implied government guarantee… Since 37 percent of their $10.6 billion annual subsidy is soaked up by the GSEs themselves, it is clear that they have converted their congressionally-conferred benefits into a highly-efficient profit-delivery system…”

“They [Fannie Mae and Freddie Mac] have now become so ascendant in the financial markets that their activities have far-reaching effects throughout the entire national financial system and therefore into the pocketbooks of ordinary citizens.  Increased oversight by Congress is absolutely obligatory....”

“They have been permitted to interpret their charters as an infinitely malleable set of loose guidelines where anything that makes a hefty profit is constructed as furthering homeownership.  The affordable housing mission has become nothing more than a politically-convenient fig leaf.”

Ms. Paige’s complete testimony is available on CAGW's website, www.cagw.org.  CAGW is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, mismanagement and abuse in government.