Media Availability Corporate Welfare for Fannie Mae and Freddie Mac: New CBO Report Details Billions in Federal Subsidies… But Where Is All the Money Going? | Citizens Against Government Waste

Media Availability Corporate Welfare for Fannie Mae and Freddie Mac: New CBO Report Details Billions in Federal Subsidies… But Where Is All the Money Going?

Press Release

May 17, 2001

 

WHO:

Members of the Homeowners’ Education Coalition (HomeEC):

  • Leslie Paige, Citizens Against Government Waste, (202) 467-5334
  • John Berthoud, National Taxpayers Union, (703) 683-5700
  • Bert Ely, Ely & Co., (703) 836-4101

WHAT:

According to an article in the May 17th Wall Street Journal, the Congressional Budget Office is poised to announce that home mortgage giants Fannie Mae and Freddie Mac receive taxpayer-subsidized benefits totaling a whopping $10.6 billion, an increase of 75 percent in the last five years.  More than a third of these subsidies are not passed through to American homebuyers, but instead, line the pockets of GSE shareholders and high-paid executives.  

WHY:

Fannie Mae and Freddie Mac are unique government-sponsored enterprises (GSEs) that enjoy a raft of government-conferred benefits, such as state and local tax exemption, multi-billion dollar lines of credit with the U.S. Treasury, and an implied government guarantee on their securities.  Not only do the GSEs reap excessive stockholder profits because of their lucrative government benefits, they are well on their way to dominating the entire national mortgage market.  Is this convoluted corporate welfare scheme the way Americans want to encourage homeownership?

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