Sen. Bunning on the housing bill: 'Unpopular,' 'unusually bad'

Sen. Jim Bunning, formerly of the Philadelphia Phillies and now of Kentucky, receives special attention around here because he was the first U.S. senator to find fault with the housing bill that is dominated by tax breaks for home-builders.  Today Bunning explained his objections to the bill in detail. Excerpts:

"This is an unusually bad bill, and I have opposed it from the start.  The course it has followed almost guarantees that it will be filled with the worst kind of gimmickry.  And it is.  The Senate may be the world’s greatest deliberative body, but this bill is anything but the product of deliberation.  It is a jumble of disjointed ideas, unlikely to solve the crisis at hand, and it’s unpopular.

"It turns out that the American people don’t like the idea of bailing out banks and their neighbors who gambled on home prices.   The voters understand what is going on in Washington, better than we do. ...

"Another provision that deserves far more scrutiny is the $4 billion in community development block grants that will be allocated to state and local governments to buy foreclosed properties.  To begin with, this program is very poorly managed. The Wall Street Journal called it among the worst-run programs in Washington, and there is a lot of competition for that title."

"The White House called the program 'ineffective' just two months ago, and when the HUD Inspector General testified before Congress in 2006, he explained that his agency had recently indicted 159 individuals and recovered $120 million of misappropriated funds. GAO also has criticized the targeting of grant recipients, which is a polite way of saying that the money is going to those with political connections and influence in local government.  Adding money to this program is risky at best. 

"Let’s not have any illusions.  This extraordinarily unwise grant of taxpayer money is really just a bailout for banks in disguise.  It goes to states, but the ultimate beneficiaries will be banks that made risky loans.  Instead of selling foreclosed properties on the open market, these banks will have the luxury of selling to local officials with whom they may already have a relationship.   These officials will be buying properties not with their own funds, but with 'O.P.M.'  O.P.M. stands for 'other people’s money.'  And, in this case, the O.P.M. comes from you and me, the American taxpayer, and millions of unborn Americans that we are saddling with even more debt.

"Another provision that could benefit from more thoughtful deliberation is the $100 million of spending on counseling. ... We also don’t know all that much about the non-profit groups that will get the money.  Are some of these groups funded mostly by credit card companies?  If so, they will have a clear conflict of interest.  Maybe they will actually advise people to abandon their homes to foreclosure in order to pay credit card debt.  That would make the foreclosure situation worse, not better."

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com
Photo Credit: 1966 file photo of Jim Bunning, via AP.

Comments

[jb]

I sent Bunning an e-mail - I have never voted for a republican in my life but I am jumping ship - Boxer and Feinstein - are you listening?????

[let the builders fall]

I thank the senator for his honesty, something you do not see much. One I guess who did not care when the builders decided to stop donating to the house.

I also agree with Peter in Palm Springs and Cindy.

As a tax payor who has lived with in my means and have done the right thing. I feel that we should not rescue the builders and the banks.

The banks use our money and invest if they made poor choices then they should have to pay for there mistakes, as i would.

I was also ripped off by a builder who sold us a toxic mold enviroment and has refused to properly repair the premises that is not in livable state and has never been in a livable state from before closing to after. It is now almost 2 years and we have not spent one night in the property. And have been forced to pay 2 mortgages and legal expenses and expert fees.

the fact that the government will bail out builders who have made billions of dollars over the years and have spent it stupidly by given stupid bonuses out is not the publics problem. And the fact that some of these company's are rewriting their contracts so that if the company still does not do well they will be entitle to a bonus anyway.
Is our government paying attention to these articles that are all over the place.

If I was irresponsable, then I would let the mold infested mc mansion forclose. But as a responsblbe tax payor I will not do that.

[SoCalRealEstateNews.com]

Cal, you nightowl,

Thanks for the link to Default Research's stats. Good stuff, & scary.

I contacted their CEO, & they're primarily reporting NODs, so these homes are mostly 5 - 7 months away from hitting the market.

We ended up building a post around the info:

http://socalrealestatenews.wordpress.com/

We think think this oncomin tsunami of foreclosures makes it prudent for congress and the fed to continue exploring prudent actions that might be taken to mitigate the damage.

With the emphasis equally on "prudent" and "action."

[jbunniii]

"Sen Bunning may be right on in the parts of the bill that he criticizes. Too bad he doesn't also propose alternatives that might be more helpful."

I agree completely, and in fact, I just dispatched a letter to him suggesting that this is an excellent time for the Senate to consider legislation to repeal the mortgage interest tax deduction! Who's with me?