On Thursday, despite a deal said to have been struck with Democrats in August, Senate Republicans successfully used the filibuster to block meaningful economic reform again.
With just 42 Republican votes, the GOP was able to block the majority and continue to prevent the President’s nominee — his second — from taking taking the helm at a crucial federal agency, ensuring the man appointed by George W. Bush would remain in that key role.
In late summer, in “GOP Filibuster Still ‘Single Largest Obstacle to Meaningful Economic Recovery’“, we explained how the Senate’s Republican minority had successfully used the filibuster to prevent the Obama Administration from replacing Bush Administration holdover Edward DeMarco as head of the Federal Housing Finance Agency(FHFA) . The FHFA is the federal agency which oversees government-sponsored mortgage giants, Fannie Mae and Freddie Mac, which own 60% of all mortgages in the United States.
Last year, in a petition to President Barack Obama, the advocacy group Change.Org described DeMarco as “the single largest obstacle to meaningful economic recovery”. That assessment was shared by The New York Times’ Nobel Prize winning economist Paul Krugman, who called for President Obama to “Fire Ed DeMarco,” after DeMarco, in defiance of the Obama Administration, rejected a U.S. Treasury Department request “that he offer debt relief to troubled homeowners — a request backed by an offer that the U.S. Treasury would pay up to 63 cents to the FHFA for every dollar of debt forgiven.”
Although Krugman explained at the time that “a reduction in debt burdens would strengthen the economy,” creating “greater revenues” that could “offset any losses from the debt forgiveness itself,” DeMarco has consistently sought to protect the Wall Street casino (aka the mortgage backed securities market) against any relief to homeowners who were victimized by those fraudulent schemes.
All of these years later, Republicans in the U.S. Senate, defying the majority will of the American people, continue to help him…
We explained in the previous article that Obama’s first nominee to head the FHFA, Joseph Smith, withdrew his nomination on Jan. 27, 2011 after Republicans, according to the National Council of State Housing Agencies, “prevented the nomination from coming to a vote in the full Senate” despite a 16-6 vote of approval by the U.S. Senate Banking Committee.
In our late summer report, we also noted that despite the accord struck at the time between Republican and Democratic leadership in the U.S. Senate — in an effort to stave off the so-called “nuclear option” that might have done away with the filibuster – the Senate had not acted on Obama’s second nominee to FHFA, Rep. Mel Watt (D-NC). That nomination had been pushed back to September.
With Thursday’s vote, 42 Senate Republicans simultaneously refused to permit an up-or-down majority vote on either the Watt nomination or the Obama administration’s nomination of Patricia Millett to the U.S. Court of Appeals in Washington D.C.
Although the White House has refused to withdraw the Watt nomination, so far, there is little indication to date that Senate Leader Harry Reid (D-NV) is prepared to again threaten the “nuclear option” in order to secure a majority vote that may prove vital to a meaningful economic recovery.
During an interview with Rachel Maddow on MSNBC this week, however, Reid did indicate that there could be more changes coming to the filibuster in the U.S. Senate, though he offered no specifics on what he may have in mind.
“We already changed things,” Reid said, in reference to the deal brokered over the summer, “and time will only tell if we change it some more…Stay tuned.”
In the meantime, the George W. Bush appointee to the FHFA remains in charge of that crucial federal agency almost five years since the Bush Administration left office.
Ed DeMarco is required by law to safeguard taxpayer money. As head of FHFA, Ed DeMarco has been authorizing lawsuits against banks, exercising put-back clauses; forcing banks to take back the loans at full value. Thus, recovering money for the taxpayers. Indeed, $4 billion of that non-starter $13 billion sweetheart deal Holder and Obama signed off on is actually the work of Ed DeMarco and should not be included in the $13 billion settlement.
HAMP & HAMP II were supposed to do what change.org wants Ed DeMarco to do. Obama’s failed programs,rife with fraud, abuse, and outright chicanery. More useful as propaganda than anything else. Banks would eat the losses (actually, if done right, tax deductible).
By having FHFA and F&F do what Obama and Holder have failed to do in any meaningful way… it is possible that F&F will own the loans and the put-backs being pursued, successfully, by Ed DeMarco would not happen. Resulting in massive taxpayer losses. In other words, Obama, Holder, Change.org, etc… would have the taxpayer pay for the outright criminal fraud perpetrated by the banks.
And that suits Obama and Holder just fine. Yves Smith at nakedcapitalism dot com, and others, have dissected the low-ball, sweetheart deals of Holder and the SEC, including the fraud perpetrated by Obama’s DoJ head, Holder. Jet on over there and look up the BofA fraud that DoJ successfully covered up by killing the investigation.
Ed DeMarco, is doing what he is supposed to do, by law. Holder and Obama? Sweetheart deals for Wall Street.
In “Fire Ed DeMarco,” Paul Krugman made short work of DeMarco’s claim that debt forgiveness would produce “a net loss to taxpayers.”
Furthermore, even if there’s a small net cost to taxpayers, debt relief is still worth doing if it yields large economic benefits.
In any case, however, deciding whether debt relief is a good policy for the nation as a whole is not DeMarco’s job. His job — as long as he keeps it, which I hope is a very short period of time — is to run his agency. If the Secretary of the Treasury, acting on behalf of the president, believes that it is in the national interest to spend some taxpayer funds on debt relief, in a way that actually improves the FHFA’s budget position, the agency’s director has no business deciding on his own that he prefers not to act.