Bush says he won’t back bill that bails out lenders
The president’s comments came as Senate leaders are working on a bipartisan bill to help strapped borrowers get government-backed mortgages, paid for by tapping a fund designed to help poor families. Bush did not comment on that proposed legislation directly. He has threatened to veto a House version of the bill.
“Laws shouldn’t bail out lenders,” Bush said after getting an economic update from Treasury Secretary Henry Paulson. “Laws shouldn’t help speculators. The government ought to be helping creditworthy people stay in their homes.”
The president pushed Congress to pass legislation to more tightly regulate Fannie Mae and Freddie Mac, the government-sponsored companies that finance home loans.
“Our fellow citizens have got to know that these major players in the mortgage markets — if reformed properly by Congress — will really help stabilize the markets and make it easier for people to stay in their homes,” Bush said.
The Bush administration on Monday also reiterated its stance that it remains too soon to consider a second economic stimulus boost for the nation. The first package produced tax rebates checks for millions of Americans. Bush said Paulson assured him that people are getting the money as promised.
“It should help our economy, and more importantly, help people pay their bills,” Bush said. “And we hope people use that money and take care of their families and shop.”
Many Democrats in Congress are pushing for another government-backed economic boost to help people deal with rising gas and food prices.
Meanwhile, Bush has threatened to veto a House-passed Democratic measure aimed at preventing foreclosures. It would have the government step in to insure up to $300 billion in new mortgages for distressed homeowners; Bush says it would “reward speculators and lenders.”
Senators are working on a version that would tap a fund drawn from Fannie Mae’s and Freddie Mac’s profits to pay for a new foreclosure-prevention program. Many community groups want that money directed to a low-income housing fund. Yet without diverting the affordable housing fund, many Republicans say the bill would be a bailout that would open taxpayers to undue risk.
Negotiations were continuing on the possible bargain, and action on the proposed Senate bill was expected to pick up on Tuesday.
Bush spokesman Scott Stanzel said the White House had no position on the proposed bill yet.