So much for the tax cut for the middle class if your a homeowner

[ttown]

Seems those that own always pay for those that don't

"Hidden" mortgage fee paying for payroll tax cut


http://www.cbsnews.com/8301-505263_162-57371781/home-buyers-left-holding-bag-for-payroll-tax-cut/

 

[Billybob]

Catch this?

"The $35.7 billion collected in fees won't go into the Social Security fund to replace the lost payroll tax. It goes to the general treasury where Congress can spend it however they please."

 

[ttown]

yep, SOP. You didn't think they'd use it for anything but to keep the system going as long as they can did ya?

 

[Shadowrider]

From the article. Emphasis mine...

CBS News went to Capitol Hill ask what Congress was thinking when they passed the mortgage fee hike. Boehner pointed the finger at the Senate.

"As you're well aware, this bill came over from the Senate. I don't know how they justified it. We would rather have offset that two-month extension with reductions in spending," he said.

But the Senate blamed the House. And Democrats and Republicans blamed each other.

One congressman, Florida Republican Allen West, said he tried to blow the whistle on the whole thing before Christmas.

"I read the legislation and raised the flag. Unfortunately nobody paid attention to what I was saying at the time," he said, calling the fee a backdoor tax increase on the middle class.

Now who do you think is at the bottom of this? Answer: Democrats! It the Democrat way!

 

[Hobbes]

From the article. Emphasis mine...



Now who do you think is at the bottom of this? Answer: Democrats! It the Democrat way!

And why didn't the GOP in the Senate filibuster it like they filibuster everything else they don't like? Hmmm?

 

[Hobbes]

According to Axel, Fannie and Freddie will likely be required to provide significantly more to Treasury than the 10 basis points minimum the statute requires. Once the FHFA completes its capital analysis, Axel argues that as much as 50 basis points addition to a 4% mortgage interest rate could be imposed, adding roughly $58 a month on a $200,000 mortgage, with the additional revenue again being used to pay off the U.S. debt and away from the coffers of Fannie and Freddie.

This diversion, along with large dividend fees and an inability to pay back Treasury for taxpayer costs in installments, make it seemingly impossible for the two firms to emerge from conservatorship or ever appear more healthy.

A House Republican staffer said one of the motivations for diverting guarantee fee revenue away from Fannie and Freddie is to starve the two mega-housing firms and keep pressure on lawmakers to dismantle them.

He added that there were people in the congressional leadership that want to see that they never come out of conservatorship, and the more that they can be prevented from paying back Treasury, the more likely Congress will legislate them out of existence.

The staffer noted that top legislators seeking to dismantle Fannie and Freddie are cutting off revenue streams for the firms because they are worried that they could one day accumulate enough money to buy themselves out of conservatorship. In that scenario, he added, there may be little or no impetus on Capitol Hill to abolish them.

Leading the effort on Capitol Hill to dismantle the two firms — which were taken over by the government and put into conservatorship in September 2008 — are a core group of Republican lawmakers on the House Financial Services Committee. The vast majority of lawmakers, Republican and Democratic, are still undecided about how to move forward. Read about Republican bills to overhaul Fannie and Freddie

A bill introduced by Rep. Jeb Hensarling, Republican of Texas, would eliminate all government backing for the two firms and use any guarantee fee hikes for deficit reduction. Hensarling told MarketWatch he has been a long-standing supporter of hiking the guarantee fee to help level the playing field and bring in the private market. Responding to a question about whether he was pleased that fee revenue was being used to pay for tax cuts, he said that he is “very concerned about revenue diversion” and that “you don’t always get exactly what you want” in negotiations.

Going in a completely different direction, another bill, introduced by Rep. John Campbell, a California Republican, and Rep. Gary Peters, a Michigan Democrat, would overhaul the federal mortgage financing system and set up as many as 15 or 20 firms that would buy loans, package and sell them with explicit government guarantees.

Bose George, analyst at Keefe, Bruyette & Woods, said that further increases in the fees are consistent with long-term policy goals of both political parties to decrease the role of Fannie and Freddie in the mortgage market. However, he added that the Obama administration would be opposed to a significant, quick hike in the fee, because it would undermine efforts by the Federal Reserve to boost the economy and keep interest rates low.

Mark Calabria, director of financial regulation studies at the Cato Institute, said Republicans agreed to the use of Fannie and Freddie fees because they wanted to push the Obama administration to move faster to hike the guarantee fee and drive the return of the private market.

http://www.marketwatch.com/story/payroll-tax-law-may-starve-reform-fannie-freddie-2012-01-17

 

[TerryMiller]

First paragraph of MarketWatch story:

"When Congress signed a deal in the waning days of 2011 to extend the payroll tax cut by two months, they paid for it by increasing and diverting fees charged by Fannie Mae and Freddie Mac to guarantee mortgages."

It always aggravates me that the media and the liberals always say that we "have to pay for a tax cut." I would prefer that they say that we should "compensate for a tax cut" by reducing the size and strength of government.