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Taxpayers On The Hook For Another Freddie Mac Bailout
May 6, 2010 – Washington, D.C. – Senator John Ensign today commented on Freddie Mac’s request for an additional $10.6 billion from American taxpayers to continue its operations. The government previously provided Freddie with $50.7 billion when it first took over the company in September 2008, and this newest request would bring that total to $63.1 billion.
“It’s becoming glaringly obvious that Freddie Mac is unable to function without money from hard-working Americans,” said Ensign. “As the economy continues to struggle and many people in my state remain unemployed, Freddie Mac is continuing to drain the bank account of this country dry, and this is simply unacceptable. Unless we address the issue of real reform of these government-sponsored entities, which this financial reform bill does not do, the taxpayer will continue to be on the hook for bailout after bailout.”
Senator Ensign has offered an amendment to the financial reform bill that would address the issue of government-sponsored entities being “too big to fail” by imposing a limit on their size so that they would not be bigger than 3% of the GDP. The Ensign amendment would force Freddie Mac to get smaller, thereby reducing its risk to taxpayers.”
As the Washington Post reported, Freddie Mac was bailed out by the government in September 2008, and under the terms of that bailout, American taxpayers are required to make up the shortfall in any quarter when the firm’s net worth is negative. Because of revised rules that took effect just this year, Freddie Mac was required to move all mortgages that it guarantees, but does not own, onto its books. This revision in rules caused the company’s equity to drop by $11.7 billion.
All totaled, the bailouts of Fannie Mae and Freddie Mac will be a $389 billion drain on the American taxpayer through 2019.
Ensign: Internet Regulation Will Stifle Growth In Broadband
May 5, 2010 – Washington, D.C. – Senator John Ensign, a senior member of the Senate Commerce Committee and the ranking member of its Communications Subcommittee, today commented on news reports that FCC Chairman Julius Genachowski has decided to impose stricter regulation on the Internet under Title II of the Communications Act.
“I am extremely disappointed that Chairman Genachowski has chosen to go down this path as re-regulating the Internet under outdated monopoly telephone rules is a major mistake,” said Ensign. “Using this heavy-handed approach to regulation under Title II will jeopardize private investment and innovation in broadband and inject regulatory uncertainty throughout the entire Internet. Internet companies, broadband providers, and consumers will all suffer from such uncertainty. The government has taken over a lot of industries just this year, and the last thing that our economy needs right now is for the government to take over the Internet, too.”
Senator Ensign has been a vocal opponent of regulating the Internet under Title II and shared his concerns with FCC Chairman Genachowski earlier this year at a Senate Commerce Committee hearing.
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