December 26, 2012

NEWSMAX
Conservative Groups to GOP Leaders: Don’t Fear Fiscal Cliff Dive
by Newsmax Wires
December 24, 2012

Republicans in Congress must be prepared to jump off the fiscal cliff if that’s what it takes to make President Barack Obama abandon his idea of ending tax cuts for the wealthy, conservative interest groups say.

House Speaker John Boehner and other GOP leaders have acted too much out of fear of the automatic spending cuts and tax increases that will begin Jan. 1 if Congress and the president don’t reach a deal before then, leaders of the groups say, according to The Hill.

Republicans have the upper hand, because if the fiscal cliff talks fail and a recession ensues, Obama will be the one to take the blame, the groups say.

“I think Obama is very mindful of his legacy and is horrified of going over the cliff,” Andy Roth, vice president of government affairs at the Club for Growth, told The Hill. “Going over the cliff might be a signal that needs to be sent to the president that he needs to play ball.”

Plenty of others agree. “I think it is certainly better to go over the fiscal cliff than to have the Republican party deny the American people to have one party that stands for lower taxes and another party that doesn’t,” Michael Needham, CEO of Heritage Action, said last week.

Meanwhile, Sen. John Barrasso, R-Wyo., said on "Fox News Sunday" that Obama actually wants to leap off the cliff for political purposes. "I think he sees a political victory at the bottom of the cliff," the chairman of the Republican Senate Policy Committee said. "He gets all this additional tax revenue for new programs; he gets to cut the military, which Democrats have been calling for for years; and he gets to blame Republicans for it."

Read more: http://goo.gl/yvfzt

TOWNHALL
The Next Taxpayer Bailout: The Federal Housing Administration
by Kevin Glass
December 25, 2012

The Federal Housing Administration (FHA), hit hard by the collapse of the housing bubble, is still making risky loans on the taxpayers' dime, and may need a bailout in 2013.
An exhaustive study of the subject by the American Enterprise Institute's Edward Pinto reveals some shocking statistics:

An estimated 40 percent of the FHA’s business consists of loans with either one or two subprime attributes—a FICO score below 660 or a debt ratio greater than or equal to 50 percent (based on loans insured during FY 2012). The FHA’s underwriting policies encourage low- and moderate-income families with low credit scores or high debt burdens to make risky financing decisions—combining a low credit score and/or a high debt ratio with a 30-year loan term and a low down payment. A substantial portion of these loans have an expected failure rate exceeding 10 percent. 

Across the country, 9,000 zip codes with a median family income below the metro area median have projected foreclosure rates equal to or greater than 10 percent.These zips have an average projected foreclosure rate of 15 percent and account for 44 percent of all FHA loans in the low- and moderate-income zips.

The full AEI study is a must-read. It's not merely that the FHA is exposing taxpayers to inordinate risk, it's that their entire model is predatory upon low- and middle-income American families:

The resulting reduced or declining home values impact FHA and non-FHA low- and moderate-income families diligently making their payments. These families may be denied the opportunity to build equity, provide security for their family, and have the down payment for their next home as their family grows. Foreclosures also result in increased blight and crime and the larger community suffers from a reduced tax base and higher costs for providing municipal services.

Writing in the Wall Street Journal, Nick Timiraos reports that the FHA will be facing a $16.3 billion shortfall at the end of September, forcing the government to direct taxpayer money to the agency. The FHA backs over $1 trillion in U.S. home loans.

The FHA has been attempting reforms recently to try to avoid succumbing to a taxpayer bailout, but it is yet to be seen if this becomes successful. Further reporting from Timiraos is that the agency will be suspending its most popular reverse-mortgage program.

The federal government itself, despite the home bubble collapse in 2008, has added fuel to the fire.

In 2009, as home values plunged, Congress boosted the maximum home value that seniors could borrow against, fueling more demand for reverse mortgages. Private offerings of reverse mortgages disappeared as the housing bust deepened.

Reforms must be made to the FHA, especially in light of the vulnerabilities that the agency has shown in the wake of 2008's massive decrease in home values. It's not just that they expose taxpayers to an inordinate amount of risk, it's that FHA policy actively harms the quality of life for middle- and lower-income Americans. Reforms are needed sooner rather than later, as the clock is ticking on the FHA's bankruptcy.

Read more: http://goo.gl/yaQDB

REAL CLEAR POLITICS
A Washington Mess
by Richard Cohen
December 26, 2012

In 1962, Casey Stengel, the longtime manager of the New York Yankees, came out of retirement to lead the New York Mets, an expansion team. That season the Mets lost an astounding 120 games -- which is within about 20 games of what Stengel used to win with the Yankees -- and prompted Stengel to ask a memorable question: "Can't anybody here play this game?" That very question can now be asked about Washington.

I found myself channeling Stengel when, incredibly, John Boehner, speaker of the House and leader of his party, last week had to abort a vote he himself had called because he lacked sufficient Republican support. This brought a rare expression of sheer wonder from a former Republican speaker of the House, Dennis Hastert. "You don't ever bring something to the floor without the votes," he told National Journal.

The vote was supposed to be on a tax bill Boehner unironically called Plan B, which, as my colleague Dana Milbank pointed out, is also the name of the morning-after pill. Maybe for that reason -- one cannot underestimate the level of stupidity in Washington -- 26 Republican members of the House said they would vote no. Boehner thereupon called off the vote and sent the House home for Christmas. Maybe he'll use the time to learn how to count.

Washington has been reveling in its own history of late. The Senate last week took time off to watch Steven Spielberg's magnificent "Lincoln." To Spielberg's credit, he depicted a president who did more than grandly free the slaves; he got an anti-slavery constitutional amendment through Congress one recalcitrant member at a time. Lincoln cajoled and arm-twisted and even, we may suppose, bought the occasional vote, not with cash but with jobs and contracts. Few politicians will sell their soul, but they will on occasion sell a vote real cheap, sometimes out of sheer affection for the president.

Abraham Lincoln is Barack Obama's hero, and the president seemed to invoke Honest Abe when he promised to do something about guns. In the movie, Lincoln says that as a wartime president, he is "clothed in immense power." Obama said he will "use whatever power this office holds to engage my fellow citizens" in preventing gun tragedies. The words, the phrasing -- all redolent of Lincoln. The outcome, the past being prologue, will not be Lincolnesque. It will be an Obama muddle.

Spielberg knows what Obama does not. His Lincoln is in incessant negotiations with Congress and the rest of the Washington power structure. He does more than make grand speeches. But Obama is a grand speech sort of guy. After his re-election he said he had won a mandate. He actually hit the road again, asserting a mandate to raise taxes on the rich. He is right to want to do that, but his mandate is chimerical, made of rhetorical filigree that evaporates in the intellectually arid atmosphere of congressional districts that voted tea-party Republican.

Some 15 Republicans won in congressional districts that Obama carried -- whose mandate is that, anyway? -- and other Republicans triumphed in districts where Obama is considered an alien creature. One of those who refused to support Boehner's Plan B was Tim Huelskamp of Kansas. He won with -- this is no typo -- 100 percent of the vote. (He had no Democratic opposition.) Try telling him about mandates.

As with Lincoln, Washington now reveres Lyndon Johnson. Much of this is due to Robert A. Caro's latest volume, "The Passage of Power," and its tales of how Johnson knew how to squeeze out every last congressional vote. Caro tells how Johnson basted the crusty Sen. Harry Byrd Sr. of Virginia, slathering him in praise and promises that Byrd knew would be redeemed. Johnson won titanic legislative victories, but he did so one vote at a time. He was a creature of Congress. Johnson left the Senate with a gaggle of friends and the experience to change history. Obama served in the Senate too. He just came and went.

Obama and Boehner are co-pilots steering us toward the fiscal cliff. Their respective jobs are beyond them. One talks over the head of Congress, the other called for a vote he couldn't win. The thing's on automatic pilot -- automatic spending cuts, automatic tax increases: automatic debacle. The stock market fell. Next, jobs will be lost. Boehner went home to Ohio and the president went to Hawaii for a vacation ... from what? Only the ghost of Casey Stengel remains in town: "Can't anybody here play this game?"

Apparently not.

Read more: http://goo.gl/AJKcF