by Paul Bradford
Joe Biden promises to bring the Obama years back with a vengeance. One thing that’s likely to return is government slush funds for left-wing groups. Unless Trump takes decisive action, one of the biggest piggy banks for the Left will come from the Federal Housing Financial Agency (FHFA).
The Supreme Court recently heard Collins v. Mnuchin. The case is a complicated matter that involves government management of Fannie Mae and Freddie Mac and how independent it is from the administration. The federal government placed both under conservatorship – meaning federal management – during the 2008 financial crisis. The agency in control was the Federal Housing Financial Agency. A federal appeals court previously ruled FHFA’s structure unconstitutional.
The slush fund angle came into importance in 2012. That year, the Obama Administration enacted a rule to give 100 percent of Fannie and Freddie’s profits to the federal government, allowing liberal bureaucrats to dole out the money as they see fit. A ruling in Collins v. Mnuchin could put an end to that practice.
But an easier way to keep future liberal bureaucrats’ hands off this money is to take Fannie and Freddie out of conservatorship. The Trump Administration’s own FHFA appointees support this and are trying to make it happen ASAP. This will ensure a possible Biden Administration can’t launder the profits to radical left-wing groups without any oversight or accountability.
This is a serious problem across many government agencies. Former Attorney General Jeff Sessions waged war on these slush funds when he served in the Trump Administration. Sessions ended the Justice Department’s slush fund that lavished such groups as the pro-amnesty UnidosUS. The Justice Department’s slush fund was funded by large donations from corporations as part of their settlement agreements with the government agency. The Environmental Protection Agency was another agency that ran a similar slush fund arrangement.
Likewise, Fannie and Freddie also operated left-wing slush funds under the Obama Administration. The two mortgage giants were ordered by then-FHFA director Mel Watt in December 2014 to dole out their profits to the Housing Trust Fund and the Capital Magnet Fund. These two funds ostensibly focus on low-income housing, but they act primarily to redistribute wealth to Democratic constituencies.
“Director Watt’s decision to activate the Fannie and Freddie slush fund may be an early Christmas present for Acorn-like, liberal housing activists, but it’s a lump of coal in the stocking of every American taxpayer,” then-Rep. Jeb Hensarling (R-Texas) said at the time.
These payments are pretty much guaranteed to resume if Biden gets his way. In fact, a President Biden would likely expand Fannie and Freddie’s generosity to left-wing causes. Bridging the “racial wealth gap” and “racial homeownership gap” are some of Biden’s top priorities. That likely means he will expropriate more of Fannie and Freddie’s profits to advance his goals and enrich left-wing groups at the expense of the taxpayer.
Trump officials are considering the end of the federal government’s conservatorship, much to the horror of liberal think tanks and activists. These figures are particularly upset that Trump would end this practice to deny Biden access to Fannie and Freddie’s billions of dollars. It’s apparently Trump’s duty to ensure the money faucet for liberal housing activists is never turned off.
There will be many terrible aspects about a possible Biden Administration and the Trump Administration must do everything it can to mitigate these disastrous policies. We should not allow liberal bureaucrats to direct billions of dollars in legal compensation and mortgage profits to fortify the leftist power structure.
There’s an easy fix to prevent this nightmare: end Fannie and Freddie’s conservatorship. This arrangement wasn’t meant to last forever and it’s time these two mortgage giants went out on their own with minimal help from the taxpayer. The taxpayer isn’t served by profits going to amnesty advocates and promoters of Section 8 in the suburbs. This outdated arrangement only serves the interests of liberal elites.
– – –
Paul Bradford is a Capitol Hill refugee now earning an honest living.