Mortgage Madness

The White House isn’t buying the Senate housing bill.

As Benton Ives reports in Congressional Quarterly, President Bush is not too thrilled with the bailout proposal. Why?

“The bill will likely do more harm than good by bailing out lenders and speculators and passing on costs to other Americans who play by the rules and honor their mortgage debt obligations,” White House Press Secretary Dana Perino said in a Tuesday briefing.

A key official at the Department of Housing and Urban Development (HUD) isn’t buying the House housing proposal, either.

“We must not federalize the housing market,” Assistant Secretary Brian D. Montgomery said Wednesday in testimony to the House Financial Services Committee. “And we must not harm our economy through solutions that, however well intentioned, further erode the foundation of the nation’s housing market, hurt homeowners who are meeting their mortgage obligations, or prolong the correction.”

Both the White House and Montgomery know something that lawmakers on Capitol Hill can’t seem to understand: Whenever Congress meddles with the free market, you can bet unintended — and bad — consequences will follow.

Click here for more insight into the housing crisis and what Congress should and shouldn’t do about it.