In the last presidential debate we heard the candidates discuss their views on Fannie Mae and Freddie Mac. While neither candidate has provided specifics on how to fix the problem there, some of their statements are revealing. During the first presidential debate, Senator Obama stated that in 2007 he “wrote to the secretary of the Treasury to make sure that he understood the magnitude of this problem and to call on him to bring all the stakeholders together to try to deal with it.” Senator McCain on the other hand was a co-sponsor of a bill entitled the Federal Housing Enterprise Regulatory Reform Act of 2005 (Senate Bill S-190). S-190 addressed many of the concerns regarding Fannie Mae and Freddie Mac that are being discussed today.
While I’m sure Senator Obama’s letter to the Treasury Secretary was informative, the primary job of a Legislator is not to write letters warning of financial disaster; it’s to pass laws to prevent them.
A big reason Senator Obama has no voting record on Fannie Mae and Freddie Mac reform is because every Democrat in committee voted against the bill. This display of partisanship ensured that the bill would not have the sixty votes necessary to come to a full vote.
While explaining the intricacies of mortgage backed securities, collateralized debt obligations, and credit default swaps, and their affects on the credit crisis, is complex, what is simple and clear is who politically benefited the most from Fannie Mae and Freddie Mac. On July 16, 2008, The Center for Responsive Politics, a Washington DC think tank, released a survey of individual and PAC donations made by Fannie Mae and Freddie Mac for the ten year period ending June 30, 2008. The study based on data downloaded from the Federal Election Commission reveals that in the last ten years only two candidates for public office have received more political contributions than Barack Obama. Even more remarkable is that the two individuals who received more money, Christopher Dodd and John Kerry, have been in the Senate for more than ten years, a stark contrast to Barack Obama three year tenure in the Senate.
To gain a better understanding of the issue just follow the money. Do we want a candidate for President who wrote a letter and at the same time accepted over $100,000 of campaign contributions from Fannie and Freddie or do we want a President who more than three years ago, at a time when it was unpopular to do so, co-sponsored a bill to reform Fannie Mae and Freddie Mac? I think the choice is clear. I encourage my fellow citizens to vote for John McCain and Sarah Palin on November 4, 2008.