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Bush Undercuts GOP on Housing

The split between the White House and House Republicans has been widening all year. After holding the line on a series of vetoes in 2007, party rank and file recently balked at backing up the president’s vetoes on the farm bill and the fix for Medicare doctor payments. A mere 37 Republicans voted against a highway spending bill Wednesday that Bush threatened to veto.

The housing deal gives Democratic leaders a huge political victory heading into the August break, with Financial Services Chairman Barney Frank (D-Mass.) and Speaker Nancy Pelosi (D-Calif.) exerting their newfound leverage over the housing crisis to maximum effect.

Frank dismissed Republican criticism, arguing that the new authority given to the Treasury secretary to invest in Fannie and Freddie would likely not be needed and would likely not cost nearly as much as predicted by conservatives.

And he got in a few digs about the split between Congressional Republicans and the White House, calling it “a classic situation of where the right hand doesn’t know what the far right hand is doing.”

Frank noted that the Congressional Budget Office set a $25 billion budget score on the package, a far cry from the $5 trillion in loans backed by the two mortgage giants. Frank also pointed to a new regulatory framework overseeing the companies and said nothing in the bill guarantees Fannie and Freddie’s debt.

“How does $25 billion become $5 trillion? By fantasy. If every single mortgage paid nothing, then you would have $5 trillion, but it wouldn’t be ours.”

Correction: July 25, 2008

The article misquoted House Financial Services Chairman Barney Frank (D-Mass.). Frank actually referred to a split between the White House and Congressional Republicans as “a classic situation of where the right hand doesn’t know what the far right hand is doing.”

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