The Washington Post: ‘U.S. promises unlimited financial assistance to Fannie Mae, Freddie Mac’
Given the role Fannie and Freddie played in the financial crisis, you’d think that they’d be getting nothing but coal in their stockings. Unfortunately, you’d be wrong:
The Obama administration pledged Thursday to provide unlimited financial assistance to mortgage giants Fannie Mae and Freddie Mac, an eleventh-hour move that allows the government to exceed the current $400 billion cap on emergency aid without seeking permission from a bailout-weary Congress.
The Christmas Eve announcement by the Treasury Department means that it can continue to run the companies, which were seized last year, as arms of the government for the rest of President Obama’s current term.
But hey, at least the Obama administration has gone to great lengths to make sure that companies that profit from government bailouts reign in their corporate executive bonuses. So it’s not like the hundreds of billions in bailouts for Fannie and Freddie are going to go towards funding exorbitant bonuses, right?
But even as the administration was making this open-ended financial commitment, Fannie Mae and Freddie Mac disclosed that they had received approval from their federal regulator to pay $42 million in Wall Street-style compensation packages to 12 top executives for 2009.
The compensation packages, including up to $6 million each to Fannie Mae and Freddie Mac’s chief executives, come amid an ongoing public debate about lavish payments to executives at banks and other financial firms that have received taxpayer aid. But while many firms on Wall Street have repaid the assistance, there is no prospect that Fannie Mae and Freddie Mac will do so.
Merry Christmas, I guess.