What: All Issues : Housing : Funding for Housing Programs : HR 1427. (Federal housing financing overhaul), Hensarling of Texas amendment to prevent affordable housing money from being transferred between funds/On agreeing to the amendment (2007 house Roll Call 392)
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HR 1427. (Federal housing financing overhaul), Hensarling of Texas amendment to prevent affordable housing money from being transferred between funds/On agreeing to the amendment
house Roll Call 392     May 22, 2007
Progressive Position:
Nay
Progressive Result:
Win

This vote was on an amendment to a massive bill that sought to overhaul federal regulation of mortgage finance giants Fannie Mae and Freddie Mac, offered by Jeb Hensarling, R-Texas, who chairs the conservative Republican Study Committee. Hensarling’s amendment was one in a series of Republican attempts to erase, cripple or otherwise chip away at a $3 billion affordable housing fund, which would help low-income families construct and maintain homes. Specifically, this amendment sought to prevent money from being transferred between two federal affordable housing accounts.

Debate on the amendment, which was one in a series of votes called more to make a political point than actually effect change, centered mostly around the existence of the affordable housing fund itself, which the bill would fund at $3 billion. Opponents of the fund say funneling profits from Fannie Mae and Freddie Mac’s investment portfolio could threaten the companies’ solvency. Others argue that it could become another type of entitlement spending (examples of which are Medicare and Social Security).

“I don’t know exactly what the housing trust fund is, but I’m nervous about it. I’m nervous about it because when I look at almost every other government trust fund, what I see is an entitlement,” Hensarling said. “And the last thing we need to do is to be authorizing spending for a yet to be created entitlement spending fund.”

Barney Frank, D-Mass., who chairs the Financial Services Committee, said the bill handles the trust fund this way to avoid running afoul of budget rules known as PAYGO, a congressional rule requiring any bill that creates new spending or reduces revenues be offset by a reduction in spending, or creation of new revenue.

“An entitlement means that individuals will be able to say ‘Give me housing, I am entitled to it legally.’ What we are saying is we will set up a housing fund. We will debate how it is distributed, but it will never be close to an entitlement,” Frank countered.

With a vote of 263-155, the amendment was rejected on a largely party-line vote, with 39 Republicans joining Democrats in opposing it. The amendment’s defeat means the authority to transfer money between affordable housing funds is left intact.

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