President Barack Obama has found himself caught between a Congressional “rock” and a Political “hard place,'” and he now deperately seeks to circumvent Congress–which represents the “will of the people”–to use taxpayer dollars to “fund” part of his re-election campaign.
After sufferring a stunning bipartisan defeat in the “rock-hard” Democrat-led Senate, which stopped his “Jobs bill” cold last Thursday night, it appeared as though President Obama has been rendered politically “impotent”–or has he?
President Obama is very clever, and has had his advisors combing the law for quite some time now, looking for ways that he may effectively “implement” any of his pet programs via the executive pen.
Here are the two “loopholes” they have found–so far.
The first one will be announced by President Obama during a campaign fund raising visit to Las Vegas today, where according to a FOXNews.com article today, the maximum loan-to-value ratio rules under the original “Home Affordable Refinance Program” (HARP) will be eliminated. This action is intended to help peolpe with federally insured mortgages, whose homes are “underwater”–worth less than their outstanding mortgage balance.
The objective of the plan is to allow those who qualify to re-finance their existing mortgage to a lower interest rate, in order to reduce their monthly payment and avoid foreclosures.
On the surface this seems like a good idea–provided that owners cannot increase their mortgage balance through the refinancing process, thereby increasing exposure to loss for the already struggling Fannie and Freddie.
But, the “big money” question is who will take the hit on the resulting “discount” to the loan value, which could be substantial?
The government cannot “force” the bank or investor that owns the loan to take a write down, which would be subtracted from its “net capital” requirement and threaten its solvency in the eye of regulators, made especially more complicated by the Dodd-Frank Act.
So, it would be the taxpayers again, in a clear form of “wealth redistribution,” unfairly favoring a single class of people.
Although these changes will not create a single job–they may buy a few votes.
The other loophole program will be announced on the second leg of President Obama’s “western air tour”, after he arrives in Los Angeles, to attend three other high-dollar fund raising events, including one at the home of Melanie Griffith and Antonio Banderas–He is going to take unilateral action on student loans, according to Chris Stirewalt’s article in FOXNews.com today.
Student loan debt reportedly stands at $1 trillion, and as Democrats successfully “nationalized” the program early in the Obama presidency, he has broad latitude in setting the terms for repayment or amnesty–which would be yet another form of “wealth redistribution” to a single “favored” class of people–students and recent college graduates, who were a very important source of votes for the president in 2008.
As a result of Congress freezing Obama’s “credit line”, he is trying get a little altitude for has gasping re-election campaign, by rolling out another anti-Republican bumper-sticker slogan … “We can’t wait!”
Actually, we believe Obama “confiscated” this slogan–because it has always been the iconic Tea Party battle cry.
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