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House Financial Services Committee Chairman Rep. Spencer Bachus, (R-Ala.), explains why Obama's housing plan is risky.
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Should with the Fed Chairman but before we do that we wanna bring in Republican congressman Spencer -- us from Alabama he is chairman of the house financial services committee.
He joins us now from Capitol Hill congressman -- need to be with us this morning.
-- congressman Paul Ryan as Ben Bernanke this very thing whether the the low interest rate.
Easy money policy from the Federal Reserve is essentially giving congress and the White House.
-- past to be fiscally irresponsible.
Do you think.
That the Federal Reserve is part of the bigger problem.
-- Federal Reserve has had to keep interest rates down to give the congress an opportunity to.
Address our long term structural problems -- -- entitlement programs.
I would be a little more positive and say that the Federal Reserve -- -- -- -- Bernanke could.
He's he's given -- time and he's actually come before our committee and Humphrey Hawkins testimony and literally pleaded with the to -- long term structural changes in our entitlement program.
Because that's the only way you'll come up with 56.
A trillion dollars that you're gonna have to say that.
You have not done that many roadways making congress has not addressed that.
Now they hadn't and -- -- the house -- his past -- not enough.
The absolutely nothing.
And the president.
Rather than tonight and -- but you know the pattern that we we've had several commission and I've laid out -- what today.
And I actually was optimistic about the gang of six.
Last year.
But it did apparently it was just too big a pill for the for the congress and administration and I think that's Shannon.
One place for the president had -- joined the debate is over.
Housing and how to fix that -- at the housing mess with this refinancing plan that came out this week I know that you congressman called this.
Top -- wasn't serious not a serious plan what do you think of the big problems.
With the -- -- essentially trying to refinance lot of these mortgages that are underwater.
-- I think he was serious serious proposal but I don't think.
It's a serious proposal and that.
You know where every athlete Democrats Republicans even non.
I think you would agree that every government foreclosure.
Plan has been disasters is left things worse -- failed.
And basically to quote Albert Einstein.
Insanity is to continue to repeat time and time again.
What doesn't work hoping for different result and that's what this is this time he he -- FHA to pick up these mortgages.
And and what you're talking about it is three or four million dollar I mean I'm sorry you're talking about probably three million.
Mortgages.
On top of the seven million that the FHA already insurers.
And they FHA.
You know you're talking about that would be.
Seven trillion dollars worth of obligations they only had two.
Point four billion dollars on reserve and the president's apps in general this -- this program won't cost ten million.
So in that seven point five billion that the taxpayer -- -- off the bat.
You've got to give them that they would have -- that out you'll have a bailout -- FHA later this year.
Do you know he actually when he talked about that plan.
Vegan he actually said no more bailouts he proposed a plan and they said no more bail out.
But it would lead to a bail -- I think later this year of FHA unless the economy improves.
And let me say this.
-- the -- foreclosure plan is a job.
Commonwealth said congressman but conversely.
You talk about that they today and -- possibility of a bail out later this year.
And then that you throw in Fannie Mae and Freddie Mac and you have the federal government Uncle Sam touching.
Almost every mortgage that is made in this country the vast majority of them so conversely.
Are you in favor of shrinking.
Government involvement because you could easily do that you could -- lower.
The rates that they have of those -- Side of the mortgages that that they take touches you could do more to reduce the -- on mortgage deduction are you in favor of that.
Let me say this the best way to to revive.
The housing market is to revive our economy.
So gonna lose the single thing I would say that's been the biggest mistake this month.
Is -- that million barrels -- -- Every day that's coming out of China and create jobs in China the Keystone Pipeline I mean 20000 jobs immediately.
And -- a 100000.
Created over the next three years now that's amazing job program that that would.
You know that's a foreclosure mitigation.
Program right there.
We've we've past thirty bills out of the house.
To create capital -- you have -- capital on workforce that creates economic activity.
They're over in the senate we've said that the president -- -- address.
Foreclosures address the economy create jobs and their thirty.
Bipartisan bills that are over in the senate.
Pick up the phone call -- -- talent to pass social built in fact the president endorsed several of those bills in his state of the union.
But I don't do this you mentioned.
Over and I think not a 2% of our mortgages are now insured by the federal government right this would probably take it up to -- 5%.
Now what we what we have proposed Republican instead of you know you ask about Fannie and Freddie we proposed private market crowding out.
The government now.
The administration has said the same thing but we've yet to say they're they're program we proposed program which they've resisted nation would be -- -- -- problems senate.
So until.
They have -- that the private market his got to.
Grow that share I'm afraid we're -- have a longer had the we've had we've had some six or eight.
Hearings this year.
On the profit more.
-- congressman Spencer baucus the chairman of the house.
Financial services committee.
Gonna return to our coverage of chairman Bernanke right now but we hope you come back in -- talk about these issues with us.
In the future -- baucus with us from Capitol Hill to the downside -- in the whole heck of a lot right now.
