Last month at a gala for the Congressional Hispanic Caucus Institute, President Obama said: “I wish I had a magic wand and could make this all happen on my own...There are times where — until Nancy Pelosi is speaker again, I’d like to work my way around Congress."
This week, Mr. Obama is moving forward to do precisely that.
He is acting to disregard the bipartisan rejection of his so-called jobs bill – another warmed over stimulus bill like the one that already spectacularly failed – and implement large pieces of it without approval from Congress. The president is simply pretending the bill passed and moving forward, starting with yet another mortgage bailout.
For Obama to impose yet another mortgage bailout on a country sick of bailouts is outrageous. The subsidized-refinancing scheme will cost taxpayers at least $600 million according to the administration’s own estimates, and will almost certainly cost much more than that if any significant number of borrowers actually sign up for the program. That’s because the federal government is a significant owner of mortgage-backed paper.
Beyond the losses to taxpayers, bond market investors will be slammed if the subsidized refinancing scheme catches on, because lower costs for borrowers mean lower returns for holders of their existing loans. This is the trouble when government steps in with bailouts – they create losers as well as winners, and undermine the ability of the market to function.
That Obama would do this by sidestepping Congress, the legitimate legislative branch, is completely unacceptable, but unfortunately follows a familiar pattern.
Obama has abused executive and regulatory power to launch an all-out war on affordable energy via the EPA and Interior Department, regulate the Internet via the FCC, and advance a radical union agenda at the NLRB and Department of Labor.
Now he’s trying to force more bailouts and stimulus on an American people who just want big government to go away and let us get on with on our lives. As President Calvin Coolidge said: “the chief business of the American people is business,” not more government programs.
It is clearly no longer enough for Congress to reject Obama’s bad ideas – they need to step up and actively stop him from working his way around them.
Phil Kerpen is vice president for policy at Americans for Prosperity and author of “Democracy Denied: How Obama is Ignoring You and Bypassing Congress to Radically Transform America – and How to Stop Him,” available at www.DemocracyDenied.org.