TheDC Morning: WH agrees: Fat Fannie and Freddie need to slim down

Mike Riggs | Contributor

— “Nine months after his campaign was staggered by reports that he had incorrectly claimed to have served in Vietnam, Democratic Sen. Richard Blumenthal made what seemed to be a similar misstatement Tuesday, putting himself at the center of the action in the historic 1973 Supreme Court case that legalized abortion,” reports the Connecticut Mirror. “I’m new to the Senate but I’m not new to this battle,” Blumenthal said in his very first Washington press conference. “Since the days of Roe v. Wade, when I clerked for Justice Blackmun, as a state legislator, as attorney general, I have fought this battle.” The problem with this statement is that Blumenthal clerked for Blackmun a year after he’d written the Roe v. Wade decision. But why let the truth get in the way of a good story? Seriously. Connecticut Sen. Dick Blumenthal wants to know why he can’t just make stuff up.

— How would you feel if the owners of the only two gas stations in your town met and agreed to charge the same price for gas at both their stores? It’s possible that you would pay the same low rate at both the gas station near your house and the gas station near your office. It’s also possible to hold your breath for up to 8 minutes. But wouldn’t you rather have a snorkel when you go swimming? According to the New York Times, “The new health care law encourages collaboration by doctors and hospitals for cost savings, but a split has developed here as to just how far they can go without running afoul of antitrust laws.” Without “vigorous antitrust enforcement,” the Federal Trade Commission is worried that the “new alliances of health care providers could reduce competition and increase costs to consumers.” While such collusion happens all the time, Pres. Obama’s antitrust lawyer feels “the commission has demonstrated unreasonable skepticism toward collaboration by health care providers.” You know, because doctors aren’t in it for the money.

— Caring about underfunded public sector pensions is the new black. Here to help you dress up your knowledge is the Manhattan Institute’s Josh Barro. “The true size of the unfunded liability for retiree benefits is far larger” than the $1 trillion commonly mentioned in news stories, writes Barro in a new report. “This is because governments use excessively optimistic assumptions when estimating the size of their pension liabilities. If less rosy accounting is used, with the (smaller) liabilities of local governments included, unfunded pension obligations total more than $3 trillion. If the costs of health care for retirees are included, unfunded obligations amount to more than $4 trillion.” While Barro’s number is four times as scary as the more commonly used one, it also makes his suggestions–including annually and publicly disclosing pension investment projections–four times more interesting.

— “More than two years after the government seized Fannie Mae and Freddie Mac, the Obama administration will recommend phasing out the housing-finance giants and gradually reducing the government’s footprint in the mortgage market,” reports the Wall Street Journal. “The most conservative would propose no government role in the mortgage market beyond existing federal agencies, such as the Federal Housing Administration. The two others would create a way for the government to backstop part of the secondary mortgage market, a role long-filled by Fannie and Freddie. Under one, that government backstop would kick in primarily during periods of market stress; under the other, the government would play a role at all times.” One of these plans is not like the others, insofar as two of these plans aren’t a whole lot different from what we have now.

— “A House GOP push to permanently extend expiring provisions of the Patriot Act is running into opposition from conservative and ‘tea party’-inspired lawmakers wary of the law’s reach into private affairs,” the L.A. Times–which still sees fit to present Tea Party as “tea party”–reported on Monday. On Tuesday, the act failed to pass for renewal. Dave Weigel of Slate has a list of Republicans who said “HELL NO” to the executive overreach. Of 26 dissenters, only eight are Tea Party froshes. Alleged small-government fanatics Allen West, Michele Bachmann, and Kristi Noem voted in favor of renewing the act. King Buzzkill (AKA Allahpundit) had this to say: “After months of rhetoric about government intrusion and hand-wringing on both sides about Obama’s expansion of Bush’s counterterror powers, [Tea Partiers] had some political cover to draw the line on extending parts of the Patriot Act further if they wanted to. Nope.”

— “Taking one more step towards a budget showdown, the House Appropriations Committee voted Tuesday evening to accept the framework of a GOP plan that would cut $35 billion in spending from the current federal budget,” writes the AJC’s Jamie Dupree. Rep. Jeff Flake was the only person to vote against the package, saying, “If we were to cut $100 billion – and I think we should – that would represent only 1/15th of the deficit.” While Flake’s colleagues disagreed with him in committee, they “vowed to vote for more cuts on the floor of the House.”

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