Conservative activists were pushing for a cash infusion in the rescue package for Fannie Mae and Freddie Mac, and some in Congress seemed reluctant to pay the money back.
A group called Stand With Fannie and Freddie, an advocacy group, said in a statement that it “was first informed of the troubled bailout” by the paper Politico in December 2016. The group said that, based on media reports about negotiations over the bailout, at least $10 billion could have been paid back in 2025 by the companies, which still owned $187.5 billion in taxpayer funding after the 2008 financial crisis.
That’s how conservative leaders were advocating for a bailout. During closed-door congressional meetings, there were some Republican lawmakers who rejected the idea of giving some of the bailout money back in exchange for a private enterprise option that would largely pay off the federal government, Republican sources told Politico.
“Some of them were just trying to hold up the deal,” one senior Republican aide said. “They were almost making it illegal to implement that plan.”
In the end, the Democrats and Republicans who crafted the legislative compromise all made “$169 billion cash repayment a prerequisite for approving the plan,” according to Politico.
And even then, on Tuesday, there was push-back from conservatives. “The Republican leadership and the on : GOP leaders stuck to legislation, today but some in disagree,” the Fix the Debt think tank wrote on Twitter.
So after more than eight years of having taxpayers bailout these two government-sponsored entities (GSEs), Republican leaders continue to attempt to defund them, a solution that will only lead to further bailouts. pic.twitter.com/akasYgxUAo — Fix the Debt () March 21, 2018
But the push to bailout was most audacious and the outcry loudest from people who strongly backed their party’s candidates in 2016. Republican presidential candidate Paul Ryan got the ball rolling with a position paper. But Democratic presidential candidate Hillary Clinton also pushed for a bailout, which is why Bernie Sanders became an unlikely ally on the issue. Even Donald Trump’s plan to deregulate Fannie Mae and Freddie Mac, which would have given them freer rein to extend subprime mortgages, came under assault from banks and conservatives.
One of the most powerful voices to discuss the bailout was Ayn Rand, the American author and advocate for free markets who died in 1982. Ms. Rand opposed government involvement in the economy, and she was scathing in her criticism of the bailout proposal. “You take money out of the system, and the market will have severe dislocations,” she said in 1986. The problem of a government bailout is that “there will be crying people around the house who then will go hungry.”
She was right, of course.