If you don't know who the patsy is...

While Justin has been hard at work writing a story about Fannie Mae and Freddie Mac, I've been spending some time revisiting the law Congress passed in July that let Treasury do what it did over the weekend.

There was a whole lot of other stuff in there, if you remember back, including billions of dollars in federal funding that will start flowing on October 1. You can read about how people are preparing for that money by clicking here.

What I'd like to highlight here is something I noticed while reading a summary of the bill the House put out shortly before it passed. In the section about the program that lets the FHA insure up to $300 billion of new, fixed-rate mortgages for homeowners who owe more than their house is worth and can't afford their current loan, the House proudly states:

According to the CBO [Congressional Budget Office], this three-year program, starting October 1, 2008, will not cost taxpayers a dime, as it is more than paid for by using funds in the first few years from the Affordable Housing Trust Fund.

Elsewhere in the summary, the House again waives the banner of fiscal responsibility, talking about the provision that:

Creates a new permanent affordable housing trust fund—financed by the GSEs [i.e., Fannie and Freddie] and not by taxpayers—to fund the construction, maintenance and preservation of affordable rental housing for low and very low-income individuals and families nationwide in both rural and urban areas.

An affordable housing trust fund financed by Fannie and Freddie, which are now essentially owned by... oh, yeah. Taxpayers.

As the director of the CBO put it earlier this week:

It is CBO's view that the operations of Fannie Mae and Freddie Mac should be directly incorporated into the federal budget... In practical terms what it means is that the revenue earned by the GSEs would be recorded as a federal receipt and their spending would be recorded as a federal outlet. So, for example, when they guarantee a mortgage-backed security, that would be reflected in the federal budget. And when they pay their heating bills, that would count as a federal outlet.

So close, Congress. So close.

Barbara!