On May 5th, Senator Chris Dodd (D-CT) was talking with reporters about the financial reform bill where he said, “We’ve ended the ‘too big to fail’ debate. So no longer do I expect any argument to be made that this bill exposes the American taxpayer.”
On the same day, Freddie Mac announced that that it lost another $6.7 billion in the first quarter of 2010 and therefore needed another $10.6 billion in cash from U.S. taxpayers.
This week Fannie Mae is now requesting $8.4 billion more of your money from the Treasury Department after losing $13.1 billion in the first quarter.
Since formally nationalizing Freddie in 2008, the federal government has already spent $50.7 billion bringing the Freddie bailout total to $61.3 billion so far. Combined with Fannie Mae’s raid on the Treasury, the Congressional Budget Office estimates that the American people will spend $389 billion bailing out the two Government Sponsored Entities by 2019.
Nothing in the Dodd bill does anything to reform Fannie Mae and Freddie Mac. This despite the fact that Fannie and Freddie were key players in causing the very financial crises Dodd claims his bill will forever prevent.
So much for American taxpayers no longer being exposed to “too big to fail.”