Early Estimates of Bailout Range to $100 Billion
The independent Congressional Budget Office has announced the expected federal taxpayer bailout of Fannie Mae and Freddie Mac will appear as a $25 billion budget expense, but that the real bill could be anywhere from zero to $100 billion. This, even though the once-governmental agencies were formally privatized in 1968.The independent Congressional Budget Office has announced the expected federal taxpayer bailout of Fannie Mae and Freddie Mac will appear as a $25 billion budget expense, but that the real bill could be anywhere from zero to $100 billion. This, even though the once-governmental agencies were formally privatized in 1968.
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The budget office said there was a better than even chance that the rescue package would not be needed before the end of 2009 and would not cost taxpayers any money. But the office also estimated a 5 percent chance that the mortgage companies, Fannie Mae and Freddie Mac, could lose $100 billion, which would cost taxpayers far more than $25 billion.
The House is expected to act this week on housing legislation that includes the proposed rescue plan. Legislative language has not been finalized, but the Congressional Budget Office said its estimates were based on the plan by the Treasury Department and that it did not expect significant changes in the final bill.
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Editorial Cartoons
Editorial Cartoons
Lessons learned from the 2008 financial crisis show that taxpayer-funded blank checks to institutions do nothing to help those struggling
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