Fannie Mae (FNMA)

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THE OBAMACARE FANNIE/FREDDIE GATE CONNECTION:

Government documents leave little doubt profits from Fannie and Freddie confiscated by the U.S. Treasury have been used by the Obama administration to pay Obamacare subsidies and other items not appropriated by Congress, in complete and illegal circumvention of the District Court’s ruling and the Constitution’s determination that only the Congress shall have the power to tax and spend.

For instance, Chapter 3 of the Congressional Budget Office publication “The Budget and Economic Outlook: 2015 to 2025” notes on page 63 that the major contributors to mandatory U.S. government spending include “… outlays for Medicaid, subsidies for health insurance purchases through exchanges, and the government’s transactions with Fannie Mae and Freddie Mac.”


https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/49892-Outlook2015.pdf

Why Fannie and Freddie are specified in this context, when Fannie and Freddie have had sufficient earnings to operate without government subsidies since 2008 is made clear a few pages later.

On page 65, in Table 3-2, the CBO report notes “mandatory outlays projected in CBO’s baseline” from Fannie Mae and Freddie Mac for 2014 is -$74 billion and for 2015 a total of -$26 billion.


https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/49892-Outlook2015.pdf

The figures are “negative dollar amounts” because instead of paying out to Freddie and Fannie, the U.S. Treasury is collecting from Freddie and Fannie, with the proceeds going into the U.S. Treasury general fund to pay “mandatory outlays,” including evidently continued subsidies to insurers, as specified by ACA Section 1402.

In footnote 14 on page (1)8 of that CBO report lets the cat out of the bag, noting the Obama administration considers payments from Freddie and Fannie “to be outside of the federal government for budgetary purposes,” recording cash payments from Freddie and Fannie to the Treasury as “federal receipts.”


https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/49892-Outlook2015.pdf

The Obama administration evidently considered this all-too-convenient redefinition of terms allowed the government to argue the use of Fannie and Freddie profits to pay Obamacare Section 1402 subsidies was not in violation of the District Court ruling.

Why? Evidently because Fannie and Freddie profits were not taxpayer-generated, but were profit payments generated by Government Sponsored Entities that still had some common and preferred stock private and institutional shareholder ownership.

In the same footnote, the CBO takes exception with the Obama administration, commenting the CBO considers profit payments to the Treasury made by Fannie and Freddie to be “intragovernmental” receipts going into the same Treasury general fund pot, to be mixed indistinguishably with taxpayer revenue, not distinct public/private GSE “receipts” separately accounted for in the Treasury general fund as distinguishable from taxpayer revenue.

If the federal courts conclude Fannie and Freddie GSE “receipts” to Treasury still need Congressional appropriation to be spent legitimately by the executive branch of government, the Obama administration will have been exposed as having operated outside the Constitution in its desperate attempt to keep the ACA from imploding.

What should be outrageous to progressives understanding the Obama administration subterfuge to keep the ACA alive is that by confiscating Fannie/Freddie profits to keep Obamacare alive, Obama ignored core members of the Democratic Party’s core constituency – affordable housing advocates and minority groups – with little explanation.

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