Tonight, the Senate plans to vote on a reconstituted version of the $700 billion bailout bill that failed to pass the House earlier this week. Included in the bill are new provisions, including “a one-year increase in Federal Deposit Insurance Corp. caps for bank and credit union accounts, extensions of numerous business tax breaks that have expired and a fix to the alternative minimum tax for individual taxpayers.”
No longer in the bill is a provision stating that 20% of the government’s profits from the sale of a troubled asset be deposited, with 65% of the deposit directed to the Housing Trust Fund. The Housing Trust Fund is a federal housing program that provides “funds to state governments for the purpose of building and rehabilitating homes for the very lowest income people in the United States.”
The provision was removed because, for the last week, conservatives have been harping against it. They called it a “slush fund” for ACORN, the Association of Community Organizations for Reform Now. ACORN is “the nation’s largest grassroots community organization of low- and moderate-income people,” engaged in initiatives to prevent predatory lending, develop affordable housing, and build funding for public schools. Watch a compilation:
Rep. John Boehner (R-OH) called the provision a “left-wing giveaway Democrats are pushing to force taxpayers to bankroll a slush fund for a discredited ally of the Democratic Party.” Michelle Malkin wrote that it’s “$100 million more in funding for the left-wing housing entitlement thugs and heavily tax-subsidized fraudsters at ACORN.”
But conservatives are completely mischaracterizing this part of the bill. Directing funds to the Housing Trust Fund does not mean that money is being given to ACORN. In fact, state and local governments – not the federal government – choose which organizations receive money from the fund.
While it is conceivable that ACORN would receive money, it “was not specifically directed any funds in the previous proposal.” For its part, ACORN, in order to maintain independence, “does not accept government funding and is not tax exempt.”
Conservatives have already tried to dodge responsibility for the financial crisis by blaming it on the poor. Now, they have refused funding for a program specifically set up to aid the poor just two months ago:
The Housing Trust Fund is the first new federal housing production program since 1974 that is specifically for extremely low income renter households. The need for this new program is acute. Today in the United States, there are 9 million extremely low income renter households and only 6.2 million homes with rents these families can afford.
Consequently, 71% of extremely low income renters spend more than half of their income for housing, leaving them without enough money for other essentials and at high risk of losing their homes and joining the ranks of the homeless. This is a housing crisis of major and longstanding proportions that the federal government must address.
It seems that the only bailout conservatives can get behind is one that leaves homeowners and the poor out, while giving tax cuts to corporations and the wealthy.