Government-sponsored enterprises (GSEs) like the Farm Credit System (FCS), Fannie Mae and Freddie Mac are no strangers to huge federal bailouts. And while Congress has been willing, in the past, to bail them out when they’ve gone too far, Congress isn’t always willing to kowtow whenever Fannie, Freddie or the FCS make demands.
According to a September 17 article on executive pay by Jena McGregor at the Washington Post, Fannie and Freddie have been brought to heel, at least for now. McGregor writes, “That bigger pay day seems unlikely to last. The Senate bill will go to the House, and, if it passes, on to President Obama’s desk—where he is likely to sign it into law. The White House has objected to the increases, and a similar measure sponsored by Rep. Ed Royce (R-Cal.) passed the House Financial Services Committee by a vote of 57-1.”
Finally, Congress has begun to increase oversight on the activities of some GSEs, but why aren’t the Federal Housing Finance Agency (FHFA) and the Farm Credit Administration (FCA) doing their jobs and making sure the GSEs they’re supposed to regulate are adhering to their mandate? What use is a regulatory agency if it doesn’t regulate?
Making sure that Fannie and Freddie play by sensible rules is all well and good, but when will Congress apply the same scrutiny to the waste in the FCS that’s causing America’s farmers to languish? What financial catastrophe will it take for Congress to keep the FCS in check? What’s more, what is the FCA doing to prevent the rampant waste and neglect in the FCS? The answer is clear: unless we want another huge, taxpayer-funded bailout, Congress needs to take the FCA and the FCS to task.