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August 11, 2008

Subject: Mortgage Bailout Bill Funds Eminent Domain
Permission to post granted by Margaret Byfield ("Margaret Byfield says it is fine to post it.Thank you!") Stewards of the Range www.stewards.us
Liberty Matters www.libertymatters.org

President Bush just signed another taxpayer-funded piece of constitutionally challenged legislation to bail out 400,000 home buyers who face forclosure in the failing Bush economy. The government's latest intrusion into market issues, the Housing and Economic Recovery Act of 2008, may have far-reaching ill effects on private property, however. Among other provisions, "it creates a new regulator for ailing mortgage giants Fannie Mae and Freddie Mac and establishes a $300 billion program to expand the Federal Housing Administration's ability to guarantee mortgages." And, writes John Berlau, "of all the unintended consequences of the housing bill, one of the most ironic and far-reaching may be this: that whatever security marginal homeowners have from foreclosure, their homes will be far less safe from being taken by a bureaucrat through eminent domain." Included in the package is $3.9 billion for Community Development Block Grant funds. Those funds will allow cities and counties to take private properties and then sell them to private developers, thanks to the 2005 Supreme Court Kelo decision. The Senate made an attempt to protect property owners from greedy governments by inserting a clause stating, "No funds under this title may be used in conjunction with property taken by eminent domain unless eminent domain is employed for a public use." But, that clause disappeared from the House version after House Financial Services Chairman Barney Frank (D-MA) and Treasury Secretary Henry Paulson got their heads together. The new language allows bureaucrats to use the billions in federal grants to seize homes for general economic development, as provided under Kelo, and then pull the old "bait and switch" by creating a new project to sell the land to developers, likely not a violation of the House bill. "All in all," writes Berlau, who writes the Open Markets blog for the Competitive Enterprise Institute, "this new language means that.there will be virtually nothing stopping states and localities from using the federal housing grants to help themselves to confiscate housing." How ironic that a man who won his first Governor's race by championing private property no longer believes in its importance to the future security of individual Americans or our nation.