Hightower Lowdown

Don't you wish now that your parents had named you Fannie or Freddie? Sure, these are old-fashioned names, but maybe you could have parlayed your moniker into a piece of the massive bailout that Washington has arranged for the two mortgage financiers, Fannie Mae and Freddie Mac.

Both the Bush White House and the Democratic leaders of Congress have insisted that this bailout of private investors is essential, because our country's financial structure is tied into the shaky mortgages that Fannie and Freddie hold. Whether you buy that or not, one thing Congress definitely should not have bought is the Bushites' power grab built into the bailout.

To rescue investors who bet on the two big mortgage managers, Congress has agreed to put two of its designated constitutional powers into the hands of the treasury secretary.

First, the new law empowers the secretary to dole out unlimited billions of our federal dollars directly to Fannie and Freddie. Never mind that the Constitution explicitly says that only Congress can appropriate public monies. Second, the secretary is given authority to use the credit of the United States to raise money to loan to these two mortgage giants--yet, the Constitution says that only Congress can borrow on our national credit.

Economist Marty Mayer also points out that the Exchange Stabilization Fund, which FDR set up in 1934, could have handled any financial support that Fannie and Freddie needed, without subverting congressional authority.

This is yet another cave-in by Congress to the White House.