Rove falsely asserted that Frank called Bush's Fannie, Freddie reform proposals "inane"
In his Wall Street Journal column, Karl Rove falsely claimed that Rep. Barney Frank "labeled" President George W. Bush's "proposals" for reform of Fannie Mae and Freddie Mac as "inane." In fact, Frank's remark came in response to Bush's assertion that "Congress needs to get [Fannie Mae and Freddie Mac] reformed" by passing Bush's "robust reform package" before Fannie and Freddie could expand their mortgage portfolios. The New York Times reported that in an interview, Frank "said that the president's comments were 'inane.' 'Tell the Republicans to stop blocking the bill,' Mr. Frank said.''
In a January 8 Wall Street Journal column, Fox News contributor Karl Rove falsely claimed that Rep. Barney Frank (D-MA) "labeled" President George W. Bush's "proposals" for reform of the former government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac as "inane." Rove's assertion echoed a similar mischaracterization of Frank's comment in a September 12, 2008, Washington Post op-ed by two former members of the Bush administration. In fact, as Frank wrote in a letter to the editor responding to the false claim in the Post op-ed, his "reference to the president's inanity" came in response to Bush's assertion at an August 2007 press conference that "Congress needs to get [Fannie Mae and Freddie Mac] reformed" by passing Bush's "robust reform package" before the GSEs could expand their mortgage portfolios. In his letter, Frank wrote that he had called that comment "inane" because the House had already "passed a bill giving the Bush administration everything it asked for in increased regulatory powers over Fannie and Freddie," which, according to Frank, Senate Republicans were "blocking."
Rove's column echoes attacks by numerous other media conservatives who have attempted to scapegoat progressives and proponents of expanding affordable housing in the financial crisis. Indeed, the day before the publication of Rove's op-ed, during the January 7 broadcast of his nationally syndicated radio show, Rush Limbaugh falsely claimed that Frank "created the problem" of the subprime mortgage crisis.
During his August 9, 2007, press conference, Bush had the following exchange with a reporter:
Q Sir, getting back to the credit crunch caused by defaults in sub-prime mortgages, should Fannie Mae and Freddie Mac be allowed to buy mortgages beyond their current limits, or play any additional role that could help revive mortgage finance?
THE PRESIDENT: As you know, we put up a robust reform package for these two institutions, a reform package that will cause them to focus on their core mission, first and foremost; a reform package that says like other lending institutions, there ought to be regulatory oversight. And therefore, first things first when it comes to those two institutions. Congress needs to get them reformed, get them streamlined, get them focused, and then I will consider other options.
An August 11, 2007, New York Times article reported that in an interview, Frank "said that the president's comments were 'inane.' " The article continued: " 'Tell the Republicans to stop blocking the bill,' Mr. Frank said. If the president 'is saying that "I don't want to support any increase until we pass the reforms," then you pass the bill and the bill takes care of that.' ''
But in the Post op-ed, former director of Bush's National Economic Council Al Hubbard and former Bush communications director Noam Neusner falsely claimed that Frank "said that the president's suggestion for a strong, independent regulator of Fannie and Freddie was 'inane.' " In Frank's letter to the editor, he wrote of that statement, "The truth is exactly the opposite of what they sought to convey":
Al Hubbard and Noam Neusner [op-ed, Sept. 12] quoted me as saying that the president's suggestion for a strong, independent regulator of Fannie Mae and Freddie Mac was "inane." The truth is exactly the opposite of what they sought to convey.
In May 2007, four months after the Democrats organized in Congress, the House passed a bill giving the Bush administration everything it asked for in increased regulatory powers over Fannie and Freddie. My reference to the president's inanity came in August and referred to his calling on the House to do what we'd already done.
The question at the time was whether or not Fannie and Freddie could take increased action to try to deal with the mortgage crisis. The House voted to significantly increase regulatory oversight of the two entities so that they could increase their activity in a responsible way. That is why after saying the president's comments were "inane," I said "Tell the Republicans to stop blocking the [House-passed] bill" in the Senate.
Republican obstruction ended in July 2008. So after 12 years in which the Republican Congress had not passed a reform bill, the Democratic Congress gave the Bush administration all that it asked for in 19 months. Who blocked reform?
From Rove's January 8 Wall Street Journal column:
But Mr. Dodd wasn't the only Democrat to heap abuse on the Bush reforms. Rep. Barney Frank of Massachusetts defended Fannie and Freddie as "fundamentally sound" and labeled the president's proposals as "inane." He later voted for the reforms. Sen. Charles Schumer of New York dismissed Mr. Bush's "safety and soundness concerns" as "a straw man." "If it ain't broke, don't fix it," was the helpful advice of both Sen. Thomas Carper of Delaware and Rep. Maxine Waters of California. Rep. Gregory Meeks of New York berated a Bush official at a hearing, saying, "I am just pissed off" at the administration for raising the issue.