The congressional plan to bail out the U.S. housing
and mortgage industries, which could be approved by Congress and signed by
the president as early as this weekend, actually endangers Americans'
housing, according to the director of the Center for Entrepreneurship at
the Competitive Enterprise
Institute.
"Of all the unintended consequences of the housing bill
that passed the House – of which there will likely be many – one
of the most ironic and far-reaching may be this: that whatever security marginal
homeowners have from foreclosures, their homes will be far less safe from
being taken by a bureaucrat through eminent domain," John Berlau wrote on
the organization's website.
According to the Wall Street Journal the White House
says the bill needs to be enacted soon so its new authorities will start
taking effect.
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The sweeping package, the report said, "is the government's
most aggressive response to rising foreclosures and fragile credit markets.
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."
However, some of the details included in the hundreds
of pages of the bill are likely to surprise – and concern – Americans. For
example, there's a requirement for a new fingerprint registry for those who
are associated with the mortgage industry, raising privacy concerns for
many.
There's
also a provision many are interpreting as allowing the federal government
to obtain information about online spending, money transfers and purchases,
including ordinary eBay purchases.
Now comes the concern that the new proposal's affirmation
of the Kelo decision by the U.S. Supreme Court actually could make the situation
worse for homeowners.
That still-bitterly opposed Supreme Court opinion in
Kelo v. New London decided in 2005 that the U.S. Constitution allows the
taking of private property for private economic
development, a decision decried by
WND columnist Ellis Washington as "a blatant violation of citizen property
rights, also an obvious misinterpretation of the Takings Clause of the Fifth
Amendment, which mandates, 'nor shall private property be taken for public
use, without just compensation.'"
Berlau explains his worries about the wake of the Kelo
verdict, and the new provisions in the housing bailout plan.
"Some states have passed laws protecting property owners
by barring eminent domain solely for economic development purposes. But for
the many states that still allow this practice, the federal government is
often the source of funds for the projects that result in the use of eminent
domain. Efforts to bar federal funds to be used on projects that make use
of this type of eminent domain have stalled in this and the last Congress," he
said.
"To their credit, the drafters of the Housing and Economic
Recovery Act of 2008, which passed the Senate on July 11, at least recognized
this danger of throwing billions in construction grants to state and local
governments. So they put in 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.' The clause then adds that 'public
use shall not be construed to include economic development that primarily
benefits any private entity," he said.
"But this language has vanished from the House bill," he
said.
Replacing it is language that "would give governments
substantially more leeway to take land."
That provision changes the Senate's prohibition on funds "used
in conjunction with property taken by eminent domain" with the looser ban
of using funds for a "project that seeks to use the power of eminent domain."
"This new language in the House bill would give property-grabbing
bureaucrats an easy way around the supposed prohibition on using eminent
domain," Berlau said. "All they would have to do is take property for any
reason that Kelo allows, and then come up with another project for the specific
use of that property. If land were grabbed for general economic development,
as Kelo permits, and then a new project were created for a city to sell this
land to developers, this would likely not be a violation of the House bill.
After all, the new project isn’t 'seeking' to use eminent domain, it
is merely using land that had already been confiscated."
He warned of the potential for the bill to "stimulate
a bonanza of state and local property confiscation of the type green-lighted
in the Supreme Court's 5-4 deciion Kelo v. New London."
"This new language means … there will be virtually
nothing stopping states and localities from using the federal housing grants
to help themselves to confiscate housing," he said.
Senators can be reached through the Capitol HIll switchboard
at 202-224-3121.
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