Washington, DC - House Financial Services Committee Chairman Frank released the following statement today regarding the refusal of the Wall Street Journal editorial board to publish his response to an inaccurate editorial in a timely manner:
On Sept 9th, the Wall Street Journal ran an editorial criticizing my record with regard to Fannie Mae and Freddie Mac. The editorial was factually inaccurate. I subsequently drafted a response correcting the numerous errors and engaging the ideological issues where the Journal editorial staff and I have long standing differences of opinion. I submitted my response to the Journal that afternoon. They subsequently said they would run my response in its entirety as a letter to the editor. A full week has passed and they have run nothing.
I am not surprised to find myself in disagreement with the Wall Street Journal on what the government's role should be in helping to build affordable housing, but I am very surprised and deeply disappointed that they would present my view in an intellectually dishonest way and then refuse to allow me the chance to correct their distortions in a timely manner.
The Journal's actions indicate a narrowness of vision and a refusal to entertain contrary opinions that amount to censorship. More importantly, they rob their readers and the broader public of the opportunity to form their own views about issues that currently roil our financial; market place and the resolution of which will have a profound effect on our economic future.
Chairman Frank's response is printed in full below:
Letter to the editor of the Wall Street Journal from Rep. Barney Frank, September 9, 2008:
The Journal's recent misleading and inaccurate editorial on my relationship with Fannie Mae and Freddie Mac leaves out one central fact, and it does so in a very revealing fashion.
At the bottom of the first column of the editorial, the Journal begins by saying that "by early 2007, Mr. Frank was in charge of the House Financial Services Committee, arguing that he had long favored some kind of reform." A reader unfamiliar with the facts would have no idea that I did not simply argue in favor of reform, but presided over passage of a very tough reform bill.
When the Democrats obtained the majority in the 2006 Election, and I became Chair of the Committee, I made a very strong reform bill one of our highest priorities and worked closely with Secretary Paulson to break the logjam that hindered the bill in the past. As a result, the Financial Services Committee, which organized under the Democrats on January 31, 2007, passed the bill restructuring the regulation of Fannie and Freddie -- specifically including all the increased powers that the Bush administration requested -- on March 28, 2007 and the full House followed -- by a vote of 313 to 104 in early May. The House passed these important reforms in May of 2007 -- only four months after we became the majority. It is true that the bill was held up for over a year by inaction in the Senate, but that is not surprising given the difficulty the Senate has moving controversial legislation on any subject.
Additionally, when we were considering the stimulus package in early 2008, I proposed to Secretary Paulson that in addition to raising the jumbo loan limits for Fannie Mae and Freddie Mac, we include the GSE reform that the House had passed. He did not agree, fearing that it might slow things down.
In fact, my reform efforts had begun when we were still in the minority. In 2005, I joined Michael Oxley, then Chairman of the House Financial Services, in supporting legislation to increase the regulation of Fannie and Freddie that passed the House by a vote of 330 to 90. When former Congressman Richard Baker proposed to examine the compensation structure of Fannie's and Freddie's top executives, and some Members of Congress tried to block him, I explicitly spoke out in support of his right to do that and our right, as a Congress, to examine the GSE's compensation practices.
There is another glaring distortion in the editorial, driven by the Journal's opposition to our efforts to help build affordable rental housing. The editorial laments the fact that as part of the ultimate package I received my "biggest payoff" in the Affordable Housing Trust Fund. While that is true, I am struck by the Journal's absolute inability to understand that some of us think that the plight of people who do not have adequate rental housing ought to be addressed. The bizarre belief that adequate housing means homeownership and not rental housing was one of the push factors in the subprime crisis. That is apparently the basis for assuming that the only reason we would support an affordable housing program - along with such as the non-partisan groups as Catholic and Lutheran Churches, Habitat for Humanity, and Enterprise Community Partners -- was so that we could personally profit from this politically. The truth is that the way this fund will be created, Members of Congress will have no say over its disbursements. To the right-wing ideologues who write the Journal's editorials, funding to build affordable residential housing is "loot." Fortunately, that is a distinctly minority opinion in the Congress and in much of the country.
I acknowledge differences between myself and the Journal as to whether or not we should be trying to build affordable rental housing and as to whether or not some public role in housing finance is worth supporting. But the Journal's assertion that support for those two entities meant opposition to reform is entirely wrong, and it is presented in one of the most dishonest pieces of journalism I have seen. The Journal's error concerning what happened when the Democrats took over the majority early in 2007 is a classic example of ideological bias. It is important to repeat that the editorial omits the key point, that it was exactly in that period that the House Financial Services Committee, that I chair, passed and helped pass through the House a bill that embodied the reforms asked for by the Bush administration, and that was the basis for Secretary Paulson's and Director Lockhart's recent actions. Your readers deserve the whole story. The Journal's original letter can be found here.