President Obama’s massive housing bailout plan ignited a furious national debate yesterday, with advocates calling it a godsend and critics demanding to know why homeowners who pay their mortgages on time should subsidize those who don’t.
A new Rasmussen poll reflected the divided country – 45 percent of Americans oppose the federally subsidized mortgage bailouts, while 38 percent approve. Eighteen percent are undecided. With an eye fixed on shoring up the faltering housing market, Obama this week unveiled a $75 billion plan to help as many as 4 million “at-risk” homeowners facing foreclosure, while putting another $200 billion behind the troubled government-backed mortgage firms Fannie Mae and Freddie Mac.
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Obama said the plan is necessary to help out millions of Americans threatened with losing their homes after the subprime-mortgage crisis – but while many Democrats have praised the approach, Republicans and others have criticized it as a handout for people who lived beyond their means.
On CNBC, commentator Rick Santelli exploded over the plan, fuming, “The government is promoting bad behavior . . . President Obama, are you listening? Do we really want to subsidize the losers’ mortgages?” he asked.
“This is America! How many of you people want to apply for your neighbors’ mortgage?”
Around New York, residents were deeply divided.
Heather Graham, 25, a part-time Columbia grad student and hairstylist, said, “Why are we thinking twice about helping homeowners when we’ve written multibillion-dollar checks to greedy corporations to help them out?”
But Timothy O’ Neill, 42, a Bank of America employee who lives with his teacher wife in a one-bedroom co-op in Park Slope, Brooklyn, said, “None of this makes sense . . . Why is our hard-earned money being used to bail out people who were frivolous spenders and lived beyond their reach?”
But James Murphy, 43, a banker with a one-story home in Astoria, Queens, said there’s no choice.
“We have to help people out of this mess,” he said. “With the number of pink slips being handed out every day, you can’t blame people entirely for being in this situation.”
Allison Giuseppe, 33, a high-school math teacher who rents a Washington Heights apartment, agreed.
“Normally, I’d say [such a bailout is] unfair, but these are extraordinary times and we all have to pull together because everything’s connected.
“Thousands of people losing their homes will have an impact on everything. We can’t afford to let things collapse any more than they already have.”
Additional reporting by Kavita Mohka in New York and Daphne Retter in Washington