In the Iron Triangle

The worst legislation I have heard of this year is, apparently, languishing in committee:

A bill pending in Congress would divert a percentage of profits from federally chartered institutions such as Fannie Mae to a national affordable-housing trust fund, but it seems stalled.

At first this bill seems almost sweet-natured; skim a little of FNMA's ill-gotten gains and use them to help the poor. But this is a sham. The real effect would be to further entrench Fannie's [and Freddie Mac's] implicit government guarantee, by entangling its operations more closely with those of the federal government. This would in turn bolster the corporate welfare they enjoy (in the form of advantageous borrowing rates), which has been dented somewhat by the recent scandals and by Alan Greenspan's open criticism.

This bill is a scam, and should be known as such.