A large hedge fund that invested in shares of the government-sponsored mortgage companies Fannie Mae and Freddie Mac has sued the U.S. Treasury Secretary and the head of the Federal Housing Finance Agency along with the agencies themselves, arguing that their attempts to wind down the companies violate a Congressional mandate.
In a suit filed Sunday evening with a U.S. District Court in Washington, D.C., Perry Capital asserts that a 2012 amendment to the Housing and Economic Recovery Act illegally changed the rules governing Fannie and Freddie as part of their move into federal conservatorship. - Read more at CNBC
SENATE TURNS TO STUDENT LOAN FIX The Senate is expected to focus on fixing student loan interest rates this week, after Congress allowed the rates on subsidized Stafford loans to double from 3.4 percent to 6.8 percent on July 1.
Lawmakers left town for the July 4th holiday with the intention of retroactively adjusting those rates downward upon their return. The new, higher rates only affect new loans, and most students won’t be signing off on them for a few weeks.
The Senate has tentatively scheduled a vote on Wednesday for a one-year extension of the current 3.4 percent rate. However, Republicans oppose the idea of another quick fix, and prefer a bipartisan plan that would tie the interest rate to 10-year Treasury notes plus 1.85 percent. - Read more at Politico
CONGRESS’ DEADLINE PROBLEM After a week of recess, Congress returns to Washington Monday with a slew of issues--immigration reform, student loans, the farm bill, and looming fiscal deadlines-- that need to be addressed before they leave again for August recess. Given the record of the “do nothing Congress, it’s unlikely these issues will be settled. The New York Times’ Jonathan Weisman writes, “Even in some of the worst years of partisan gridlock, a deadline has meant something to Congress — until 2013. Drop-dead dates have come and gone this year, causing real-world consequences. On Jan. 1, tax rates went up not only for affluent families, but also for virtually all workers when lawmakers looked the other way and let a payroll tax cut expire. On March 1, after leaders from both parties declared that automatic, across-the-board spending cuts would never happen, they happened anyway because of inaction.” - Read more at The New York Times
OBAMACARE AD WARS BEGIN As the White House prepares to roll out new provisions of Obama’s signature health care law, conservative opponents of Obamacare are ramping up their efforts to derail the new law. Americans for Prosperity, a Tea Party group, is pouring $1 million into a new television and website campaign opposing the health care law, debuting it in the swing states of Ohio and Virginia. To combat the negative ads, Organizing for Action, a nonprofit, liberal advocacy group stemming from President Obama’s reelection campaign, is pushing forward with its own campaign highlighting the benefits of Obamacare. The dueling ads come a week after the White House announced that it will be delaying a key provision of the law for one year. - Read more at The Hill
COULD MILLENNIALS BRING DOWN THE ECONOMY? The Fiscal Times’ Josh Boak says if millennials don’t start earning more money, the U.S. economy can be harmed. He says, “It all depends on rising paychecks. Without higher salaries for millennials, baby boomers will struggle to sell their houses to a younger generation. New parents cannot save for their own children’s education. The trouble is that young college graduates working full-time earned, on average, $34,500 last year, according to the progressive Economic Policy Institute. Adjusting for inflation over the past dozen years, this translates into a shocking loss of $3,200. - Read more at The Fiscal Times
MOST AMERICANS FEAR POWERFUL GOVERNMENT A new Rasmussen survey asked 1,000 adults “What is the biggest danger in the world today…a government that is too powerful or not powerful enough?” Sixty-three percent said a government with too much power is more dangerous than one without enough power. Only 21 percent said governments with “not enough power” are a greater threat. - See the survey here
FURLOUGH FRENZY BEGINS AT DOD The Pentagon’s 650,000 civilian workers begin their first of 11 furlough days today through the end of September. Most furloughs will be on Mondays and Fridays, though each agency within the DOD has set its own guidelines for when the furloughs are scheduled. - Read more at GovExec