WASHINGTON (AP) — A conservative seniors group with ties to the billionaire Koch brothers on Monday announced $1.5 million in ads against seven members of the Senate Banking Committee in the hopes of derailing a proposal that would effectively scrap mortgage giants Freddie Mac and Fannie Mae.
The 60 Plus Association is urging Banking Committee members — three Democrats and four Republicans — "don't bring Obamacare to the mortgage industry." The seniors group says it worries that changes to Fannie and Freddie could hurt retirees, whose investments include bonds sold through the mortgage giants.
"First it was Obamacare. Millions of Americans saw their health plans canceled," says one ad running against Sen. Kay Hagan, the North Carolina Democrat facing a tough re-election bid. "Now, Kay Hagan is teaming up with Barack Obama to take over the mortgage industry," the ad continues, trying to build voters' frustration with the national health care law.
In addition to Hagan, the group is running ads against Sen. Joe Manchin of West Virginia and Sen. Mark Warner of Virginia — both Democrats. On the other side, the ads are against Sen. Mike Crapo, the Idaho senator who is the top Republican on the panel, as well as Sen. Dean Heller of Nevada, Sen. Mark Kirk of Illinois and Sen. Jerry Moran of Kansas.
Moran currently leads the National Republican Senatorial Committee, the GOP's campaign committee trying to win a Senate majority. The ads are the latest effort of the vast political network backed by Charles and David Koch, who already have been a driving force among Republicans through contributions to the tea party-aligned Americans for Prosperity.
Charles Koch, 78, and David Koch, 73, inherited a small oil company from their father. They expanded worldwide into chemicals, textiles, paper and other products, building a hugely profitable and privately held conglomerate.
Senate Majority Leader Harry Reid and other Democrats trying to defend their majority in the Senate have openly criticized the industrialist brothers for spending money with groups to back candidates who would help them grow their wealth.
Forbes magazine ranks the brothers as tied for sixth among the world's richest people, worth $40 billion each. The brothers seem not to be dissuaded by the criticism and are continuing their ads hoping to influence what happens in Washington, focused now on the mortgage giants.
Fannie and Freddie don't directly make loans. They buy mortgages from lenders, package them as bonds, guarantee them against default and sell them to investors. But they have their hands on 60 percent of all home loans, giving them huge sway on the broader economy.
Their central role in the housing market has long been a source of frustration for lawmakers from both parties and scaling back their influence has been a common goal of legislation set to be debated in the Senate Banking Committee during April.
Both organizations would be wound down and then eliminated under the bipartisan plan, negotiated between Banking Committee Chairman Tim Johnson, D-S.D., and top Republican committee member Crapo. A Federal Mortgage Insurance Corporation would be created to replace Freddie and Fannie.
The White House has signaled its support for the changes. The 60 Plus Association ads warn "the federal government will seize all profits" from Freddie and Fannie. The messages are designed to fuel anxiety among seniors who not only have retirement accounts invested in Freddie and Fannie bonds but also are among Republicans' most reliable voting blocs.
Despite the 60 Plus Association ads' warnings, Freddie and Fannie already send most of their profits to the Treasury Department under terms of their federal bailout during the economic crisis. The institutions received almost $188 billion in tax dollars in the bailout and will have sent almost $203 billion back as dividends on that investment through the end of March.
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