The nonprofit political advocacy group founded by former Vice President Mike Pence is warning congressional lawmakers that President Biden's plans for the federal government to intervene in the housing market will only escalate the problem to a scale not seen since the Great Recession.
Pence's organization, Advancing American Freedom (AAF), issued a policy memo to lawmakers and their staff on Friday, claiming the president's proposals would "kill" the American dream, and result in a "repeat" of the 2008 crisis.
The memo pointed to the Biden administration's proposal out of Freddie Mac that would guarantee certain second mortgages, and said if the rule comes to fruition it would mean the government-backed entity would take on another $3 trillion in liabilities. AAF claims such a move would only fuel inflation further, and cause increased instability in the mortgage market.
The policy group also warned against the administration's proposal to weaken credit standards for borrowers, and the president's plan – outlined in his State of the Union address – to offer $10,000 subsidies for first-time homebuyers and starter-home sellers.
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AAF noted that the affordable housing crisis in the U.S. is a supply-side issue due to the shortage of homes in the U.S., and argues Biden's approach would only feed demand, making the problem worse.
AAF, which was launched for the purpose of defending the accomplishments of the Trump-Pence administration, is urging conservatives in Congress to utilize the Congressional Review Act to stop the Biden administration's proposals by using the power of the purse, and to "get the government out of the mortgage business altogether" by ending the conservatorship of Fannie Mae and Freddie Mac.
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The group argues that the federal government could increase the supply of housing by returning surplus federal lands back to the states, and eliminate agencies like the EPA, which it says is driving up the cost of housing due to burdensome environmental regulations that hinder building.
"President Biden and the Democrats should get out of the mortgage business before America barrels headlong into a repeat of the 2008 housing crisis," AAF Executive Director Paul Teller told FOX Business.
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"This is a supply problem, not a demand problem, but what Biden is suggesting will just drive up demand, spiraling us into a repeat of 2008," he added. "Every time the swamp weighs in on these issues, it’s the American people who suffer."
FOX Business reached out to the White House for comment.
