Toomey, Sestak Tangle Over Mortgage Crisis

Republican Senate candidate Pat Toomey on Wednesday attacked his Democratic rival, Joe Sestak, for Sestak's votes in support of the bailouts of mortgage giants Fannie Mae and Freddie Mac -- and said he had warned of the housing crisis years ago.

Toomey, a businessman who served in the U.S. House from 1999 to 2005, said Congress could have avoided or greatly mitigated the housing collapse if it had passed a bill he co-sponsored in 2003 that would have increased government regulation over Fannie and Freddie.

“Congressman Sestak sold taxpayers out in order to pursue his left-wing agenda,” Sestak said at a campaign event at a downtown hotel, adding that the bailout of Fannie and Freddie cost $148 billion. “He now wants taxpayers to pay for his mistakes.”

Toomey and Sestak are locked in a hyper-competitive race to replace five-term Sen. Arlen Specter, whom Sestak defeated in the May primary after deciding not to run for re-election to his suburban Philadelphia congressional seat while he ran for Senate.

Sestak spokesman Jonathon Dworkin called Toomey's attacks unfounded and said Sestak -- a former Navy admiral -- voted in favor of more oversight for Fannie Mae and Freddie Mac as soon as he got into office, in May 2007. That bill passed.

Another bill Sestak supported in 2007 to ban lenders from making loans that borrowers can't repay and hold investment banks that package mortgage securities liable for violations of lending laws was blocked by Republican opposition in the Senate.

“Congressman Toomey likes to point the finger at everyone except himself, but he can't hide from the fact that he has always sided with Wall Street,” Dworkin said in a statement. “Toomey supported the reckless Bush spending and aggressive dismantling of Wall Street safeguards that created this mess. He also did nothing to improve oversight of Fannie Mae and Freddie Mac.”

Toomey said the 2003 legislation would have limited the size of single-family mortgages that Fannie and Freddie could purchase and transferred regulatory authority over Fannie and Freddie from the Department of Housing and Urban Development to the Treasury Department, among other things.

The election is Nov. 2. On Wednesday, both VoteVets.org -- which supports Sestak -- and the National Republican Senatorial Committee announced that they were each sponsoring their first TV ad in the race. New TV ads from the campaigns, as well as outside groups, have been surfacing at a rate of one per day this month.