President George W. Bush has dropped his threat to veto the mortgage rescue bill, meaning that the package, which would boost Fannie Mae and Freddie Mac, will likely go through. The package will come at a huge cost to American taxpayers, as the U.S. government will essentially insure about $300 billion in mortgages. “We believe this is not the time for a prolonged veto fight but we are confident the president would prevail in one,” Dana Perino told reporters in a conference call. Treasury Secretary Henry Paulson said in a speech in New York Tuesday that the stability of Fannie Mae and Freddie Mac was key to erasing uncertainty in U.S. financial markets. Hours later, he flew to Washington to meet with Senate Republicans for lunch to discuss the measure.
