Dec. 31 (Bloomberg) -- Taxpayer losses from supporting Fannie Mae and Freddie Mac will top $400 billion, according toPeter Wallison, a former general counsel at the Treasury who is now a fellow at the American Enterprise Institute.

“The situation is they are losing gobs of money, up to $400 billion in mortgages,” Wallison said in a Bloomberg Television interview. The Treasury Department recognized last week that losses will be more than $400 billion when it raised its limit on federal support for the two government-sponsored enterprises, he said.

The U.S. seized the two mortgage financiers in 2008 as the government struggled to prevent a meltdown of the financial system. The debt of Fannie Mae, Freddie Mac and the Federal Home Loan Banks grew an average of $184 billion annually from 1998 to 2008, helping fuel a bubble that drove home prices up by 107 percent between 2000 and mid-2006, according to the S&P/Case- Shiller home-price index.

The Treasury said on Dec. 24 it would provide an unlimited amount of assistance to the companies as needed for the next three years to alleviate market concern that the government lifeline for Fannie Mae and Freddie Mac, the largest source of money for U.S. home loans, could lapse or be exhausted.

Lax regulation of Fannie Mae and Freddie Mac led to the mortgage companies taking on too many risky loans, Wallison said.

“It turns out it was impossible to regulate them,” he said. “They were too powerful.” He said no one knows how much will be needed to keep the companies solvent.

From 1990 to 1999, Wallison served on the board of directors of MGIC Investment Corp., the largest U.S. mortgage insurer, including a stint on the audit committee, according to Bloomberg data and company filings.

The continued government support of Fannie Mae and Freddie Mac makes buying their debt a good investment, Wallison said.

“It was always safe to buy these notes,” he said. The U.S. government was always going to stand behind them. They’re as good as Treasury notes.”

To contact the reporter on this story: Matthew Leising in New York atmleising@bloomberg.net.

Former Vice President  Cheney accused President Barack Obama on Tuesday of “trying to pretend we are not at war” with terrorists, pointing to the White House response to the attempted sky bombing as reflecting a pattern that includes banishing the term “war on terror” and attempting to close the Guantanamo Bay detention center.

“[W]e are at war and when President Obama pretends we aren’t, it makes us less safe,” Cheney said in a statement to POLITICO. “Why doesn’t he want to admit we’re at war? It doesn’t fit with the view of the world he brought with him to the Oval Office. It doesn’t fit with what seems to be the goal of his presidency — social transformation — the restructuring of American society.”

Cheney was joining a chorus of Republicans who have criticized Obama following the Christmas Day attack, in which a Nigerian suspect is accused of trying to blow up a loaded airliner with a bomb stitched into his underwear.

A senior Democrat said in response: “It’s telling that in attacking the president and the administration, that Vice President Cheney did not condemn the attack against our nation on Christmas Day.”

Foreshadowing the party’s strategy for next year’s midterm congressional elections, GOP officeholders have eschewed the customary partisan restraint following a terrorist incident and baldly portrayed Democrats as weak on security.

Rep. Peter King of New York, ranking Republican on the House Homeland Security Committee and a member of the Intelligence Committee, said Tuesday on NBC’s “Today” show: “I think that the administration has made a mistake by treating this terrorist as a common criminal, by putting him into the criminal-justice system. I wish they had put him into a military tribunal so we could get as much intelligence and information out of him as we could.”

Here is Cheney’s full statement:

"As I’ve watched the events of the last few days it is clear once again that President Obama is trying to pretend we are not at war. He seems to think if he has a low-key response to an attempt to blow up an airliner and kill hundreds of people, we won’t be at war. He seems to think if he gives terrorists the rights of Americans, lets them lawyer up and reads them their Miranda rights, we won’t be at war. He seems to think if we bring the mastermind of Sept. 11 to New York, give him a lawyer and trial in civilian court, we won’t be at war.

“He seems to think if he closes Guantanamo and releases the hard-core Al Qaeda-trained terrorists still there, we won’t be at war. He seems to think if he gets rid of the words, ‘war on terror,’ we won’t be at war. But we are at war and when President Obama pretends we aren’t, it makes us less safe. Why doesn’t he want to admit we’re at war? It doesn’t fit with the view of the world he brought with him to the Oval Office. It doesn’t fit with what seems to be the goal of his presidency — social transformation — the restructuring of American society. President Obama’s first object and his highest responsibility must be to defend us against an enemy that knows we are at war."

The good news for Senator Ben Nelson is that he doesn't have to face Nebraska voters until 2012.

If Governor Dave Heineman challenges Nelson for the Senate job, a new Rasmussen Reports telephone survey shows the Republican would get 61% of the vote while Nelson would get just 30%. Nelson was reelected to a second Senate term in 2006 with 64% of the vote.

Nelson's health care vote is clearly dragging his numbers down. Just 17% of Nebraska voters approve of the deal their senator made on Medicaid in exchange for his vote in support of the plan. Overall, 64% oppose thehealth care legislation, including 53% who are Strongly Opposed. In Nebraska, opposition is even stronger than it is nationally.

Fifty-six percent (56%) of voters in the state believe that passage of the legislation will hurt the quality of care, and 62% say it will raise costs.

The House and Senate have passed different versions of the health care legislation and now will try to agree on a plan to pass early in 2010. Because every Democratic vote is required to pass the legislation in the Senate, Nelson's vote is essential. If Nelson votes to block final passage of the health care plan, he would still trail Heineman but would be in a much more competitive situation.

(Want a free daily e-mail update? If it's in the news, it's in our polls). Rasmussen Reports updates are also available on Twitter or Facebook.

When survey respondents were asked how they would vote if Nelson blocks health care reform, 47% still pick Heneman while 37% would vote to keep the incumbent in office. Twenty percent (20%) of those who initially said they'd vote for Heineman say they'd switch to supporting Nelson. Another six percent (6%) of Heineman supporters say they're not sure what they'd do if Nelson stops the health care plan from becoming law.

If Nelson votes to block health care reform, 10% of all voters would prefer a third-party option. Most of those who would prefer a third choice initially said they would vote for Nelson.

Overall, 40% of Nebraska voters have a favorable opinion of Nelson while 55% have an unfavorable view. Those figures include 12% with a Very Favorable opinion while 34% hold a Very Unfavorable view.

Twenty-six percent (26%) say Nelson has done a good or excellent job in the health care debate. Forty-seven percent (47%) give him poor marks.

Forty-two percent (42%) say their senator has been too supportive of President Obama's agenda while 13% say he's not been supportive enough. Thirty percent (30%) say he's got the balance about right.

Nelson is also one of the key players in the discussion about how abortion should be handled in the health care plan. Sixty-five percent (65%) of Nebraska voters say that coverage of abortion should be prohibited in any plan that receives government subsidies. Only six percent (6%) want coverage mandated, while 22% want no requirements either way.

Obama earned 42% of the Nebraska vote in 2008, and 38% continue to approve of his job performance. Sixty-one percent (61%) of Nebraska voters disapprove of how the president is performing.

Please sign up for the Rasmussen Reports daily e-mail update (it's free) or follow us on Twitter or Facebook. Let us keep you up to date with the latest public opinion news.

Rasmussen Reports is an electronic publishing firm specializing in the collection, publication, and distribution of public opinion polling information.

This statewide telephone survey of 500 Likely Voters in Nebraska was conducted by Rasmussen Reports December 28, 2009. The margin of sampling error for the survey is +/- 4.5 percentage points with a 95% level of confidence.

President Barack Obama has worked hard to forge a solid political alliance with Michael Bloomberg. He courted the New York City mayor during the presidential campaign, sought out his views on topics from gun control and education, and offered only the most tepid of endorsements for Bill Thompson, Bloomberg's last challenger, even though he was the endorsed candidate of Obama's own party.

On Sunday, however, Bloomberg threw a wrinkle into the relationship when he leveled a rather sharp critique at the health care legislation Obama is poised to sign into law.

"You know, if you really want to object to something in this bill, number one, I have asked congressperson after congressperson. Not one can explain to me what's in the bill, even in the House version. Certainly not in the other version," Bloomberg said during an appearance on "Meet the Press." "And so for them to vote on a bill that they don't understand whatsoever, really, you got to question how-- what kind of government we have. Number two, when they talk about bending the curve as -- the governor said, bending the curve is a flimflam euphemism for increasing costs, but we're going to say we'll do it at slightly lower rate than we would have otherwise."

"They are not talking about reducing costs," he added. "They're talking about changing the first derivate, slowing the growth down. And when you look at where the cost savings are going to be, well, they're going to cut something out of Medicare and Medicaid. Now anybody that runs for office will tell you, you don't do that. I mean, the bottom line is it's so politically explosive, it really would be a first time in the history of the world that they ever cut anything [from those programs]."

Bloomberg did credit Obama himself for being willing to tackle some of the tough aspects of health care reform, telling host David Gregory that his quibbles were with Congress. But his comments, nevertheless, represent a departure of sorts from the pro-reform camp. Bloomberg had been hailed by the White House as a prominent non-Democrat supporter of getting legislation passed. In recent days, however, both he and New York Governor David Patterson have raised concerns that the bill would be blow a hole in the state's budget and force the closure of 100 or so health clinics

Officials: U.S., Yemen reviewing targets for possible strike

A Yemeni army helicopter carries out operations against al Qaeda suspects on December 17 in the Sanaa province.

STORY HIGHLIGHTS

• Two senior U.S. officials tell CNN that Yemen, U.S. are looking at fresh targets
• U.S. and Yemen trying to identify potential al Qaeda training sites in Yemen
• Strikes would be in retaliation for botched attempt to blow up airliner landing in Detroit
• U.S. believes there may be a few hundred al Qaeda fighters in Yemen

Washington (CNN) -- The U.S. and Yemen are now looking at fresh targets in Yemen for a potential retaliation strike, two senior U.S. officials told CNN Tuesday, in the aftermath of the botched Christmas Day attack on an airliner that al Qaeda in Yemen claims it organized.

The officials asked not to be not be identified because of the sensitive nature of the information. They both stressed the effort is aimed at being ready with options for the White House if President Obama orders a retaliatory strike. The effort is to see whether targets can be specifically linked to the airliner incident and its planning.

U.S. special operations forces and intelligence agencies, and their Yemeni counterparts, are working to identify potential al Qaeda targets in Yemen, one of the officials said. This is part of a new classified agreement with the Yemeni government that the two countries will work together and that the U.S. will remain publicly silent on its role in providing intelligence and weapons to conduct strikes.

Officially the U.S. has not said it conducted previous airstrikes inYemen, but officials are privately saying the Yemeni military could not have carried out the strikes on its own.

By all accounts, the agreement would allow the U.S. to fly cruise missiles, fighter jets or unmanned armed drones against targets in Yemen with the consent of that government.

Video: Yemen the next terror haven?

RELATED TOPICS

• Yemen
• Al Qaeda
• Terrorism

One of the officials said Yemen has not yet consented to the type of special forces helicopter-borne air assault that would put U.S. commandos on the ground with the mission of capturing suspects for further interrogation. That is also a capability the U.S. would like the Yemenis to eventually develop the official said.

At this point, the U.S. believes there may be a few hundred al Qaeda fighters in Yemen centered around a group of key network leaders. U.S. intelligence believes some key leaders were killed in recent airstrikes but is still working to confirm details.

U.S. military and intelligence officials describe to CNN an al Qaedanetwork with organized command and control that has evolved and grown over the past year. U.S. intelligence concludes there are several training camps similar to those established in other countries where one or two dozen fighters at a time train.

The U.S. and Yemenis are also looking into the possibility the Nigerian suspect in the airliner incident trained at one of the camps.

One of the camps was among the targets in each set of airstrikes earlier this month.

• Ronald Reagan Square, formerly Central Square, in Kraków, Poland
• Ronald Reagan Park, in Gdansk, Poland
• Ronald Reagan Roundabout, in Wroclaw, Poland
• Ronald Reagan Monument, in Wroclaw, Poland[20]

Where the Terrorism Threat From al Qaeda Is Headed

The deadly assault in Mumbai was a chilling reminder of just how effective low-tech attacks can be

The attacks in Mumbai this winter shocked the counterterrorism community, not only for the brazen nature of the assault and its high death toll but also because of the low-tech manner in which such carnage was brought to the streets of the Indian city. It was yet another reminder of the ever evolving nature of the terrorist threat.

Al Qaeda, which was not directly linked to the attacks in India, has historically striven to pull off more dramatic, deadly, and complex plots than the one in Mumbai, meaning its attacks have been less frequent and more difficult to bring about. But intelligence experts worry about what lessons Osama bin Laden and his followers might take from the brutal effectiveness of a handful of men armed with automatic weapons.

Whatever bin Laden may conclude, al Qaeda remains one of the greatest threats to the homeland for the foreseeable future, intelligence and defense experts agree. "Al Qaeda has suffered serious setbacks, but it remains a determined, adaptive enemy, unlike any our nation has ever faced," outgoing CIA chief Michael Hayden said recently. The group "is both resilient and vulnerable."

Despite the resurgence of the Taliban in Afghanistan and in the tribal regions of Pakistan, there has been a rise in the number of high-ranking al Qaeda leaders reported killed. On New Year's Day, Usama al-Kini and Sheik Ahmed Salim Swedan, both Kenyan nationals wanted in connection with the 1998 bombings of U.S. embassies in Africa, were killed in an apparent U.S. airstrike. In November, a similar attack killed Rashid Rauf, who was wanted in connection with a plot to use liquid explosives to down trans-Atlantic airliners. In 2008, there were more than 30 missile strikes against suspected al Qaeda targets.

Yet al Qaeda has still managed to mount or inspire attacks around the globe, from the killing of Benazir Bhutto and the Marriott hotel bombing in Pakistan to the unsuccessful attacks against the airport in Glasgow, Scotland. U.S. intelligence officials say al-Kini was involved in the Marriott attack and an unsuccessful bombing attack on Bhutto several months before she was assassinated.

For intelligence agencies and the U.S. military, the main challenge is to understand the reasons for the group's resiliency and to figure out how to exploit its vulnerabilities, such as ideological rifts. While the threat of an attack with weapons of mass destruction always tops U.S. fears, there are other, perhaps more likely, scenarios that worry counterterrorism officials, including more low-tech attacks and possible cyberassaults.

Lessons from Mumbai. The vast majority of terrorist strikes worldwide involve explosives or guns to wreak havoc. In Mumbai, using grenades and machine guns, terrorists killed more than 170, wounded 300, and paralyzed the city. It was the second-largest global terrorist attack since 9/11. (Also last year, terrorists in the United Kingdom tried using a flaming sport utility vehicle to ram the Glasgow International Airport.)

The Mumbai attack was so shocking that New York City immediately revised its training for police officers to include the use of machine guns that may be used in response to such an incident. The NYPD is also looking for ways to disrupt cellphone communications during an attack, after the Mumbai perpetrators used cellphones repeatedly throughout their three-day rampage. "You could envision that happening in any American city," says Kenneth Wainstein, the president's homeland security adviser. "It's something we're very worried about."

Just as the West relies on small groups of commandos to ferret out terrorists, so, too, have these terrorist groups come to rely on small, innovative, disciplined units to achieve outsize results. David Kilcullen, a coauthor of the Army'sCounterinsurgency Field Manual , says Mumbai marked a departure from the traditional terrorist modus operandi. "[The Mumbai attacks] have all the hallmarks of a Special Forces raid, closer to a commando raiding activity than a traditional al Qaeda-style terrorist attack."

That's something that counterterrorism officials have long feared. This winter, a group of men were convicted of planning a machine gun attack on Fort Dix in New Jersey. "After 9/11, the great fear was that terrorists would attack shopping malls with small bombs or machine guns. It's nearly impossible to stop, cheap to fund, and as likely today as it was then," says Jamie Smith, a retired CIA officer who now heads a private security firm.

Report Shows 36,000 Troops Would Seal Southern Border

(CNN) -- The Iranian president on Tuesday likened the anti-government protests during Sunday's observances of Ashura to "a theater play by the Zionists and the Americans," the state-run Islamic Republic News Agency said.

"The Iranian nation has witnessed many plays of this kind: a play ordered by the Zionists and the Americans, who had purchased the tickets to this play and were the only audience of this play," IRNA quoted President Mahmoud Ahmadinejad as saying.

Ashura is the major Shiite Muslim holy day. It marks the death of Imam Hussein, grandson of the Prophet Mohammed, as a martyr. Shiites commemorate the death of Hussein each year, climaxing on Ashura -- the 10th day of the month of Muharram -- after a 40-day mourning period.

Read more about the protests in Iran

Ahmadinejad strongly criticized the positions taken by U.S. President Obama and the British government, IRNA said. The news agency quoted the president as saying he had "advised" the two countries several times, but "they insist on experiencing humiliation."

The British ambassador to Iran, Simon Gass, was summoned to the Iranian Foreign Ministry on Tuesday "to receive Iran's complaint regarding that country's interference in Iran's internal affairs," the semi-official news agency Fars reported.

Ari Larijani, the speaker of Iran's parliament, also slammed Britain and the United States on Tuesday for condemning the government crackdown Sunday on the protesters.

Timeline: Turmoil in Iran

Video: Perspective on Iran

Video: Your questions on Iran

Video: Iran: Blood in the streets

Larijani said authorities should mete out "the harshest punishment" to protesters who disrupted Ashura observances. Addressing lawmakers, Larijani said the protesters had insulted Imam Hussein.

He urged officials to "arrest offenders of the religion and mete out harshest punishments to such anti-revolutionary figures with no mercy."

An Iranian media blackout had made it difficult to verify accounts of the weekend's violence, but videos that found their way west depicted bloodied and, in some cases, apparently dead protesters.

Are you there? Share your stories, photos and videos

In one video, posted on the Web site YouTube on Tuesday, green and white police trucks rush into crowds of protesters in Tehran. The demonstrators scatter in all directions, but one truck drives into a crowd trapped in a narrow street with a wall on one side and parked cars on the other.

The camera follows the truck as it backs away, but a person briefly can be seen crumpled in the street where the truck had been. When the camera returns to the spot, another police truck drives over the person. Other protesters rush to the downed person's aid, but it was not clear whether that person was killed.

CNN cannot confirm the authenticity of the video, or another one obtained by CNN that shows a woman who was reportedly killed when hit by a car driven by members of the Basij, the Iranian paramilitary group. The video shows protesters transfering her body from a clinic near where she was killed to another hospital to keep her remains out of reach of security forces.

Abbas Jafari Dolatabadi, Tehran's chief prosecutor, said Tuesday that seven people were killed in the Ashura riots Sunday. The toll makes them the bloodiest since June, when protests over the disputed presidential election that gave Ahmadinejad a second term left at least eight dead.

The Iranian government has denied that its security forces killed anyone.

One of those reported killed was Saeed Ali Moussavi, the nephew of Iranian opposition leader Mir Hossein Moussavi. Moussavi's movement says the nephew was shot to death.

Dolatabadi said that one of those killed was fatally shot and that the case is under investigation, but he did not identify the victim. He said most of the seven deaths occurred after the people were struck with "hard objects or due to similar causes."

Mir Hossein Moussavi's Web site said the nephew was killed in the demonstrations by a shot to the heart. But IRNA said that the bullet came from a "terror team" and that other such teams were operating in Tehran. It did not offer further details.

The Mehr semi-official news agency quoted security forces Tuesday as explaining that the nephew was standing on a street at midday Sunday when he was "assassinated by firearm by the occupants of a passing vehicle, and died because of the delay in taking him to the hospital.

"He died of severe bleeding on the way to the hospital. Efforts to identify the culprit or culprits continue."

IRNA disputed an account on the reformist Web site Parlemannews, which said the nephew's body had disappeared.

It said the government is holding the body and four others for autopsies. The delay meant the dead could not be buried within 24 hours, as Islamic custom dictates.

Iran Deputy Police Chief Ahmad Reza Radan and Tehran Police Chief Azizollah Rajabzadeh denied that their forces had killed anyone. In fact, they told the semi-official Islamic Students News Agency, their forces fired no weapons and weren't even carrying firearms.

In many cases, opposition media reported, government security forces prevented observances of Ashura.

Police arrested hundreds of people, including prominent figures. Nobel Laureate Shirin Ebadi said Monday that Iranian intelligence officials had detained her sister, dentistry professor Nushin Ebadi.

IRNA, Fars and other state news agencies said there would be a pro-government march on Wednesday afternoon.

Putin: Russia to develop offensive weapons to keep balance with U.S.

Russian Prime Minister Vladimir Putin, left, and President Dmitry Medvedev favor more offensive nuclear missiles.

STORY HIGHLIGHTS

• Russian President Putin calls for an exchange of information with the U.S.
• Russia willing to trade information with the U.S. on its offensive weapons
• Putin: "It was the balance of forces ... that preserved peace even during the Cold War"

RELATED TOPICS

• Russia
• Vladimir Putin
• Nuclear Weapons

Moscow, Russia (CNN) -- Russia needs to develop "offensive strike systems" to preserve strategic balance with the United States, without producing its own missile defense, Prime Minister Vladimir Putin said Tuesday.

Putin's comment, made at a press briefing in the far eastern Russian city of Vladivostok, echoed a similar call from Russian President Dmitry Medvedev last week.

"If we want to retain the balance, we have to establish an exchange of information: Let the U.S. partners provide us information on [their] missile defense while we will give them information on [our] offensive weapons," Putin said.

Putin also spoke positively about ongoing negotiations between the two countries on a new nuclear arms control agreement that would replace the U.S.-Russian START treaty, which expired December 5.

The United States and Russia plan to complete it and sign it at the beginning of 2010, Russian and American leaders have said. As envisioned, the new treaty would significantly reduce nuclear armson both sides.

"I think that we need certain rules on weapons limitation which could be equally understood, easily verifiable and transparent," Putin said. "The existence of those rules is better than their absence."

He repeated that offensive and defensive arms should be linked, because they are closely related.

"It was the balance of forces -- including missile defense, air defense and offensive weapons systems -- that preserved peace even during the Cold War," Putin said.

"Since we are not developing [our own] missile defense, there is a threat that our [U.S.] partners would feel totally secure having created an umbrella against our offensive systems," he added. "Then our partners might do whatever they want; the aggressiveness in real politics and economics would increase because of the broken balance."

Last week, in Medvedev's year-end live interview with three Russian TV channels, he reiterated that Russia will continue to develop strategic offensive missiles after the signing of the new START treaty.

"This is normal," Medvedev said. "The whole world is doing this. Of course, this work needs to take place within the framework of conventions and agreements, including our future agreements with the Americans. But this process will continue and our nuclear shield will always be effective and sufficient for protecting our national interest."

Medvedev added, "That doesn't mean that we cannot talk about a nuclear-free world. It's a beautiful and right goal. But we should approach it gradually. ... Not only Russians and Americans, but also other countries who are looking forward to joining the 'nuclear club,' thus causing many problems, should take part in it."

(CNN) -- The father of terrorism suspect Umar Farouk AbdulMutallab talked about his son with someone from the CIA and a report was prepared, but the report was not circulated outside the agency, a reliable source told CNN's Jeanne Meserve on Tuesday.

Had that information been shared, the 23-year-old Nigerian who is alleged to have bungled an attempt to blow up a jetliner before it landed in Detroit, Michigan, on Christmas Day might have been denied passage on the Northwest Airlines flight, the source said.

The source's comments came shortly after President Obama blamed "a mix of human and systemic failures" for the incident and directed that preliminary findings into the matter be delivered to the White House by Thursday.

Earlier this week, a senior Obama administration official said AbdulMutallab's father warned officials at the U.S. embassy in Nigeria in November that he believed his son was under the influence of religious extremists.

Federal authorities have charged Umar Farouk AbdulMutallab with trying to detonate explosives hidden in his underwear as the Northwest Airlines flight from Amsterdam, Netherlands, made its final approach to Detroit. The device failed to fully detonate, instead setting off a fire at his seat.