In yet another expansion of the federal government, President Bush today announced a “limited” bailout of homeowners that face foreclosure.

The move marks a historic expansion of the role of the FHA, a Depression-era agency that has traditionally served low- and moderate-income families and first-time buyers, but not delinquent borrowers. Nearly 16% of subprime borrowers are behind on their ARMs, and an estimated 2 million subprime ARMs totaling about $600 billion will reset to higher rates through the end of next year.

When will this madness stop? And please, don’t even think of pinning this one on the Democrats.

The program, which doesn’t need congressional approval, should take effect early next year.

No, this one lies completely at the feet of a Republican president. Why do we vote Republican again?

In describing the plan Thursday, senior administration officials avoided using the word “bailout.” Friday, Bush also emphasized that the plan was limited in scope.

“It’s not the government’s job to bail out speculators or those who bought a home they knew they could not afford,” he said.

That’s freaking hilarious. With a straight face, he goes in front of the American people, expands government, bails out people that shouldn’t have been able to purchase a home in the first place, bails out lenders that shouldn’t have approved the loans in the first place, bails out the insurers that shouldn’t have insured the lenders that shouldn’t have approved the loans in the first place and has the stones to tell us it isn’t a freaking bailout! I’m beginning to feel like a Daily KOS’er.

Still, the plan is sure to incite critics. “If you’re going to help someone to refinance, you’re going to bail out the person who financed him in the first place,” Peter Wallison of the American Enterprise Institute said Thursday night. “This will only cause the problem to arise again.”

Wallison said the lenders who provided the financing in many of these cases likely knew that the borrowers couldn’t meet the financial obligations of the loan.

“If we’re going to allow (lenders) to be refinanced out, what we’re doing is saving them from their own greed. … It might be good politics, but it’s very bad policy.”

Good politics, bad public policy. Bush has found his legacy.