NEW YORK | We knew it could happen, even though they said it wouldn't. The government is using our money again to haul private companies' hindquarters out of the fire -- this time it's troubled mortgage giants Fannie Mae and Freddie Mac.

It's a plan with holes in it.

It's a plan that comes too late.

It's a plan that still insulates those leading those same poorly managed companies.

Yet American taxpayers are on the hook for a mess that could undermine confidence in our financial system, depress the value of our currency and lead to higher inflation.

Those supporting the bailout of government-sponsored enterprises Fannie Mae and Freddie Mac point to what would happen if they collapsed, a scenario that has panicked investors in recent weeks.

As mortgage default rates have soared, these companies -- like many financial institutions -- have been plagued by massive losses. But Fannie and Freddie are required by their government regulator to have a financial cushion, which has been dwindling as the losses pile up.

Since these companies fund more than two-thirds of the home mortgages issued in this country as the broader lending market has dried up, their collapse could cripple the housing market and deal a serious blow to the already battered economy. Together, they own or back $5.3 trillion of mortgage debt.

A failure of either company would also rattle global financial markets because their shares and debt are widely held by pension funds, mutual funds and most importantly, foreign governments.

All that sounds like a convincing argument for government action, but it simplifies the issues surrounding Sunday's announcements by the U.S. Treasury Department and the Federal Reserve.

Treasury Secretary Henry Paulson said the Treasury is seeking expedited authority from Congress to expand its current line of credit to the two companies and buy some shares of the companies -- if needed.

"Fannie Mae and Freddie Mac play a central role in our housing finance system and must continue to do so in their current form as shareholder-owned companies," Paulson said. "Their support for the housing market is particularly important as we work through the current housing correction."