Kola jumped the gun bigtime on this one. :roll: :roll: :roll:
The final wording has not even been nailed down in the bill.
The sponsors have obviously agreed to some concessions that Bush will tolerate.
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July 22, 2008 – 9:44 p.m.
Housing Bill Headed to House Floor
By Benton Ives, CQ Staff
The House set the stage for floor consideration Wednesday of a comprehensive housing package, including a lifeline for Fannie Mae and Freddie Mac that would not include a dollar cap but, against White House wishes, would be subject to the federal debt limit.
Although a final deal hasn’t been worked out with the Senate, lawmakers appear likely to move forward with several modifications to a Bush administration plan to backstop the mortgage giants if their financial situation becomes more dire. The Congressional Budget Office (CBO) said the plan could cost the federal government $25 billion over the next two fiscal years, though it added that chances are “probably better than 50 percent” that a bailout won’t be necessary.
The measure (HR 3221) also includes a regulatory overhaul of Fannie and Freddie and expanded federal loan guarantees for struggling homeowners.
In an effort to shore up Fannie and Freddie — which have seen their share prices plunge in recent weeks — the Bush administration asked for broad new authority for the Treasury Department to offer credit and buy stock in the two companies through the end of 2009 if such intervention is needed to stabilize them.
On Tuesday, House Financial Services Chairman Barney Frank , D-Mass., said the package will not include a dollar limit on the Treasury’s lending, although any spending will be subject to the nation’s statutory debt limit. The legislation would include an increase in the debt limit that was previously planned.
Frank also said the government will have “total control” over the compensation packages for Fannie and Freddie executives, which some critics say are too high. Although the legislation will not include a “mandate” for providing preferred-shareholder status for any government equity stake in the two companies, which would ensure a priority return on a federal investment, that will be an option in the “secretary’s arsenal,” Frank added.
The House package would place the Federal Reserve in a “consultative” role with the new regulator for Fannie and Freddie. But that provision will expire at the end of 2009 under the House bill, while the administration proposal would not have provided an expiration for the Fed’s role.
The cap on the size of mortgages Fannie and Freddie can buy and package as securities, known as the conforming loan limit, would be set at $625,000 in certain high-cost areas, with additional language aimed at allowing more homes to qualify for the programs.
Defying a White House veto threat, the legislation includes a $3.9 billion local grant program for the purchase of foreclosed homes.
“Nobody in America will agree with everything in this bill,” Frank said. He has been working to hammer out a deal with Senate Banking Chairman Christopher J. Dodd , D-Conn., and Alabama Sen. Richard C. Shelby , the panel’s ranking Republican.
In a joint statement late Tuesday, Dodd and Shelby said that they “have been engaged in extensive and largely fruitful discussions with our counterparts in the House of Representatives, as well as Administration officials. We remain optimistic about the prospects for this legislation.”