Both enterprises, while stating their support for a stronger regulator for years, have torpedoed past legislative efforts to reform their oversight.
This time, Fannie Mae seems genuinely to want legislation, partly due to the prodding of investors, whose confidence in the GSEs’ governance was badly shaken by the accounting scandals at both firms.
Lawmakers may now feel duty-bound to tighten oversight of the GSEs after pushing them to expand their market share. Since the collapse of the housing market last year, members of Congress prodded the director of the Office of Federal Housing Enterprise Oversight to loosen the capital constraints that were put on Fannie and Freddie in the wake of their accounting scandals.
In the economic stimulus package passed earlier this year, Congress and the White House agreed to temporarily lift the cap on the size of mortgages they can buy, from $417,000 to almost $730,000, so that the GSEs could inject liquidity into the frozen jumbo loan market.
Another factor helping the legislation is the weakening economy and the tougher climate for Republicans in the fall.
Dodd has tied GSE reform to housing legislation to rescue strapped borrowers that vulnerable GOP members, particularly from states hit hard by the mortgage mess, may feel pressure to support. Banking panel members Elizabeth Dole (N.C.), who is fighting off a tough challenger, and Sen. Mel Martinez of Florida, where foreclosures are soaring, are seen as likely supporters of the bill.
Shelby’s insistence that the affordable housing trust fund be diverted temporarily to pay for any defaults under this housing rescue plan also is likely to weaken GOP opposition to the bill.
The Week in Congress APPROPRIATIONS
• The Senate Appropriations Defense Subcommittee has scheduled a hearing to discuss the Defense Department’s budget request on Tuesday at 11 a.m. in 192 Dirksen. Defense Secretary Robert Gates and Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, are scheduled to attend.
• The House Legislative Branch Appropriations Subcommittee has scheduled a hearing to discuss the Capitol Visitor Center on Thursday at 10 a.m. in 2359 Rayburn. Stephen Ayers, acting Architect of the Capitol, is scheduled to attend.
ENERGY
• The Senate Energy and Natural Resources Committee will examine the economic impacts of climate change legislation on Tuesday at 10 a.m. in 366 Dirksen.
• The House Energy and Commerce Energy and Air Quality Subcommittee will review a bill that would prohibit the importation of certain low-level radioactive waste into the United States at a hearing set for Tuesday at 10 a.m. in 2123 Rayburn.
ENVIRONMENT
• The House Natural Resources Committee holds a hearing on how the administration enforces the Endangered Species Act on Wednesday at 10 a.m. in 1324 Longworth. A new Government Accountability Office report is expected to be discussed.
FINANCE
• The House Financial Services Committee will hold a hearing on the impact of credit-based insurance scoring on the insurance market on Wednesday at 10 a.m. in 2128 Rayburn.
• The House Financial Services Committee will hold a hearing on the impact on the housing market of increased conforming loan limits on Thursday at 10 a.m. in 2128 Rayburn.
HEALTHCARE
• The House Small Business Committee’s Urban and Rural Entrepreneurship Subcommittee will hold a hearing on Medicare’s competitive bidding program for durable medical equipment on Wednesday at 10 a.m. in 1539 Longworth.
• The House Energy and Commerce Committee’s Health Subcommittee is scheduled to have a hearing on bills to fund breast-cancer research and treatment on Wednesday at 10 a.m. in 2123 Rayburn. • The House Veterans’ Affairs Committee is having a hearing on ex-service members’ access to medical, mental health and dental care under the “wounded warrior” legislation enacted this year on Wednesday at 2 p.m. in 334 Cannon.
• The House Energy and Commerce Committee’s Oversight and Investigations Subcommittee will convene a hearing titled, “Germs, Viruses, and Secrets: Government Plans to Move Exotic Disease Research to the Mainland United States” on Thursday at 10 a.m. in 2123 Rayburn.
DEFENSE
• The Senate Armed Services Committee holds a hearing to review the nomination of Gen. David Petraeus to become the head of Central Command and the nomination of Lt. Gen. Ray Odierno to become the top U.S. commander in Iraq on Thursday at 9:30 a.m. in 106 Dirksen.
TRANSPORTATION
• The House Transportation and Infrastructure Railroads, Pipelines, and Hazardous Materials Subcommittee is scheduled to mark up the Passenger Rail Investment and Improvement Act on Tuesday at 2167 Rayburn.
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