Administration optimistic on Fannie, Freddie costs

In the budget, the president proposes gradually reducing the investment portfolios by at least 10 percent a year. The size and amount of loans guaranteed by Fannie and Freddie would also be limited under the budget, with the goal being to get the GSEs out of conservatorship.

The budget comes three days after the administration unveiled its plan for the nation's housing finance system. That report offered three options forward, but all included the ultimate winding down of Fannie and Freddie, a significant increase in the amount of the housing market supported by the private sector.

Meanwhile, House Republicans have also identified GSE reform as a top priority in the new Congress, vowing to quickly free taxpayers of the burden of Fannie and Freddie.

This post updated at 1:25 pm.