Senators push back against using guarantee fees to offset spending

A bipartisan group of senators are pushing back against possible plans to use revenue generated by mortgage giants Fannie Mae and Freddie Mac to offset federal spending.

Led by Sens. Mike CrapoMichael (Mike) Dean CrapoCongress can defend against Russia by outlawing anonymous shell companies On The Money: Senate passes disaster aid bill after deal with Trump | Trump to offer B aid package for farmers | House votes to boost retirement savings | Study says new tariffs to double costs for consumers Senate passes disaster aid bill after deal with Trump MORE (R-Idaho) and Mark WarnerMark Robert WarnerTrump puts GOP in tough spot with remarks on foreign 'dirt' Trump puts GOP in tough spot with remarks on foreign 'dirt' Hillicon Valley: Tim Cook visits White House | House hearing grapples with deepfake threat | Bill, Melinda Gates launch lobbying group | Tech turns to K-Street in antitrust fight | Lawsuit poses major threat to T-Mobile, Sprint merger MORE (D-Va.), a dozen lawmakers introduced a measure on Tuesday that would raise a budget point of order preventing the Senate's use of the guarantee fees charged by Fannie and Freddie if a budget uses them to pay for other initiatives.

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"Guarantee fees should be used to protect taxpayers from risk, but some want to increase these fees simply to create a piggy bank for Congress,” said Warner, a member of the Senate Banking Committee.

"Raiding Fannie and Freddie G-fees to pay for unrelated federal spending only makes that goal more difficult to reach," he said. 

The lawmakers argue that when guarantee fees, which are used to protect taxpayers against losses on the mortgages Fannie and Freddie back, are diverted for unrelated spending by Congress, taxpayers are left exposed to additional risk and homeowners pay for the fee in the mortgages.

They also argue that using guarantee fees as an offset will make it even harder to overhaul the housing finance system because it will increase the cost of any legislation that would wind down Fannie and Freddie. 

“Congress must get serious about reforming Fannie and Freddie and stop treating them as political entities,” Crapo said.

“Any increase of guarantee fees should be used to protect taxpayers from mortgage losses — not used as an artificial offset for new government spending," he said. 

Crapo worked last year with former Senate Banking Chairman Tim JohnsonTimothy (Tim) Peter JohnsonSeveral hurt when truck runs into minimum wage protesters in Michigan Senate GOP rejects Trump’s call to go big on gun legislation Court ruling could be game changer for Dems in Nevada MORE (D-S.D.) on a bipartisan measure that would eventually eliminate Fannie and Freddie. 

They used a measure crafted by Warner and fellow Banking committee member Sen. Bob CorkerRobert (Bob) Phillips CorkerPress: How 'Nervous Nancy' trumped Trump Press: How 'Nervous Nancy' trumped Trump Amash gets standing ovation at first town hall after calling for Trump's impeachment MORE (R-Tenn.), who is backing this effort. 

So far, this Congress hasn't ramped up the push for fresh legislation. 

Fannie and Freddie have been under government control since the financial crisis hit in 2008. 

Overall, the legislation would ensure that a congressionally mandated increase of guarantee fees can only be used for deficit reduction and will not be scored as an offset. 

A 60-vote threshold would still be required on a provision that spends more or reduces taxes and is offset with a guarantee fee increased because the fee would not be recognized as an offset.

The bill is co-sponsored by Senate Banking Committee Chairman Richard Shelby (R-Ala.) and Sens. Jon TesterJonathan (Jon) TesterManchin eyes Senate exit Manchin eyes Senate exit Democrats hope some presidential candidates drop out — and run for Senate  MORE (D-Mont.), Heidi HeitkampMary (Heidi) Kathryn HeitkampLobbying World Pro-trade group targets Democratic leadership in push for new NAFTA On The Money: Stocks sink on Trump tariff threat | GOP caught off guard by new trade turmoil | Federal deficit grew 38 percent this fiscal year | Banks avoid taking position in Trump, Dem subpoena fight MORE (D-N.D.), David VitterDavid Bruce VitterSenate confirms Trump judge who faced scrutiny over abortion views Collins votes against Trump judicial pick Progressive group targets Susan Collins over Trump judicial pick MORE (R-La.), Joe DonnellyJoseph (Joe) Simon DonnellyConservatives spark threat of bloody GOP primaries Anti-corruption group hits Congress for ignoring K Street, Capitol Hill 'revolving door' K Street giants scoop up coveted ex-lawmakers MORE (D-Ind.), Mark KirkMark Steven KirkEx-GOP Sen. Kirk registers to lobby The global reality behind 'local' problems Dems vow swift action on gun reform next year MORE (R-Ill.), Dean HellerDean Arthur HellerThis week: Barr back in hot seat over Mueller report Trump suggests Heller lost reelection bid because he was 'hostile' during 2016 presidential campaign Trump picks ex-oil lobbyist David Bernhardt for Interior secretary MORE (R-Ne.), Tim ScottTimothy (Tim) Eugene ScottOn The Money: Trump weighs emergency declaration for Mexico tariffs | GOP senators look to rein in Trump on trade | Powell says Fed may cut rates if trade war hurts economy On The Money: Trump weighs emergency declaration for Mexico tariffs | GOP senators look to rein in Trump on trade | Powell says Fed may cut rates if trade war hurts economy Trump floats new emergency declaration to impose Mexico tariffs MORE (R-S.C.) and Jerry MoranGerald (Jerry) MoranSenate Dem to reintroduce bill with new name after 'My Little Pony' confusion Senate Dem to reintroduce bill with new name after 'My Little Pony' confusion Senators clinch votes to rebuke Trump on Saudi arms sale MORE (R-Kan.).