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 CrapoThe Energy Sector Innovation Credit Act is an industry game-changer The 19 GOP senators who voted for the T infrastructure bill Wyden asks White House for details on jet fuel shortage amid wildfire season MORE (R-Idaho) and Mark WarnerMark Robert WarnerAdvocates call on top Democrats for 0B in housing investments Democrats draw red lines in spending fight Manchin puts foot down on key climate provision in spending bill 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.
"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 JohnsonCornell to launch new bipartisan publication led by former Rep. Steve Israel Trump faces tough path to Fannie Mae, Freddie Mac overhaul Several hurt when truck runs into minimum wage protesters in Michigan 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 CorkerCheney set to be face of anti-Trump GOP How leaving Afghanistan cancels our post-9/11 use of force The unflappable Liz Cheney: Why Trump Republicans have struggled to crush her 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.
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