Financial Services Committee
Bachus: Democrats Claim "No Urgency" to Reform Fannie and Freddie While Taxpayers Are Forced to Guarantee $6 Trillion of their Debt
WASHINGTON, Aug 17 -
- Financial Services Committee Ranking Member Spencer Bachus today said that contrary to the sluggish pace of the Obama Administration and claims by Chairman Barney Frank that reform is not urgent, Congress must immediately address Fannie Mae and Freddie Mac, and the Treasury Department's conference offered nothing but further delays in the development and implementation of a strategy to end the bailout.
"Since the government takeover of Fannie Mae and Freddie Mac almost two years ago, Democrats have been unwilling to consider any legislation to either end the bailout or fundamentally reform the Government-Sponsored Enterprises (GSEs). With the taxpayer funded tab for this bailout alone reaching $150 billion, it is beyond frustrating that the Administration still doesn't know how to deal with these companies, and would rather host academic forums instead of putting pen to paper and creating a plan. This is the wrong approach that continues to throw the financial burden of these two companies onto the backs of Americans who are already struggling to make ends meet. Rather than stage further media events, the Administration owes it to Americans to develop and release a serious plan."
In a letter sent yesterday to Treasury Secretary Timothy Geithner, Bachus criticized the Administration for falling far short in its promise to entertain a broad range of policy perspectives at the conference, instead inviting mostly those who support continued government involvement in housing finance. "Virtually all of the participants are proponents of a continued Federal government role in backstopping the residential mortgage market, which implies a continued role for taxpayers in bearing losses in times of crisis. The lack of balance in the list of invited participants gives rise to a concern that Treasury is less interested in a candid airing of competing viewpoints than in laying the groundwork for a predetermined policy outcome that looks uncomfortably similar to the failed status quo."
NOTE: In July of 2009, House Republicans introduced comprehensive legislation to end the bailout of Fannie Mae and Freddie Mac and wind down the two taxpayer supported companies. Additionally, Republicans repeatedly attempted to add GSE reform to the financial reform legislation, but Democrats blocked those efforts. To view the Committee Republican plan and legislative proposals, click here.