Senate Votes to Study, Not Wind Down, Fannie and Freddie
The Senate just voted on two amendments tackling the loss-taking government-sponsored enterprises Fannie Mae and Freddie Mac, which stabilize the mortgage market at a $7 billion-per-month cost.
Sens. John McCain (R-Ariz), Richard Shelby (R-Ala.) and Judd Gregg’s (R-N.H.) amendment to end Fannie and Freddie’s governmental conservatorships within three years and to sell them off or wind them down — a proposal described as problematic by housing experts from both sides of the aisle — failed in a 43 to 56 vote.
But a proposal by Sen. Chris Dodd (D-Conn.), the architect of the financial regulatory reform bill, to ask the Treasury Department to study Fannie and Freddie and determine the best way to end the conservatorship will be added to the bill. It passed 63 to 36.
“This program needs to be fixed, no question about it,” Dodd said during floor debate before the votes. “You need an alternative housing finance system. But [the McCain] amendment doesn’t offer any. It just says get rid of the one you’ve got.”