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GOP Targeting Fannie and Freddie . . . Or Are They?

By Matthew Yglesias on November 22, 2010 at 12:28 pm

"GOP Targeting Fannie and Freddie . . . Or Are They?"

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Sean Lengell’s Washington Times article is headlined “GOP targets mortgage bailouts: Vows to end aid to Fannie and Freddie” but it seems to me that arguably the reverse is happening. After all, the GOP has been throwing a lot of rhetoric fire in the direction of Fannie Mae and Freddie Mac for about two years now. But when last they held office they didn’t undertake any serious effort to reform Fannie and Freddie. Now that they’re back in the majority in the House, Spencer Bachus who’ll run the House Financial Services Committee still calls this “my top priority.”

But what’s really going to happen?

Mr. Bachus cautioned that change won’t take place immediately and that the problem must be handled delicately so as not to further disrupt the slumping housing market.

Republicans also are pressing for stricter government oversight and greater transparency of Fannie Mae and Freddie Mac’s accounting practices, including the creation of a position for an independent inspector general.

“The Democrats failed to conduct any oversight; instead, they gave the administration a protective shield from answering any tough questions regarding their actions,” Mr. Bachus told CNBC. “This protection will be gone when Republicans take control.”

Bashing the $150 billion-plus bailout of the lenders is a “political no-loser” for Republicans, said Mark A. Calabria of the Cato Institute, a Washington think thank that advocates a free-market policy.

In other words, the Bachus/Calabria plan is to: a) keep Fannie and Freddie in place as-is indefinitely, b) go fishing for scandals, c) to “bash” the bailout while keeping it going, and d) to chortle to The Washington Times about what a “political no-loser” this is for Republicans. But I suspect the quantity of actual reforming that gets done will be similar to what we saw from GOP-controlled congresses in the 1995-2006 era.

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