Bachus: We’ll move on a broader housing reform bill first

Bachus made his comment at a press conference to introduce a bill in the Senate, sponsored by Sens. John McCain (R-Ariz.) and Orrin Hatch (R-Utah), that would match one introduced earlier this month by Bachus and Rep. Jeb Hensarling (R-Texas).

The legislation, which was introduced in the previous Congress by Hensarling, would free the governments-sponsored enterprises (GSEs) two years after enactment. Then, if the firms are deemed financially solvent, they would have three years until their charters as GSEs would expire, which would render them wholly private enterprises. If they are not viable, they would be placed into receivership and wound down.

That sweeping bill stands in stark contrast to the granular package introduced by House Republicans the following week. Those bills would make very specific changes to the GSEs’ operations, with the overall goal remaining to significantly reduce their role in the housing market.

The theory behind the targeted bills — of which more are expected to be forthcoming — is that it improves the chances something could be approved by the Senate and made law.

Hensarling said Thursday he believed the two approaches were “complementary strategies.”

“If I have to do it on a piecemeal basis, so be it,” he added.

Specific or broad, the lawmakers yesterday were adamant that Fannie and Freddie need to be overhauled and freed from government conservatorship.

“The housing market needs long-term certainty, and it’s never too early to get taxpayers off the hook,” said Bachus.

“Something has to be done about Fannie and Freddie,” said McCain. “We’ve got to move forward and stop the hemorrhaging.”

While Republicans are pushing for action on the housing front, Sen. Richard Shelby (R-Ala.) has told Senate Democrats that they still have more work to do before putting together their own proposal. The ranking member of the Senate Banking Committee said at hearing Tuesday that it would be “premature” to consider any legislative proposals, instead calling for further research and hearings to be held on the matter.

The comment was interpreted by some, including some House Republicans, as throwing cold water on any legislative efforts, but a spokesman for Shelby clarified Thursday that his comments were directed at any Democratic proposals that might be in the works.

“Republicans’ view on Fannie and Freddie is based on the extensive hearings Sen. Shelby conducted as Chairman of the Banking Committee beginning in 2003,” said Shelby spokesman Jonathan Graffeo. “Democrats are not proposing such an approach.  If they are to reach any other legitimate conclusion, Sen. Shelby believes they must support their case by building an equally extensive record.”

This post updated at 4:09 pm.