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Conservatives: Slow Down on Housing Bailout

Momentum appears to be building behind quick congressional action this week on a plan to help Fannie Mae and Freddie Mac weather their current financial storm. But not everyone on Capitol Hill is on board.

Rep. Jeb Hensarling (R-Texas) -- chairman of the Republican Study Committee, an influential group of House conservatives -- is circulating a letter that will be sent to Speaker Nancy Pelosi (D-Calif.) and House Financial Services Chairman Barney Frank (D-Mass.) urging them not to rush the issue without meaningful time for debate.

"As elected officials with a responsibility to safeguard taxpayer dollars, we have significant concerns about proposals to provide new, direct federal financial assistance to Fannie Mae and Freddie Mac, potentially exposing taxpayers to more than $5 trillion of new risk," the letter states.

"Such proposals raise many concerns about the proper role of government in dealing with these two private sector companies, and deserve careful consideration before enactment. ... Thus, we respectfully demand that any legislative efforts to enact this proposal go through regular order, including hearings at the committee level, full debate, and the opportunity to offer amendments to modify the proposal before a vote on final passage."

Despite Fannie and Freddie's long success at beating back efforts on the Hill to increase regulation on them or force them to keep more capital in reserve as a hedge against potential losses, the government sponsored enterprises (GSEs) do have their critics in Congress, and those critics are feeling that the current crisis has proven them right.

But even if Hensarling is able to round up the signatures, and support, of dozens of conservatives, it looks unlikely that they can do anything substantive to derail the legislative train in the House. Nearly every Democrat will support quick action, and many Republicans will jump on board as well. Because if its rules, the Senate is the more likely setting for a revolt. If you want to pick a conservative to follow during the coming debate on Fannie/Freddie, don't watch Hensarling. Watch Sen. Jim DeMint (R-S.C.).

By Ben Pershing  |  July 14, 2008; 5:44 PM ET
Categories:  Agenda  
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